Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Rockwell Ventures Inc. - Exhibit 4.B

  

FARMOUT AND JOINT VENTURE AGREEMENT 

 

 BETWEEN 

 

 AMARC RESOURCES LTD. 

 

 AND 

 

ROCKWELL VENTURES INC. 

 TABLE OF CONTENTS 

	 ARTICLE 1 INTERPRETATION	 2
	 	 
	 ARTICLE 2 REPRESENTATIONS AND WARRANTIES	 5
	 	 
	 ARTICLE 3 OPTION AND EXPLORATION PROGRAMS	 6
	 	 
	 ARTICLE 4 JOINT VENTURE	 8
	 	 
	 ARTICLE 5 AMARC'S CALL RIGHTS	 8
	 	 
	 ARTICLE 6 ARBITRATION	 9
	 	 
	 ARTICLE 7 NOTICE	 10
	 	 
	 ARTICLE 8 FORCE MAJEURE	 10
	 	 
	 ARTICLE 9 GENERAL PROVISIONS	 11

	 SCHEDULE 1:	 DESCRIPTION OF PROPERTIES
	 SCHEDULE 2:	 FORM OF CALL NOTICE

THIS AGREEMENT dated for reference the 1st day of November, 2004. 

AMONG: 

  
    
      
         AMARC RESOURCES LTD., having an office at, 

          Suite 1020 - 800 West Pender Street, Vancouver British Columbia, 

          V6C 2V6 

         (hereinafter called "Amarc") 

      

    

  

 OF THE FIRST PART 

AND: 

  
    
      
         ROCKWELL VENTURES INC., having an office at 

          Suite 1020 - 800 West Pender Street, Vancouver, British 

          Columbia, V6C 2V6 

         (hereinafter called "RCW") 

      

    

  

 OF THE SECOND PART 

WHEREAS: 

 (A)                 Amarc
  beneficially owns and holds rights to acquire interests in the mineral properties
  (each a "Property" and collectively the "Properties" as hereinafter defined)
  set out on Schedule 1; 

 (B)                 Amarc
  has agreed to grant to RCW the right to earn a working interest (an "Interest")
  in one or more of the Properties in consideration of RCW providing a Funding
  Commitment (as defined) for exploration work to be conducted on the Properties
  in conjunction with other exploration work Amarc is conducting on the Properties
  and thereby earning RCW Interests; 

 (C)                 
  The exploration work is intended to quality as CEE (as defined); 

 (D)                 
  For a period of 180 days after RCW has earned an Interest in a Property, Amarc
  will have the option of purchasing any and all of the RCW Interests on the terms
  and conditions of this Agreement; 

 (E)                 To
  the extent Amarc does not exercise its option to purchase any of the RCW Interests,
  Amarc and RCW will form a joint venture, proportional to their respective Interests
  in each Property in which RCW has acquired an Interest, in order to coordinate
  exploitation of their Interests and to consider further exploration and development;

NOW, THEREFORE, THIS AGREEMENT WITNESSES that, in consideration of $1.00 now paid by RCW to Amarc and the mutual covenants and agreements herein contained, the parties hereto mutually agree as follows:

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 ARTICLE 1 

 INTERPRETATION 

Definitions 

 1.1                 
  In this Agreement the following words and phrases shall have the following meanings:

(a)                 
  "Affiliate" means, in respect of a party hereto, a corporation with which
  that party is affiliated within the meaning of subsection 1(2) of the Securities
  Act (British Columbia). 

(b)                 "Business
  Day" means a day, other than a Saturday, Sunday or Statutory Holiday on
  which the main branch of Canadian Imperial Bank of Commerce in Vancouver, British
  Columbia is open to the public for the transaction of business. 

(c)                 "Call"
  means Amarc's right to purchase any and all of the RCW Interests in certain
  events as described in Article 5. 

(d)                 "Call
  Notice" means notice in the form of Schedule 2. 

(e)                 
  "Call Price" has the meaning set out in §5.3. 

(f)                 
  "CEE" means Canadian exploration expense as defined in s.66.1(6) of the
  Tax Act. 

(g)                 
  "Earn-In Date" has the meaning in §3.9. 

(h)                 
  "Funding Commitment" means an aggregate of $600,000 to be expended
  by RCW on Qualified Expenditure Programs in order to earn Interests in the Properties
  as more particularly described on Schedule 1. 

(i)                 "Interest"
  means a 50% undivided beneficial percentage working or participating interest
  to be earned by RCW in a Property (subject to any royalties to which the Property
  are subject as of the date hereof), provided it funds the Program for the sum
  of money listed beside each Property in Schedule 1 as the Qualified Expenditure
  Program. Amarc’s Interest will be equal to 50%.

(j)                 
  "Joint Venture" means the joint venture to be formed as of the Participation
  Date between Amarc and RCW in respect of a Property upon RCW having earned an
  Interest and providing Amarc has not previously exercised its Call right in
  respect of the RCW Interest on that Property. 

(k)                 
  "Joint Venture Agreement" means the joint venture agreement to be entered
  into between Amarc and RCW as provided for in Article 4 hereof. 

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(l)                 
  "Operator" means for each Property and Joint Venture, Amarc (as long
  as it has at least a 50% Interest in a Property) or such other third party that
  Amarc appoints to carry out Qualified Expenditures. 

(m)                 
  "Option" means the separate right of RCW to earn up to a 50% Interest
  in each the Properties by paying any of the respective Property Commitment in
  accordance with Schedule 1.

(n)                 
  "Other Tenements" means all surface rights of and to any lands within
  the perimeter of the Amarc Properties including surface rights held in fee or
  under lease, licence, easement, right of way or other rights of any kind (and
  all renewals, extensions and amendments thereof or substitutions therefor) acquired
  by or on behalf of the parties with respect to the Amarc Properties. 

(o)                 
  "Participant" means any party having an Interest in a Joint Venture on
  a Property and includes its successors and permitted assigns. "Participants"
  means collectively all parties having an Interest and their respective successors
  and permitted assigns. 

(p)                 
  "Participation Date" shall have the meaning determined in accordance
  with §3.9. 

(q)                 
  "Program" means a program to carry out exploration and incur Qualified
  Expenditures on a Property represented by a document or documents wherein there
  is specified in reasonable detail an outline of any and all research, prospecting
  and exploration and development work proposed to be carried out during such
  Program, the estimated Qualified Expenditures to be incurred in carrying out
  such work and the area of the Property on which such work is to be undertaken
  and shall include any amendments to a Program as may be agreed upon by the parties.

(r)                 
  "Property" means a mining property, claim, interest and other rights
  comprised in the mineral claims more particularly described in Schedule 1 and
  shall include any renewal thereof and any other form of successor or substitute
  title therefor, and shall include any other mineral properties, claims or interest
  made part of a Property pursuant to this Agreement. 

(s)                 
  "Property Commitment" the amount to be expended on behalf of RCW on a
  Property, expressed in dollars as more particularly described on Schedule 1
  hereto and as it may be amended by agreement between the parties. 

(t)                 
  "Properties" means each Property together; 

(u)                 
  "Qualified Expenditure" means an expense, incurred on behalf of RCW in
  carrying out Programs, all of which shall qualify as CEE. 

(v)                 
  "RCW Interest" means each 50% Interest acquired by RCW in a Property
  pursuant to this Agreement and RCW Interests means all of them.

(w)                 
  "Tax Act" means the Income Tax Act (Canada) as amended and in
  force from time to time. 

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(x)                 
  "TSX" means the TSX Venture Exchange. 

 1.2                 
  This Agreement shall be read with such changes in gender or number as the context
  shall require. 

 1.3                 
  The headings to the articles, paragraphs, parts or clauses of this Agreement
  and the table of contents are inserted for convenience only and shall not affect
  the construction hereof. 

 1.4                 
  Unless otherwise stated, a reference herein to a numbered or lettered article,
  paragraph, clause or schedule refers to the article, paragraph, clause or schedule
  bearing that number or letter in this Agreement. A reference to "this" article,
  paragraph, clause or schedule means the article, paragraph, clause or schedule
  in which the reference appears. A reference to "this Agreement", "hereof", "hereunder",
  "herein" or words of similar meaning, means this agreement including the schedules
  hereto, together with any amendments thereof. 

 1.5                 All
  dollar amounts expressed herein refer to lawful currency of Canada. 

 1.6                 Wherever
  interest is chargeable under this Agreement, unless otherwise specifically provided,
  interest will be at the specified per annum rate, calculated daily and compounded
  on the last day of each calendar month. For the purposes hereof, the Prime Rate
  in effect for each day of a month shall be equal to the Prime Rate declared
  at noon on the first Business Day of that month. For greater certainty, the
  daily interest rate chargeable will be the specified per annum rate divided
  by the number of days in that calendar year. 

 1.7                 
  A reference to a statute, regulation or other legislation herein shall be deemed
  to extend to and include any amendments thereto and successor legislation. 

 1.8                 
  The following schedules are incorporated into this Agreement by reference: 

	 	 Schedule  	 Description  
	 	 	 
	 	 1  	 Description of the Properties and Amarc and RCW proposed 
      Commitments Program  
	 	 	 
	 	 2  	 Form of Call Notice  

 1.9                 This
  Agreement shall be construed and governed by the laws in force in the Province
  of British Columbia and, except as provided in Article 6, the courts of said
  Province shall have exclusive jurisdiction to hear and determine all disputes
  arising hereunder. Each of the parties hereto irrevocably attorns to the jurisdiction
  of said courts and consents to the commencement of proceedings in such courts.
  This paragraph shall not be construed to affect the rights of a party to enforce
  a judgement or award outside the said Province, including the right to record
  or enforce a judgement or award in any jurisdiction in which the Property is
  situated. 

 1.10                 If
  any provision of this Agreement is or shall become illegal, invalid or unenforceable,
  in whole or in part, the remaining provisions shall nevertheless be and remain

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valid and subsisting and the said remaining provisions shall be construed as if this Agreement had been executed without the illegal, invalid or unenforceable portion. 

 ARTICLE 2 

 REPRESENTATIONS AND WARRANTIES 

 2.1                 Each
  party represents and warrants to the other parties with respect to such party
  that:

(a)                 
  it is a body corporate duly incorporated, organized and validly subsisting under
  the laws of British Columbia; 

(b)                 
  it has full power and authority to carry on mineral exploration 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 conflict with, result in the breach of or accelerate the
  performance required by any agreement or instrument to which it 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 the laws of any jurisdiction
  applicable or pertaining thereto or of its constating documents or directors'
  or shareholders' resolutions or any judgement, order, law or governmental or
  administrative regulation or restriction applicable to it; and 

(e)                 
  all corporate authorizations have been obtained for the execution of this Agreement
  and for the performance of its obligations hereunder. 

 2.2                 Amarc
  additionally represents and warrants to RCW that:

(a)                 the
  mineral claims and other interests comprising each Property are accurately described
  in Schedule 1, are presently in good standing under the laws of British Columbia
  and, except as noted in Schedule 1, are free and clear of all liens, charges
  and financial encumbrances and Amarc owns the percentage interest noted thereon;

(b)                 any
  mineral claims included in each Property as described in Schedule 1 have been
  properly and legally staked, recorded, tagged and maintained;

(c)                 there
  is no adverse claim or challenge against or to the ownership of or title to
  any of the mineral claims and other interests comprising each the Property,
  nor to the knowledge of Amarc is there any basis therefore or interest therein,
  and there are no other agreements or options to acquire or purchase any Property
  or any portion thereof, and no person has any other royalty or other interest
  whatsoever in production from any part of any Property;

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(d)                 
  no proceedings are pending for and Amarc is unaware of any basis for the institution
  of any proceedings leading to the dissolution or winding-up of Amarc or the
  placing of Amarc into bankruptcy or subject to any other laws governing the
  affairs of insolvent persons; 

(e)                 each
  Property and its existing and prior uses comply with and Amarc is not in violation
  of and has not violated in connection with its ownership, use, maintenance or
  operation of the Property, any applicable federal, provincial, municipal or
  local laws, regulations, orders or approvals, including environmental, health
  safety and similar matters; and 

(f)                 the
  performance of this Agreement will not be in violation of or conflict the memorandum
  and articles of Amarc or any agreement to which Amarc is a party and will not
  give any person or company right to terminate or cancel any agreement or any
  right enjoyed by Amarc and will not result in the creation or imposition of
  any lien, encumbrance or restriction of any nature whatsoever in favour of a
  third party upon or against the assets of Amarc. 

 2.3                 
  The representations, warranties, covenants, agreements and conditions herein
  set out upon which the parties have relied in entering into this Agreement and
  shall survive the acquisition of the Interest in a Property by RCW, and each
  party will indemnify and save the others harmless from all loss, damage, costs,
  actions and suits arising out of or in connection with any breach of any representation,
  warranty, covenant, agreement or condition made by them and contained in this
  Agreement (including, without limitation, legal fees and disbursements). 

 ARTICLE 3 

 OPTION AND EXPLORATION PROGRAMS 

 3.1                 Amarc
  hereby grants to RCW the right to earn a 50% Interest in each of the Properties
  by incurring Qualified Expenditures by funding Amarc with funds equal to the
  proposed Program for such property as described on Schedule 1, such funds to
  be utilized by Amarc in making Qualified Expenditures on the Properties for
  and on behalf of RCW on or before December 31, 2004 . Amarc agrees it shall
  make its best efforts to offer to RCW Qualified Expenditure Work Programs totalling
  at least $600,000 by December 31, 2004. On execution hereof, RCW shall elect
  to participate in the initial programs and shall fund it with a payment to Amarc
  of $600,000.

 3.2                 Amarc
  hereby grants to RCW the right to elect to cancel its right to earn an Interest
  in a Property by giving Amarc not less than 30 days notice and providing that
  it shall thereupon lose all interest in such Property. 

 3.3                 The
  Interest in each Property earned by RCW hereunder will be deemed to be earned
  rateably as Qualified Expenditures are incurred by Amarc on behalf of RCW. 

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 3.4                 Amarc
  may retain Hunter Dickinson Inc. or such other professionally qualified third
  party (herein referred to as a "Designee") as it deems appropriate to incur,
  on behalf of RCW, the Qualified Expenditures required by this Article 3. 

 3.5                 Amarc
  shall deliver to or cause to be delivered to RCW, on a monthly basis and within
  20 days of each month-end during the term of the earn-in, a statement of the
  Qualified Expenditures actually incurred on a Property during the preceding
  month along with an invoice for any shortfall in RCW's funding. RCW shall not
  be liable for program overruns. RCW may question the accuracy of any such statement
  and invoice, by written notice to Amarc delivered within thirty (30) days following
  the receipt by RCW of such statement. Upon delivery by Amarc of a notice questioning
  the accuracy of such statement, the matter shall be referred to Amarc's independent
  Chartered Accountants for final determination. If Amarc's independent Chartered
  Accountants are unable or unwilling to make such determination, the matter may
  be referred to arbitration in accordance with Article 6. If Amarc's accountant
  or the arbitrator, as the case may be, determines that Amarc's statement was
  accurate (within one percent (1%)), no other action shall be taken with respect
  thereto and the costs of such audit or arbitration, as the case may be, shall
  be borne by RCW. Otherwise the statement shall be corrected and Amarc will pay
  the audit or arbitration cost. 

 3.6                 During
  the currency of the earn-in rights under this Article 3, Amarc or its designee
  shall act as Operator for the purpose of carrying out work and incurring Qualified
  Expenditures on the Properties. All such work and Qualified Expenditures shall
  be in accordance with one or more Programs prepared by Amarc in consultation
  with RCW. Any amendments to any Program shall similarly be prepared by Amarc
  in consultation with RCW. Amarc shall have final decision in respect of the
  final budgets for all Programs and RCW's discretion is limited to participating
  in such Programs or terminating its earn-in rights related thereto. 

 3.7                 During
  the currency of RCW's rights pursuant to Article 3 hereunder, RCW or its representatives,
  at their own risk and expense, and upon giving Amarc reasonable prior notice,
  may access each Property on which they have a Property Commitment at all reasonable
  times and inspect all records prepared by Amarc in connection with work done
  on or with respect to such Property, pursuant to this Agreement. 

 3.8                 At
  any time prior to the Earn-In Date in respect of a Property, RCW may, subject
  to Amarc’s Call right referred to in Article 5 of this Agreement, terminate
  its Property Commitment so long as it is not in default of any of its obligations
  under this Agreement and has paid all amounts incurred to date, by giving 30
  days notice in writing to that effect to Amarc. In the event of termination,
  RCW shall retain no interest in the Property but shall be responsible for its
  share of costs incurred to the end of the 30 day period.

 3.9                 Subject
  to earlier termination hereunder and provided that Amarc has not exercised its
  Call right referred to in Article 5 of this Agreement, a Participation Date
  in respect of each Property shall be that date which is 180 days after the Earn-In
  Date. The date that the Program for a Property has been completed and paid for
  by RCW is the "Earn-In Date". 

 3.10                 At
  the close of business on the date which is the Participation Date, RCW and Amarc
  shall form the Joint Venture referred to in Article 4. 

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 ARTICLE 4 

 JOINT VENTURE 

 4.1                 Upon
  the Participation Date, Amarc and RCW will form a separate Joint Venture for
  each Property in which RCW has earned an RCW Interest. The Joint Venture shall
  be formed for the purpose of carrying out further exploration, and if warranted,
  further development. The parties will negotiate in good faith to execute a Joint
  Venture Agreement, said agreement to have standard Rocky Mountain Mineral Law
  Foundation model agreement terms and shall include as primary terms, but not
  be limited to, the following provisions:

(a)                 the
  initial interest of RCW in each Joint Venture will be RCW's Interest in the
  Property earned pursuant to this Agreement expressed as a percentage, and the
  Interest of Amarc will be 100% less RCW's Interest expressed as a percentage;

(b)                 Amarc
  shall be the operator of the Joint Venture as long as Amarc has at least 50%,
  otherwise RCW shall be operator; 

(c)                 the
  operations of the Joint Venture will be overseen by a management committee,
  with each party to have voting rights on such committee equal to their Interest
  in the Joint Venture; 

(d)                 each
  party will have 15 days following adoption of a work program to elect to participate
  therein and invoices rendered to participating parties in respect of any work
  program shall be payable within 30 days; and 

(e)                 each
  party will grant to the other a 30-day right of first refusal with respect to
  the sale of such party's interest in the Joint Venture. 

 ARTICLE 5 

 AMARC'S CALL RIGHTS 

 5.1                 On
  the Earn-In Date RCW shall have the RCW Interest in a Property, if any, determined
  according to Article 3. 

 5.2                 
  For a period of 180 days after the Earn-In Date, Amarc shall have the exclusive
  right to purchase any or all, but not less than 100% individually (a "Call"),
  of each of RCW's Interests providing such purchase is completed within 60 days
  from the Call Notice to RCW, subject to such 60 day period being extended by
  any period reasonably required by Amarc (using always its reasonable efforts
  to complete the Call) necessitated by the requirements of any regulatory authority.
  Each Call Notice shall be initiated, where applicable, in the form attached
  as Schedule 2. 

 5.3                 Each
  Call may be exercised in cash or in consideration of the issuance of Amarc common
  shares or in a combination of both in Amarc’s sole discretion. The acquisition
  Call price of RCW’s called Interest to Amarc shall be equal to the sum
  of a number of Amarc shares 

 - 9 - 

 (or cash equivalent) valued as provided for in §5.4 in an amount which
  is agreed by the parties but which shall not be less than 110% of the Qualified
  Expenditures incurred by or for the account of RCW to earn its Interest in a
  Property. The total Amarc shares (or cash equivalent) so agreed being herein
  the “Call Price” .If the parties are unable to agree on the Call
  Price the parties shall retain an independent valuator who shall provide an
  opinion to the parties as to the fair value of the RCW Interest to be called.
  If either party disagrees with the value a second opinion shall be obtained
  and the two valuations shall be averaged to arrive at the Call Price. All valuators
  must hold appropriate credentials and must be acceptable to the TSX Venture
  Exchange. If Amarc elects not to proceed with acquisition after receiving one
  or two valuations it need not complete the Call and the parties will thereupon
  form the joint venture.

 5.4                 The
  common shares of Amarc to be issued upon exercise of the Call shall be valued
  at the weighted average 5-day trading prices (sum of the last trade price in
  the day times volume for the trade day over 5-days; then the sum thereof divided
  by the total volume over the 5-day period) of Amarc's common shares as quoted
  on the TSX for the 5-trading days prior to the date of the call notice after
  Amarc provides RCW with notice of its intention to exercise the Call. 

 ARTICLE 6 

 ARBITRATION 

 6.1                 Any
  matter required or permitted to be referred to arbitration pursuant to this
  Agreement will be determined by a single arbitrator to be appointed by the parties
  hereto. 

 6.2                 Any
  party may refer any such matter to arbitration by written notice to the others
  and, within ten days after receipt of such notice, the parties will agree on
  the appointment of an arbitrator. No person will be appointed as an arbitrator
  hereunder unless such person agrees in writing to act. 

 6.3                 If
  the parties cannot agree on a single arbitrator as provided in §6.1, or
  if the person appointed is unwilling or unable to act, either party may request
  the court to appoint a single arbitrator in accordance with the Commercial
  Arbitration Act of the Province of British Columbia (the "Act"). 

 6.4                 
  Except as specifically provided in this Article, an arbitration hereunder shall
  be conducted in accordance with the Act. The arbitrator shall fix a time and
  place in Vancouver, British Columbia for the purpose of hearing the evidence
  and representations of the parties and he shall preside over the arbitration
  and determine all questions of procedure not provided for under such Act or
  this Article. After hearing any evidence and representations that the parties
  may submit, the arbitrator shall make an award and reduce the same to writing
  and deliver one copy thereof to each of the parties. The decision of the arbitrator
  will be made within 45 days after his appointment, subject to any reasonable
  delay due to unforeseen circumstances. The expense of the arbitration shall
  be paid as specified in the award. The parties agree that the award of the single
  arbitrator shall be final and binding upon each of them and shall not be subject
  to appeal. 

  

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ARTICLE 7 

 NOTICE 

 7.1                 Any
  notice, direction or other communication required or permitted to be given under
  this Agreement shall be in writing and may be given by the delivery of the same
  or by mailing the same (first class postage prepaid) or by sending the same
  by facsimile transfer or other similar form of telecommunication, in each case
  addressed as follows: 

	 	 (a)      	 If to Amarc, at: 
	 
	 	 	Suite 1020 - 800 West Pender Street

      Vancouver, British Columbia, V6C 2V6 
	 
	 	 	 Attention: Ronald Thiessen 

      Fax: (604) 684-8092 
	 
	 	 (b)      	 If to RCW, at: 
	 
	 	 	Suite 1020 - 800 West Pender Street

      Vancouver, British Columbia, V6C 2V6 
	 
	 	 	 Attention: Rene Carrier 

      Fax: (604) 684-8092 

 7.2                 Any
  notice, direction or other communication aforesaid shall, if delivered, be deemed
  to have been given and received on the day it was delivered and, if mailed,
  shall be deemed to have been given and received on the third Business Day following
  the day of mailing, except in the event of disruption of the postal service
  in which event notice shall be deemed to be received only when actually received
  and, if sent by facsimile transfer or other similar form of telecommunication,
  shall be deemed to have been given or received on the next Business Day following
  the day on which it was so sent. 

 7.3                 Any
  party may at any time give to any other party notice in writing of any change
  of address of the party giving such notice or of notice of an assignment giving
  contact information of a new party, and from and after the giving of such notice,
  the address therein specified shall be deemed to be the address of such party
  for the purposes of giving notice hereunder. Any change of address notice shall
  include a contact number for the sending of notices by telecommunication hereunder.

 ARTICLE 8 

 FORCE MAJEURE 

 8.1                 
  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,
  earthquake, explosion, strikes, lockouts or other industrial disturbances, power
  line failures; laws, rules and regulations or orders of any duly constituted
  court or governmental authority; or nonavailability of materials or transportation
  (each an "Intervening Event"). 

 - 11 - 

 8.2                 All
  time limits imposed by this Agreement will be extended by a period equivalent
  to the period of delay resulting from an Intervening Event described in this
  Article, plus an additional time period reasonable in the circumstances. 

 8.3                 A
  party relying on the provisions of this Article will take all reasonable steps
  to eliminate any 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 court or governmental
  authority or to complete its obligations under this Agreement if an Intervening
  Event renders completion impossible. 

 8.4                 A
  party relying on the provisions of this Article shall give notice to the other
  party forthwith upon the occurrence of the Intervening Event and forthwith after
  the end of the period of delay when such Intervening Event has been eliminated
  or rectified. 

 8.5                 No
  party claiming force majeure has any obligation to accede to labour demands
  in strike or lock-out situations. 

 ARTICLE 9 

 GENERAL PROVISIONS 

 9.1                 This
  Agreement constitutes the entire agreement between the parties and replaces
  and supersedes all prior agreements, memoranda, correspondence, communications,
  negotiations and representations, whether oral or written, express or implied,
  statutory or otherwise between the parties with respect to the subject matter
  herein. This Agreement may not be amended or modified except by an instrument
  in writing signed by each of the parties hereto. 

 9.2                 No
  consent or waiver, express or implied, by any party to or of any breach or default
  by any other party of any or all of its obligations under this Agreement will:

(a)                 be
  valid unless it is in writing and stated to be a consent or waiver hereunder;

(b)                 be
  relied upon as a consent or waiver to or of any other breach or default of the
  same or any other obligation; 

(c)                 constitute
  a general waiver under this Agreement; or 

(d)                 eliminate
  or modify the need for a specific consent or waiver in any other or subsequent
  instance. 

 9.3                 The
  parties will execute such further and other documents and do such further and
  other things as may be necessary or convenient to carry out and give effect
  to the intent of this Agreement. 

 9.4                 All
  payments to be made to any party hereunder may be made by cheque or draft mailed
  or delivered to such party at its address for notice purposes as provided herein,
  or for the 

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account of such party at such bank or banks in Canada as such party may designate from time to time by written notice. Such bank or banks shall be deemed the agent of the designating party for the purpose of receiving, collecting and receipting such
payment. 

 9.5                 If
  any party (a "Defaulting Party") is in default of any requirement herein set
  forth, the other party may give written notice to the Defaulting Party specifying
  the default. The Defaulting Party shall not lose any rights under this Agreement
  unless, within 30 days after the giving of notice of default by the other party,
  the Defaulting Party has failed to take reasonable steps to cure the default
  by the appropriate performance or the Defaulting Party fails to dispute the
  notice of default. Upon any such failure, the other party shall be entitled
  to seek any remedy it may have on account of such default. 

 9.6                 Time
  shall be of the essence in the performance of this Agreement. 

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

 9.8                 
  If any right, power or interest of any party in any property under this Agreement
  would violate the rule against perpetuities, then such right, power, or interest
  shall terminate at the expiration of 20 years after the death of the last survivor
  of all the lineal descendants of Her Majesty, Queen Elizabeth II, living on
  the date of execution of this Agreement. 

 IN WITNESS WHEREOF the parties hereto have executed this Agreement
  the _____ day of November, 2004 effective as of the 1st day of November, 2004.

	 AMARC RESOURCES LTD.  	 
	 	 	 
	 	 	 
	Per:  	  	 
	 	 Ronald W. Thiessen 	 
	 	 	 
	 	 	 
	 ROCKWELL VENTURES INC.  	 
	 	 	 
	 	 	 
	Per:  	  	 
	 	 Rene Carrier  	 

 SCHEDULE 1 

  
    
      
        
          
             To a Farmout and Joint Venture Agreement between
              Amarc Resources Ltd. 

              and Rockwell Ventures Inc. dated for reference the 1st day of November,
              

              2004. 

          

        

      

    

  

 DESCRIPTION OF PROPERTIES 

	 Property  	 Claims 	 British Columbia Tenure

       Numbers  	 Percentage Owned 
 By
      Amarc 	 Qualified Expenditure 
 Programs 
    
	 KALDER  	 KAL 1 to KAL 9 	 414001  to 414008, 415081 
    	 100% 	 $ 180,000  
	 M2  	 M2#1 to M2#9 	 411863 to 411869, 413183, 413184 
    	 100% 	  $105,000  
	 TSIL  	 TSIL 1 to TSIL 4 	 413997 - 414000  	 100% 	  $125,000  
	 M5  	 M5#1, M5#2 	 415330, 415331  	 100% 	 $ 75,000  
	 M3  	 M3#1 	 415100  	 100% 	  $55,000  
	 CRYSTAL  	 CRYSTAL 1 to CRYSTAL 9 	 408539 to 408542, 411322  to 411326 
    	 100% 	  $30,000  
	 HOOK  	 RAT 1 to RAT 7 	 409496 to 409502  	 100% 	  $30,000  

 SCHEDULE 2 

  
    
      
        
          
             To a Farmout and Joint Venture Agreement between Amarc Resources
              Ltd. and Rockwell Ventures Inc. dated for reference the 1st day
              of November, 2004 

          

        

      

    

  

 CALL NOTICE 

 Date ‹›

 TO: ‹› which has acquired an Interest
  pursuant to the Farmout and Joint Venture Agreement dated for reference the
  1st day of November, 2004. 

 Amarc hereby gives you notice that it intends to purchase your Interest in
  the Property by the issuance of ‹›
  Amarc Shares valued at $‹› each
  and/or cash of $‹›. Our calculation
  of the Call amount is attached. 

 Please confirm your preparedness to accept the foregoing consideration or
  notify us of a price which is acceptable to you.

	 AMARC RESOURCES LTD.  	 
	 	 	 
	 	 	 
	Per:  	  	 
	 	 Authorized Signatory  	 

 Receipt of the foregoing Call terms are acknowledged this ___ day of _______________
  , 2005. 

‹›

	 	 	 
	Per:  	  	 
	 	 Authorized SignatoryEXHIBIT 10.19
                                                                   -------------

                        SCHNITZER STEEL INDUSTRIES. INC.

                              AMENDED AND RESTATED

                     ECONOMIC VALUE ADDED ("EVA") BONUS PLAN

                          EFFECTIVE DATE: JULY 15, 2004

The following are the terms of the Schnitzer Steel Industries, Inc. (the
"COMPANY", "SCHNITZER STEEL" or "SSI") EVA ("ECONOMIC VALUE ADDED") Bonus Plan
(the "PLAN") for certain employees of the Company and its wholly-owned
subsidiaries, including Cascade Steel Rolling Mills, Inc. ("CASCADE STEEL") (but
excluding its subsidiary, Pick-N-Pull Auto Dismantlers, which is subject to a
separate EVA Bonus Plan), as amended and restated, effective July 15, 2004.
References to the "COMPANY", "SCHNITZER STEEL" or "SSI" shall be deemed to refer
instead to a wholly owned subsidiary as the context requires for a particular
employee, employed by such subsidiary.

A.     1.     Purpose of the Bonus Plan
              -------------------------

              In order to align employee incentives with shareholder and lender
              interests, incentive compensation will reward the creation of
              value for the Company. This Plan will tie incentive compensation
              to Economic Value Added ("EVA") and, thereby, reward participants
              for creating value and also "feel" the effect of a reduction in
              value.

       2.     Eligibility
              -----------

              Eligibility for the Plan is limited to regular, full time and part
              time employees (as determined by the Human Resources Policy #250
              Employee Definition) and its wholly owned subsidiaries who have
              worked for the Company for a minimum of 90 days, exclusive of the
              employees subject to a collective bargaining agreement, unless
              such agreement expressly provides otherwise (collectively, the
              "EMPLOYEES" or "PARTICIPANTS"). Newly hired regular, full time or
              part time Employees who meet the criteria for participation are
              eligible to earn their first bonus based upon their EVA Earnings
              (as defined below) from their date of hire through the end of the
              applicable fiscal year, provided they meet the minimum duration of
              employment as stated above. The Plan Administrator shall designate
              the EVA Center for each Employee (which may be determined by
              category, e.g., Employee's job designation). An Employee may be in
              one or more EVA Centers (prorata). The Company's Human Resources
              Department shall maintain the list of EVA Centers.

       3.     Bonus Calculation
              -----------------

       (a)    The bonus earned for Participants during a Plan year will be
              determined based upon the applicable fiscal year's actual EVA of
              the Participant's EVA Center(s). EVA is defined as Net Operating
              Profit After Taxes ("NOPAT") - Capital Charge (see Attachment A).

              A Participant's initial declared bonus (the "EVA BONUS
              DECLARATION" or "BONUS") will be computed as follows:

              EVA
              BONUS  =                EVA  X      TARGET    X    BONUS
              DECLARATION             EARNINGS    BONUS          MULTIPLE

              To better understand how an EVA Bonus will be declared, see the
              example below.
<PAGE>

       (b)    The BONUS MULTIPLE is determined by the EVA achieved for the
              fiscal year ("ACTUAL EVA") compared to the EVA objective for that
              year. The Bonus Multiple is mathematically determined as follows:

              Bonus Multiple = 1 + Actual EVA - Target EVA
                                   -----------------------
                                     EVA Leverage Amount
                                      (the "INTERVAL")

       (c)    The EVA LEVERAGE AMOUNT (also called the "INTERVAL") is the change
              in EVA over and above the Target EVA required to double a bonus
              (i.e., change from a 1.0 to a 2.0 times Bonus Multiple) or the
              shortfall below Target EVA needed to change from a 1.0 to a 0.0
              times Bonus Multiple. The EVA Leverage Amount varies by EVA
              Center, based on the expected volatility of the operating results.

              Expected improvement in EVA and EVA Leverage Amounts are
              determined during the calibration period, normally every two to
              three years or when there is a material change in the Company's
              business or Capital structure, which is determined at the sole
              discretion of the Plan Administrator or with respect to Executive
              Officers, the Compensation Committee of the Company's Board of
              Directors (the "COMPENSATION COMMITTEE").

       (d)    EVA TARGET BONUS. Eligible Participants will have a Target Bonus
              expressed as a percentage of their earnings in the fiscal year.
              The Target Bonus percentage varies by level of responsibilities
              within the Company. The Human Resources Department maintains the
              list of Employees and their EVA Target Bonus Percentages.

              The Target Bonus for each employee is determined by multiplying
              the Employee's EVA Earnings (defined below) during the fiscal year
              by the Target Bonus percentage.

       (e)    EVA FISCAL YEAR EARNINGS (EVA EARNINGS) are those earnings
              described in Attachment B. Any compensation not listed on
              Attachment B is specifically excluded from EVA Earnings,
              including, without limitation, commissions, relocation payments,
              auto allowances, other fringe benefits and extraordinary payments.
              EVA Earnings exclude EVA Bonus payments under the Plan.

       (f)    EXAMPLE: The following is an example of an EVA Bonus Declaration
              for a fictitious "Employee A":

              EVA Earnings = $35,000
              EVA Target Bonus = 10% of EVA Earnings of $3,500
              EVA Leverage or Interval = $2,000,000
              Target EVA for fiscal 200X = $500,000
              Actual EVA for fiscal 200X = $650,000
              Bonus Multiple =
                             1 + (650,000 - 500,000)
                                 -------------------
                                      2,000,000      = 1.075

              EVA Bonus Declaration =  EVA Earnings x Target Bonus x Bonus
                                       Multiple
                                    =  $35,000 x 10% x 1.075
                                    =  $3,763

       4.     Performance Versus Target
              -------------------------

              The Plan has significant upside, as well as downside performance
              potential. The incentive earnings are based on EVA improvement of
              the Employees' assigned EVA Center(s). If the EVA Center

                                      -2-
<PAGE>

              achieves its Targeted level of EVA improvement, the Employees
              within that EVA Center will achieve their EVA Target Bonus
              Percentage or 1.0 times their Bonus Multiple. If the EVA Center
              exceeds its Targeted level of improvements its Employees will earn
              a multiple greater then 1.0. Conversely, if the EVA Center falls
              below its EVA Target, the Employees will earn a multiple that is
              less than 1.0.

              The Plan is designed to provide the Participants with significant
              upside opportunity, but they also will participate in any dramatic
              negative changes in EVA.

       5.     Bonus Caps and Floor
              --------------------

              In order to protect the Plan Participants from SIGNIFICANT swings
              in performance the Plan is designed with Caps and Floors.
              Generally, the Cap and Floor will vary by EVA Center and Employee
              job classification. The following are the Cap and Floor details
              for the respective business units:

       (a)    ALL SSI EVA CENTERS, WITH THE EXCEPTION OF CASCADE STEEL (GRADES 9
              AND ABOVE) AND PICK-N-PULL AUTO DISMANTLERS. For Participants with
              a salary grade of 9 or above, EVA Bonus Declarations under the
              Plan will not exceed 3x a Participant's EVA Target Bonus (the
              "CAP"), in other words, 300% of Target Bonus and in the event of
              negative performance, will not be more than - 1.0x a Participant's
              EVA Target Bonus (the "FLOOR"), being negative 100% of Target
              Bonus. The Cap and Floor only limit the annual EVA Bonus
              Declaration, but do not limit the Target EVA for the succeeding
              year.

              Earnings cannot be taken away; however, it is possible to earn a
              "negative bonus". A negative bonus will result if the actual EVA
              in any year falls DRAMATICALLY short of the EVA Target. In this
              case, the negative bonus would be applied to the EVA Bonus Bank,
              if applicable. See the discussion below regarding the EVA Bonus
              Bank.

              Participants with a salary grade of 8 and below and/or hourly,
              will not participate in the EVA Bonus Bank and therefore will not
              be subject to a negative Bonus. In exchange, the Bonus Multiple
              for these Participants will not exceed 2.0. The amount of any
              positive Bonus shall be paid in cash (net of withholdings) to
              these Participants on the applicable Payment Date.

       (b)    CASCADE STEEL. Due to the Company's announcement in May 2004 that
              it would explore options with respect to Cascade Steel, it was
              determined by Cascade Steel's senior management team that the
              Cascade Steel Plan Participants who are Grade 9 and above will not
              be subject to a Cap or Floor. Thus, they have unlimited upside and
              downside.

              Cascade Steel Participants with a salary grade of 8 and below
              and/or hourly will not participate in the EVA Bonus Bank and
              therefore will not be subject to a negative bonus. In exchange,
              the Bonus Multiple for these Participants will not exceed 2.0. The
              amount of any positive Bonus shall be paid in cash (net of
              withholdings) to these Participants on the applicable Payment
              Date.

       6.     Payment of Bonus and EVA Bonus Bank (Grades 9 and Above)
              --------------------------------------------------------

              The amount of any positive Bonus shall be paid in cash (net of
              withholdings) to the Participant, subject to a banking system of
              two thirds of the amount in excess of the Annual EVA Target Bonus.
              The total Bonus PAYMENT (each an "INDIVIDUAL AWARD") for each Plan
              year will be determined as follows:

                    BEGINNING YEAR BANK BALANCE
              +     EVA BONUS DECLARED
              =     AVAILABLE BANK BALANCE

                                      -3-
<PAGE>

              -     PAYOUT UP TO 100% OF ANNUAL EVA TARGET BONUS TO PARTICIPANT
              =     BONUS BANK BALANCE AVAILABLE TO BE PAID IN CURRENT YEAR
              -     CURRENT YEAR BANK PAYOUT EQUAL TO 33 1/3% OF ANY BANK
                    BALANCE AVAILABLE

              =     ENDING  YEAR BANK BALANCE

              The banking of Bonuses serves to smooth Bonus payouts over the
              business cycle. This banking system also ensures that performance
              is sustained by making the payout of bank balances contingent on
              sustained performance, through the formula outlined above.

              The payment will be made (net of withholding) shortly after the
              Company's fourth quarter earnings release, for each Plan year,
              after all financial statement audits are completed (each a
              "PAYMENT DATE").

              The Bonus Bank balance, if any, is not separately funded or set
              aside like a 401(k) Plan and/or Pension Plan and remains an asset
              of the Company, subject to the rights of general creditors.
              Further, it is not adjusted for interest or investment gains and
              losses.

       7.     Negative Bonus Bank (Grades 9 and Above)
              ----------------------------------------

              As previously mentioned, the Plan subjects certain Participants to
              risks that can result in both significantly higher Bonus payouts
              than the EVA Target Bonus, but can also cause Bonus declarations
              to be negative. A Negative Bonus Declaration can cause a
              Participant's Bonus Bank to be negative entering a new Plan year.
              In this circumstance any negative Bonus Bank must be repaid as
              follows: In a year a "positive" EVA Bonus Declaration is made, 50
              cents of every dollar of such EVA Bonus will be used, first to
              repay the negative Bonus Bank amount until the Bonus Bank balance
              is at zero, and the balance of the EVA Bonus will be paid (and a
              portion may be placed in the Bonus Bank as provided in paragraph
              A. 6 above) to the Participant on the applicable Payment Date.

              EXAMPLE:

              Fictitious "Employee A's" EVA Earnings = $35,000
              EVA Target Bonus % = 10%

              Beginning Bonus Bank Balance                              ($3,500)
              Current year Bonus Multiple = .50x
              EVA Bonus Declaration = $1,750
                  Repay the negative Bonus Bank
                  Balance $.50 per $1.00                         875
                                                             -------
              Ending Year Bonus Bank Balance                 ($2,628)

              Individual Award paid in current year                        $875

B.     Administration and Guidelines of the Plan
       -----------------------------------------

              Administration of the Plan is at the sole discretion of the
              Company's Chief Executive Officer (the "PLAN ADMINISTRATOR")
              except with respect to the Company's Executive Officers, for whom
              the Plan shall be administered by the Compensation Committee of
              the Company's Board of Directors. The Plan Administrator shall
              establish the EVA Centers. Guidelines for EVA adjustments and the
              "capitalization" of certain items will be maintained by the
              Company's Chief Financial Officer (the "CFO"). The Plan may be
              amended in whole or in part from time to time, or terminated in
              its entirety by the Plan Administrator or the

                                      -4-
<PAGE>

              Board of Directors, provided that no such amendment or termination
              shall adversely affect any positive balance then remaining in a
              Participant's Bonus Bank. Guidelines for the Plan's administration
              are:

       1.     Duration of the Current Plan Provisions
              ---------------------------------------

              It is anticipated that the EVA Bonus Plan will endure long into
              the future. However, the current provisions in the Plan have been
              set and are not anticipated to change, except in the unusual
              circumstances that include a significant change in the Company's
              business operations and/or a material change in capital structure.
              It is anticipated that every two to three years, the Plan's
              provisions will be reviewed and key factors MAY be recalibrated.

       2.     Individual Awards
              -----------------

              Individual Awards for exempt and non-exempt eligible Participants
              shall be based on the EVA Earnings (as defined in Attachment B) of
              each Participant during the applicable fiscal year.

       3.     Determination of EVA Improvement Factors/Targets
              ------------------------------------------------

              The EVA Targets for each EVA Center will be objectively calculated
              based upon its prior year's actual EVA, plus an improvement
              factor, which is determined as part of the Plan's recalibration. A
              summary of each EVA Center's improvement factors will be
              maintained by the CFO and will be reviewed during the
              recalibration periods.

       4.     Determination of Bonus Awards
              -----------------------------

              The CFO will compute each EVA Center's EVA for the fiscal year and
              present it for approval by the Plan Administrator.

       5.     New Hires/Promotions
              --------------------

              An individual who is hired/promoted into a position that
              participates in the EVA Bonus Plan may be eligible for a Bonus
              award so long as he/she has been employed full or part time for 90
              consecutive days. (see Eligibility on page 1). The EVA Bonus will
              be based upon the EVA Earnings from the date of hire/promotion to
              the end of the fiscal year.

              Mid-year promotions that change the Employee's EVA Target Bonus
              and/or EVA Center will be weighted based on the number of days at
              each EVA Target Bonus level and/or days in each EVA Center.

       6.     Transfers
              ---------

              A Participant who transfers his or her employment from one EVA
              Center to another shall have his or her EVA Bonus Bank transferred
              to the new EVA Center. For the year in which the transfer occurs,
              the Participant will have his or her EVA Bonus Declaration
              weighted based on the time spent in each particular EVA Center The
              Participant's weighted average EVA Bonus Multiple will be based on
              each EVA Center's full year EVA performance, prorated based upon
              the period the Participant was employed in each EVA Center.

       7.     Death or Disability
              -------------------

              A Participant who dies or becomes permanently disabled, as defined
              by the Company's disability policy, while in the employment of the
              Company, shall receive full payment of his or her positive Bonus
              Bank Balance, if any, after the EVA Bonus payment for the year in
              which he or she dies or becomes permanently disabled has been
              calculated, together with his or her pro-rata share of the

                                      -5-
<PAGE>

              current year's EVA Bonus Declaration (to the extent it results in
              a positive number). In the event of death, the payment will be
              made to the Employee's estate. Such payments shall be made on the
              Payment Date in respect to the Plan year in which such death or
              disability occurs.

       8.     Retirement
              ----------

              A Participant who retires from the Company shall receive full
              payment of his or her positive Bonus Bank Balance, if any, that
              remains after the calculation of the Participant's EVA Bonus
              Declaration for the fiscal year in which such retirement occurs,
              together with his or her pro-rata share of the current year's EVA
              Bonus Declaration (to the extent it results in a positive number).
              The payment of the Bonus Bank, if any, will be made in a lump sum
              on the Payment Date in respect of the Plan year in which such
              retirement occurs. Negative Ending Bonus Bank Balances are waived.
              For the purposes of this paragraph 8, a person who is at least age
              55 is deemed to be "retired" when he/she would receive retirement
              benefits under his or her retirement pension plan, if any.

       9.     Involuntary Termination without Cause
              -------------------------------------

              A Participant who is involuntarily terminated without cause will
              receive full payment of his or her Bonus Bank Balance on the
              Payment Date next following the Employee's date of termination.
              Negative Ending Bonus Bank Balances are waived.

       10.    Voluntary Resignation or Termination with Cause
              -----------------------------------------------

              Except as expressly provided above, voluntary termination of
              employment or termination with cause (as determined by the Plan
              Administrator or the Compensation Committee, as applicable) shall
              result in forfeiture of the Participant's Bonus Bank Balance and
              any EVA Bonus Declaration for the fiscal year in which voluntary
              resignation or termination with cause occurs.

       11.    General Provisions
              ------------------

       (a)    Withholding of Taxes. The Company shall have the right to withhold
              the amount of taxes, which it determines is required to be
              withheld under law with respect to any amount payable under this
              Plan.

       (b)    Expenses. All expenses and costs in connection with the adoption
              and administration of the Plan shall be borne by the Company.

       (c)    No Prior Right or Offer. Except and until expressly granted
              pursuant to the Plan, nothing in this Plan shall be deemed to give
              any Employee any contractual or other right to participate in the
              benefits of the Plan. No award to any such Participant in any Plan
              period shall be deemed to create a right to receive any award or
              to participate in the benefits of the Plan in any subsequent Plan
              Period.

       12.    Limitations
              -----------

       (a)    No Continued Employment. Neither the establishment of the Plan or
              the grant of an award hereunder shall be deemed to constitute an
              express or implied contract of employment with any Participant for
              any period of time, or change an Employee's "at will" status, or
              in any way abridge the rights of the Company to determine the
              terms and conditions of employment or to terminate the employment
              of any Employee with or without cause, at any time.

       (b)    Not Part of Other Benefits. The benefits provided in this Plan
              shall not be deemed a part of any other benefit provided by the
              Company to its employees. The Company assumes and shall have no
              obligation to Participants except as expressly provided in this
              Plan.

                                      -6-
<PAGE>

       (c)    Other Plans. Nothing contained herein shall limit the Company's
              power to grant bonuses to employees of the Company, whether or not
              they are Participants in this Plan.

                                      -7-
<PAGE>

ATTACHMENT A

                                 GUIDELINES FOR:
                         AMENDMENTS TO EVA TARGET LEVELS
                       AND THE CAPITALIZATION OF EXPENSES

                   AMENDMENT TO EVA TARGET PERFORMANCE LEVELS
                   ------------------------------------------

The EVA performance Targets established under the EVA Bonus Plan is intended to
achieve long term improvements in shareholder value. These Targets have been
objectively determined based on investors' expectations of the Company's
returns. Changes to these Targets are expected to be infrequent, but are likely
to change upon the recalibration of the Plan or upon a major acquisition or
divestiture by the Company. It is expected that the Plan will be recalibrated
every two to three years. Nonetheless, situations will arise in which it is
appropriate to revise such objectives.

                           CAPITALIZATION OF EXPENSES
                           --------------------------

Similarly, certain "significant" expenses, losses, income and gains should not
be considered normal due to their unusual nature. Under EVA theory certain of
these expenses should be "capitalized" so that they do not distort operating
results calculated under EVA in any given year. These items are to be added to
the capital base of the EVA Center and thus required to earn a return as long as
these capitalized expenses remain a part of the capital base. A capitalized
expense (a "CAPITAL CHARGE") would usually have one or more of the following
criteria:

     o    Material to the Company
     o    Unusual
     o    Nonrecurring in the foreseeable future
     o    Result in tangible, measurable, long-term benefit to the business.

     Some examples of significant unusual income and expense items that MIGHT be
     capitalized are as follows:

     o    Significant shut-down expenses related to consolidation of operating
          units following an acquisition
     o    Expenses related to a Plant closing. The shut-down is expected to lead
          to improved operating profits
     o    (Gains)/Losses on the disposal of equipment
     o    Income received from a legal settlement (e.g., electrode price fixing
          settlement)
     o    Significant, legacy environmental issues that are the result of
          changes in law or government focus

     Some examples of costs that should NOT be capitalized are as follows:

     o    Ongoing environmental prevention and "normal" remediation costs
          associated with the business
     o    Losses resulting from holding inventory or decreases in market prices
     o    New revenue sources (e.g., power sales, adding a new product line like
          dock activity, etc.)
     o    Employee severance costs resulting from terminations and
          hiring/relocation expenses

The CFO will review all requests for capitalization of expenses, which should be
submitted prior to incurring the costs or expenses, where practical. Any
revisions to EVA calculations are at the discretion of the Plan Administrator
and/or the Compensation Committee, as the case may be.

                                 EVA ADJUSTMENTS
                                 ---------------

In order to calculate EVA in a manner that is consistent with the underlying
economics of the business and to properly align management motivations with
investor expectations, the Company will make certain adjustments to

                                      -8-
<PAGE>

the "normal' financial statements that are produced for external reporting. As
part of the implementation of EVA, a cross functional team of managers from
across the Company analyzed potential adjustments that could be made. Based upon
this analysis the following EVA adjustments will be made on a monthly basis to
calculate EVA:

A. NOPAT (NET OPERATING PROFITS AFTER TAXES) IS CALCULATED AS NET INCOME, WHICH
INCLUDE, WITHOUT LIMITATION, THE FOLLOWING ADJUSTMENTS:

1.     Interest expense is added back to NOPAT.
2.     The interest component of operating lease expense is added back to NOPAT.
       The interest component of operating lease expense is calculated as
       capitalized operating leases x cost of borrowing.
3.     Income resulting from non-operating items (capitalized bond fees at CSRM,
       benefit plan assets, certain non-operating notes) is excluded from the
       calculations.
4.     The after-tax amount of non-recurring expense (income) is excluded from
       NOPAT calculations, but added to (subtracted from) Capital.
5.     Increase in the bad debt reserve is added back to NOPAT.
6.     Increase in the valuation reserves is added back to NOPAT. No such
       adjustment is required for the scrap inventory.
7.     Amortization of goodwill is added back to NOPAT.
8.     Expenses from strategic investments may be capitalized into a suspense
       account and brought in to the EVA calculations over time if approved in
       advance by the steering committee with a specified schedule.
9.     Economic taxes are calculated by applying economic tax
10.    Delinquent customer advances are amortized as a NOPAT expense over a
       limited, defined period.

B. CAPITAL IS CALCULATED AS TOTAL ASSETS, WHICH INCLUDE, WITHOUT LIMITATION, THE
FOLLOWING ADJUSTMENTS:

1.     Non-interest bearing current liabilities (accounts payable, accrued
       payroll liabilities, etc.) are subtracted from Capital, but current
       portion of environmental liability is not treated as a non-interest
       bearing current liability.
2.     Capitalized operating leases are added to Capital.
3.     Non-operating items are removed from Capital.
4.     The after-tax amount of non-recurring expense (income) is added to
       (subtracted from) Capital.
5.     Accounts receivable is grossed up to include the bad debt reserve.
6.     Inventory is grossed up to include any valuation reserves.
7.     Goodwill is grossed up to include accumulated amortization.
8.     Capital from strategic investments may be capitalized into a suspense
       account and brought in to the EVA calculations over time if approved in
       advance by the Plan Administrator with a specified schedule.
9.     Cumulative difference between the cash tax paid by Schnitzer Steel and
       the economic tax is added to Capital.
10.    Delinquent customer advances are amortized over a limited, defined
       period.

The Company will continue to review the list of adjustments and consider changes
or additions to the list of adjustments as part of the Plan's calibration.

                                      -9-
<PAGE>

ATTACHMENT B

                     EVA FISCAL YEAR EARNINGS (EVA EARNINGS)

       Regular Salary (base salary)
       Overtime (applies to non-exempt employees)
       Double-time (applies to eligible non-exempt employees)
       Bereavement
       Adjusted Wages (adjustments to wages)
       Vacation (vacation pay, where applicable)
       PTO (paid time off, where applicable)
       Sick (sick pay, where applicable)
       Disability Bank ("frozen" sick leave balances applicable only to those
            Employees who were employed by the Company prior to the
            implementation of the PTO program)
       Floating Holiday, if applicable
       Miscellaneous Fringe Benefits (pursuant to list maintained by the
            Company's Human Resources Department)
       Shift differential pay
       Jury duty
       Military leave

                                      -10-
<PAGE>

                                GLOSSARY OF TERMS

References to defined terms in the EVA Bonus Plan:

              Term:                                    Paragraph:
              ----                                     ----------

        Actual EVA                                        A. 3(b)

        Bonus                                             A. 3(a)

        Bonus Bank                                          A. 6

        Bonus Multiple                                    A. 3(b)

        Calibration Period                            See Attachment A

        Cap                                               A. 5(a)

        Capital                                       See Attachment A

        Capital Charge                                See Attachment A

        CFO                                         B (first paragraph)

        Compensation Committee                            A. 3(c)

        Employee/Participant                                A. 2

        EVA                                            A. 1 / A. 3(a)

        EVA Bonus Declaration                             A. 3(a)

        EVA Center                                          A. 2

        EVA Earnings                                      A. 3(e)

        EVA Leverage Amount or Interval                   A. 3(c)

        EVA Target Bonus or Target Bonus                  A. 3(d)

        Expected Improvement                                B. 3

        Floor                                             A. 5(a)

        Individual Awards                                   A. 6

        Interval (or EVA Leverage Amount)                   A. 3

        Negative Bonus                                      A. 4

        NOPAT                                             A. 3(a)

                                      -11-
<PAGE>

              Term:                                    Paragraph:
              ----                                     ----------

        Payment Date                                        A. 6

        Plan                                       Introductory paragraph

        Plan Administrator                          B. (first paragraph)

        Schnitzer Steel or SSI or Company          Introductory paragraph

                                      -12-

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