Document:

Exhibit 10.38

 

DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING (COLORADO)

 

by and from

 

TELETECH SERVICES CORPORATION (“Grantor”)

 

to

 

THE PUBLIC TRUSTEE
OF THE COUNTY OF DOUGLAS, COLORADO (“Trustee”)

 

for the benefit of

 

BANK OF AMERICA, N.A.,

in its capacity as Collateral Agent (“Beneficiary”)

 

Dated as of October 24, 2003

 

	
  Location:

  	
   

  	
  9197 S.
  Peoria Street

  
	
   

  	
   

  	
   

  
	
  Municipality:

  	
   

  	
  Englewood

  
	
  County:

  	
   

  	
  Douglas

  
	
  State:

  	
   

  	
  Colorado

  

 

*COLLATERAL CONTAINS FIXTURES*

 

TO BE FILED FOR RECORD IN THE REAL PROPERTY RECORDS

 

PREPARED BY, RECORDING REQUESTED BY,

AND WHEN RECORDED MAIL TO:

 

Mayer, Brown, Rowe & Maw LLP

190 S. LaSalle Street

Chicago, IL 60603

Attention: Ami G. Scott

 

 

DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING (Colorado)

 

THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES  AND FIXTURE FILING (Colorado) (this “Deed of Trust”) dated as of October
24,2003 is made by TELETECH SERVICES
CORPORATION, a Colorado corporation (“Grantor”), whose address is
9197 South Peoria Street, Englewood, Colorado 80112, Attention: Karen Breen, to
THE PUBLIC TRUSTEE OF THE COUNTY OF DOUGLAS,
COLORADO (“Trustee”),  for
the benefit of BANK OF AMERICA, N.A. (“Bank
of America”), as collateral agent (in such capacity, the “Collateral Agent”) for and representative
of various creditors of TeleTech Holdings, Inc. (the “Company”) under the Intercreditor Agreement referred to below
(the Collateral Agent, together with its successors and assigns, “Beneficiary”),  having an address at 231 S. LaSalle Street, Chicago, Illinois
60697.

 

RECITALS

 

A.            The Company, various financial institutions
(collectively the “Lenders”) and
Bank of America, as administrative agent (in such capacity, the “Administrative Agent”), have entered into
a Credit Agreement dated as of October 29, 2002 (as amended, restated or
otherwise modified from time to time, the “Credit
Agreement”).

 

B.            The Company is a party to a Note Agreement
dated as of October 1, 2001 (as amended by the First Amendment to Note Purchase
Agreement dated as of February 1, 2003, the Waiver and Second Amendment to Note
Purchase Agreement dated as of August 1, 2003 and the Third Amendment to Note
Purchase Agreement dated as of September 30, 2003, and as further amended,
restated or otherwise modified from time to time, the “Note Agreement”) with each of the
purchasers listed on Schedule A thereto (the “Purchasers”;
the Purchasers together with each other holder of a Note (as defined
in the Intercreditor Agreement referred to below), collectively, the “Noteholders” and individually each a “Noteholder”).

 

C.            Grantor has guaranteed all obligations of the
Company under the Credit Agreement, the Note Agreement and certain other
financing arrangements pursuant to one or more guaranties (the “Guaranties”).

 

D.            The obligations of Grantor under the
Guaranties are evidenced by a Global Note dated October 24, 2003 (the “Global Note”) payable to the Collateral
Agent for the benefit of each of the Benefited Parties (as defined below).

 

E.             Pursuant to an Intercreditor Agreement dated
as of the date hereof (as amended, restated or otherwise modified from time to
time, the “Intercreditor Agreement”),
the Administrative Agent, on behalf of itself and the Lenders, the Purchasers
and the Collateral Agent have agreed that (i) certain obligations of the
Company and various subsidiaries shall be secured and guaranteed pari passu and
(ii) Bank of America shall act as collateral agent for the holders of such
obligations (such holders, together with the Collateral Agent, the “Benefited Parties”).

 

F.             The obligations of Grantor under the
Guaranties are to be secured pursuant to this Deed of Trust.

 

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ARTICLE 1

 

DEFINITIONS AND INTERPRETATION

 

SECTION 1.1 Definitions. As used herein, the following terms shall
have the following meanings;

 

(a)           “Base Rate”: For any day a fluctuating rate per annum
equal to the higher of (i) the Federal Funds Rate plus 0.5% and (ii) the rate
of interest in effect for such day as publicly announced from time to time by
Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of
America based upon various factors, including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.

 

(b)           “Default Rate”: The sum of the Base Rate plus 2%.

 

(c)           “Event of Default”: The failure by Grantor to make any payment
under either Guaranty upon demand therefor by Administrative Agent or any
Noteholder.

 

(d)           “Federal Funds Rate”: For any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a
business day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding business day as so published on the next
succeeding business day, and (b) if no such rate is so published on such next
succeeding business day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1
%) charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.

 

(e)           “Financing Agreement”: The Credit Agreement, the Note Agreement,
each Note (as defined in the Note Agreement), the Global Note and any other
agreement which evidences or gives rise to any obligation that is secured
pursuant to the Guaranties or pursuant to which any collateral is granted to
secure the obligations under any other Financing Agreement.

 

(f)            “Indebtedness”: All obligations of Grantor under the
Guaranties. The scheduled final maturity date of the Indebtedness is October
31, 2011 and the maximum principal amount of the Indebtedness is $225,000,000.

 

(g)           “Mortgaged Property”: All
of Grantor’s right, title and interest in and to the following:

 

(i)            the fee interest, if any, in the real
property described in Exhibit A hereto (the “Land”), which together with all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances appertaining to the foregoing and all interests now or in the
future arising in respect of, benefiting or otherwise relating to the Land,
including

 

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easements, rights-of-way,
development rights and all right, title and interest now owned or hereafter
acquired by Grantor in and to any land lying within the right of way of any
street, open or proposed, adjoining the Land, and any and all sidewalks,
alleys, driveways and strips and gores of land adjacent to or used in
connection with the Land (all of the foregoing, together with the Land,
collectively the “Real Property”);

 

(ii)           all buildings, structures, facilities and improvements of every nature
whatsoever now or hereafter situated on the Land or any other real property
encumbered hereby (the “Improvements”);

 

(iii)          (x) all fixtures (as defined in the UCC (as defined below)), and all
extensions, additions, accessions, improvements, betterments, renewals,
substitutions and replacements thereto (the “Fixtures”)
(the Real Property, Fixtures and Improvements, collectively, the “Premises”);

 

(iv)          all leases, subleases, lettings, licenses, operating agreements,
management agreements and other agreements affecting the Mortgaged Property
that Grantor has entered into, taken by assignment, taken subject to, assumed
or otherwise become bound by, now or in the future, that give any Person the
right to conduct its business on, or otherwise use, operate or occupy, all or
any portion of the Premises, and any leases, agreements or arrangements
permitting anyone to enter upon or use any of the Premises to extract or remove
natural resources of any kind, together with all amendments, extensions and
renewals of the foregoing, and all rental, service, maintenance or other
similar agreements pertaining to use or occupation of the Premises or any part
thereof, together with all related security and other deposits (the “Leases”);

 

(v)           all of the rents, revenues, receipts, royalties, income, proceeds,
profits, license fees, security and other types of deposits, and other benefits
paid or payable by parties to the Leases for using, leasing, licensing,
possessing, operating from, residing in, selling or otherwise enjoying the
Mortgaged Property (the “Rents”);

 

(vi)          all other agreements, guaranties, warranties, permits, licenses,
certificates and entitlements in any way relating to the construction, use,
occupancy, operation, maintenance, enjoyment or ownership of the Mortgaged
Property (the “Property Agreements”);

 

(vii)         all rights, privileges, tenements, hereditaments, rights-of-way, easements,
appendages and appurtenances appertaining to the foregoing;

 

(viii)        all property tax refunds and rebates and utility refunds and rebates
(the “Refunds”);

 

(ix)           all accessions, replacements and substitutions for any of the foregoing
and all proceeds thereof (the “Proceeds”);

 

(x)            all insurance policies, unearned premiums
therefor and proceeds from such policies covering any of the above property now
or hereafter acquired by Grantor (the “Insurance”);
and

 

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(xi)           all of Grantor’s right, title and interest in and to any awards,
damages, remunerations, reimbursements, settlements or compensation heretofore
made or hereafter to be made by any government authority pertaining to the
Premises or Fixtures (the “Condemnation
Awards”).

 

As
used in this Deed of Trust, the term “Mortgaged Property” means all or, where
the context permits or requires, any portion of the above or any interest
therein.

 

(h)           “Obligations”: All of the agreements, covenants,
conditions, warranties, representations and other obligations of Grantor under
the Guaranties.

 

(i)            “UCC”: The Uniform Commercial Code in the State of
Colorado, except to the extent that the provisions of Section 9-301 or any
other section of the Uniform Commercial Code in the State of Colorado mandate
that the Uniform Commercial Code of another jurisdiction be applied, in which
event (and to such extent), the term “UCC” means the Uniform Commercial Code in
effect in that jurisdiction.

 

SECTION 1.2 Interpretation. The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms. The term “including”
is by way of example and not limitation. Any reference to an Article or
a Section is to the relevant Article or Section of this Deed of Trust,
unless otherwise specified. Article, Section and subsection headings herein are
included for convenience of reference only and shall not affect the
interpretation of this Deed of Trust.

 

ARTICLE 2

 

GRANT

 

SECTION 2.1 Grant. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Grantor GRANTS, BARGAINS, SELLS, ASSIGNS, and CONVEYS to Trustee the Mortgaged Property, TO HAVE AND TO HOLD the Mortgaged Property
unto Trustee, IN TRUST, WITH POWER OF SALE, and
Grantor hereby binds itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to the
Mortgaged Property unto Trustee.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES

 

Grantor
represents and warrants to Beneficiary and the Benefited Parties as follows:

 

SECTION 3.1 Title to Mortgaged Property and Lien of this
Instrument.  Grantor has (i) good, sufficient and legal
title to (in the case of fee interests in real property comprising the
Mortgaged Property) and (ii) good and marketable title to (in the case of all
other property comprising the Mortgaged Property) the Mortgaged Property free
and clear of all Liens, claims and interests, except Liens permitted by Section
7.01 (a), (b) or (f) of the Credit Agreement and Section 10.5 of the Note
Agreement (“Permitted Liens”). Grantor has and will

 

4

 

continue to have full power
and lawful authority to grant, release, convey, assign, transfer, mortgage,
pledge, hypothecate and otherwise create Liens on the Mortgaged Property as
provided herein. The Mortgaged Property is accurately, completely, adequately
and sufficiently described herein and in Exhibit A as required by
applicable laws for this Deed of Trust to create a deed of trust lien on (and
security interest against) all of the Mortgaged Property.

 

SECTION 3.2 Other Real Property. Grantor does not own or lease or have any
interest in any other real property used or useful in the operation of the
Mortgaged Property, other than the real property described on Exhibit A
hereto.

 

SECTION 3.3 First Priority Deed of Trust. This Deed of Trust creates a valid,
enforceable first priority deed of trust lien and security interest against the
Mortgaged Property and first priority assignment of the Leases and Rents,
subject in each case only to Permitted Liens, and there are no defenses or
offsets to Grantor’s obligations pursuant to this Deed of Trust. Grantor shall
preserve and protect the Lien and security interest created hereunder and the
priority thereof. If any Lien or security interest other than any Permitted
Lien is asserted against the Mortgaged Property, Grantor shall promptly, at its
expense, (a) give Beneficiary a detailed written notice of such Lien or
security interest (including origin, amount and other terms) and (b) pay the
underlying claim in full or take such other action so as to cause it to be
released or contest the same in compliance with the requirements of the
Financing Agreements (including the requirement of providing a bond or other
security reasonably satisfactory to Beneficiary).

 

SECTION 3.4 Leases. With respect to the assignment of Leases and
Rents set forth in Article 6, Grantor represents that (i) it has
provided Beneficiary with a true and complete copy of each Lease in effect on
the date hereof; (ii) as of the date hereof, Grantor is not, in the capacity of
lessor, a party to any other lease, whether written or oral, or any agreement
for the use and occupancy of any of the Mortgaged Property, except as
heretofore disclosed in writing by Grantor to Beneficiary; (iii) the Leases are
valid, binding and in full force and effect and have not been amended or
modified, except as heretofore disclosed in writing by Grantor to Beneficiary;
(iv) Grantor is the sole owner of the lessor’s interest in the Leases; (v)
except for Permitted Liens, Grantor has not executed any other assignment or
pledge of any of the Leases or Rents or performed any other act or executed any
other instrument which might prejudice Beneficiary’s rights hereundcr; (vi) to
the best of Grantor’s knowledge, no default exists on the part of any lessee,
or on the part of Grantor, as lessor, in the performance of the terms,
covenants, provisions, conditions or agreements contained in any Lease; (vii)
Grantor knows of no condition which, with the giving of notice or the passage
of time or both, would constitute a default under any Lease on the part of any
lessee or Grantor, as lessor, except as heretofore disclosed in writing by
Grantor to Beneficiary; (viii) no rent has been paid by any lessee for more
than one installment in advance; and (ix) no payment of any of the Rents to
accrue under the Leases has been or will be waived, released, reduced,
discounted or otherwise discharged or compromised by Grantor, except as heretofore
disclosed in writing by Grantor to Beneficiary.

 

SECTION 3.5 Peaceable Possession. Grantor’s possession of the Mortgaged
Property has been peaceable and undisturbed and, to the best of Grantor’s
actual knowledge, without investigation or inquiry, except as previously
disclosed in writing to Beneficiary, the title thereto has never been disputed
or questioned, and, except as previously disclosed in writing to

 

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Beneficiary, Grantor does
not know of any facts by reason of which any adverse claim to any part of the
Mortgaged Property or to any undivided interest therein might be set up or
made.

 

SECTION 3.6 Taxes. The Land is or will be taxed separately
without regard to any other property. Grantor has not received any notice of
any federal, state or local tax claim or Lien assessed or filed against Grantor
or the Mortgaged Property for taxes which are due and payable, unsatisfied of
record or docketed in any court of the state in which the Mortgaged Property is
located or in any other court located in the United States.

 

SECTION 3.7 Casualty and Condemnation. The Mortgaged Property has not been damaged
or destroyed by fire or other casualty, and no condemnation or eminent domain
proceeding has been commenced or is pending with respect to the Mortgaged
Property and, to the best of Grantor’s knowledge, no such condemnation or
eminent domain proceeding is about to be commenced.

 

SECTION 3.8 Other Mortgaged Property Rights. All easements, leasehold and other property
interests, all utility and other services (including gas, electric, telephone,
water and sewage services and facilities), means of transportation, facilities,
other materials and other rights that are reasonably necessary for the
operation of the Mortgaged Property in accordance with applicable requirements
of law have been procured or are commercially available to the Mortgaged
Property at commercially reasonable rates and, to the extent appropriate,
arrangements have been made on commercially reasonable terms for such
easements, interests, services, means of transportation, facilities, materials
and rights.

 

SECTION 3.9 Subdivision Compliance. The Land has been subdivided from all other
property in compliance with applicable laws. No subdivision or other approval
is necessary with respect to the Premises in order for Grantor to mortgage,
convey or otherwise deal with the Premises as a separate lot or parcel.

 

ARTICLE 4

 

COVENANTS OF GRANTOR

 

Grantor
covenants for the benefit of Beneficiary and the Benefited Parties as follows:

 

SECTION 4.1 Payment and Performance. Grantor shall pay the Indebtedness when due
under the Guaranties and shall perform the Obligations in full when they are
required to be performed in accordance with the terms of the Guaranties.

 

SECTION 4.2 Warranty of Title. Grantor shall warrant, preserve and defend
Grantor’s title to the Mortgaged Property, the interest of Beneficiary and the
Benefited Parties in and to the Mortgaged Property and the validity,
enforceability and priority of the Lien of this Deed of Trust, this assignment
of Leases and Rentals and this grant of a security interest against the claims
and demands of all Persons whomsoever, at its sole cost and expense.

 

6

 

SECTION 4.3 Taxes.

 

(a)           Grantor shall pay, prior to delinquency, all taxes, charges and similar
assessments (“Impositions”)
imposed or levied by any government authority which create a Lien upon the
Mortgaged Property or any part thereof. If by law any such Imposition is
payable, or may at the option of the taxpayer be paid, in installments, Grantor
may pay the same, together with any accrued interest on the unpaid balance of
such Imposition, in installments as the same become due and before any fine,
penalty, interest or cost may be added thereto for the nonpayment of any such
installment and interest. If at any time after the date hereof there shall be
assessed or imposed a license fee, tax or assessment on Beneficiary which is
measured by or based in whole or in part upon the amount of the outstanding
Obligations, then all such taxes shall be deemed to be included within the term
“Impositions” as defined herein, and Grantor shall pay and discharge the same
as herein provided with respect to the payment of Impositions, or, if Grantor
shall not be permitted by law to pay and discharge such Imposition either
directly or indirectly, then, at the option of Beneficiary, all obligations
secured hereby, together with all interest thereon, shall become immediately due
and payable.

 

(b)           Subject to the provisions of Section 4.3(c), upon written
request therefor Grantor shall furnish to Beneficiary within 30 days after the
date upon which any Imposition would be delinquent, official receipts of the
appropriate taxing authority, or other proof satisfactory to Beneficiary,
evidencing the payment thereof.

 

(c)           Grantor has the right, before any delinquency occurs, to contest or
object to the amount or validity of any Imposition by appropriate proceedings
promptly instituted and diligently conducted, so long as (i) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (ii) in the case of a charge or claim
which has or may become a Lien against any of the Mortgaged Property, such
contest proceedings conclusively operate to stay the sale of any portion of the
Mortgaged Property to satisfy such Imposition.

 

SECTION 4.4 Utilities. Grantor shall pay, when due, all utility
charges incurred by Grantor for the benefit of the Mortgaged Property, or which
may become a charge or Lien against the Mortgaged Property, for gas,
electricity, water, sewer and all other utility services furnished to the
Mortgaged Property, and all other assessments or charges of a similar nature,
whether public or private, affecting the Mortgaged Property or any portion
thereof, whether or not such assessments or charges are Liens thereon.

 

SECTION 4.5 Adverse Action. Grantor shall appear in and contest any
action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or any Benefited Party and shall pay all costs and
expenses, including the cost of a title report and reasonable attorneys’ fees
(including the reasonable attorneys’ fees of Beneficiary and such Benefited
Party) incurred in any such action.   If
Grantor receives any notice or other instrument which might materially and
adversely affect the Mortgaged Property or the deed of trust lien of this Deed
of Trust, Grantor shall promptly furnish a copy of such notice or other
instrument to Beneficiary. The notices referred to shall include notices from
any tenant or landlord of the Mortgaged Property claiming a default by Grantor
under any Lease; any notice from a government authority concerning any special
tax; any notice of any alleged violation of any building, zoning, fire or other
law or regulation affecting the Mortgaged Property; any notice of a

 

7

 

mechanic’s or supplier’s
Lien, whether actually filed or threatened; and any notice of an action or
proceeding filed or threatened against Grantor or the Mortgaged Property.

 

SECTION 4.6 Condemnation Awards and Insurance Proceeds.

 

(a)           Condemnation Awards. Grantor assigns all Condemnation Awards to
which it is entitled for any condemnation or other taking, or any purchase in
lieu thereof, to Beneficiary and authorizes Beneficiary to collect and receive
such Condemnation Awards and to give proper receipts and acquittances therefor.

 

(b)           Insurance Proceeds. Grantor assigns to Beneficiary all of
Grantor’s right, title and interest in and to all proceeds of any insurance
policies insuring against loss or damage to the Mortgaged Property. Grantor (i)
authorizes Beneficiary to collect and receive such proceeds and (ii) authorizes
and directs the issuer of each of such insurance policies to make payment for
all such losses directly to Beneficiary, instead of to Grantor and Beneficiary
jointly.

 

(c)           Insurance.

 

(i)            Grantor shall not carry separate or
additional insurance concurrent in form or contributing, in the event of loss,
with that required hereunder unless such insurance is endorsed in favor of
Beneficiary as loss payee or additional insured, as applicable, and contains
endorsements providing coverage secondary to the insurance required to be
carried hereunder. Nothing contained herein shall prohibit Grantor from holding
or obtaining an owner’s policy of title insurance covering the Mortgaged
Property.

 

(ii)           If Grantor fails to maintain the insurance required to be maintained by
any Financing Agreement, then Beneficiary, if it so elects, may itself have
such insurance effected in such amounts and in such companies as it may deem
proper and may pay the premiums therefor, and all expenses so incurred of every
kind and character shall be a demand obligation owing by Grantor to Beneficiary
and shall bear interest from the date of expenditure until paid at the Default
Rate, and the same shall be secured by the lien evidenced by this Deed of
Trust. Beneficiary shall not be responsible for the solvency of any company
issuing any insurance policy, whether or not selected or approved by it, or for
the collection of any amount due under any such policy, and shall be
responsible and accountable only for such money as may be actually received by
it.

 

ARTICLE 5

 

DEFAULT AND FORECLOSURE

 

SECTION 5.1 Remedies. If an Event of Default exists, Beneficiary
may, at Beneficiary’s election and by or through Trustee or otherwise, exercise
any or all of the following rights, remedies and recourses:

 

(a)           Entry on Mortgaged Property. Enter the Mortgaged Property and take
exclusive possession thereof and of all books, records and accounts relating
thereto or located thereon. If Grantor remains in possession of the Mortgaged
Property after an Event of Default

 

8

 

and without Beneficiary’s
prior written consent, Beneficiary may invoke any legal remedies to dispossess
Grantor.

 

(b)           Operation of Mortgaged Property. Hold, lease, develop, manage, operate or
otherwise use the Mortgaged Property upon such terms and conditions as
Beneficiary may deem reasonable under the circumstances (making such repairs,
alterations, additions and improvements and taking other actions, from time to
time, as Beneficiary deems necessary or desirable), and apply all Rents and
other amounts collected by Trustee in connection therewith in accordance with
the provisions of Section 5.7.

 

(c)           Foreclosure and Sale. Elect to commence foreclosure proceedings
by way of a public trustee’s sale pursuant to the provisions of Title 38,
Article 38, Colorado Revised Statutes, as amended, or in any other manner then
permitted by law, four weeks’ public notice having previously been given of the
time and place of such sale by advertisement, weekly, in a newspaper of general
circulation in the county in which the property is located, or upon such other
notice as may then be required by law; or foreclose this Deed of Trust by
appropriate proceedings in any court of competent jurisdiction. Beneficiary,
any Benefited Party or any designee of any of the foregoing may be a purchaser
at such sale, and if Beneficiary is the highest bidder, Beneficiary may credit
the portion of the purchase price that would be distributed to Beneficiary
against the Indebtedness in lieu of paying cash. If this Deed of Trust is
foreclosed by judicial action, appraisement of the Mortgaged Property is
waived. Beneficiary shall be entitled to collect all costs and expenses
incurred in pursuing the remedies provided herein, including reasonable
attorneys’ fees and costs of appraisals and title evidence. Except as otherwise
provided by applicable law or in Section 5.7, Trustee shall apply the
proceeds of sale in the following order: (a) to all costs and expenses of the
sale, including the Trustee’s fees, attorneys’ fees and costs of appraisals and
title evidence; (b) to all sums secured by this Deed of Trust in accordance
with the terms of the Intercreditor Agreement; and (c) the excess, if any, to
the person or persons legally entitled thereto. Nothing in this Section 5.1
(c) shall be deemed to contradict or add to the requirements and procedures
now or hereafter specified by Colorado law, and any such inconsistency shall be
resolved in favor of Colorado law applicable at the time of foreclosure.

 

(d)           Receiver. Make application to a court of competent jurisdiction for, and obtain
from such court as a matter of strict right and without notice to Grantor or
regard to the adequacy of the Mortgaged Property for the repayment of the
Indebtedness, the appointment of a receiver of the Mortgaged Property, and
Grantor irrevocably consents to such appointment. Any such receiver shall have
all the usual powers and duties of receivers in similar cases, including the
full power to rent, maintain and otherwise operate the Mortgaged Property.

 

(e)           Acceleration. Declare the Indebtedness to be immediately
due and payable and thereupon all Indebtedness shall be and become immediately
due and payable.

 

(f)            Other. Exercise all other rights, remedies and recourses granted under the
Intercreditor Agreement or any Financing Agreement or otherwise available at
law or in equity.

 

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SECTION 5.2 Separate Sales. The Mortgaged Property may be sold in one or
more parcels and in such manner and order as Beneficiary in its sole discretion
may elect; the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.

 

SECTION 5.3 Remedies Cumulative, Concurrent and
Nonexclusive.
Beneficiary, the Benefited Parties, and Trustee have all rights, remedies and
recourses granted in the Intercreditor Agreement and any Financing Agreement,
and available at law or equity (including the UCC), which rights (a) shall be
cumulative and concurrent, (b) may be pursued separately, successively or
concurrently against Grantor or others obligated under the Collateral
Documents, or against the Mortgaged Property, or against any one or more of
them, at the sole discretion of Beneficiary, the Required Benefited Parties (as
defined in the Intercreditor Agreement) or Trustee, as the case may be, (c) may
be exercised as often as occasion therefor shall arise, and the exercise or
failure to exercise any of them shall not be construed as a waiver or release
thereof or of any other right, remedy or recourse and (d) are intended to be,
and shall be, nonexclusive. No action by Beneficiary, any Benefited Party or
Trustee in the enforcement of any right, remedy or recourse under any Financing
Agreement or any Collateral Document or otherwise at law or equity shall be
deemed to cure any Event of Default.

 

SECTION 5.4 Release of and Resort to Collateral. Beneficiary may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate Lien on the Mortgaged Property, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the Lien or security interest (including
with respect to the Mortgaged Property) created in or evidenced by the other
Collateral Documents. For payment of the Indebtedness, Beneficiary may resort
to any other security in such order and manner as Beneficiary may elect.

 

SECTION 5.5 Waiver of Redemption, Notice and Marshalling of
Assets. To the
fullest extent permitted by law, Grantor irrevocably and unconditionally waives
and releases (a) all benefit that might accrue to Grantor by virtue of any
present or future statute of limitations or law or judicial decision exempting
the Mortgaged Property from attachment, levy or sale on execution or providing
for any stay of execution, exemption from civil process, redemption or
extension of time for payment, (b) except as expressly provided for herein or
in any applicable Financing Agreement, all notices of any Event of Default or
of any election by Trustee, Beneficiary or any Benefited Party to exercise or
the actual exercise of any right, remedy or recourse provided for herein, and
(c) any right to a marshalling of assets or a sale in inverse order of
alienation.

 

SECTION 5.6 Discontinuance of Proceedings. Beneficiary, any Benefited Party or Trustee
have the unqualified right to invoke any right, remedy or recourse permitted
hereunder or under applicable law and the unqualified right thereafter to
discontinue or abandon it for any reason, and, in such an event, Grantor,
Beneficiary, the Benefited Parties and Trustee shall be restored to their
former positions with respect to the Indebtedness, the Obligations, the
Financing Agreements, the Mortgaged Property and otherwise, and the rights,
remedies and recourses of Beneficiary, the Benefited Parties and Trustee shall
continue as if the right, remedy or recourse had never been invoked, but no
such discontinuance or abandonment shall waive any Event of Default which may
then exist or the right of Beneficiary, any Benefited Party or Trustee

 

10

 

thereafter to exercise any
right, remedy or recourse under any Financing Agreement for such Event of Default.

 

SECTION 5.7 Application of Proceeds. Subject to Section 5.1(c), the proceeds of
any sale of, and the Rents and other amounts generated by the holding, leasing,
management, operation or other use of the Mortgaged Property, shall be applied
by Beneficiary in accordance with the terms of the Intercreditor Agreement.

 

SECTION 5.8 Additional Advances and Disbursements; Costs  of
Enforcement.

 

(a)           If any Event of Default exists, Beneficiary and each of the Benefited
Parties has the right, but not the obligation, to cure such Event of Default in
the name and on behalf of Grantor. All sums advanced and expenses incurred at
any time by Beneficiary or any Benefited Party under this Section 5.8,
or otherwise under this Deed of Trust or applicable law, shall bear interest
from the date that such sum is advanced or expense incurred, to and including
the date of reimbursement, at the Default Rate, and all such sums, together
with interest thereon, shall be secured by this Deed of Trust.

 

(b)           Grantor shall pay all expenses (including reasonable attorneys’ fees
and expenses) of or incidental to the perfection and enforcement of this Deed
of Trust, or the enforcement, compromise or settlement of the Indebtedness or
any claim under this Deed of Trust, and for the curing thereof, or for
defending or asserting the rights and claims of Beneficiary in respect thereof,
by litigation or otherwise. To the fullest extent permitted by law, any costs
incurred by Beneficiary or its attorney as a part of the cost of foreclosure in
conjunction with Grantor’s default hereunder shall be deemed allowable by
Trustee in a foreclosure action. Such allowable costs shall include appraisal
fees, attorneys’ fees and all costs incurred by Beneficiary or its attorney in
conjunction with securing, preserving and maintaining the Mortgaged Property
and any improvements contained thereon, such as, by way of example and not by
way of limitation, costs incurred in conjunction with the appointment and/or
institution of a receivership (whether or not a receiver be appointed).

 

SECTION 5.9 No Mortgagee in Possession. Neither the enforcement of any of the
remedies under this Article 5, the assignment of the Rents and Leases
under Article 6, the security interests under Article 7, nor any
other right, power or remedy afforded to Beneficiary under this Deed of Trust
or any other Collateral Document, at law or in equity, shall cause Beneficiary,
any Benefited Party or Trustee to be deemed or construed to be a mortgagee in
possession of the Mortgaged Property, to obligate Beneficiary, any Benefited
Party or Trustee to lease the Mortgaged Property or attempt to do so, or to
take any action, incur any expense, or perform or discharge any obligation,
duty or liability whatsoever under any of the Leases or Otherwise.

 

SECTION 5.10 Actions by Beneficiary to Preserve the
Mortgaged Property.
If Grantor fails to make any payment or do any act as and in the manner
provided in this Deed of Trust beyond any applicable cure period, Beneficiary,
in its sole and absolute discretion, without obligation so to do and without
notice to or demand upon Grantor and without releasing Grantor from any
obligation, may make such payment or do such act in such manner and to such
extent

 

11

 

as Beneficiary may deem
necessary to protect the security hereof. 
In connection therewith (without limiting Beneficiary’s general powers),
Beneficiary shall have and is hereby given the right, but not the obligation,
to the extent permitted under applicable law, (a) to enter upon and take
possession of the Mortgaged Property; (b) to make additions, alterations,
repairs and Improvements to the Mortgaged Property which it may consider
necessary or proper to keep the Mortgaged Property in good condition and repair;
(c) to appear and participate in any action or proceeding which affects or may
affect the security hereof or the rights or powers of Beneficiary; (d) to pay,
purchase, contest or compromise any encumbrance, claim, charge, Lien or debt
which, in Beneficiary’s judgment, may affect or appear to affect the security
of this Deed of Trust; and (e) in exercising such powers, to employ counsel or
other necessary or desirable experts or consultants. Grantor shall, immediately
upon demand therefor by Beneficiary, pay all costs and expenses incurred by
Beneficiary in connection with the exercise by Beneficiary of the foregoing
rights, including cost of evidence of title, court costs, appraisals, surveys
and reasonable attorneys’ fees, together with interest thereon from the date
incurred at the Default Rate. All such costs and expenses together with such
interest shall be secured by this Deed of Trust.

 

ARTICLE 6

 

ASSIGNMENT OF RENTS AND LEASES

 

SECTION 6.1 Assignment.  In
furtherance of and in addition to the assignment made by Grantor in Section
2.1, Grantor absolutely and unconditionally assigns, sells, transfers and
conveys to Beneficiary all of its right, title and interest in and to all
Leases, whether now existing or hereafter entered into, and all of its right,
title and interest in and to all Rents. This assignment is an absolute
assignment and not an assignment for additional security only. So long as no
Event of Default exists, Grantor shall have a revocable license from
Beneficiary to exercise all rights extended to the landlord under the Leases,
including the right to receive and collect all Rents and to hold the Rents in
trust for use in the payment and performance of the Obligations and to
otherwise use the same. During the existence of an Event of Default, whether or
not legal proceedings have commenced, and without regard to waste, adequacy of
security for the Obligations or the solvency of Grantor, the license herein
granted shall automatically expire and terminate, without notice by Beneficiary
(any such notice being hereby expressly waived by Grantor).

 

SECTION 6.2 Perfection Upon Recordation. Grantor acknowledges that Beneficiary has
taken all actions necessary to obtain, and that upon recordation of this Deed
of Trust Beneficiary shall have, to the extent permitted under applicable law,
a valid and fully perfected, first priority, present assignment of the Rents
arising out of the Leases and all security for such Leases. Grantor
acknowledges and agrees that, to the extent permitted under applicable law,
upon recordation of this Deed of Trust Beneficiary’s interest in the Rents
shall be deemed to be fully perfected, “choate” and enforced as to Grantor and
all third parties, including any subsequently appointed trustee in any case
under Title 11 of the United States Code (the “Bankruptcy
Code”), without the necessity of commencing a foreclosure action
with respect to this Deed of Trust, making formal demand for the Rents,
obtaining the appointment of a receiver or taking any other affirmative action.

 

12

 

SECTION 6.3 Bankruptcy Provisions. Without limitation of the absolute nature of
the assignment of the Rents hereunder, Grantor and Beneficiary agree that (a)
this Deed of Trust shall constitute a “security agreement” for purposes of
Section 552(b) of the Bankruptcy Code, (b) the security interest created by
this Deed of Trust extends to property of Grantor acquired before the
commencement of a case in bankruptcy and to all amounts paid as Rents and (c) such
security interest shall extend to all Rents acquired by the estate after the
commencement of any case in bankruptcy.

 

ARTICLE 7

 

SECURITY AGREEMENT

 

SECTION 7.1 Fixture Filing. This Deed of Trust shall also constitute a
“fixture filing” for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. For purposes of the UCC and the
fixture filing, information concerning the security interest herein granted may
be obtained at the addresses of Debtor (Grantor) and Secured Party
(Beneficiary) as set forth in the first paragraph of this Deed of Trust,
Grantor is the “Debtor”, Beneficiary is  the
“Secured Party” and the collateral is all of the Mortgaged Property which is or
is to become fixtures.

 

SECTION 7.2  Financing Statements.
Grantor shall execute (as applicable) and deliver to Beneficiary, in form and
substance reasonably satisfactory to Beneficiary, such financing statements and
such further assurances as Beneficiary may, from time to time, reasonably
consider necessary to create, perfect and preserve Beneficiary’s security
interest hereunder, and Beneficiary may cause such statements and assurances to
be recorded and filed, at such times and places as may be required or permitted
by law to so create, perfect and preserve such security interest. Grantor
authorizes Beneficiary to file any financing statement without its signature,
to the extent permitted by applicable law, and/or to file a copy of this Deed
of Trust as a financing statement in any jurisdiction.

 

ARTICLE 8

 

CONCERNING THE TRUSTEE

 

SECTION 8.1 Certain Rights. Trustee has the right to rely on any
instrument, document or signature authorizing or supporting any action taken or
proposed to be taken by it hereunder, believed by it in good faith to be
genuine. Trustee is entitled to reimbursement for actual, reasonable expenses
incurred by it in the performance of its duties and to reasonable compensation
for Trustee’s services hereunder as shall be rendered. Grantor shall, from time
to time, pay the compensation due to Trustee hereunder and reimburse Trustee
for, and indemnify, defend and save Trustee harmless against, all liability and
reasonable expenses which may be incurred by it in the performance of its
duties, including those arising from joint, concurrent or comparative
negligence of Trustee; provided that Grantor shall not be liable under
such indemnification to the extent such liability or expenses result solely
from Trustee’s gross negligence or willful misconduct. Grantor’s obligations
under this Section 8.1 shall not be reduced or impaired by principles of
comparative or contributory negligence.

 

13

 

SECTION 8.2  Retention of Money.
All moneys received by Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other moneys (except to the extent required
by law), and Trustee shall be under no liability for interest on any moneys
received by it hereunder.

 

SECTION 8.3  Colorado Law Regarding Public
Trustees. Nothing in this Deed of Trust shall be deemed to
contradict or add to the rights of a public trustee under Colorado law.

 

ARTICLE 9

 

MISCELLANEOUS

 

SECTION 9.1 Notices. Any notice hereunder shall be in writing
(including facsimile transmission) and shall be sent to Grantor or Beneficiary
at its address set forth in the introductory paragraph (or at such other
address as such party may have designated as its address for such purpose).

 

SECTION 9.2 Covenants Running with the Land. All obligations contained in this Deed of
Trust are intended by Grantor, Beneficiary and Trustee to be, and shall be
construed as, covenants running with the Mortgaged Property. As used herein,
“Grantor” shall refer to the party named in the first paragraph of this Deed of
Trust and to any subsequent owner of all or any portion of the Mortgaged
Property. All subsequent owners and lenders who may have or acquire an interest
in the Mortgaged Property shall be deemed to have notice of, and be bound by,
the terms of this Deed of Trust.

 

SECTION 9.3 Attorney-in-Fact. Grantor irrevocably appoints Beneficiary and
its successors and assigns as its attorney-in-fact, which agency is coupled
with an interest and with full power of substitution, (a) to execute and/or
record any notice of completion, notice of cessation of labor or any other
notice that Beneficiary deems appropriate to protect Beneficiary’s interest, if
Grantor shall fail to do so within five (5) Business Days after written request
by Beneficiary, (b) upon the issuance of a deed pursuant to the foreclosure of
this Deed of Trust or the delivery of a deed in lieu of foreclosure, to execute
all instruments of assignment, conveyance or further assurance with respect to
the Leases, Rents, Property Agreements, Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Beneficiary’s security interests and rights in or to any of the Mortgaged
Property, and (d) while any Event of Default exists, to perform any obligation
of Grantor hereunder, however: (1) Beneficiary shall not under any
circumstances be obligated to perform any obligation of Grantor; (2) any sums
advanced by Beneficiary in such performance shall be added to and included in
the Indebtedness and shall bear interest at the Default Rate; (3) Beneficiary
as such attorney-in-fact shall only be accountable for such funds as are
actually received by Beneficiary; and (4) Beneficiary shall not be liable to
Grantor or any other Person for any failure to take any action which it is
empowered to take under this Section 9.3.

 

14

 

SECTION 9.4 Successors and Assigns. This Deed of Trust shall be binding upon and
inure to the benefit of Beneficiary, the Benefited Parties, Trustee and Grantor
and their respective successors and assigns. Grantor shall not, without the
prior written consent of Beneficiary, assign any rights, duties or obligations
hereunder.

 

SECTION 9.5 No Waiver. Any failure by Beneficiary, any Benefited
Party or Trustee to insist upon strict performance of any of the terms,
provisions or conditions of this Deed of Trust shall not be deemed to be a
waiver thereof, and Beneficiary, the Benefited Parties or Trustee have the
right at any time to insist upon strict performance of all of such terms,
provisions and conditions.

 

SECTION 9.6 Conflicting Provisions. It any conflict exists between this Deed of
Trust and any Financing Agreement, such Financing Agreement shall govern.

 

SECTION 9.7 Release. Upon payment in full of the Indebtedness and
performance in full of the Obligations, Beneficiary shall release this Deed of
Trust in due form in accordance with applicable law at Grantor’s expense. No
release of this Deed of Trust or the lien hereof shall be valid unless executed
by Beneficiary.

 

SECTION 9.8 Waiver of Stay, Moratorium
and Similar Rights.
Grantor agrees, to the full extent that it may lawfully do so, that it will not
at any time insist upon or plead or in any way take advantage of any stay,
marshalling of assets, extension, redemption or moratorium law now or hereafter
in force and effect so as to prevent or hinder the enforcement of the
provisions of this Deed of Trust or the Indebtedness or Obligations secured
hereby, or any agreement between Grantor and Beneficiary or any right or remedy
of Beneficiary, the Benefited Parties or Trustee.

 

SECTION 9.9 Applicable Law. This Deed of Trust is a contract made under
and intended to be construed in accordance with and governed by the laws of the
State of Colorado. No defense given or allowed by the laws of any state or
country shall be interposed in any action or proceeding resulting from the
enforcement of this Deed of Trust unless such defense is also given or allowed
by the laws of the State of Colorado.

 

SECTION 9.10 Beneficiary as Collateral Agent; Successor
Collateral Agents.

 

(a)           Collateral Agent has been appointed to act as Collateral Agent
hereunder by the Benefited Parties. Collateral Agent has the right hereunder to
make demands, to give notices, to exercise or refrain from exercising any
right, and to take or refrain from taking any action (including the release or
substitution of the Mortgaged Property) in accordance with the terms of the
Intercreditor Agreement, any related agency agreement among Collateral Agent and
the Benefited Parties (collectively, as amended, supplemented or otherwise
modified or replaced from time to time, the “Agency
Documents”) and this Deed of Trust. Grantor and all other Persons
are entitled to rely on releases, waivers, consents, approvals, notifications
and other acts of Collateral Agent, without inquiry into the existence of
required consents or approvals of the Benefited Parties therefor.

 

15

 

(b)           Beneficiary shall at all times be the same Person that is Collateral
Agent under the Agency Documents. Written notice of resignation by Collateral
Agent pursuant to the Agency Documents shall also constitute notice of
resignation as Collateral Agent under this Deed of Trust. Removal of Collateral
Agent pursuant to any provision of the Agency Documents shall also constitute
removal as Collateral Agent under this Deed of Trust. Appointment of a
successor Collateral Agent pursuant to the Agency Documents shall also
constitute appointment of a successor Collateral Agent under this Deed of
Trust. Upon the acceptance of any appointment as Collateral Agent by a
successor Collateral Agent under the Agency Documents, that successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Collateral
Agent as Beneficiary under this Deed of Trust, and the retiring or removed
Collateral Agent shall promptly (i) assign and transfer to such successor
Collateral Agent all of its right, title and interest in and to this Deed of
Trust and the Mortgaged Property, and (ii) execute and deliver to such
successor Collateral Agent such assignments and amendments and take such other
actions, as may be necessary or appropriate in connection with the assignment
to such successor Collateral Agent of the Liens and security interests created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Deed of Trust. After any
retiring or removed Collateral Agent’s resignation or removal hereunder as
Collateral Agent, the provisions of this Deed of Trust and the Agency Documents
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Deed of Trust while it was the Collateral Agent hereunder.

 

SECTION 9.11 Revolving Line of Credit Revolving Provisions. Grantor acknowledges and agrees that (a) the
Credit Agreement evidences a revolving line of credit and indebtedness under
the Credit Agreement may be repaid and readvanced from time to time, (b) this
Deed of Trust shall secure, to the fullest extent permitted by applicable law,
the guaranty by Grantor of all additional or future advances and readvances of
principal under the Credit Agreement, (c) the line of credit evidenced by the
Revolving Notes and secured by this Deed of Trust shall be used by the Company
primarily for business or commercial purposes, (d) this Deed of Trust shall
remain in full force and effect, without loss of priority, until the payment in
full of the indebtedness and obligations secured hereby and the termination of
all commitments of the Benefited Parties to extend credit to the Company and
(c) this Deed of Trust shall not be extinguished as a result of the
indebtedness and obligations under the Credit Agreement having a zero balance
from time to time (and, to the full extent permitted by applicable law, Grantor
hereby waives the operation of any applicable law, statutory or otherwise,
having a contrary effect).

 

SECTION 9.12 Severability. If any provision of this Deed of Trust is or
becomes invalid, illegal or unenforceable, such provision shall be deemed
amended to conform to applicable laws so as to be valid and enforceable or, if
it cannot be so amended without materially altering the intention of the
parties, it shall be stricken and the remainder of this Deed of Trust shall
remain in full force and effect

 

16

 

ARTICLE 10

 

EVIDENCE OF INDEBTEDNESS

 

For
purposes of this Deed of Trust, the evidence of the Indebtedness secured hereby
shall be a fully executed original of the Global Note, such that, for example,
the Global Note may be presented to Trustee as original evidence of the
indebtedness secured hereby when seeking to foreclose on this Deed of Trust or
securing any partial or complete release of this Deed of Trust, and Trustee
shall accept a signed original of the Global Note as the original evidence of
indebtedness or “promissory note” for such purposes.

 

ARTICLE 11

 

SUCCESSOR TRUSTEE

 

Unless
otherwise prohibited by applicable law, Beneficiary acting alone may from time
to time, by written instrument executed and acknowledged by Beneficiary, mailed
to Grantor and recorded in the county in which the Land is located, and by
otherwise complying with the provisions of applicable law, substitute a successor or successors to Trustee named herein or acting hereunder.

 

 

[The remainder of this page has been
intentionally left blank]

 

17

 

IN WITNESS WHEREOF, Grantor has on the date set forth in the acknowledgement hereto,
effective as of the date first above written, caused this instrument to be duly
EXECUTED AND DELIVERED by authority duly given.

 

	
  TELETECH
  SERVICES CORPORATION,

  	
   

  
	
  a Colorado corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
					

 

 

	
  STATE OF COLORADO

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss

  
	
  COUNTY OF DOUGLAS

  	
  )

  	
   

  

 

The foregoing was
acknowledged before me this      day of October,
2003, by
                                                                    
as                                                            
of TeleTech Services Corporation, a Colorado corporation.

 

	
  WITNESS my hand and
  official seal.

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My Commission Expires:

  	
   

  

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

Lot 1A, Meridian Office Park
Filing No. 3, 1st Amendment

Lot 2, Meridian Office Park
Filing No. 3

 

County of Douglas

State of Colorado

 

 

Commonly known as 9197 South
Peoria Street, Douglas County, Colorado:Filed by Automated Filing Services Inc. (604) 609-0244 - Chilco River Holdings Inc. - Exhibit 10.1

 NICHOLSON & ASSOCIATES

  natural resource development inc. 

 April 11, 2003 

 CHILCO RIVER HOLDINGS INC.  

  #420 - 625 Howe Street 

  Vancouver, BC 

  V7C 2T6 

Attention: Robert Krause

 RE: SALE AND ACQUISITION OF MINERAL CLAIMS, 

  SOUTHWESTERN BRITISH COLUMBIA, CANADA  

 The following terms and conditions are applicable for the sale of 16 mineral
  claim units near Harrison Hotsprings, British Columbia, Canada by Nicholson
  & Associates Natural Resources Development Inc. (herein after referred to
  as "NIC") to Chilco River Holdings Inc. (herein after referred to as "CHILCO").
  Both NIC and CHILCO agree to the following:

	a)	NIC will transfer title to sixteen (16) mineral claim
        units listed in Exhibit "A" and outlined in Exhibit "B' to CHILCO within
        21 days of this agreement. These claims will be contiguous hard rock mineral
        claims covering almost 1,000 acres. 

	 	 
	b)	NIC will provide to CHILCO within 21 days of this
        agreement a geological report summarizing the mineral claims, particulars
        of recent sampling and geological investigation, copies of all records,
        a budget for further work and recommendations, and all other information
        and material relevant to a geological report requisite for filing with
        the regulatory bodies. 

	 	 
	c)	NIC will ensure that the claims shall be maintained in good standing for
      at least 24 months from the date of claim recording. 
	 	 
	d)	NIC shall sell 100% (one hundred percent) interest
        in the claims to CHILCO subject to a 2 1/2% Net Smelter Royalty (NSR)
        and a 7 1/2% Gross Rock Royalty (GRR) for a total of $7500. 1 1/2% of
        the NSR can be acquired for $1.0 million within 12 months from commencement
        of commercial production. Advance royalties of $25,000 shall be paid annually
        commencing 36 months from date of signature of this agreement.

 
	1210 - 675 West Hastings Street, Vancouver, BC V68 1N2	Telephone: (604) 682-1845 Fax: (604) 682-1816

 Page 2 of 6 

	e) 	If CHILCO fails to make the advance royalty payments
        on the 36 month anniversary of the signature of this agreement, as described
        in (d) above, then CHILCO agrees to transfer ownership of the subject
        mining claims to NIC within no less than a 10 day period. 

	 	 
	f)	As part of the inclusive sale price, NIC will provide
        geological consulting services for the claims and will maintain the claims
        in good standing for a period of up to 24 months. 

CHILCO shall: 

	i)	Pay $7,500 to NIC upon delivery of report and transfer
        of property title, but not later than 211 days from signing.

	 	 
	ii)	Provide the name and number of an individual or corporate
        Free Miner Certificate to transfer the claims into. 

By signature witnessed below, the undersigned hereby acknowledge
  that they have read and understood and agree to the aforementioned terms. 

Dated at Vancouver, British Columbia, Canada this 17th day of April, 2003.

		
	per Chilco River Holdings Inc.	George E. Nicholson, P.Geo
	 	President
	 	 
	Witness	Witness
	 	 
		
	Print name	Print name

 Page 3 of 6 

 Footnotes to Agreement

	1) 	All dollar figures are denoted in the currency of the United States of
      America.
	 	 
	2)	The total to be paid by CHILCO to NICor third parties for the claims is
      $7,500 inclusive of assessment. 
	 	 
	3)	To maintain claims in British Columbia annual assessment
        work is required of $100 (CDN) in year 1-3 per claim, followed by $200
        per claim thereafter. (One metric claim unit = 25 hectares). There is
        a filing fee of $10 per $100 expended per claim. Therefore, if 48 units
        then $4,800 (CDN) of work plus $480 of filing fees in years 1-3. In year
        3 and following, for 48 units, $9,600 (CDN) of work plus filing fees of
        $960. 

	 	 
	4) 	Attached are definitions of NSR and GRR. 

 Page 4 of 6 

 Advance Royalty Payments means from time to time payments
  to the Optionor by the Optionee before Commencement of Commercial Production
  of Minerals.

 Commencement of Commercial Production, with respect to Minerals or
  Rock, as the case may be, means:

	(a) 	if a mill is located on the subject property, the
        last day of a period of forty (40) consecutive days in which, for not
        less than thirty (30) days, the mill processed Mineral or Rock from the
        Property at 60% of its rated capacity; or

	 	 
	(b)	if no Mill is located on the Property, the last day
        of the first period of thirty (30) consecutive days during which Mineral
        or Rock has been shipped from the Property on a reasonably regular basis
        for the purpose of earning revenues; or 

	 	 
	(c)	with respect to Rock, following the 30th day of extraction for commercial
      use. 

No period of time during which ore or concentrate is shipped
  from the Property for testing purposes or during which milling operations are
  undertaken as initial tune-up will be taken into account in determining the
  date of Commencement of Commercial Production. 

 Gross Rock Revenue means, for any period, the gross
  proceeds received by the Optionee in that period from the sale of Rock produced
  from the Property less any treatment, beneficiation or other changes or penalties
  deducted by the purchase to whom such Rock is shipped, less: 

	(a)	all costs of the Optionee associated with such sales
        involving handling, weighing, sampling, determination of water content,
        insuring, packaging and transporting Rock; 

	 	 
	(b)	the costs of marketing, including rebates or allowances made or given;
      and 
	 	 
	(c)	any sales, severance, gross production, privilege or similar taxes (other
      than income taxes or mining taxes based on income). 

Minerals means the ores or concentrates of minerals,
  as that term is defined in the Mineral Tenure Act (British Columbia), and the
  rock that is part of such ores and concentrates sold by the Optinnee. 

 Page 5 of 6 

 Net Smelter Return means, for any period the difference between:

	(a)	 the sum of: 
	 	 	 
	 	(i)	the gross proceeds received by the Optionee in that
        period from the sale of Minerals produced from the property to a party
        that is arm's length to the Optionee, or that would have been received
        by the Optionee if the purchase of the Minerals were at arm's length to
        the Optionee, and 

	 	 	 
	 	(ii)	in the case of the sale of Minerals that are ores
        that have not been processed in a Mill, the estimated cost that would
        have been incurred in crushing and beneficiating such Minerals in a Mill
        as agreed by the parties or otherwise determined by a competent mining
        or metallurgical engineer; 

and

	(b)	the sum of: 
	 	 	 
	 	(i)	all amounts paid on account of Advance Royalty Payments;
	 	 	 
	 	(ii)	any insurance costs in connection with shipping such Minerals; 
	 	 	 
	 	(iii)
	any costs of transport; 
	 	 	 
	 	(iv)	all costs of the Optionee associated with such sales
        involving handling, weighing, sampling, determination of water content,
        insuring and packaging; 

	 	 	 
	 	(v) 	the costs cf marketing, adjusted for rebates or allowance made or given;
    
	 	 	 
	 	(vi)	any sales, severance, gross production, privilege
        or similar taxes (other than income taxes or mining taxes based on income)
        assessed on or in connection with the Minerals or the value thereof; and
      

	 	 	 
	 	(vii) 	any treatment, beneficiation or other charges or
        penalties deducted by any smelter or refinery to which such Minerals are
        shipped that have not been previously deducted in the computation of gross
        proceeds.

 Page 6 of 6 

 Net Smelter Royalty means the percentage of Net Smelter
  Return from time to time payable to the Optionor after Commencement of Commercial
  Production from the sale of Minerals. 

 Rock means all substances that axe mined from the Property and sold
  by the Optionee that are not Minerals. 

 Rock Royalty means the amount of royalty from time
  to time payable to the Optionor after Commencement of Commercial Production
  from the sale of Rock pursuant to Section 11.06.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}]]