Document:

Balaton Power Inc.: Exhibit 4.8 - Filed by newsfilecorp.com

AMENDED AND RESTATED OPTION AGREEMENT 
(Voisey’s Bay West
Property) 

THIS AGREEMENT dated for reference March 4, 2011, as
amended and restated on December 21, 2011. 

BETWEEN: 

  
    
      
        JAL EXPLORATION INC., a corporation duly
          incorporated pursuant to the laws of British Columbia and having an
          office at 15492 Buena Vista Avenue, White Rock, British Columbia V4B
          1Z1 (hereinafter called the “Optionor") 

      

    

  

OF THE FIRST PART 

AND: 

  
    
      
        BALATON POWER INC., a corporation duly incorporated
          pursuant to the laws of British Columbia and having an office at 206-20257-54TH
          Avenue, Langley, BC V3A 3W2 (hereinafter called the "Optionee")
        

      

    

  

OF THE SECOND PART 

WHEREAS: 

	A. 	
      The Optionor is the sole registered and beneficial owner
      of 100% of the right, title and interest in and to the Licenses (subject
      to the Underlying Royalty (as defined below)) which are situated in
      Newfoundland and Labrador and which licenses are more particularly
      described in Schedules "A- 1" and “A-2" attached hereto and forming part
      hereof (hereinafter, called the "Licenses");

	 	 
	B. 	
      The Optionor has exclusive possession of and the right to
      explore and mine the Licences free and clear of all claims, liens or
      encumbrances except for Native Claims and the Underlying Royalty;
    and

	 	 
	C. 	
      The parties entered into an agreement dated March 4, 2011
      (the “Original Agreement”) whereby the Optionor granted options to
      the Optionee to purchase up to 80% in aggregate of the right, title and
      interest in and to the Original Licences on the terms and conditions as
      set out therein;

	 	 
	D. 	
      The Underlying Royaltyholder acquired the Additional
      Licence and then transferred such Additional Licence to the Optionor and,
      accordingly, the Optionor is now the recorded owner of that Additional
      Licence and that Additional Licence has become a Licence (as that term is
      defined herein) and subject to the First Option and the Second Option;
      and

	 	 
	E. 	
      The parties would like to enter into this Agreement in
      order to amend and restate the Original Agreement, on the terms
      hereinafter set forth;

Page 1 of 40 

THE PARTIES AGREE AS FOLLOWS: 

	1. 	
      INTERPRETATION

	 	 
	1.1 	
      In this Agreement:

	 	(a) 	
      “Abandoned Property” has that meaning set out in
      Section 14.1;

	 	 	 	 
	 	(b) 	
      “Acquiring Party” has that meaning set out in
      Section 12.1(a);

	 	 	 	 
	 	(c) 	
      “Acquisition Notice” has that meaning set out in
      Section 12.1(a);

	 	 	 	 
	 	(d) 	
      “Additional Licence” means the Map Staked Licence
      set out in Schedule “A-2”;

	 	 	 	 
	 	(e) 	
      “Additional Property” has that meaning set out in
      Section 12.1;

	 	 	 	 
	 	(f) 	
      “Arbitration Matter” has that meaning set out in
      Section 20.2;

	 	 	 	 
	 	(g) 	
      “Area of Interest Option” has that meaning set out
      in Section 12.1(b);

	 	 	 	 
	 	(h) 	
      “BCICAC” has that meaning set out in Section
      20.1;

	 	 	 	 
	 	(i) 	
      “Business Day” means any day other than Saturdays,
      Sundays and statutory holidays in the Province of British
  Columbia;

	 	 	 	 
	 	(j) 	
      “Canadian Stock Exchange” means any of the
      following:

	 	 	 	 
	 		(i) 	
      the Canadian National Stock Exchange;

	 	 	 	 
	 		(ii) 	
      the TSX Venture Exchange; or

	 	 	 	 
	 		(iii) 	
      the TSX Exchange;

	 	 	 	 
	 	(k) 	
      “Cumulative Exploration Expense” means the sum
      of:

	 	 	 	 
	 		(i) 	
      the Exploration Expense incurred in the pertinent period;
      and

	 	 	 	 
	 		(ii) 	
      all other Exploration Expense incurred under this
      Agreement;

	 	 	 	 
	 	(l) 	
      “Defaulting Party” has that meaning set out in
      Section 23.1;

	 	 	 	 
	 	(m) 	
      “Department of Natural Resources” means the
      Department of Natural Resources, Government of Newfoundland and
      Labrador;

	 	 	 	 
	 	(n) 	
      “Discounted Market Price” means:

	 	 	 	 
	 		(i) 	
      If the Optionee is not listed on a Canadian Stock
      Exchange at the time of the proposed issuance of Shares to the Optionor,
      then 75% of the last closing price on the last day before the date of the
      proposed share issuance; and

Page 2 of 40 

	 	(ii) 	
      If the Optionee is listed on a Canadian Stock Exchange at
      the time of the proposed issuance of Shares to the Optionor, then the
      lowest price allowed by the policies of such Canadian Stock
    Exchange;

	 	(o) 	
      "Dollars ($)" means legal currency of the United
      States of America;

	 	 	 
	 	(p) 	
      “Election to Proceed to Second Option Notice” has
      that meaning set out in Section 7.1(a);

	 	 	 
	 	(q) 	
      “Election to Enter Into the Joint Venture Notice”
      has that meaning set out in Section 7.1(b);

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

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

	 	 	 
	 	(t) 	
      “Exchange” means the Over-The-Counter Bulletin
      Board;

	 	 	 
	 	(u) 	
      “Exploration Expense” means the sum of all monies
      spent in prospecting, exploring, geological or geophysical surveying,
      sampling, examining, diamond and other types of drilling, developing,
      dewatering, assaying, testing, constructing, maintaining and operating
      roads, trails and bridges upon or across the Property, buildings,
      equipment, plant and supplies, salaries and wages (including fringe
      benefits) of employees and contractors directly engaged therein, insurance
      premiums, and all other expenses ordinarily incurred in prospecting,
      exploring and developing mineral exploration and mining lands, but not
      including legal or accounting costs;

Page 3 of 40 

	 	(v) 	
      “Exploration Expense Report” means a report
      prepared by the Optionee in accordance with generally accepted accounting
      principles, fully disclosing in appropriate categories, all types of
      expenses being Exploration Expenses incurred by the Optionee during the 12
      months ending on the most recent December 31, with the amounts separated
      into four fiscal quarters and reported on by the auditors of the Optionee
      that in their opinion the Exploration Expense Report presents fairly, in
      all material respects the Exploration Expense incurred by the Optionee for
      the 12 months ended December 31 in accordance with the provisions of the
      Option Agreement;

	 	 	 
	 	(w) 	
      “Feasibility Report” means a comprehensive study
      of a mineral deposit in which all geological, engineering, legal,
      operating, economic, social, environmental and other relevant factors are
      considered in sufficient detail that it could reasonably serve as the
      basis for a final decision by a financial institution to finance the
      development of the deposit for mineral production upon which any
      reasonable financial institution will lend funds in an amount sufficient
      to fully the operation of the mining anticipated in the study;

	 	 	 
	 	(x) 	
      “First Option” has that meaning set out in Section
      3.1 (a);

	 	 	 
	 	(y) 	
      “Initial Optionor’s Assessment Report Filing” has
      that meaning set out in Section 2.1(k) and 2.2(m);

	 	 	 
	 	(z) 	
      “Initial Optionee’s Assessment Report Filing” has
      that meaning set out in Section 2.1(n);

	 	 	 
	 	(aa) 	
      “Initial Licences” means the Map Staked Licences
      set out in Schedule “A-1”;

	 	 	 
	 	(bb) 	
      “Initial Security Deposits” has that meaning set
      out in Section 2.1(j);

	 	 	 
	 	(cc) 	
      “Intervening Event” has that meaning set out in
      Section 16.1;

	 	 	 
	 	(dd) 	
      “Joint Venture” has that meaning set out in
      Section 7.1(b);

	 	 	 
	 	(ee) 	
      “Joint Venture Agreement” has that meaning set out
      in Section 7.4;

	 	 	 
	 	(ff) 	
      “Last Day of Notice Period” has that meaning set
      out in Sections 9.3 and 9.5;

	 	 	 
	 	(gg) 	
      “Laws” means applicable laws (whether criminal,
      civil or administrative) including all statutes, codes, ordinances,
      decrees, rules, regulations, municipal by-laws, judicial or arbitral or
      administrative or ministerial or departmental or regulatory judgments,
      orders, decisions, rulings or awards, policies, guidelines, and general
      principles of common and civil law and equity, binding on or affecting a
      person or the Property referred to in the context in which the word is
      used;

	 	 	 
	 	(hh) 	
      "Licences" means the Map Staked Licenses set out
      in Schedule "A-1" and “A-2”;

	 	 	 
	 	(ii) 	
      “Native Claims” means any possible demands or
      claims by aboriginal or other native groups of any kind;

	 	 	 
	 	(jj) 	
      "Net Returns" has that meaning set out in Schedule
      “B”;

Page 4 of 40 

	 	(kk) 	
      “Notice of Exercise of Option & Compliance
      Certificate” means a written document signed by each of the Chief
      Executive Officer and the Chief Financial Officer of the Optionee stating
      that the relevant Option has been exercised in full compliance with the
      terms of this Agreement and that the Optionee is not in breach of any term
      of this Agreement;

	 	 	 
	 	(ll) 	
      “Optionee” means Balaton Power Inc.;

	 	 	 
	 	(mm) 	
      “Optionor” means JAL Exploration Inc.;

	 	 	 
	 	(nn) 	
      “Optionor’s Service Providers” has that meaning as
      set out in Section 11.1(s);

	 	 	 
	 	(oo) 	
      “Original Agreement” has that meaning as set out
      in Recital “C”;

	 	 	 
	 	(pp) 	
      “Other Party”, has that meaning as set out in
      Section 12.1(a);

	 	 	 
	 	(qq) 	
      “Pre-feasibility Report” means a comprehensive
      study of the viability of a mineral project that has advanced to a stage
      where the mining method, in the case of underground mining, or the pit
      configuration, in the case of an open pit, has been established and an
      effective method of mineral processing has been determined, and includes a
      financial analysis based on reasonable assumptions of technical,
      engineering, legal, operating, economic, social, and environmental factors
      and the evaluation of other relevant factors which are sufficient for a
      qualified person, acting reasonably, to determine if all or part of the
      mineral resource may be classified as a mineral reserve which recommends
      that a Feasibility Report be prepared pertaining to the
Property;

	 	 	 
	 	(rr) 	
      “Property” means those Licences set out in
      Schedule “A-1” and “A-2” to the Agreement and
includes:

	 	(i) 	
      any Additional Property; and

	 	 	 
	 	(ii) 	
      any Map Staked Licence, ground staked licence, extended
      licence, map staked claim, ground staked claim, mining lease or other
      right to search for or extract minerals covering any portion of the ground
      currently covered by the Licenses which may have been re-acquired by the
      Optionee or its successors, assigns or associates as a result of any of
      the Licences having been previously abandoned;

	 	(ss) 	
      “Second Option” has that meaning set out in
      Section 3.1(b);

	 	 	 
	 	(tt) 	
      “Semi-Carried Financing” means a financing
      arranged by the Optionee and provided to each of the Optionee and the
      Optionor, in proportion to their joint venture ownership of an amount
      sufficient to fully finance both the Optionee and the Optionor
  for:

	 	(i) 	
      all the costs involved in putting a mine into production
      on the Property in a method and manner in full compliance with the
      Feasibility Study;

	 	 	 
	 	(ii) 	
      all of the costs associated with the continued operation
      of the mine; and

	 	 	 
	 	(iii) 	
      all costs associated with the shutting down of such mine,
      including all environment and clean up costs.

Page 5 of 40 

	 		
      Such financing is to be provided at the most attractive
      interest rate offered by the Bank of Montreal for its most credit worthy
      commercial clients. Such financing is to be repaid by the Optionor and the
      Optionee from the sale of ore from the Property on the basis that 80% of
      all revenue of each will be paid first to repay the financing with the
      balance of 20% of the revenue of each being paid to and shared between the
      Optionor and the Optionee in proportion with their Joint Venture interests
      until the financing has been re- paid in full following which the revenue
      from the mine will be shared between the Optionor and the Optionee in
      proportion with their Joint Venture interests.

	 	 	 
	 	(uu) 	
      "Shares" means fully paid and non-assessable
      common shares in the capital stock of the Optionee as presently
      constituted registered in the name of the Optionor and free and clear of
      all liens, charges and other encumbrances whatsoever, other than the
      re-sale and legend requirements of the Exchange and applicable securities
      laws;

	 	 	 
	 	(vv) 	
      “Technical Report” means a report drafted in
      compliance with National Instrument 43- 101 Standards of Disclosure for
      Mineral Properties and Form 43-101 Technical Report, as further
      defined in Section 1.1 of National Instrument 43-101 Standards of
      Disclosure for Mineral Properties;

	 	 	 
	 	(ww) 	
      “Transferee” has that meaning set out in Section
      13.1;

	 	 	 
	 	(xx) 	
      “Transfer Request” has that meaning set out in
      Section 14.1;

	 	 	 
	 	(yy) 	
      “Underlying Royalty” means the royalty to be paid
      to the Underlying Royaltyholder, on the terms and conditions set out in
      Schedule “B”; and

	 	 	 
	 	(zz) 	
      ”Underlying Royaltyholder” means James Alexander
      Lenec”.

	2. 	
      REPRESENTATIONS AND WARRANTIES AND
      ACKNOWLEDGMENTS

	 	 
	2.1 	
      The Optionee represents and warrants to the Optionor and
      the Optionee acknowledges that:

	 	(a) 	
      it is a corporation duly incorporated and validly
      subsisting under the laws of British Columbia and is in good standing with
      respect to filing annual reports;

	 	 	 
	 	(b) 	
      it 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;

	 	 	 
	 	(c) 	
      neither the execution and delivery of this Agreement nor
      any of the agreements referred to herein or contemplated hereby, nor the
      consummation of the transactions hereby contemplated will conflict with,
      result in the breach of or accelerate the performance required by any
      agreement to which the Optionee is a party;

	 	 	 
	 	(d) 	
      the execution and delivery of this Agreement and the
      agreements contemplated hereby will not violate or result in the breach of
      laws of any jurisdiction applicable or pertaining thereto or of its
      constating documents;

	 	 	 
	 	(e) 	
      the shares of the Optionee are listed on the
    Exchange;

	 	 	 
	 	(f) 	
      the Optionee is not in breach of any policy of the
      Exchange;

Page 6 of 40 

	 	(g) 	
      the Optionee has made all required filings in
      SEDAR.com;

	 	 	 	 
	 	(h) 	
      the trading in the shares of the Optionee is not subject
      to:

	 	 	 	 
	 		(i) 	
      a halt trade order;

	 	 	 	 
	 		(ii) 	
      a stop trade order;

	 	 	 	 
	 		(iii) 	
      a suspension;

	 	 	 	 
	 		(iv) 	
      a cease trade order; or

	 	 	 	 
	 		(v) 	
      any other similar order or restriction;

	 	 	 	 
	 	(i) 	
      to its best knowledge, neither it nor any of its
      directors and officers is subject to an investigation by either of the
      Exchange or any securities commission of any country;

	 	 	 	 
	 	(j) 	
      at the time the Underlying Royaltyholder staked the
      Licences, the Underlying Royaltyholder paid not only a $10 per claim
      staking recording fee, but also a $50 per claim security deposit relating
      to the claims forming each Licence (the “Initial Security
      Deposits”);

	 	 	 	 
	 	(k) 	
      before the expiration of the first anniversary of the
      issuance of Licences 016248M and 016250M the Optionor performed assessment
      work and filed a report of that assessment work in an amount which claimed
      to be equal to or in excess of the required amount of assessment work to
      be performed within the first year of the currency of Licences 016248M and
      016250M (the “Initial Optionor’s Assessment Report
  Filing”);

	 	 	 	 
	 	(l) 	
      by letter dated July 5, 2010, the Department of Natural
      Resources advised that the Initial Optionor’s Assessment Report Filing had
      been reviewed for compliance with the Mineral Act (RSN 1990) and the
      Mineral Regulations thereunder and that the Initial Optionor’s Assessment
      Report Filing was accepted;

	 	 	 	 
	 	(m) 	
      following the acceptance of the Initial Optionor’s
      Assessment Report Filing, the Department of Natural Resources did refund
      or will be refunding to the Optionor the Initial Security Deposits
      relating to claims forming Licences 016248M and 016250M and the Optionee
      will have no claim to or interest whatsoever in such refunds;

	 	 	 	 
	 	(n) 	
      the Optionee filed not later than February 25, 2011, as
      assessment work against each of the Licences all exploration expenses
      incurred by or on behalf of the Optionee to the maximum amount allowable
      and not less than $150,000 (the “Initial Optionee’s Assessment Report
      Filing”) and use its best efforts to ensure that the Department of
      Natural Resources accepted all of those expenditures as assessment and the
      Optionee either did or will ensure that the assessment work is credited to
      each of the Licences to ensure that the amount filed against each of the
      Licences is greater than the required amount of assessment for the two
      terms expiring the date of the issuance of each of the Licences;

	 	 	 	 
	 	(o) 	
      following the filing and acceptance of the Initial
      Optionee’s Assessment Report Filing, the Department of Natural Resources
      did refund or will be refunding to the Optionor the Initial Security
      Deposit relating to the claims forming Licence 017061M and neither
    the Optionee nor the Underlying Royaltyholder will have any
      claim to or interest whatsoever in such refund;

Page 7 of 40 

	 	(p) 	
      the Optionee is authorized to carry-out business in the
      Province of Newfoundland and Labrador; and

	 	 	 	 
	 	(q) 	
      the Optionee acknowledges that although the Optionor or
      the Underlying Royaltyholder may introduce financing to the Optionee or
      participate in any financing of the Optionee neither the Optionor, nor the
      Underlying Royaltyholder has:

	 	 	 	 
	 		(i) 	
      promised or agreed, either orally or in writing, to
      provide any type of financing to the Optionee, either prior to the signing
      or deemed signing of this Agreement, at the signing or deemed signing of
      this Agreement, or thereafter; or

	 	 	 	 
	 		(ii) 	
      promised or agreed , either orally or in writing, to
      provide any assistance to the Optionee in obtaining any type of financing,
      either prior to the signing or deemed signing of this Agreement, at the
      signing or deemed signing of this Agreement, or
  thereafter.

	2.2 	
      To the best of the Optionee’s knowledge, the
      representations and warranties set out in Section 2.1 are accurate and
      true in all material respects and the representations and warranties do
      not fail to set out a fact, the omission of which, would make any of the
      representations and warranties misleading or inaccurate any material
      respect.

	 	 	 
	2.3 	
      The Optionor represents and warrants to the
    Optionee:

	 	 	 
		(a) 	
      the Licences have been duly and validly issued and are
      accurately described in Schedule "A";

	 	 	 
		(b) 	
      the Licences are presently in good standing under the
      laws of the jurisdiction in which they are located and are free and clear
      of all liens, charges and encumbrances, except for Native Claims and the
      Underlying Royalty;

	 	 	 
		(c) 	
      subject to the interest of the Underlying Royaltyholder
      in the Underlying Royalty, the Optionor is the sole registered and
      beneficial owner of a 100% interest in and to the Licences and has the
      exclusive right to enter into this Agreement and all necessary authority
      to dispose of a 100% interest in and to the Licences in accordance with
      the terms of this Agreement;

	 	 	 
		(d) 	
      subject to the interest of the Underlying Royaltyholder
      in the Underlying Royalty, no person, firm or corporation has any
      proprietary or possessory interest in the Licences other than the
      Optionor;

	 	 	 
		(e) 	
      there are no outstanding agreements or options to acquire
      or purchase the Licences or any interest in the Licences or any portion
      thereof;

	 	 	 
		(f) 	
      to the knowledge of the Optionor, no person is entitled
      to any royalty or other payment in the nature of rent or royalty on any
      minerals, ores, metals or concentrates or any other such products removed
      from the Licenses, except for the Underlying Royalty to the paid to the
      Underlying Royaltyholder;

Page 8 of 40 

	 	(g) 	
      the Optionor is not aware of any demand, claims or
      notices from any level of government, including, but not restricted,
      municipal, provincial or federal relating to environmental issues relating
      to the Licenses except for potential Native Claims;

	 	 	 
	 	(h) 	
      the Optionor has no interest in any Property that is
      contiguous to the Licences or any part of which are within five kilometers
      of the Licences;

	 	 	 
	 	(i) 	
      to the best knowledge of the Optionor, there are no
      Environmental Liabilities;

	 	 	 
	 	(j) 	
      to the best knowledge of the Optionor, the Optionor is
      not in breach of any Environmental Laws;

	 	 	 
	 	(k) 	
      neither the execution and delivery of this Agreement nor
      any of the agreements referred to herein or contemplated hereby, nor the
      consummation of the transactions hereby contemplated will conflict with,
      result in the breach of or accelerate the performance required by any
      agreement to which the Optionor is a party or by which it is
  bound;

	 	 	 
	 	(l) 	
      the execution and delivery of this Agreement and the
      agreements contemplated hereby will not violate or result in the breach of
      the laws of any jurisdiction applicable or pertaining thereto;

	 	 	 
	 	(m) 	
      at the time the Underlying Royaltyholder staked the
      Licences, the Underlying Royaltyholder paid not only a $10 per claim
      staking recording fee, but also a $50 per claim security deposit (the
      “Initial Security Deposits”);

	 	 	 
	 	(n) 	
      before the expiration of the first anniversary of the
      issuance of Licences 016248M and 016250M the Optionor performed assessment
      work and filed a report of that assessment work in an amount which claimed
      to be equal to or in excess of the required amount of assessment work to
      be performed within the first year of the currency of Licences 016248M and
      016250M (the “Initial Optionor’s Assessment Report
  Filing”);

	 	 	 
	 	(o) 	
      by letter dated July 5, 2010, the Department of Natural
      Resources advised that the Initial Optionor’s Assessment Report Filing had
      been reviewed for compliance with the Mineral Act (RSN 1990) and the
      Mineral Regulations thereunder and that the Initial Optionor’s Assessment
      Report Filing was accepted;

	 	 	 
	 	(p) 	
      following the acceptance of the Initial Optionor’s
      Assessment Report Filing, the Department of Natural Resources did refund
      or will be refunding to the Optionor the Initial Security Deposits
      relating to claims forming Licences 016248M and 016250M and the Optionee
      will have no claim to or interest whatsoever in such refunds;

	 	 	 
	 	(q) 	
      following the filing and acceptance of the Initial
      Optionee’s Assessment Report Filing, the Department of Natural Resources
      did refund or will be refunding to the Optionor the Initial Security
      Deposit relating to the claims forming Licence 017061M and neither the
      Optionee nor the Underlying Royaltyholder will have any claim to or
      interest whatsoever in such refund; and

	 	 	 
	 	(r) 	
      the Optionor is duly authorized to carry on business in
      the Province of Newfoundland and Labrador.

Page 9 of 40 

	2.4 	
      To the best of the Optionor’s knowledge the
      representations and warranties set out in Section 2.3 are accurate and
      true in all material respects and the representations and warranties do
      not fail to set out a fact, the omission of which, would make any of the
      representations and warranties misleading or inaccurate any material
      respect.

	 	 
	2.5 	
      The representations and warranties hereinbefore set out
      are conditions on which the parties have relied in entering into this
      Agreement and will survive the acquisition of any interest in the Property
      by the Optionee and each party will indemnify and save the other party
      harmless from all loss, damage, costs, actions and suits arising out of or
      in connection with any breach or any representation, warranty, covenant,
      agreement or condition made by the other party and contained in this
      Agreement.

	3. 	
      GRANT OF FIRST OPTION AND SECOND OPTION

	 	 
	3.1 	
      In consideration for the payment of $25,000 paid by the
      Optionee to the Optionor, the Optionor grants to the
  Optionee:

	 	(a) 	
      an exclusive option (the “First Option”) to
      acquire an undivided 55 percent (55%) legal and beneficial interest in the
      Property free and clear of all liens, charges and claims of others except
      for the Underlying Royalty and Native Claims; and

	 	 	 
	 	(b) 	
      an exclusive Option (the “Second Option”) to
      acquire a further undivided 25 percent (25%) legal and beneficial interest
      in the Property free and clear of all liens, charges and claims of others
      except for the Underlying Royalty and Native
Claims.

	4. 	
      EXERCISE OF FIRST OPTION

	 	 
	4.1 	
      In order to exercise the First Option, the Optionee must
      not be in breach of any term of this Agreement and
must:

	 	(a) 	
      pay to the Optionor $240,000 as follows:

	 	 	 	 
	 		(i) 	
      pay the Optionor a $20,000 by December 31,
2011;

	 	 	 	 
	 		(ii) 	
      pay the Optionor a further $20,000 by June 30,
    2012;

	 	 	 	 
	 		(iii) 	
      pay the Optionor a further $20,000 by December 31,
      2012;

	 	 	 	 
	 		(iv) 	
      pay the Optionor a further $30,000 by June 30,
    2013;

	 	 	 	 
	 		(v) 	
      pay the Optionor a further $50,000 by December 31, 2013;
      and

	 	 	 	 
	 		(vi) 	
      pay the Optionor a further $100,000 by December 31,
      2014;

	 	 	 	 
	 	(b) 	
      issue and deliver Shares to the Optionor, as
    follows:

	 	 	 	 
	 		(i) 	
      at the signing or the deemed signing of this Agreement,
      but not later than March 4, 2011, issue and deliver to the Optionor
      3,000,000 Shares (which was done);

	 	 	 	 
	 		(ii) 	
      issue and deliver to the Optionor a further 2,000,000
      Shares by December 31, 2011;

Page 10 of 40 

	 	(iii) 	
      issue and deliver to the Optionor a further 2,000,000
      Shares by December 31, 2012;

	 	 	 
	 	(iv) 	
      issue and deliver to the Optionor a further 3,000,000
      Shares by December 31, 2013;

	 	 	 
	 	(v) 	
      issue and deliver to the Optionor a further 3,000,000
      Shares by December 31, 2014; and

	 	 	 
	 	(vi) 	
      issue and deliver to the Optionor a further number of
      Shares being equal to 10% of the number of issued and outstanding shares
      in the capital of the Optionee at the time of the election under Section
      7.1(a) or (b) or deemed election under Section 7.1, such Shares to be
      delivered:

	 	(A) 	
      within five Business Days of such election or deemed
      election; and

	 	 	 
	 	(B) 	
      not later than March 31,
2015;

	 	(c) 	
      incur further Exploration Expense of at least $4,000,000
      as follows:

	 	 	 	 
	 		(i) 	
      incur Exploration Expense of at least $150,000 by March
      31, 2012 (which is a firm commitment);

	 	 	 	 
	 		(ii) 	
      incur Cumulative Exploration Expense of at least $350,000
      by December 31, 2012 (which is a firm commitment);

	 	 	 	 
	 		(iii) 	
      incur Cumulative Exploration Expense of at least
      $1,000,000 by December 31, 2013; and

	 	 	 	 
	 		(iv) 	
      incur Cumulative Exploration Expense of at least
      $4,000,000 by December 31, 2014;

	 	 	 	 
	 	(d) 	
      subject to Section 4.2, by February 28, 2013, cause the
      common shares of the Optionee to be fully listed on a Canadian Stock
      Exchange;

	 	 	 	 
	 	(e) 	
      do and pay for all things necessary in order for the
      drafting of a Pre-feasibility Report and have drafted and pay for a
      Pre-feasibility Report pertaining to the Property and deliver a copy of
      that Pre-feasibility Report to the Optionor, all by June 30,
  2015;

	 	 	 	 
	 	(f) 	
      keep the Property in good standing until June 30, 2015;
      and

	 	 	 	 
	 	(g) 	
      deliver to the Optionor a Notice of Exercise of Option
      & Compliance Certificate by June 30, 2015.

	4.2 	
      In the event that following February 20, 2013 and prior
      to February 28, 2013, the Optionee determines that it will be unable to
      comply with Section 4.1(d) by February 28, 2013, the Optionee may elect to
      pay the Optionor $30,000 not later than February 28, 2013, in which case
      the date by which the requirement set forth in Section 4.1(d) must be
      completed will be extended to May 31, 2013 provided that the Optionee
      delivers to the Optionor a certificate to the satisfaction of the
      Optionee, acting reasonably, executed by each of the Chief Executive
      Officer and the Chief Financial Officer of the Optionee on behalf of the
      Optionee and in no way in their own personal capacities, stating the steps that the
      Optionee has performed to comply with Section 4.1(d).

Page 11 of 40 

	4.3 	
      In the event that the Optionee fails to incur Exploration
      Expense in accordance with Section 4.1(c), the Optionee may make payment
      to the Optionor by cash, certified cheque, money order or wire transfer in
      the amount of deficiency of such required Exploration Expense within 30
      days of the relevant date set out in Section 4.1(c), in which case the
      Optionee will be deemed to have incurred the required Exploration Expense
      within the required period.

	 	 
	4.4 	
      At the sole election of the Optionor made from time to
      time, each of such elections to be made at least 10 Business Days prior to
      the dates set out in Section 4.1(a), the Optionee, instead of paying any
      of the amounts set out in Section 4.1(a) in cash, will instead pay such
      elected payment set out in Section 4.1(a) by issuing and delivering to the
      Optionor, Shares at the deemed price being equal to the Discounted Market
      Price as of the date being 10 Business Days prior to the dates set out in
      Section 4.1(a), and such Shares will be delivered to the Optionor by the
      dates set out in Section 4.1(a).

	 	 
	4.5 	
      Notwithstanding any term of this Agreement, the Optionee
      may, at its sole option, pay any money amount, issue and deliver any
      Shares, incur Exploration Expense and do such other things set out in
      Section 4.1 prior to the dates set out in Section 4.1 provided that the
      Optionee has first given the Optionor the opportunity to make an election
      under Section 4.4.

	 	 
	5. 	
      EXERCISE OF SECOND OPTION

	 	 
	5.1 	
      In order to exercise the Second Option, the Optionee must
      not be in breach of any term of this Agreement and
must:

	 	(a) 	
      exercise the First Option;

	 	 	 	 
	 	(b) 	
      deliver to the Optionor the Election to Proceed to Second
      Option Notice pursuant to Section 7.1(a) or have been deemed to have
      delivered to the Optionor the Election to Proceed to Second Option
      pursuant to Section 7.2;

	 	 	 	 
	 	(c) 	
      pay to the Optionor a further $400,000 as
  follows:

	 	 	 	 
	 		(i) 	
      pay the Optionor $100,000 by July 31, 2015;

	 	 	 	 
	 		(ii) 	
      pay the Optionor a further $100,000 by July 31, 2016;
      and

	 	 	 	 
	 		(iii) 	
      pay the Optionor a further $200,000 by July 31,
    2017;

	 	 	 	 
	 	(d) 	
      issue and deliver further Shares to the Optionor, as
      follows:

	 	 	 	 
	 		(i) 	
      issue and deliver to the Optionor 5,000,000 Shares by
      July 31, 2015;

	 	 	 	 
	 		(ii) 	
      issue and deliver to the Optionor a further 5,000,000
      Shares by July 31, 2016; and

	 	 	 	 
	 		(iii) 	
      issue and deliver to the Optionor a further number of
      Shares being equal to 10% of the number of issued and outstanding shares
      in the capital of the Optionee at the time of the Notice of Second
      Exercise, such Shares to be delivered:

Page 12 of 40 

	 	(A) 	
      within five Business Days of the Notice of Second
      Exercise; and

	 	 	 
	 	(B) 	
      not later than December 31,
2017;

	 	(e) 	
      do and pay for, all things necessary in order for the
      drafting of a Feasibility Report and have drafted and pay for a
      Feasibility Report pertaining to the Property and deliver a copy of that
      Feasibility Report to the Optionor, all by December 31, 2017;

	 	 	 
	 	(f) 	
      arrange for the Semi-Carried Financing by December 31,
      2018 and have that funding advanced either to the Optionor or to the Joint
      Venture on behalf of the Optionor by March 31, 2019;

	 	 	 
	 	(g) 	
      keep the Property in good standing until March 31,
      2019;

	 	 	 
	 	(h) 	
      deliver to the Optionor a Second Option Exercise Notice
      by March 31, 2019; and

	 	 	 
	 	(i) 	
      deliver to the Optionor a Notice of Exercise of Option
      & Compliance Certificate.

	5.2 	
      At the sole written election of the Optionor made from
      time to time, each of such elections to be made at least 10 Business Days
      prior to the dates set out in Section 5.1(c), the Optionee, instead of
      paying any of the amounts set out in Section 5.1(c) in cash, will instead
      pay such elected payment set out in Section 5.1(c) (or a portion of such
      amount, as set out in the written election of the Optionor) by issuing and
      delivering to the Optionor, Shares at the deemed price being equal to the
      Discounted Market Prices as of the date being 10 Business Days prior to
      the dates set out in Section 5.1(c), and such Shares will be delivered to
      the Optionor by the dates set out in Section 5.1(c) along with the cash
      balance, if any.

	 	 
	5.3 	
      Notwithstanding any term of this Agreement, the Optionee
      may, at its sole option, pay any money amount, issue and deliver any
      Shares and do such other things set out in Section 5.1 prior to the dates
      set out in Section 5.1, provided that the Optionee has first given the
      Optionor the opportunity to make an election under Section
  5.2.

	6. 	
      TRANSFER OF TITLE

	6.1 	
      Following the exercise of the First Option and the
      delivery of the Election to Proceed to Second Option Notice, the
      Optionor will deliver to the Optionee a duly executed transfer in
      registrable form of 55% right, title and interest in and to the Property
      in favour of the Optionee, which transfer the Optionee will be entitled to
      register against title to the Property.

	 	 
	6.2 	
      Following the exercise of the First Option and the
      delivery of the Election to Enter Into the Joint Venture Notice,
      each of the Optionor and the Optionee will execute a transfer in
      registrable form and deliver to the Operator under the Joint Venture
      Agreement 100% in aggregate of the title to the Property (subject to the
      Underlying Royalty), to be held in trust by the Operator, in accordance
      with the terms of the Joint Venture Agreement, which transfer the Operator
      will be entitled to register against title to the Property.

	 	 
	6.3 	
      Upon the exercise of the Second Option, each of the
      Optionor and the Optionee will execute a transfer in registrable form and
      deliver to the Operator 100% in aggregate of the title to the Property
      (subject to the Underlying Royalty), to be held in trust by the Operator,
      in accordance with the terms of the Joint Venture Agreement, which
      transfer the Operator will be entitled to register against title to the
      Property.

Page 13 of 40 

	7. 	
      EXERCISE OF FIRST OPTION

		
      ELECTION TO EITHER (A) PROCEED TO ATTEMPT TO EXERCISE
      THE SECOND OPTION OR (B) COMMENCE THE JOINT VENTURE

		
      FAILURE TO EXERCISE SECOND OPTION 
JOINT VENTURE
      AGREEMENT

	7.1 	
      Provided that the Optionee has exercised the First
      Option, the Optionee will not later than July 31, 2014, either:

	 	 	 
		(a) 	
      deliver to the Optionor a notice in writing (the
      “Election to Proceed to Second Option Notice”) that it has elected
      to proceed to attempt to exercise the Second Option; or

	 	 	 
		(b) 	
      deliver to the Optionor a notice in writing (the
      “Election to Enter Into the Joint Venture Notice”) that it has
      elected not proceed to attempt to exercise the Second Option but instead
      to join and participate in a joint operation for the purposes of further
      exploring the Property and if deemed warranted, of developing,
      constructing and operating a mine on the Property or a portion thereof
      (the “Joint Venture”).

	7.2 	
      In the event that the Optionee fails to deliver by the
      date set out in Section 7.1 either the Election to Proceed to Second
      Option Notice set out in Section 7.1(a) or the Election to Enter Into the
      Joint Venture Notice set out in Section 7.1(b), then the Optionee will be
      deemed to have delivered to the Optionor the Election to Proceed to Second
      Option.

	 	 	 
	7.3 	
      In the event that the Optionee has delivered to the
      Optionor the Election to Proceed to Second Option Notice or has been
      deemed to have delivered to the Optionor the Election to Proceed to Second
      Option Notice and the Second Option expires without being exercised, then
      the Optionee will then be deemed to have delivered to the Optionor the
      Election to Enter Into the Joint Venture.

	 	 	 
	7.4 	
      In the event that:

	 	 	 
		(a) 	
      the Optionee has delivered the Optionor the Election to
      Enter Into the Joint Venture Notice in accordance with Section
      7.1(b);or

	 	 	 
		(b) 	
      the Optionee has been deemed to have delivered to the
      Optionor the Election to Enter into the Joint Venture Notice pursuant to
      Section 7.3,

	 	 	 
		
      then the Optionee and the Optionor will be deemed to join
      in a Joint Venture. The Joint Venture shall be conducted in accordance
      with an agreement (the “Joint Venture Agreement”), the material
      terms of which are set out in “Part I – Exercise of the First Option Only”
      in the attached Schedule “C”.

	 	 	 
	7.5 	
      In the event that the Second Option is exercised, then
      the Optionee and the Optionor will be deemed to join in a Joint Venture.
      The Joint Venture shall be conducted in accordance with an agreement (the
      “Joint Venture Agreement”), the material terms of which are set out
      in “Part II – Exercise of the First Option and the Second Option in the
      attached Schedule “C”.

	 	 	 
	7.6 	
      The Optionor and the Optionee will use their best efforts
      to negotiate the terms of the formal joint venture agreement representing
      the Joint Venture Agreement and then execute the form of Joint Venture
      Agreement.

Page 14 of 40 

	7.7 	
      In the event that the Optionor and the Optionee do not
      agree on the terms of the Joint Venture Agreement, then the Optionor and
      the Optionee will enter into arbitration pursuant to Section 20 and the
      Arbitrator will determine the terms of the Joint Venture
  Agreement.

	8. 	
      RIGHT OF ENTRY

	 	 
	8.1 	
      The Optionee, its employees, agents and independent
      contractors, will during the term of the First Option and the Second
      Option, have the sole and exclusive right to:

	 	(a) 	
      enter upon the Property;

	 	 	 
	 	(b) 	
      have exclusive and quiet possession thereof;

	 	 	 
	 	(c) 	
      do such prospecting, exploration, development or other
      mining work thereon and thereunder as Optionee in its sole discretion may
      consider advisable;

	 	 	 
	 	(d) 	
      bring and erect upon the Property such facilities as
      Optionee may consider advisable; and

	 	 	 
	 	(e) 	
      remove therefrom and dispose of reasonable quantities of
      ores, minerals, and metals for the purposes of obtaining assays or making
      other tests, but not including any bulk
sampling.

	9. 	
      EXPIRATION OR TERMINATION OF OPTIONS

	 	 
	9.1 	
      In the event that the deemed signing of this Agreement
      does not occur by March 4, 2011, then there is to be no deemed signing of
      this Agreement and only actual signing of this Agreement and delivery by
      March 4, 2011 to the Optionor of four copies originally signed by the
      Optionee and duly notarized will bring this Agreement into force and
      effect (an actual signing was done).

	 	 
	9.2 	
      In the event that the First Option is not exercised, then
      each of the First Option and the Second Option will expire and be of no
      further force or effect, except that the expiration of the First Option or
      the Second Option will not reduce or eliminate any obligations of the
      Optionee under this Agreement.

	 	 
	9.3 	
      The Optionee may terminate the First Option provided that
      the Optionee first provides the Optionor 90 days written notice of such
      intention and in the event that the Optionee has not completed any such
      item listed in Section 4.1 which would need to be completed in order for
      the First Option to otherwise remain in good standing up to the last day
      of the 90 day notice period (the “Last Day of Notice Period”),
      then:

	 	(a) 	
      the Optionee will complete such item by not later than
      the 10th day following the Last Day of Notice Period;
  and

	 	 	 
	 	(b) 	
      the First Option will nonetheless expire on the Last Day
      of Notice Period.

	9.4 	
      The provision by the Optionee of notice under Section 9.3
      will not reduce or eliminate the obligations of the Optionee under this
      Agreement.

	 	 
	9.5 	
      The Optionee may terminate the Second Option provided
      that the Optionee first provides the Optionor 90 days written notice of
      such intention and in the event that the Optionee has not completed any
      such item listed in Section 5.1 which would need to be completed in order
      for the Second Option to otherwise remain in
good standing up to the last day of the 90 day notice period (the “Last Day
of Notice Period”), then: 

Page 15 of 40 

	 	(a) 	
      the Optionee will complete such item by not later than
      the 10th day following the Last Day of Notice Period;
  and

	 	 	 
	 	(b) 	
      the Second Option will nonetheless expire on the Last Day
      of Notice Period.

	9.6 	
      The provision by the Optionee of notice under Section 9.5
      will not reduce or eliminate the obligations of the Optionee under this
      Agreement.

	10. 	
      COVENANTS OF THE OPTIONOR

	 	 
	10.1 	
      The Optionor will:

	 	(a) 	
      not do any act or thing which would or might in any way
      adversely affect the rights of Optionee hereunder;

	 	 	 
	 	(b) 	
      at the signing of this Agreement and then from time to
      time, make available to Optionee and its representatives all records and
      files in the possession or control of the Optionor relating to the
      Licences and permit Optionee and its representatives at its own expense to
      take abstracts therefrom and make copies thereof; and

	 	 	 
	 	(c) 	
      promptly provide Optionee with any and all notices and
      correspondence received by the Optionor from government agencies in
      respect of the Licences.

	11. 	
      COVENANTS OF OPTIONEE

	 	 
	11.1 	
      Following the signing of this Agreement, the Optionee
      will:

	 	(a) 	
      in addition to the obligations to keep the Property in
      good standing as set forth elsewhere in this Agreement, keep the Property
      in good standing as follows:

	 	 	 	 
	 		(i) 	
      for a period of one year following the date of the
      termination, expiration or exercise of the First Option; and

	 	 	 	 
	 		(ii) 	
      in the event that the First Option is exercised and the
      Optionee delivers the Election to Proceed to Second Option Notice, then
      for a period of one year following the date of the termination or
      expiration of the Second Option;

	 	 	 	 
	 	(b) 	
      keep the Property free and clear of all liens, charges
      and encumbrances arising from its operations hereunder

	 	 	 	 
	 		(i) 	
      for a period of six years following the date of the
      termination, expiration or exercise of the First Option; and

	 	 	 	 
	 		(ii) 	
      in the event that the First Option is exercised and the
      Optionee delivers the Election to Proceed to Second Option Notice, then
      for a period of six years following the date of the termination or
      expiration of the Second Option;

	 	 	 	 
	 	(c) 	
      use its best efforts to ensure that the Department of
      Natural Resources accepts all of those expenditures set out in the Initial
      Optionee’s Assessment Report Filing as assessment
and the Optionee will ensure that the assessment work is
      credited to each of the Licences to ensure that the amount filed against
      each of the Licences is greater than the required amount of assessment for
      the two terms expiring the date of the issuance of each of the
      Licences;

Page 16 of 40 

	 	(d) 	
      from time to time, file all exploration work as
      assessment work against the Property to the maximum allowable
    extent;

	 	 	 
	 	(e) 	
      without restricting Section 11.1(d), the Optionee will
      file, as assessment work against each of the licences then forming the
      Property, all exploration expenses to the maximum amount allowable and
      will use its best efforts to ensure that the Department of Natural
      Resources accepts all of those expenditures as assessment and the Optionee
      will ensure that the assessment work is credited to each of the licences
      then forming the Property;

	 	 	 
	 	(f) 	
      permit the Optionor, or its representatives duly
      authorized by it in writing, at its own risk and expense, access to the
      Property at all reasonable times;

	 	 	 
	 	(g) 	
      permit the Optionor, or its representatives duly
      authorized by it in writing, access to all records pertaining to the
      Property, including those prepared by the Optionee and those prepared by
      other people both before and after the date of this Agreement, in respect
      to the Property (or any Additional Property regardless of whether the Area
      of Interest Option was exercised) or work done on or with respect to the
      Property (or any Additional Property regardless of whether the Area of
      Interest Option was exercised), including, but not restricted to, all
      drill core, assay pulps, maps, drilling logs, assay results and other
      technical data acquired by the Optionee or compiled by or on behalf of the
      Optionee with respect to the Property (or any Additional Property
      regardless of whether the Area of Interest Option was exercised),
      including any interpretive data or conclusions and copies of all books,
      accounts and records of operations conducted by or on behalf of the
      Optionee on the Property (or any Additional Property regardless of whether
      the Area of Interest Option was exercised) or by others on the Property
      (or any Additional Property regardless of whether the Area of Interest
      Option was exercised);

	 	 	 
	 	(h) 	
      without demand from the Optionor, deliver to the
      Optionor, as soon as possible after receipt by the Optionee thereof, all
      documents referred to in Section 11.1(g);

	 	 	 
	 	(i) 	
      conduct all work on or with respect to the Property in a
      careful and minerlike manner and in compliance with all applicable
      Federal, Provincial and local laws, rules, orders and
  regulations;

	 	 	 
	 	(j) 	
      not breach any Environmental Laws;

	 	 	 
	 	(k) 	
      not do anything to incur Environmental
  Liabilities;

	 	 	 
	 	(l) 	
      indemnify and hold the Optionor harmless from and against
      any and all expenses, losses, claims, actions, damages or liabilities,
      whether joint or several (including the aggregate amount paid in
      reasonable settlement of any actions, suits, proceedings or claims), and
      the reasonable fees and expenses of its counsel that may be incurred in
      advising with respect to and/or defending any claim that may be made
      against the Optionor, to which the Optionor may become subject or
      otherwise involved in any capacity under any statute or common law or
      otherwise insofar as such expenses, losses, claims, damages, liabilities
      or actions arise out of or are based, directly or indirectly, (i) any
      taxes, fees or other amounts owing to any governmental agency in respect of
      the Property and (ii) any work conducted on the Property by the Optionee
      or its employees, contractors or agents and including, but not restricted
      to, any breach or alleged breach of any Environmental Laws;

Page 17 of 40 

	 	(m) 	
      in the event that the First Option or the Second Option
      is terminated or expires without being exercised, then within 15 days of
      such termination or expiry, the Optionee, at is sole cost, will have
      prepared and will deliver to the Optionor a Technical Report addressed to
      the Optionor with an effective date of not earlier than the date of such
      termination or expiration;

	 	 	 
	 	(n) 	
      deliver to the Optionor Exploration Expense Reports as
      follows:

	 	(i) 	
      by May 31, 2012 for the period ended December 31, 2011
      and by May 31 of each successive year during the term of the First Option
      and the Second Option for the period ended the previous December 31;
      and

	 	 	 
	 	(ii) 	
      within 90 days of the termination or the expiration of
      either the First Option or the Second Option;

	 	(o) 	
      in the event that the First Option or the Second Option
      is terminated or expires without being exercised, then for a period of 120
      days from such termination or expiry, the Optionee, at its sole cost will
      permit the Optionor, or its representatives duly authorized by it in
      writing, access to all records listed in Section 11.1(g);

	 	 	 	 
	 	(p) 	
      in the event that the First Option or the Second Option
      is terminated or expires without being exercised, then within 15 days of
      such termination or expiry, the Optionee, at its sole cost, will deliver
      to the Optionor all those materials listed in Section 11.1(g); and
      further, in the event that the First Option is terminated or expires, the
      Optionee will have no further right to or interest in those
    materials;

	 	 	 	 
	 	(q) 	
      make all filings and disclosures as required and within
      the time periods specified under all applicable securities legislation
      with respect to the allotment and issuance of the Shares pursuant to
      Sections 4.1(b) and 5.1(d);

	 	 	 	 
	 	(r) 	
      from time to time, do all things required to ensure that
      the Optionee is authorized to carry on business in the Province of
      Newfoundland and Labrador;

	 	 	 	 
	 	(s) 	
      in the event that the Optionor has previously introduced
      to the Optionee or in the event that following the signing of this
      Agreement the Optionor introduces to the Optionee any personnel or
      consultants, including, but not restricted to, persons providing technical
      or geological services (together the “Optionor’s Service
      Providers”):

	 	 	 	 
	 		(i) 	
      the Optionee will ensure that all agreements with the
      Optionor’s Service Providers are reduced to writing and contain the
      requirement set out in Section11.1(s) (ii), (iii) and (iv); and

	 	 	 	 
	 		(ii) 	
      upon the First Option not being exercised by the Optionee
      or the Optionee being in breach of the terms of this Option Agreement
      (which breach has not been rectified in accordance with Section
  23):

Page 18 of 40 

	 	A. 	
      the Optionee will terminate the term of all agreements
      with the Optionor’s Service Providers;

	 	 	 
	 	B. 	
      the Optionee will pay in full all amounts then owed to
      the Optionor’s Service Providers;

	 	 	 
	 	C. 	
      the Optionor will be free to deal with the Optionor’s
      Service Providers; and

	 	 	 
	 	D. 	
      the Optionee will not interfere with or hinder the
      Optionor dealing with the Optionor’s Service Providers once again and
      entering into agreements that the Optionor’s Service Providers for their
      services;

	 	(t) 	
      upon oral or written request from the Seller, immediately
      do all such things as may be necessary in order to remove any restrictive
      legend from all certificates of any shares in the capital of the Buyer,
      held by the Seller or by the Underlying Royaltyholder, including any
      restrictive legend imposed by BC Instrument 51-509, but excepting any
      other restrictive legend imposed by applicable Canadian securities
    law;

	 	 	 	 
	 	(u) 	
      ensure that at no time the trading in the shares of the
      Optionee become subject to:

	 	 	 	 
	 		(i) 	
      a halt trade order;

	 	 	 	 
	 		(ii) 	
      a stop trade order;

	 	 	 	 
	 		(iii) 	
      a suspension;

	 	 	 	 
	 		(iv) 	
      a cease trade order; or

	 	 	 	 
	 		(v) 	
      any other similar order or restriction;

	 	 	 	 
	 	(v) 	
      provided that the Optionee first agrees in writing to pay
      the Optionor his reasonable fees and out-of-pocket expenses, the Optionee
      may, from time to time, request assistance from the Optionor and the
      Optionor may, but is not obligated, to, elect to provide such
      assistance;

	 	 	 	 
	 	(w) 	
      pay the Optionor in full, within 10 days of receipt of an
      invoice from the Optionor setting out the commercially reasonable costs
      incurred by the Optionor in:

	 	 	 	 
	 		(i) 	
      doing all things relating to completing and filing with
      the Government of Newfoundland and Labrador and the Nunatsiavut Government
      the application for the proposed work program on the Licences;
  and

	 	 	 	 
	 		(ii) 	
      all things relating to responding to any comments, if
      any, of such governments and obtaining the approval therefrom;
  and

	 	 	 	 
	 	(x) 	
      in the event that one or more deposits are located or
      discovered on the Property, then the Optionee will name the most
      significant deposit as the “Alec Deposit” and, if the Property is
      commercially mined, then the mine will be initially named and continue to
      be named the “Alec Mine” in honour of Alec Lenec whose persistence and
      belief in the Property lead to the continued exploration of the
      Property.

Page 19 of 40 

	12. 	
      OTHER ACQUISITIONS

	 	 
	12.1 	
      The parties agree that a 100% interest in any and all map
      staked licences, ground staked licences, extended licences, map staked
      claims, ground staked claims, mining leases, or other rights to search for
      or extract minerals or other mineral interests staked, located, granted,
      purchased, optioned or otherwise acquired by or on behalf of any party
      which are located wholly or partially within 10 kilometers of the exterior
      boundaries of the Property, as they may be from time to time, the
      (“Additional Property”) then:

	 	(a) 	
      the party acquiring such Additional Property (the
      “Acquiring Party”) shall, within five business days of such
      acquisition, give the other party to this Agreement (the “Other
      Party”) written notice of such acquisition, including detailed costs
      of such acquisition (the “Acquisition Notice”);

	 	 	 
	 	(b) 	
      a 100% interest in such Additional Property shall, at the
      option (the “Area of Interest Option”) of the Other Party,
      exercisable within 15 business days of the receipt of the Acquisition
      Notice, form part of the Property and be subject to the terms of this
      Agreement, as if the Additional Property formed part of the Licences
      provided that if the Acquiring Party is the Optionor, then the Optionee
      will be required to reimburse the Optionor for its acquisition costs,
      including legal fees, at the time of the exercise of the Area of Interest
      Option; and

	 	 	 
	 	(c) 	
      if the Optionor is reimbursed an Initial Security Deposit
      for any licence forming the Additional Property, then the Optionee will be
      deemed to have incurred Exploration Expense in the amount of the Initial
      Security Deposit.

	12.2 	
      In the event that the Optionor exercises the Area of
      Interest Option, then the Optionee will forthwith transfer title to such
      Additional Property to the Optionor.

	13. 	
      DISPOSITION OF PROPERTY

	 	 
	13.1 	
      The Optionee may at any time sell, transfer, assign or
      otherwise dispose of all or any portion of its interest in the Property
      and this Agreement provided that, the Optionee has first obtain the
      consent in writing of the Optionor, such consent may be unreasonably
      withheld and further provided that any purchaser, transferee, assignee or
      other acquirer (together the “Transferee”) of any such interest
      will have first delivered to the Optionor its agreement related to this
      Agreement and to the Property, containing:

	 	(a) 	
      a covenant with the Optionee and the Optionor by such
      Transferee to perform all the obligations of the Optionee to be performed
      under this Agreement; and

	 	 	 
	 	(b) 	
      a provision subjecting any further sale, transfer,
      assignment or other disposition of such interest in the Property and this
      Agreement or any portion thereof to the restrictions contained in this
      Section 13.1.

	13.2 	
      The provisions of Section 13.1 will not prevent either
      party from entering into an amalgamation or corporate reorganization which
      will have the effect in law of the amalgamated or surviving company
      possessing all the property, rights and interests and being subject to all
      the debts, liabilities and obligations of each amalgamating or predecessor
      company.

Page 20 of 40 

	14. 	
      ABANDONMENT OF PROPERTY

	 	 
	14.1 	
      Subject to Section 14.2, should the Optionee, in its sole
      discretion, determine that some but not all of the Property no longer
      warrant further exploration and development or for any such other reason
      that the Optionee determines that it no longer want to further explore and
      develop some but not all of the Property (the “Abandoned
      Property”), then the Optionee may abandon such Abandoned Property, so
      long as the Optionee provides the Optionor with 60 days notice of its
      intention to so abandon such property and, if the Optionor then provides
      within 20 days of the receipt of the notice from the Optionee, a written
      request that the Optionee transfer such Abandoned Property to the Optionor
      (the “Transfer Request”), then the Optionee shall forthwith provide
      a recordable transfer of such Abandoned Property to the
Optionor.

	 	 
	14.2 	
      In the event that the Optionor provides the Transfer
      Request, the Optionee shall:

	 	(a) 	
      ensure that the Abandoned Property is unencumbered and in
      good standing for at least one year at the time of providing the
      recordable transfer referred to in Section 14.1 to the Optionor;

	 	 	 
	 	(b) 	
      pay all taxes and assessments required to maintain the
      Abandoned Property in good standing for a period of one year from the date
      of the provision of the recordable transfer of such Abandoned Property to
      the Optionor; and

	 	 	 
	 	(c) 	
      there are no Environmental Liabilities relating to the
      Abandoned Property.

	14.3 	
      Subject to 11.1(a), (b) and (c) and Section 14.2, upon
      the Abandoned Property being either:

	 	 	 
		(a) 	
      abandoned in accordance with Section 14.1, or

	 	 	 
		(b) 	
      returned to the Optionor in accordance with Section
      14.2,

		
      then the Optionee’s obligations under this Agreement
      relating to the Abandoned Property shall immediately terminate without
      adversely affecting any of the rights of the Optionee under this Agreement
      to balance of the Property.

	 	 
	15. 	
      ROYALTY

	 	 
	15.1 	
      The Property is subject to the Underlying
  Royalty.

	 	 
	16. 	
      FORCE MAJEURE

	 	 
	16.1 	
      No party will be liable for its failure to perform any of
      its obligations under this Agreement due to a cause beyond its control
      (except those caused by its own lack of funds) including, but not limited
      to acts of God, fire, flood, explosion, strikes, lockouts or other
      industrial disturbances, laws, rules and regulations or orders of any duly
      constituted governmental authority or non- availability of materials or
      transportation (each an "Intervening Event").

	 	 
	16.2 	
      All time limits imposed by this Agreement will be
      extended by a period equivalent to the period of delay resulting from an
      Intervening Event.

	 	 
	16.3 	
      A party relying on the provisions of Section 16.1 will
      take all reasonable steps to eliminate an Intervening Event and, if
      possible, will perform its obligations under this Agreement as far
    as practical, but nothing herein will require such party to
      settle or adjust any labour dispute or to question or to test the validity
      of any law, rule, regulation or order of any duly constituted governmental
      authority or to complete its obligations under this Agreement if an
      Intervening Event renders completion impossible.

Page 21 of 40 

	16.4 	
      The extension of time for the observance of conditions or
      performance of obligations as a result of force majeure shall not relieve
      the Optionee from:

	 	(a) 	
      its obligations under this Agreement to keep the Property
      in good standing; and

	 	 	 
	 	(b) 	
      any provision indicated to be a firm
  commitment.

	17. 	
      REGISTRATION OF AGREEMENT

	 	 
	17.1 	
      Notwithstanding Section 18, each of the Optionor and the
      Optionee will have the right at any time to register this Agreement or a
      Memorandum thereof against title to the Property.

	 	 
	18. 	
      CONFIDENTIAL NATURE OF INFORMATION

	 	 
	18.1 	
      The parties agree that all information obtained from the
      work carried out hereunder and under the operation of this Agreement will
      be the exclusive property of the parties and will not be used other than
      for the activities contemplated hereunder except as required by law or by
      the rules and regulations of any regulatory authority having jurisdiction,
      or with the written consent of both parties, such consent not to be
      unreasonably withheld. Notwithstanding the foregoing, it is understood and
      agreed that a party will not be liable to the other party for the
      fraudulent or negligent disclosure of information by any of its employees,
      servants or agents, provided that such party has taken reasonable steps to
      ensure the preservation of the confidential nature of such
    information.

	 	 
	19. 	
      FURTHER ASSURANCES

	 	 
	19.1 	
      The parties hereto agree that they and each of them will
      execute all documents and do all acts and things within their respective
      powers to carry out and implement the provisions or intent of this
      Agreement.

	 	 
	20. 	
      ARBITRATION

	 	 
	20.1 	
      Pursuant to Section 7.6, in the event that the Optionor
      and the Optionee do not agree on the terms of a formal agreement
      representing the Joint Venture Agreement, then the determination of the
      terms of the Joint Venture Agreement will be referred to a mutually
      agreeable professional (the "Arbitrator"). In the event that the
      Optionor and the Optionee cannot mutually agree on the appointment of an
      Arbitrator within fifteen (15) days of written notice of a disagreement or
      dispute hereunder, then a single Arbitrator will be appointed by the
      British Columbia International Commercial Arbitration Centre
      (“BCICAC”) of Vancouver, B.C., as the appointing authority. The
      BCICAC will appoint an Arbitrator with a skill set and background
      reasonably suitable to the nature of the issue or issues to be resolved in
      the Arbitration. The appointment of any additional Arbitrators will be
      with the mutual consent and agreement of the Optionor and the Optionee and
      in the absence of such agreement to appoint additional Arbitrators, a sole
      Arbitrator will preside over any such Arbitration.

Page 22 of 40 

	20.2 	
      The Arbitrator will determine the terms of the formal
      Joint Venture Agreement (the “Arbitration Matter”) and will ensure
      that the formal Joint Venture Agreement contains the terms set out in
      Schedule “C”. Following such determination, the Optionee and Optionor will
      execute the formal Joint Venture Agreement and if they fail to do so, then
      they will be deemed to have signed such Joint Venture Agreement.

	 	 
	20.3 	
      The Arbitration Matter will be resolved by arbitration
      pursuant to the Rules of Procedure established by the BCICAC, and it will
      be conducted in Vancouver, B.C., or as otherwise may be agreed to as a
      mutually convenient location for the Optionor and the Optionee.

	 	 
	20.4 	
      The cost of such arbitration will be born solely by the
      Optionee. The Arbitrator's decision will be binding and final on the
      Optionor and the Optionee, and from which there will be no
  appeal.

	 	 
	21. 	
      NOTICE

	 	 
	21.1 	
      Any notice, direction or other instrument required or
      permitted to be given under this Agreement will be in writing and will be
      given by the delivery or the same or by mailing the same by prepaid
      registered or certified mail in each case to the addresses set out on page
      1 of this Agreement.

	 	 
	21.2 	
      Any notice, direction or other instrument aforesaid will,
      if delivered, be deemed to have been given and received on the day it was
      delivered, and if mailed, be deemed to have been given and received on the
      tenth business day following the day of mailing, except in the event of
      disruption of the postal services in which event notice will be deemed to
      be received only when actually received.

	 	 
	21.3 	
      Any party may at any time give to the other notice in
      writing of any change of address of the party giving such notice and from
      and after the giving of such notice, the address or addresses therein
      specified will be deemed to be the address of such party for the purpose
      of giving notice hereunder.

	 	 
	22. 	
      HEADINGS

	 	 
	22.1 	
      The headings to the respective sections herein will not
      be deemed part of this Agreement but will be regarded as having been used
      for convenience only.

	 	 
	23. 	
      DEFAULT

	 	 
	23.1 	
      Subject to Section 16, if any party (a "Defaulting
      Party") is in default of any requirement herein set forth, the party
      affected by such default will give written notice to the Defaulting Party
      specifying the default and the Defaulting Party will not lose any rights
      under this Agreement, unless within 30 days after the giving of notice of
      default by the affected party the Defaulting Party has cured the default
      by the appropriate performance and if the Defaulting Party fails within
      such period to cure any such default, the affected party will be entitled
      to seek any remedy it may have on account of such default.

	 	 
	23.2 	
      Section 23.1 will not:

	 	(a) 	
      relieve the Optionee from any obligation to keep the
      Property in good standing;

	 	 	 
	 	(b) 	
      apply to any term of this Agreement which is stated to be
      a firm commitment; or

Page 23 of 40 

	 	(c) 	
      apply to Section 4.1 or Section
5.1.

	24. 	
      CURRENCY

	 	 
	24.1 	
      All references to monies hereunder will be in funds of
      the United States of America except where otherwise designated. All
      payments to be made to any party hereunder will be by certified cheque,
      bank draft or wired funds delivered to such party at its address for
      notice purposes as provided herein, or for the account of such party at
      such bank or banks in Canada as such party may designate from time to time
      by written notice or wired in accordance with wiring details of the person
      to be paid. Said bank or banks will be deemed the agent of the designating
      party for the purpose of receiving, collecting and receiving such
      payment.

	 	 
	25. 	
      ENUREMENT

	 	 
	25.1 	
      This Agreement will enure to the benefit of and be
      binding upon the parties hereto and their respective successors and
      permitted assigns.

	 	 
	26. 	
      GOVERNING LAW

	 	 
	26.1 	
      This Agreement will be construed in accordance with and
      governed by the laws in force in British Columbia.

	 	 
	26.2 	
      The courts of British Columbia will have exclusive
      jurisdiction to hear and determine all disputes arising
  hereunder.

	 	 
	26.3 	
      This Section 26 will not be
construed:

	 	(a) 	
      to affect the rights of a Party to enforce a judgment or
      award outside British Columbia, including the right to record or enforce a
      judgment or award in a jurisdiction in which the Property is
    situated;

	 	 	 
	 	(b) 	
      to supersede the laws of Newfoundland and Labrador
      applicable to the Property and the rights and obligations of a holder of
      mineral rights thereunder.

	27. 	
      ENTIRE AGREEMENT

	 	 
	27.1 	
      This Agreement constitutes the entire agreement between
      the parties and replaces and supersedes all prior agreements, including
      memoranda, correspondence, communications, negotiations and
      representations, whether verbal or written, express or implied, statutory
      or otherwise between the parties with respect to the subject matter
      herein.

	 	 
	28. 	
      SEVERABILITY

	 	 
	28.1 	
      Each of the provisions of this Agreement shall be
      separate and distinct and, if any provision of this Agreement shall be
      invalid, illegal or unenforceable in any respect under any applicable law,
      the validity, legality and enforceability of the remaining provisions
      hereof shall not be affected or impaired thereby.

	 	 
	29. 	
      TIME OF ESSENCE

	 	 
	29.1 	
      Subject to Section 23, time will be of the essence in
      this Agreement.

Page 24 of 40 

	30. 	
      EXECUTION OF AGREEMENT

	 	 
	30.1 	
      This Agreement may be signed in counterpart and delivered
      electronically.

Page 25 of 40 

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

JAL EXPLORATION INC. 

 

	Per:            
      /s/ James Alexander Lenec                      
       
	               
         James Alexander Lenec, President 

 

BALATON POWER INC. 

 

	Per:            
    /s/ Paul Preston                                           
    
	                  
    Paul Preston, Chief Financial Officer

Page 26 of 40 

On December 21, 2011, in the City of Vancouver, in the Province
of British Columbia I witnessed James Alexander Lenec, the President of JAL
Exploration. Inc., a person personally known to me, sign on behalf of JAL
Exploration Inc. the Amended and Restated Option Agreement dated March 4, 2011,
as amended and restated on December 21, 2011 between JAL Exploration Inc., as
Optionor, and Balaton Power Inc., as Optionee. 

Witness my hand and official seal. 

	My commission expires on 

    Death 	
    
	 

On December 21, 2011, in the City of  Vancouver                     
, in
the Province of British Columbia I witnessed Paul Preston            
, the
Chief Financial Officer of Balaton Power Inc., a person personally known to me, sign, on
behalf of Balaton Power Inc., the Amended and Restated Option Agreement dated
March 4, 2011, as Amended and Restated on December 21, 2011 between JAL
Exploration Inc., as Optionor, and Balaton Power Inc., as Optionee. 

Witness my hand and official seal. 

	My commission expires on 

    Death 	
    
	 

Page 27 of 40 

SCHEDULE “A-1” 

This is SCHEDULE "A-1" to an Option Agreement dated March
4, 2011, as amended 
and restated on December 21, 2011 between JAL
Exploration Inc., as Optionor, and 

  Balaton Power Inc., as Optionee 

LICENCES 

	Mineral 
Rights 
Licence 
Number: 	Location: 

	Owners 
Name: 

	Claim 
Status: 

	Current 
Number of 
Claims 
	Issuance 
Date: 

	NTS Maps: 

	016248M 	Reid Brook 	JAL Exploration Inc. 	Issued 	110 	2009/06/18 	14D/08 
	016250M 	Reid Brook 	JAL Exploration Inc. 	Issued 	18 	2009/06/18 	14D/08 
	017061M 	Reid Brook 	JAL Exploration Inc. 	Issued 	72 	2010/01/11 	14D/08 
	Total 	  	  	  	200 	  	  

Page 28 of 40 

SCHEDULE “A-2” 

This is SCHEDULE "A-2" to an Option Agreement dated March
4, 2011, as amended 
and restated on December 21, 2011 between JAL
Exploration Inc., as Optionor, and 

  Balaton Power Inc., as Optionee 

LICENCES 

	Mineral 
Rights 
Licence 
Number: 	Location: 

	Owners 
Name: 

	Claim 
Status: 

	Current 
Number of 
Claims: 
	Issuance 
Date: 

	NTS Maps: 

	018719M 	Reid Brook 	JAL Exploration Inc. 	Issued 	188 	2011/04/07 	14D/08 
	Total 	  	  	  	188 	  	  

Page 29 of 40 

SCHEDULE “B” 

This is SCHEDULE "B" to an Amended and Restated Option
Agreement dated March 
4, 2011, as amended and restated on December 21, 2011
between JAL Exploration Inc., 

  as Optionor, and Balaton Power Inc., as Optionee 

ROYALTY 

The Royalty is the percentage Royalty provided in the body of
the Agreement (as defined below) and is calculated and paid by Payor (as defined
below) to the Royalty Holder (as defined below) in accordance with the following
provisions: 

1.         Definitions
  

Unless otherwise set forth below, all capitalized terms used in
this Schedule shall have the meaning ascribed to them in the Agreement. 

	 	(a) 	
      “Agreement” means the agreement to which this
      Schedule is attached.

	 	 	 
	 	(b) 	
      “Allowable Deductions” has that meaning set out in
      Section 3.

	 	 	 
	 	(c) 	
      “Calendar Quarter” means each three-month period
      ending March 31st, June 30th, September 30th and December 31st of each
      calendar year.

	 	 	 
	 	(d) 	
      “Mineral Content” includes all diamonds and other
      valuable gem stones and all marketable ores, metals and minerals contained
      in Subject Ore as separately estimated by the Payor using head grade or
      assays taken prior to entering mill or heap leach facilities, mill or heap
      leach operation recovery levels, and adjustments at the refinery or other
      processing facilities, as key components in the calculation of Mineral
      Content.

	 	 	 
	 	(e) 	
      “Mineral Price Quotation” for a Product means the
      final sale price as quoted for the Product on the London Metals Exchange,
      as published in Metals Week or a similar publication. If
      publication of the final quotation on the London Metals Exchange shall be
      discontinued, the parties shall select a comparable commodity quotation
      for purposes of calculating the Net Returns. If such selection has not
      been completed prior to the end of the calendar month following the month
      in which the quotation is discontinued, the average quotation for the
      calendar month in which the quotation is discontinued shall be used on an
      interim basis pending such selection.

	 	 	 
	 	(f) 	
      “Net Returns” for a Calendar Quarter in respect of
      all of the Products means the Returns less the Allowable
  Deductions.

	 	 	 
	 	(g) 	
      “Payor” means the Party who produces and sells
      Products from the Property from which the Royalty Holder is entitled to a
      Royalty as provided in the Agreement.

	 	 	 
	 	(h) 	
      “Products” means all Subject Ores produced from
      the Property and prepared for sale under the Agreement.

	 	 	 
	 	(i) 	
      “Property” shall mean the Property, as that term
      is defined in the Agreement and all real property located within the
      Property, as that term is defined in the Agreement and shall
    include.

Page 30 of 40 

	 	(j) 	
      “Returns” for a Calendar Quarter in respect of all
      of the Products means, for each of the Products, the average Mineral Price
      Quotation for the Product for a Calendar Quarter multiplied by the total
      number of appropriate units of measurement of the Product beneficiated by
      the Payor or credited by the smelter, refiner or other bona fide purchaser
      to the Payor during that Calendar Quarter.

	 	 	 
	 	(k) 	
      “Royalty Holder” means the party or its successors
      or assigns that becomes entitled to a Royalty, as provided in the
      Agreement, it being agreed that as of the date of the Agreement and as of
      its first amendment and restatement, the Royalty Holder is the Underlying
      Royaltyholder, as that term is defined in the Agreement.

	 	 	 
	 	(l) 	
      “Subject Ore” means all ore mined by the Payor
      from the Property and, for further certainty, includes diamonds and other
      valuable gem stones.

2.         Reservation
  Of Royalty 

The Payor shall pay and the Royalty Holder shall be entitled to
receive as the royalty, 2.0% of Net Returns. 

3.         Deductions
  From Returns 

In calculating the royalty, the Payor shall be entitled to
deduct from Returns the following costs, to the extent incurred and borne by the
Payor (the “Allowable Deductions”): 

	 	(a) 	
      all smelting, minting, refining and processing costs, and
      treatment charges and penalties at the smelter, refinery or other
      processing facility including, but without being limited to, metal losses
      and penalties for impurities;

	 	 	 
	 	(b) 	
      all costs of transporting the Products from the Property
      to a smelter, mint, refinery or processing facility, including, without
      restricting the generality of the foregoing, any and all costs of
      insurance in respect thereto;

	 	 	 
	 	(c) 	
      all sampling, assaying and representation charges in
      connection with sampling and assaying carried out after the Products have
      left the Property; and

	 	 	 
	 	(d) 	
      taxes levied by any government on the value of Products
      produced or sold, but excluding income taxes if such charges are actual
      costs payable out of the proceeds received from a bona fide purchaser or
      are shown as deductions therefrom.

4.       
 General Provisions 

	 	(a) 	
      Arm’s Length Provision

	 	 	 
	 		
      If smelting, refining or other processing is carried out
      in facilities owned or controlled by the Payor, charges, costs and
      penalties for such operations, including transportation, shall mean the
      amount that the Payor would have incurred if such operations were carried
      out at facilities not owned or controlled by the Payor then offering
      similar custom services for comparable products on prevailing
  terms.

Page 31 of 40 

	 	(b) 	
      Stockpiling and Commingling

	 	 	 
	 		
      The Payor may stockpile and commingle Subject Ore,
      concentrates or other products mined and removed from the Property with
      ores, concentrates or other products not mined from the Property; provided
      however, that the Payor shall calculate from representative samples the
      average grade thereof and other measures as are appropriate, and shall
      weigh (or calculate by volume) the material before commingling. In
      obtaining representative samples, calculating the average grade of the ore
      and average recovery percentages, the Payor may use any procedures
      accepted in the mining and metallurgical industry which it believes
      suitable for the type of mining and processing activity being conducted
      and, in the absence of fraud, its choice of such procedures shall be final
      and binding on the Royalty Holder.

	 	 	 
	 	(c) 	
      Tailings and Waste

	 	 	 
	 		
      All tailings or waste material shall be the property of
      the Payor and the Payor shall have no obligation to process or extract
      substances therefrom. If the Payor elects to extract Mineral Content of
      value therefrom and utilizes or sells the same, the Royalty Holder shall
      receive the royalty provided under section 2 hereof in respect of such
      Products. If the Payor commingles the tailings or waste material produced
      from the Property with tailings and waste material not produced from the
      Property, the Payor shall calculate from representative samples the
      average grade thereof and other measures as are appropriate, and shall
      weigh (or calculate by volume) the material before commingling and the
      royalty payments, if any, shall be based upon the recoverable pro rata
      portion of the minerals in the tailings or waste material derived from the
      Property. Payment of the Royalty, provisional payments, adjustments and
      annual final reports will be made in accordance with Section 4(d), (e),
      (f) and (g). The records and provision for audit to resolve objections
      will be in accordance with Section 4(k).

	 	 	 
	 	(d) 	
      Payment of the Royalty

	 	 	 
	 		
      All royalty or provisional royalty payments will be
      payable on or before the 30th day following each Calendar Quarter. Each
      such quarterly payment to the Royalty Holder shall be accompanied by a
      statement in reasonable detail showing the calculation of the payment.
      Each such quarterly payment shall be subject to adjustment as provided
      below in the next quarterly payment or when the final report for the year
      is issued as specified below.

	 	 	 
	 	(e) 	
      Provisional Payments

	 	 	 
	 		
      If any royalty becomes due and payable to the Royalty
      Holder prior to the Payor’s final estimates of the total amount payable,
      then the Payor shall pay the Royalty Holder a provisional royalty payment
      using the Payor’s then current estimates of the amount payable for
      Products produced during the Calendar Quarter.

	 	 	 
	 	(f) 	
      Adjustments

	 	 	 
	 		
      The following adjustments shall be taken into account in
      determining the royalty or provisional royalty payments and shall be
      specified in a statement which will accompany each
  payment:

Page 32 of 40 

	 	(i) 	
      Any adjustments to charges, costs, deductions or expenses
      imposed upon or given to the Payor but not taken into account in
      determining previous royalty payments;

	 	 	 
	 	(ii) 	
      Any adjustments in the number of appropriate units of
      measurement of Products, beneficiated by the Payor, or previously credited
      to the Payor by a smelter, refiner or bona fide purchaser of Products
      shipped or sold by the Payor;

	 	 	 
	 	(iii) 	
      Any adjustments in Mineral Content and average percentage
      recovery; and

	 	 	 
	 	(iv) 	
      Any payments that have not otherwise been credited
      against previous royalty payments.

	 	(g) 	
      Annual Final Report

	 	 	 	 
	 		
      Within 90 days after the end of each calendar year, the
      Payor shall deliver or cause to be delivered to the Royalty Holder a final
      report for the year certified as being accurate by the Chief Financial
      Officer of the Payor and such other responsible officer of the Payor
      showing in reasonable detail the calculation of the royalty due the
      Royalty Holder for the prior year and all adjustments to the quarterly or
      other periodic reports and payments for the year. With such final report,
      the Payor shall, if applicable, make such additional royalty payment as is
      required by the report. If such report indicates that the Royalty Holder
      has received more than it should have been paid in respect of the royalty
      due to the Royalty Holder, then the excess shall be deducted from the next
      payment obligation owed pursuant to the provisions of this Schedule or, in
      the event of a temporary or permanent cessation of production, the Royalty
      Holder shall repay the excess within 15 days of the annual
  report.

	 	 	 	 
	 	(h) 	
      Assignment by Payor

	 	 	 	 
	 		
      Any sale, transfer assignment or disposition of the
      Property or any portion thereof, as the case may be, by the Payor may be
      effected only in accordance with the terms of the Agreement.

	 	 	 	 
	 	(i) 	
      Abandonment by Payor

	 	 	 	 
	 		
      Any abandonment of the Property or any portion thereof,
      as the case may be, by the Payor, may be effected only in accordance with
      the terms of the Agreement.

	 	 	 	 
	 	(j) 	
      Assignment by Royalty Holder

	 	 	 	 
	 		
      Notwithstanding anything to the contrary herein
      contained, if any part of the right to receive the Royalty is assigned by
      the Royalty Holder, it shall be a condition of such assignment that the
      assignee agrees with the Payor and all other parties entitled to receive
      any part of the Royalty as follows:

	 	 	 	 
	 		(i) 	
      the amount of any royalty payable hereunder shall be
      settled only with the Royalty Holder or an authorized nominee (herein
      collectively called the “Nominee”) as designated by notice to the Payor
      (such notice to be executed by all parties entitled to receive any part of
      the Royalty), and such settlement shall be final and binding upon all
      interested parties and the Payor shall not be

Page 33 of 40 

	 		
      required to make any accounting to any person save such
      Nominee;

	 	 	 
	 	(ii) 	
      payment of the royalty shall be made only to or to the
      order of the Nominee “In Trust” and such payment shall constitute a full
      and complete discharge to the Payor and it shall have no obligation to see
      to the distribution of any such payment;

	 	 	 
	 	(iii) 	
      the Payor may settle disputes arising hereunder with the
      Nominee and such settlement shall be final and binding upon all interested
      parties;

	 	 	 
	 	(iv) 	
      the Payor may rely upon any direction, advice or
      authorization signed by the Nominee and may act thereon as if the same was
      signed by all interested parties; and

	 	 	 
	 	(v) 	
      the Payor shall not be required to deal with any person
      except the Nominee. Each interested party shall exercise all of their
      respective rights only through the Nominee and shall require each of their
      respective assignees to agree in writing to be bound by the provisions
      hereof.

	 	(k) 	
      Records and Provision for Audit to Resolve
      Objections

	 	 	 
	 		
      All books and records used by the Payor to calculate the
      royalty due hereunder shall be kept in accordance with generally accepted
      accounting principles varied only by the specific provisions hereof. The
      Payor shall maintain up-to-date and complete records of the production of
      all Mineral Products. If treatment or smelting of Mineral Products is
      performed off the Property, accounts records, statements and returns
      relating to such treatment and smelting arrangements shall be maintained
      by the Payor. The Royalty Holder shall have the right at all reasonable
      times during normal business hours to inspect such accounts, records,
      statements and returns and make copies thereof at its own expense for the
      sole purpose of verifying the amount of the royalty.

	 	 	 
	 		
      All payments of the royalty made pursuant to the final
      report that is to be issued within 90 days of the end of each calendar
      year shall be considered final and in full satisfaction of all obligations
      of the Payor with respect thereto, unless the Royalty Holder gives the
      Payor written notice describing and setting forth a specific objection to
      the calculation thereof within 90 days after receipt by the Royalty Holder
      of the annual final report herein provided in Section 4(v). If the Royalty
      Holder objects to a particular quarterly statement delivered hereunder,
      the Royalty Holder shall, for a period of 90 days after the Payor’s
      receipt of notice of such objection, have the right, upon reasonable
      notice and at a reasonable time, to have the royalty payment in question
      audited by a firm of chartered accountants acceptable to the Royalty
      Holder and to the Payor (and if they cannot agree on a firm, by a firm of
      chartered accountants selected by the auditors of the Royalty Holder). If
      such audit determines that there has been a deficiency or an excess in the
      payment made to the Royalty Holder such deficiency or excess shall be
      resolved by adjusting the next quarterly payment due hereunder. The
      Royalty Holder shall pay all costs of such audit unless a deficiency of 5%
      or more of the amount due for the year under audit or $30,000, whichever
      is greater, is determined to exist. The Payor shall pay the costs of such
      audit if a deficiency of 5% or more of the amount due for the year under
      audit or $30,000, whichever is greater, is determined to exist. Failure on
      the part of the Royalty Holder to make claim on the Payor for adjustment
      in such 90-day period shall establish the correctness of the final report
      and preclude the filing of exceptions thereto or making of claims for adjustment thereon.

Page 34 of 40 

	 	(l) 	
      Royalty Running With the Property

	 	 	 
	 		
      The royalty created herein shall be a real property
      interest in all portions of the Property to which the royalty applies
      sufficient to secure the royalty payments herein provided for; provided,
      however, that the Royalty Holder will execute and deliver all instruments
      and assist in their recording necessary or desirable for the Payor to
      obtain construction and/or production financing for the Mine and Plant
      processing Products and to postpone and subordinate such royalty on
      Products to the liens, charges and repayment schedules required by all
      lenders for such construction and/or production financing of the Payor.
      Should repayments to any such lenders cause any royalty payment hereunder
      not to be paid or to be delayed before payment, then all such unpaid or
      delayed payment shall be paid out of the next available revenues from
      Products together with interest at the Prime Rate plus
  3%.

Page 35 of 40 

Schedule “C” 
This is SCHEDULE "C" to an
Amended and Restated Option Agreement dated March 
4, 2011, as amended and
restated on December 21, 2011 between JAL Exploration Inc., 

  as Optionor, and Balaton Power Inc., as Optionee 

PART I - EXERCISE OF FIRST OPTION ONLY 

MATERIAL TERMS OF THE JOINT VENTURE AGREEMENT

The Joint Venture Agreement will contain the following minimum
terms together with such other terms and conditions as the respective counsel
for the parties may reasonably request in order that the affairs of the Optionor
and the Optionee (the "Participants") in respect of the Property may be
reasonably carried out as a joint venture operation (the “Joint
Venture”): 

	1. 	
      On the date that the Optionee and the Optionor have been
      deemed to have joined in a Joint Venture pursuant to Section 7.4 of the
      Option Agreement to which this Schedule “C”, the Optionee will hold a 55%
      participating interest (“Participating Interest”) and the Optionor
      will hold a 45% Participating Interest in the Joint Venture.

	 	 
	2. 	
      The initial Participating Interest of the Optionee and
      the Optionor (each called a Participant) and the deemed Expenditures of
      each Participant (“Participant’s Initial Contribution”) at the time
      of exercise of the First Option will be:

  	Participant 	Initial Participating Interest 	Participant’s Initial Contribution 
	The Optionee 	55% 	$5,500,000(deemed) 
	The Optionor 	45% 	$4,500,000 (deemed) 
	Totals 	100% 	$10,000,000 (deemed)

	3. 	
      The objectives of the Joint Venture will be to further
      explore and, if feasible, to place the Property or some part thereof into
      commercial production.

	 	 
	4. 	
      The affairs of the Joint Venture will be governed by the
      direction and control of a management committee (the "Management
      Committee") to be composed of one representative and one alternate
      from each of the Participants, with decisions of the Management Committee
      to be determined by a majority of the percentage interests in the Property
      as voted by the representatives, except that if there is a deadlock, the
      deciding vote will be cast by the Operator.

	 	 
	5. 	
      Any decision to place the Property into Commercial
      Production is to be based on a bankable feasibility study approved by the
      Management Committee.

	 	 
	6. 	
      The Optionee will initially act as the Operator of the
      Joint Venture, subject to the budget and programmes which when duly
      approved by the parties under the Joint Venture shall be an “Approved
      Programme and Budget” as determined by the Management Committee and
      will have such other powers and duties as required to carry out that
      function.

	 	 
	7. 	
      If the Operator’s Participating Interest falls below 50%,
      then the other Participant may request a change of
  Operator.

Page 36 of 40 

	8. 	
      The Operator will be paid a fee as follows:

	 	 	 
		(a) 	
      following formation of the Joint Venture between the
      Participants but prior to the Commencement of Commercial Production, 5% of
      all exploration expenditures except in the case of exploration
      expenditures under a single contract in excess of $300,000 in which case
      the fee will be 3% of those expenditures; and

	 	 	 
		(b) 	
      after the Commencement of Commercial Production, 4% of
      all development and production expenditures except in the case of
      development and production expenditures under a single contract in excess
      of $100,000 in which case the fee will be 3% of such development and
      production expenditures.

	 	 	 
	9. 	
      The joint operations under the Joint Venture will
      commence automatically on the date of the Exercise, whether or not a
      formal joint venture agreement has been entered into. The Management
      Committee will hold its first joint venture meeting within 60 days of the
      exercise of the First Option, and the parties agree to have a formal joint
      venture agreement finalized within 90 days of the Exercise.

	 	 	 
	10. 	
      Each Participant is entitled to elect to participate, in
      proportion to its Participating Interest, the exploration, development,
      and mining operation of the Property subject to the following:

	 	 	 
		(a) 	
      If Participant elects not to contribute its share of
      costs and the other Participant elects to contribute to the shortfall
      which has been created thereby, the interests of the Participants shall be
      adjusted so that each Participant holds a Participating Interest which is
      proportionate to its contribution to the total exploration, development
      and mining operation costs pursuant to Section 15 below; and

	 	 	 
		(b) 	
      If a Participant elects not to contribute its share of
      costs, or elects to contribute less than its agreed upon share of costs,
      and the other Participant is unwilling or unable to contribute to the
      shortfall which has been created thereby, that Participant may elect to
      continue with the programme based on its proportionate share of costs, and
      the Participating Interests of the Participants shall be adjusted so that
      each Participant holds a Participating Interest which is proportionate to
      its contribution to the total exploration costs pursuant to Section 15
      below.

	 	 	 
	11. 	
      If at any time, a Participant permits its Participating
      Interest to be reduced to 10% or less, then that Participant shall be
      deemed to have withdrawn from the Joint Venture and its interest in the
      Joint Venture will be converted to a 2% Net Returns Royalty.

	 	 	 
	12. 	
      A Participant is entitled to receive, in kind, its share
      of any minerals produced from a mine on the property and to separately
      dispose of the same in proportion to its Participating Interest.

	 	 	 
	13. 	
      Each Participant will have a right of first refusal for
      sixty days in respect of the other Participant wishing to dispose all or a
      part of its Participating Interest in the Joint Venture.

	 	 	 
	14. 	
      If a Participant defaults in paying its share of
      expenditures related to an Approved Programme and Budget in which it
      elected to participate, the non-defaulting Participant shall apprise the
      defaulting Participant of the default whereupon the non defaulting
      Participant shall have 30 days to elect to either:

	 	 	 
		(a) 	
      have the defaulting Participant pay three times the
      moneys owed; or

	 	 	 
		(b) 	
      have the defaulting Participant convert its interest in
      the Joint Venture into a 2% Net Returns Royalty.

Page 37 of 40 

	15. 	
      Under Section 10 above, the Defaulting Participant's
      Participating Interest will be adjusted according to the following
      formula:

	 	 	 
		
      Divide the sum of:

	 	 	 
		(a) 	
      the agreed value of the Participant's Initial
      Contribution; and

	 	 	 
		(b) 	
      the total of all other of the Participant's Contributions
      under the Joint Venture,

by the sum of (a) and (b) for all
Participants; and multiply the result by 100 in order to obtain the percentage
interest of the Participant’s Participating Interest. 

Page 38 of 40 

PART II - EXERCISE OF FIRST OPTION AND SECOND OPTION 

MATERIAL TERMS OF THE JOINT VENTURE AGREEMENT 

The Joint Venture Agreement will contain the following minimum
terms together with such other terms and conditions as the respective counsel
for the parties may reasonably request in order that the affairs of the Optionor
and the Optionee (the "Participants") in respect of the Property may be
reasonably carried out as a joint venture operation (the “Joint
Venture”): 

	1. 	
      On the date that the Optionee has exercised the Second
      Option in full (the “Exercise”), the Optionee will hold a 80%
      participating interest (“Participating Interest”) and the Optionor
      will hold a 20% Participating Interest in the Joint Venture.

	 	 	 
	2. 	
      The objectives of the Joint Venture will be to place the
      Property or some part thereof into commercial production.

	 	 	 
	3. 	
      The affairs of the Joint Venture will be governed by the
      direction and control of a management committee (the "Management
      Committee") to be composed of one representative and one alternate
      from each of the Participants, with decisions of the Management Committee
      to be determined by a majority of the percentage interests in the Property
      as voted by the representatives, except that if there is a deadlock, the
      deciding vote will be cast by the Operator.

	 	 	 
	4. 	
      Any decision to place the Property into Commercial
      Production is to be based on a bankable feasibility study approved by the
      Management Committee.

	 	 	 
	5. 	
      The Optionee will initially act as the Operator of the
      Joint Venture, subject to the budget and programmes which when duly
      approved by the parties under the Joint Venture shall be an “Approved
      Programme and Budget” as determined by the Management Committee and
      will have such other powers and duties as required to carry out that
      function.

	 	 	 
	6. 	
      All operations und the Joint Venture will be financed by
      funds provided by the Optionee (the “Semi-Carried
    Financing”).

	 	 	 
	7. 	
      The interests of the Participants will not be subject to
      a dilution clause.

	 	 	 
	8. 	
      The Operator will be paid a fee as follows:

	 	 	 
		(a) 	
      following formation of a Joint Venture between the
      Participants but prior to the Commencement of Commercial Production, 5% of
      all exploration expenditures except in the case of exploration
      expenditures under a single contract in excess of $300,000 in which case
      the fee will be 3% of those expenditures; and

	 	 	 
		(b) 	
      after the commencement of Commercial Production, 3% of
      all development and production expenditures except in the case of
      development and production expenditures under a single contract in excess
      of $100,000 in which case the fee will be 2% of such development and
      production expenditures.

	 	 	 
	9. 	
      The joint operations under the Joint Venture will
      commence automatically on the date of the Exercise, whether or not a
      formal joint venture agreement has been entered into. The Management
      Committee will hold its first joint venture meeting within 60 days of the
      exercise of the First Option, and the parties agree to have a formal
      joint venture agreement finalized within 90 days of the
Exercise.

Page 39 of 40 

	10. 	
      A Participant is entitled to receive, in kind, its share
      of any minerals produced from a mine on the property and to separately
      dispose of the same in proportion to its Participating Interest, subject
      to paying its share of the cost of production.

	 	 	 
	11. 	
      Each Participant will have a right of first refusal for
      sixty days in respect of the other Participant wishing to dispose all or a
      part of its Participating Interest in the Joint Venture.

	 	 	 
	12. 	
      The proceeds available for payout from the Joint Venture
      will be paid as follows:

	 	 	 
		(a) 	
      80% of the proceeds will be paid to discharge the
      Semi-Carried Financing and the remaining 20% will be paid 80% to the
      Optionee and 20% to the Optionor; and thereafter

	 	 	 
		(b) 	
      80% of the proceeds will be paid to the Optionee and 20%
      will be paid to the Optionor.

Page 40 of 40ex10_1.htm

Exhibit 10.1

FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

This FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 1, 2012 (this “Amendment”), is by and among USEC INC., a Delaware corporation (“Holdings”), UNITED STATES ENRICHMENT CORPORATION, a Delaware corporation (together with Holdings, the “Borrowers”), those Lenders under the Credit Agreement referred to below which are signatories to this Amendment, and JPMORGAN CHASE BANK, N.A., as Administrative and Collateral Agent (the
“Administrative Agent”), and amends that certain Fourth Amended and Restated Credit Agreement dated as of March 13, 2012 (the “Existing Credit Agreement” and, as amended by this Amendment, the “Credit Agreement”), among the Borrowers, the Lenders party thereto, the Administrative Agent and the other financial institutions named therein as “agents”, “bookrunners” and “arrangers”.

 

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders amend certain provisions of the Existing Credit Agreement as more fully described herein; and

 

WHEREAS, the Administrative Agent and the Lenders party to this Amendment are willing to amend the Existing Credit Agreement as provided herein, all subject to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and the agreements contained herein, the parties hereto hereby agree as follows:

 

1. Capitalized Terms.  Capitalized terms used herein which are defined in the Existing Credit Agreement have the same meanings herein as therein, except to the extent that such meanings are amended hereby.

 

2. Amendment to Section 6.11 of Existing Credit Agreement.  Subject to the satisfaction of the terms and conditions set forth in Section 4 hereof and in reliance on the representations set forth in Section 3 hereof, Section 6.11 of the Existing Credit Agreement is hereby amended by deleting clauses (c) and (d) of Section  6.11 in their entirety and replacing such clauses with the following new clauses (c) and
(d):

 

“(c)           (i) the Borrowers shall be permitted to make ACP Expenditures during the period commencing on June 1, 2012 and continuing to and including the earlier of June 15, 2012 and the ACP Grant Start Date in an aggregate amount not to exceed $6,000,000, provided that on each of June 8, 2012 and June 15, 2012 (1) the Borrowers shall deliver to the Administrative Agent and the Lenders a report setting forth (x) the estimated amount of ACP Expenditures made during the period from June 1, 2012 through the Business Day immediately prior to the date of such report and (y) the status of
the Borrowers’ negotiations with the DOE regarding the definitive documentation relating to the ACP Grant, and (2) promptly following the delivery of each such report at the request of the Administrative Agent or any Lender, the Borrowers shall make a Financial Officer and other appropriate officers of the Borrowers available to participate in a teleconference with the Administrative Agent and the Lenders to discuss the Borrowers’ ACP Expenditures and the status of the Borrowers’ negotiations with the DOE regarding the definitive documentation relating to the ACP Grant, and (ii) if the Borrowers shall not have entered into definitive binding documentation with the DOE with respect to the ACP Grant on or before June 15, 2012, then (A) the Borrowers shall not be permitted to make any further ACP Expenditures during the month of June 2012 and (B) the Borrowers shall not
be permitted to make ACP Expenditures during any month commencing on or after July 1, 2012 in excess of $1,000,000 per month;”

 

“(d)           if the Borrowers shall have entered into definitive binding documentation with the DOE with respect to an ACP Grant, then, from and after the ACP Grant Start Date, the Borrowers shall be permitted to make ACP Expenditures to the extent that, as of any date, the aggregate amount of ACP Expenditures made by the Borrowers from June 1, 2012 through such date does not exceed 110% of the aggregate amount of ACP Expenditures anticipated to be made by the Borrowers through the end of the month in which such date occurs pursuant to the budget included in the definitive documentation between the Borrowers and the DOE relating to the ACP Grant;
provided that (x) if, at any time, the difference between (1) 80% of the aggregate amount of ACP Expenditures made by the Borrowers after June 1, 2012 (plus, if the Borrowers shall not have received cash proceeds (including the release of cash pledged to secure (x) surety bonds, (y) letters of credit or (z) other like instruments) equal to or greater than $43,000,000 pursuant to the DOE SWU Purchase Agreement, the aggregate amount of DOE SWU Purchase Expenditures less the amount of any such cash proceeds (including the release of cash pledged to secure (x) surety bonds, (y) letters of credit or (z) other like instruments) actually received) and (2) the aggregate amount of ACP Grant Proceeds actually received by the Borrowers after the ACP Grant Start Date, exceeds $50,000,000, or (y) if the Borrowers fail to receive any
ACP Grant Proceeds on or before the date that is three months after the ACP Grant Start Date, the Borrowers shall not make any further ACP Expenditures unless and until such time as the Borrowers have received ACP Grant Proceeds in an amount sufficient to cause the difference between (A) 80% of the aggregate amount of ACP Expenditures made by the Borrowers after June 1, 2012 (plus, if the Borrowers shall not have received cash proceeds (including the release of cash pledged to secure (x) surety bonds, (y) letters of credit or (z) other like instruments) equal to or greater than $43,000,000 pursuant to the DOE SWU Purchase Agreement, the aggregate amount of DOE SWU Purchase Expenditures less the amount of any such cash proceeds (including the release of cash pledged to secure (x) surety bonds, (y) letters of credit or (z) other like instruments) actually received) and (B) the aggregate
amount of ACP Grant Proceeds actually received by the Borrowers after the ACP Grant Start Date, to be less than $50,000,000; provided, further that in no event shall (I) the aggregate amount of ACP Expenditures made by the Borrowers from and after June 1, 2012 exceed $375,000,000 and (II) the aggregate amount of ACP Expenditures made by the Borrowers from and after June 1, 2012 for which the Borrowers are not entitled to receive reimbursement in the form of ACP Grant Proceeds exceed $75,000,000;”

 

3. No Default; Representations and Warranties, etc.  Each of the Borrowers represents and warrants to the Lenders and the Administrative Agent that as of the date hereof (a) the representations and warranties of the Credit Parties contained in Article III of the Existing Credit Agreement are true and correct in all material respects as of the date hereof as if made on such date (except to extent that such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material
respects as of such date); (b) the Borrowers are in compliance in all material respects with all of the terms and provisions set forth in the Credit Agreement and the other Financing Documents to be observed or performed by them thereunder; (c) no Default or Event of Default has occurred and is continuing; and (d) the execution, delivery and performance by the Borrowers of this Amendment (i) have been duly authorized by all necessary corporate and, if required, shareholder action on the part of the Borrowers, (ii) will not violate any applicable law or regulation applicable to the Borrowers or the organizational documents of any Borrower, (iii) will not violate or result in a default under any indenture, agreement or other instrument binding on any Borrower or any of its assets and (iv) do not require any consent, waiver or approval of or by any Person (other than the Administrative
Agent and the Lenders) which has not been obtained.

 

4. Conditions Precedent.  The effectiveness of this Amendment shall be conditioned upon the satisfaction of the following conditions precedent:

 

(a) Counterparts of Amendment:  The Administrative Agent shall have received counterparts of this Amendment signed on behalf of the Borrowers and the Required Revolving Lenders voting as a separate Class and the Required Term Lenders voting as a separate Class and a counterpart of the Ratification of Guarantee attached hereto signed on behalf of NAC International Inc., as Guarantor (which counterparts may be delivered by telecopy or electronic transmission of a pdf of a signed signature page to this Amendment or such Ratification of
Guarantee, as applicable).

 

(b) First Amendment Fee Letter:  The Borrowers shall have executed and delivered to the Administrative Agent a fee letter, in form and substance satisfactory to the Administrative Agent, which fee letter shall provide for the payment by the Borrowers to the Administrative Agent on July 15, 2012 of the first amendment fee described in such fee letter, which first amendment fee shall be shared ratably by those Lenders that have timely approved and executed this Amendment.

 

(c)           Other Documents:  The Administrative Agent shall have received such other documents from the Credit Parties as the Administrative Agent shall reasonably request in connection herewith prior to the execution of this Amendment by the Borrowers, all of which shall be satisfactory in form and substance to the Administrative Agent.

 

5. Miscellaneous.

 

(a) The Borrowers, the Lenders and the Administrative Agent hereby ratify and confirm the terms and provisions of the Credit Agreement and the other Financing Documents and agree that, except to the extent specifically amended hereby, the Credit Agreement, the other Financing Documents and all related documents shall remain in full force and effect.  Nothing contained herein shall constitute a waiver of any provision of the Financing Documents.

 

(b) The Borrowers agree to pay all reasonable and documented expenses, including legal fees and disbursements, incurred by the Administrative Agent in connection with this Amendment and the transactions contemplated thereby.

 

(c) The Borrowers agree to provide the Administrative Agent with such updates, reports and certifications as the Administrative Agent may from time to time reasonably request regarding (i) the Borrowers’ compliance with and satisfaction of all milestones and conditions required to be complied with or satisfied by the Borrowers under the definitive binding documentation relating to the ACP Grant (the “ACP Grant Milestones and Conditions”) and (ii) the status of all requisite governmental approvals necessary for the funding by the
DOE or any other Governmental Authority of ACP Grant Proceeds.  The Borrowers agree to immediately notify the Administrative Agent if (A) the Borrowers fail to comply with or satisfy any ACP Grant Milestones and Conditions, (B) the DOE notifies the Borrowers that they have failed to comply with or satisfy any ACP Grant Milestones and Conditions, (C) the DOE notifies the Borrowers that they are in default of any of their obligations under the definitive binding documentation relating to the ACP Grant, or (D) the Borrowers become aware that the DOE or any other Governmental Authority has made a determination to terminate or delay the funding of any ACP Grant Proceeds.

 

(d) This Amendment may be executed in any number of counterparts (including by way of facsimile transmission), each of which, when executed and delivered, shall be an original, but all counterparts shall together constitute one instrument.

 

(e) This Amendment shall be governed by the laws of the State of New York and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[The remainder of this page is intentionally left blank; signature pages follow.]

 

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

 

BORROWERS:

 

USEC INC.

 

By: /s/ Stephen S. Greene                                                                                

 

Name: Stephen S. Greene

 

Title:   Vice President and Treasurer

 

UNITED STATES ENRICHMENT CORPORATION

 

By: /s/ Stephen S. Greene                                                                                

 

Name: Stephen S. Greene

 

Title:  Vice President and Treasurer

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

ADMINISTRATIVE AGENT:

 

JPMORGAN CHASE BANK, N.A., as Administrative and Collateral Agent

 

By: /s/ Dan Bueno                                                                                

 

Name: Dan Bueno

 

Title:  Vice President

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

JPMORGAN CHASE BANK, N.A., as Revolving Lender

 

By: /s/ Dan Bueno                                                                                           

 

Name: Dan Bueno

 

Title:  Vice President

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

WELLS FARGO CAPITAL FINANCE, LLC, as Revolving Lender

 

By: /s/ Grant Murdock                                                                                           

 

Name: Grant Murdock

 

Title:  Authorized Signatory

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

ALLY COMMERCIAL FINANCE LLC, as Revolving Lender

 

By: /s/ W. Wakefield Smith                                                                                

 

Name: W. Wakefield Smith

 

Title: Senior Director

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

FIRST NIAGARA FINANCE, INC. a wholly-owned subsidiary of First Niagara Bank, N.A., as Revolving Lender

 

By: /s/ Michael Schwartz                                                                                

 

Name:  Michael Schwartz

 

Title:  Vice President

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

JPMORGAN CHASE BANK, N.A., as Term Lender

 

By: /s/ Dan Bueno                                                                                

 

Name:  Dan Bueno

 

Title:  Vice President

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

 LENDERS:

 

HIGHBRIDGE SENIOR LOAN HOLDINGS, L.P., as Term Lender

 

By:  Highbridge Principal Strategies, LLC, its Investment Manager

 

By: /s/ Kevin Griffin                                                                                

 

Name:  Kevin Griffin

 

Title:  Managing Director

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

HIGHBRIDGE PRINCIPAL STRATEGIES-SENIOR LOAN FUND II, L.P., as Term Lender

 

By:  Highbridge Principal Strategies, LLC, its Investment Manager

 

By: /s/ Kevin Griffin                                                                                

 

Name:  Kevin Griffin

 

Title:  Managing Director

 

 

 

 

 

  

  

  

 

 

 

 

 

 

 

 

 

LENDERS:

 

HIGHBRIDGE SENIOR LOAN SECTOR A INVESTMENT FUND, L.P., as Term Lender

 

By:  Highbridge Principal Strategies, LLC, its Investment Manager

 

By: /s/ Kevin Griffin                                                                                

 

Name:  Kevin Griffin

 

Title:  Managing Director

 

 

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

CONTINENTAL CASUALTY COMPANY, as Term Lender

 

By: /s/ Edward J. Lavin                                                                                

 

Name:  Edward J. Lavin

 

Title:  Vice President

 

 

 

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

LENDERS:

 

UNITED INSURANCE COMPANY OF AMERICA, as Term Lender

 

By: /s/ John Boschelli                                                                                

 

Name:  John Boschelli

 

Title:  Assistant Treasurer

 

 

[Signature Pages to First Amendment to Fourth Amended and Restated Credit Agreement]

  

  

  

RATIFICATION OF GUARANTEE

 

The undersigned Guarantor hereby acknowledges and consents to the foregoing First Amendment to Fourth Amended and Restated Credit Agreement (the “First Amendment”) among USEC Inc. (“Holdings”), United States Enrichment Corporation (together with Holdings, the “Borrowers”), those Lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the
“Administrative Agent”), confirms that the obligations of the Borrowers under the Credit Agreement (as such term is defined in the First Amendment) constitute “Guaranteed Obligations” guarantied by and entitled to the benefits of the Fourth Amended and Restated Guarantee dated as of March 13, 2012 executed and delivered by the Guarantor (the “Guarantee”), agrees that the Guarantee remains in full force and effect and ratifies and confirms all of its obligations thereunder.  Capitalized terms used but not otherwise defined herein shall have the meanings attributed to them in the Guarantee.

 

GUARANTOR:

 

NAC INTERNATIONAL INC.

 

By: /s/ Kent S. Cole                                                         

Name:  Kent S. Cole

Title: President

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