QUARTZ MOUNTAIN RESOURCES LTD.
(the “Company”) SHARE OPTION PLAN

Dated for Reference January 19, 2007

ARTICLE 1
PURPOSE AND INTERPRETATION

Purpose

1.1 The purpose of this Plan is to advance the interests of the Company by encouraging equity participation in the Company through the acquisition of Common Shares of the Company. It is the intention of the Company that this Plan will at all times be in compliance with the TSX Venture Policies (or, if applicable, the NEX Policies) and any inconsistencies between this Plan and the TSX Venture Policies) (or, if applicable, the NEX Policies) will be resolved in favour of the latter.

Definitions

1.2 In this Plan

(a)           Affiliate means a company that is a parent or subsidiary of the Company, or that is controlled by the same entity as the Company;

(b)           Associate has the meaning set out in the Securities Act;

(c)           Board means the board of directors of the Company or any committee thereof duly empowered or authorized to grant Options under this Plan;

(d)           Change of Control includes situations where after giving effect to the contemplated transaction and as a result of such transaction:

(i) any one Person holds a sufficient number of voting shares of the Company or resulting company to affect materially the control of the Company or resulting company, or,

(ii) any combination of Persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding, holds in total a sufficient number of voting shares of the Company or its successor to affect materially the control of the Company or its successor,

where such Person or combination of Persons did not previously hold a sufficient number of voting shares to affect materially control of the Company or its successor. In the absence of evidence to the contrary, any Person or combination of Persons acting in concert by virtue of an agreement, arrangement, commitment or understanding, holding more than 20% of the voting shares of the Company or resulting company is deemed to materially affect control of the Company or resulting company;

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(e)           Common Shares means common shares without par value in the capital of the Company providing such class is listed on the TSX Venture (or the NEX, as the case may be);

(f)           Company means the company named at the top hereof and includes, unless the context otherwise requires, all of its Affiliates and successors according to law;

(g)           Consultant means an individual or Consultant Company, other than an Employee, Officer or Director that:

(i) provides on an ongoing bona fide basis, consulting, technical, managerial or like services to the Company or an Affiliate of the Company, other than services provided in relation to a Distribution;

(ii) provides the services under a written contract between the Company or an Affiliate and the individual or the Consultant Company;

(iii) in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the business and affairs of the Company or an Affiliate of the Company; and

(iv) has a relationship with the Company or an Affiliate of the Company that enables the individual or Consultant Company to be knowledgeable about the business and affairs of the Company;

(h)           Consultant Company means for an individual consultant, a company or partnership of which the individual is an employee, shareholder or partner;

(i)           Directors means the directors of the Company as may be elected from time to time;

(j)           Discounted Market Price has the meaning assigned by Policy 1.1 of the TSX Venture Policies;

(k)           Disinterested Shareholder Approval means approval by a majority of the votes cast by all the Company’s shareholders at a duly constituted shareholders’ meeting, excluding votes attached to Common Shares beneficially owned by Insiders who are Service Providers or their Associates;

(l)           Distribution has the meaning assigned by the Securities Act, and generally refers to a distribution of securities by the Company from treasury;

(m)           Effective Date for an Option means the date of grant thereof by the Board;

(n)           Employee means:

(i) an individual who is considered an employee under the Income Tax Act (i.e. for whom income tax, employment insurance and CPP deductions must be made at source);

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(ii) an individual who works full-time for the Company or a subsidiary thereof providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions are not made at source; or

(iii) an individual who works for the Company or its subsidiary on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions need not be made at source;

(o) Exercise Price means the amount payable per Common Share on the exercise of an Option, as determined in accordance with the terms hereof;

(p) Expiry Date means the day on which an Option lapses as specified in the Option Commitment therefor or in accordance with the terms of this Plan;

(q) Insider means an insider as defined in the TSX Venture Policies or as defined in securities legislation applicable to the Company;

(r) Investor Relations Activities has the meaning assigned by Policy 1.1 of the TSX Venture Policies;

(s)           Management Company Employee means an individual employed by a Person providing management services to the Company which are required for the ongoing successful operation of the business enterprise of the Company, but excluding a Person engaged in Investor Relations Activities;

(t) NEX means a separate board of the TSX Venture for companies previously listed on the TSX Venture or the Toronto Stock Exchange which have failed to maintain compliance with the ongoing financial listing standards of those markets;

(u) NEX Issuer means a company listed on the NEX;

(v) NEX Policies means the rules and policies of the NEX as amended from time to time;

(w) Officer means a Board appointed officer of the Company;

(x) Option means the right to purchase Common Shares granted hereunder to a Service Provider;

(y) Option Commitment means the notice of grant of an Option delivered by the Company hereunder to a Service Provider and substantially in the form of Schedule A attached hereto;

(z)           Optioned Shares means Common Shares that may be issued in the future to a Service Provider upon the exercise of an Option;

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(aa)      Optionee means the recipient of an Option hereunder;

(bb) Outstanding Shares means at the relevant time, the number of issued and outstanding Common Shares of the Company from time to time;

(cc)      Participant means a Service Provider that becomes an Optionee;

(dd) Person includes a company, any unincorporated entity, or an individual;

(ee)      Plan means this share option plan, the terms of which are set out herein or as may be amended;

(ff) Plan Shares means the total number of Common Shares which may be reserved for issuance as Optioned Shares under the Plan as provided in §2.2;

(gg) Regulatory Approval means the approval of the TSX Venture and any other securities regulatory authority that has lawful jurisdiction over the Plan and any Options issued hereunder;

(hh) Securities Act means the Securities Act , R.S.B.C. 1996, c. 418, or any successor legislation;

(ii) Service Provider means a Person who is a bona fide Director, Officer, Employee, Management Company Employee, Consultant or Company Consultant, and also includes a company, 100% of the share capital of which is beneficially owned by one or more Service Providers;

(jj) Share Compensation Arrangement means any Option under this Plan but also includes any other stock option, stock option plan, employee stock purchase plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares to a Service Provider;

(kk) Shareholder Approval means approval by a majority of the votes cast by eligible shareholders of the Company at a duly constituted shareholders’ meeting;

(ll) TSX Venture means the TSX Venture Exchange and any successor thereto; and

(mm) TSX Venture Policies means the rules and policies of the TSX Venture as amended from time to time.

Other Words and Phrases

1.3 Words and phrases used in this Plan but which are not defined in the Plan, but are defined in the TSX Venture Policies (and, if applicable, the NEX Policies), will have the meaning assigned to them in the TSX Venture Policies (and, if applicable, the NEX Policies).

Gender

1.4 Words importing the masculine gender include the feminine or neuter, words in the singular include the plural, words importing a corporate entity include individuals, and vice versa.

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ARTICLE 2 SHARE OPTION PLAN

Establishment of Share Option Plan

2.1 The Plan is hereby established to recognize contributions made by Service Providers and to create an incentive for their continuing assistance to the Company and its Affiliates.

Maximum Plan Shares

2.2 The maximum aggregate number of Plan Shares that may be reserved for issuance under the Plan at any point in time is 10% of the Outstanding Shares at the time Plan Shares are reserved for issuance as a result of the grant of an Option, less any Common Shares reserved for issuance under share options granted under Share Compensation Arrangements other than this Plan, unless this Plan is amended pursuant to the requirements of the TSX Venture Policies and, if applicable, the NEX Policies.

Eligibility

2.3 Options to purchase Common Shares may be granted hereunder to Service Providers from time to time by the Board. Service Providers that are not individuals will be required to undertake in writing not to effect or permit any transfer of ownership or option of any of its securities, or to issue more of its securities (so as to indirectly transfer the benefits of an Option), as long as such Option remains outstanding, unless the written permission of the TSX Venture and the Company is obtained.

Options Granted Under the Plan

2.4 All Options granted under the Plan will be evidenced by an Option Commitment in the form attached as Schedule A, showing the number of Optioned Shares, the term of the Option, a reference to vesting terms, if any, and the Exercise Price.

2.5 Subject to specific variations approved by the Board, all terms and conditions set out herein will be deemed to be incorporated into and form part of an Option Commitment made hereunder.

Limitations on Issue

2.6 Subject to §2.9, the following restrictions on issuances of Options are applicable under the Plan:

(a)           no Service Provider can be granted an Option if that Option would result in the total number of Options, together with all other Share Compensation Arrangements granted to such Service Provider in the previous 12 months, exceeding 5% of the Outstanding Shares (unless the Company is classified as a Tier 1 Issuer by the TSX Venture and has obtained Disinterested Shareholder Approval to do so);

(b) no Options can be granted under the Plan if the Company is on notice from the TSX Venture to transfer its listed shares to the NEX;

(c)           the aggregate number of Options granted to Service Providers conducting Investor Relations Activities in any 12-month period cannot exceed 2% of the Outstanding Shares, calculated at the time of grant, without the prior consent of the TSX Venture; and

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(d) the aggregate number of Options granted to any one Consultant in any 12-month period cannot exceed 2% of the Outstanding Shares, calculated at the time of grant, without the prior consent of the TSX Venture.

Options Not Exercised

2.7 In the event an Option granted under the Plan expires unexercised or is terminated by reason of dismissal of the Optionee for cause or is otherwise lawfully cancelled prior to exercise of the Option, the Optioned Shares that were issuable thereunder will be returned to the Plan and will be eligible for re-issuance.

Powers of the Board

2.8 The Board will be responsible for the general administration of the Plan and the proper execution of its provisions, the interpretation of the Plan and the determination of all questions arising hereunder. Without limiting the generality of the foregoing, the Board has the power to

(a)           allot Common Shares for issuance in connection with the exercise of Options;

(b)           grant Options hereunder;

(c)           subject to any necessary Regulatory Approval, amend, suspend, terminate or discontinue the Plan, or revoke or alter any action taken in connection therewith, except that no general amendment or suspension of the Plan will, without the prior written consent of all Optionees, alter or impair any Option previously granted under the Plan

unless the alteration or impairment occurred as a result of a change in the TSX Venture Policies or the Company’s tier classification thereunder;

(d) delegate all or such portion of its powers hereunder as it may determine to one or more committees of the Board, either indefinitely or for such period of time as it may specify, and thereafter each such committee may exercise the powers and discharge the duties of the Board in respect of the Plan so delegated to the same extent as the Board is hereby authorized so to do; and

(e)           amend this Plan (except for previously granted and outstanding Options) to reduce the benefits that may be granted to Service Providers (before a particular Option is granted) subject to the other terms hereof.

Terms or Amendments Requiring Disinterested Shareholder Approval

2.9                     The Company shall obtain Disinterested Shareholder Approval prior to any of the following actions becoming effective:

(a)           the Plan, together with all of the Company’s other Share Compensation Arrangements, could result at any time in:

(i) the aggregate number of Common Shares reserved for issuance under Options granted to Insiders exceeding 10% of the Outstanding Shares (in the event that this Plan is amended to reserve for issuance more than 10% of the Outstanding Shares);

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(ii) the number of Optioned Shares issued to Insiders within a one-year period exceeding 10% of the Outstanding Shares (in the event that this Plan is amended to reserve for issuance more than 10% of the Outstanding Shares); or,

(iii) in the case of a Tier l Issuer only, the issuance to any one Optionee, within a 12-month period, of a number of Common Shares exceeding 5% of Outstanding Shares; or

(b) any reduction in the Exercise Price of an Option previously granted to an Insider.

ARTICLE 3 TERMS AND CONDITIONS OF OPTIONS

Exercise Price

3.1                     The Exercise Price of an Option will be set by the Board at the time such Option is allocated under the Plan, and cannot be less than the Discounted Market Price.

Term of Option

3.2                     An Option can be exercisable for a maximum of 10 years from the Effective Date for a Tier 1 Issuer, or five years from the Effective Date for a Tier 2 or a NEX Issuer.

Option Amendment

3.3 Subject to §2.9(b), the Exercise Price of an Option may be amended only if at least six (6) months have elapsed since the later of the date of commencement of the term of the Option, the date the Common Shares commenced trading on the TSX Venture, and the date of the last amendment of the Exercise Price.

3.4                     An Option must be outstanding for at least one year before the Company may extend its term, subject to the limits contained in §3.2.

3.5 Any proposed amendment to the terms of an Option must be approved by the TSX Venture prior to the exercise of such Option.

Vesting of Options

3.6 Subject to §3.7, vesting of Options shall be in accordance with Schedule B attached hereto or otherwise, at the discretion of the Board, and will generally be subject to:

(a)           the Service Provider remaining employed by or continuing to provide services to the Company or any of its Affiliates as well as, at the discretion of the Board, achieving certain milestones which may be defined by the Board from time to time or receiving a satisfactory performance review by the Company or any of its Affiliates during the vesting period; or

(b) the Service Provider remaining as a Director of the Company or any of its Affiliates during the vesting period.

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Vesting of Options Granted to Consultants Conducting Investor Relations Activities

3.7 Notwithstanding §3.6, Options granted to Consultants conducting Investor Relations Activities will vest:

(a)           over a period of not less than 12 months as to 25% on the date that is three months from the date of grant, and a further 25% on each successive date that is three months from the date of the previous vesting; or

(b) such longer vesting period as the Board may determine.

Optionee Ceasing to be Director, Employee or Service Provider

3.8 No Option may be exercised after the Service Provider has left his employ/office or has been advised by the Company that his services are no longer required or his service contract has expired, except as follows:

(a)           in the case of the death of an Optionee, any vested Option held by him at the date of death will become exercisable by the Optionee’s lawful personal representatives, heirs or executors until the earlier of one year after the date of death of such Optionee and the date of expiration of the term otherwise applicable to such Option;

(b) in the case of a Tier 1 Issuer, an Option granted to any Service Provider will expire within 90 days after the date the Optionee ceases to be employed by or provide services to the Company, but only to the extent that such Option has vested at the date the Optionee ceased to be so employed by or to provide services to the Company;

(c)           in the case of a Tier 2 or NEX Issuer, Options granted to a Service Provider conducting Investor Relations Activities will expire within 30 days of the date the Optionee ceases to conduct such activities, but only to the extent that such Option has vested at the date the Optionee ceased to conduct such activities;

(d) in the case of a Tier 2 or NEX Issuer, any Option granted to an Optionee other than one conducting Investor Relations Activities will expire within 90 days after the Optionee ceases to be employed by or provide services to the Company, but only to the extent that such Option has vested at the date the Optionee ceased to be so employed by or to provide services to the Company; and

(e)           in the case of an Optionee being dismissed from employment or service for cause, such Optionee’s Options, whether or not vested at the date of dismissal will immediately terminate without right to exercise same.

Non Assignable

3.9                     Subject to §3.8, all Options will be exercisable only by the Optionee to whom they are granted and will not be assignable or transferable.

Adjustment of the Number of Optioned Shares

3.10                   The number of Common Shares subject to an Option will be subject to adjustment in the events and in the manner following:

(a)           in the event of a subdivision of Common Shares as constituted on the date hereof, at any time while an Option is in effect, into a greater number of Common Shares, the Company will thereafter deliver at the time of purchase of Optioned Shares hereunder, in addition to the number of Optioned Shares in respect of which the right to purchase is then being exercised, such additional number of Common Shares as result from the subdivision without an Optionee making any additional payment or giving any other consideration therefor;

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(b) in the event of a consolidation of the Common Shares as constituted on the date hereof, at any time while an Option is in effect, into a lesser number of Common Shares, the Company will thereafter deliver and an Optionee will accept, at the time of purchase of Optioned Shares hereunder, in lieu of the number of Optioned Shares in respect of

which the right to purchase is then being exercised, the lesser number of Common Shares as result from the consolidation;

(c)           in the event of any change of the Common Shares as constituted on the date hereof, at any time while an Option is in effect, the Company will thereafter deliver at the time of purchase of Optioned Shares hereunder the number of shares of the appropriate class resulting from the said change as an Optionee would have been entitled to receive in respect of the number of Common Shares so purchased had the right to purchase been exercised before such change;

(d) in the event of a capital reorganization, reclassification or change of outstanding equity shares (other than a change in the par value thereof) of the Company, a consolidation, merger or amalgamation of the Company with or into any other company or a sale of the property of the Company as or substantially as an entirety at any time while an Option is in effect, an Optionee will thereafter have the right to purchase and receive, in lieu of the Optioned Shares immediately theretofore purchasable and receivable upon the exercise of the Option, the kind and amount of shares and other securities and property receivable upon such capital reorganization, reclassification, change, consolidation, merger, amalgamation or sale which the holder of a number of Common Shares equal to the number of Optioned Shares immediately theretofore purchasable and receivable upon the exercise of the Option would have received as a result thereof. The subdivision or consolidation of Common Shares at any time outstanding (whether with or without par value) will not be deemed to be a capital reorganization or a reclassification of the capital of the Company for the purposes of this §3.10;

(e)           an adjustment will take effect at the time of the event giving rise to the adjustment, and the adjustments provided for in this section are cumulative;

(f) the Company will not be required to issue fractional shares in satisfaction of its obligations hereunder. Any fractional interest in a Common Share that would, except for the provisions of this §3.10, be deliverable upon the exercise of an Option will be cancelled and not be deliverable by the Company; and

(g) if any questions arise at any time with respect to the Exercise Price or number of Optioned Shares deliverable upon exercise of an Option in any of the events set out in this §3.10, such questions will be conclusively determined by the Company’s auditors, or, if they decline to so act, any other firm of Chartered Accountants, in Vancouver, British Columbia (or in the city of the Company’s principal executive office) that the Company may designate and who will be granted access to all appropriate records. Such determination will be binding upon the Company and all Optionees.

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ARTICLE 4 COMMITMENT AND EXERCISE PROCEDURES

Option Commitment

4.1 Upon grant of an Option hereunder, an authorized officer of the Company will deliver to the Optionee an Option Commitment detailing the terms of such Options and upon such delivery the Optionee will be subject to the Plan and have the right to purchase the Optioned Shares at the Exercise Price set out therein subject to the terms and conditions hereof.

Manner of Exercise

4.2 An Optionee who wishes to exercise his Option may do so by delivering

(a)           a written notice to the Company specifying the number of Optioned Shares being acquired pursuant to the Option; and

(b)           a certified cheque, wire transfer or bank draft payable to the Company for the aggregate Exercise Price by the Optioned Shares being acquired.

Delivery of Certificate and Hold Periods

4.3 As soon as practicable after receipt of the notice of exercise described in §4.2 and payment in full for the Optioned Shares being acquired, the Company will direct its transfer agent to issue a certificate to the Optionee for the appropriate number of Optioned Shares. Such certificate issued will bear a legend stipulating any resale restrictions required under applicable securities laws. Further, if the Company is a Tier 2 or NEX Issuer, or the Exercise Price is set below than the then current market price of the Common Shares on the TSX Venture, the certificate will also bear a legend stipulating that the Optioned Shares are subject to a four-month TSX Venture hold period commencing the date of the grant of the Option.

ARTICLE 5 GENERAL

Employment and Services

5.1 Nothing contained in the Plan will confer upon or imply in favour of any Optionee any right with respect to office, employment or provision of services with the Company, or interfere in any way with the right of the Company to lawfully terminate the Optionee’s office, employment or service at any time pursuant to the arrangements pertaining to same. Participation in the Plan by an Optionee is voluntary.

No Representation or Warranty

5.2 The Company makes no representation or warranty as to the future market value of Common Shares issued in accordance with the provisions of the Plan or to the effect of the Income Tax Act (Canada) or any other taxing statute governing the Options or the Common

Shares issuable thereunder or the tax consequences to a Service Provider. Compliance with applicable securities laws as to the disclosure and resale obligations of each Participant is the responsibility of each Participant and not the Company.

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Interpretation

5.3 The Plan will be governed and construed in accordance with the laws of the Province of British Columbia.

Continuation of Plan

5.4 The Plan will become effective from and after January 19, 2007, and will remain effective provided that the Plan, or any amended version thereof receives Shareholder Approval at each annual general meeting of the holders of Common Shares of the Company subsequent to January 19, 2007.

SCHEDULE A SHARE OPTION PLAN OPTION COMMITMENT

Notice is hereby given that, effective this _________ day of ___________________, __________ (the “Effective Date”) Quartz Mountain Resources Ltd. (the “Company”) has granted to _____________________ (the “Optionee”), an Option to acquire _____________ Common Shares (“Optioned Shares”) up to 5:00 p.m. Vancouver Time on the ________ day of ______, _________ Cdn$__________ (the “Expiry Date”) at an Exercise Price of _______________ per share.

At the date of grant of the Option, the Company is classified as [a Tier _______ Issuer under TSX Venture Policies] [an NEX Issuer].

[Tier 2 if Plan Shares greater than 10% only] Optioned Shares will vest and may be exercised as follows:

{COMPLETE ONE}

_________________In accordance with the vesting provisions set out in Schedule B of the Plan

or

As follows: [INSERT VESTING SCHEDULE ][INSERT VESTING TERMS]

The grant of the Option evidenced hereby is made subject to the terms and conditions of the Plan, which are hereby incorporated herein and forms part hereof.

To exercise your Option, deliver a written notice specifying the number of Optioned Shares you wish to acquire, together with a certified cheque, wire transfer or bank draft payable to the Company for the aggregate Exercise Price. A certificate for the Optioned Shares so acquired will be issued by the transfer agent as soon as practicable thereafter and will bear a minimum four month non-transferability legend from the date of this Option Commitment, the text of which is as follows. [A Tier 1 Issuer may grant stock options without a hold period, provided the exercise price of the options is set at or above the market price of the Company’s shares rather than below.].

"WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL 12:00 A.M. (MIDNIGHT) ON [insert date 4 months from the date of grant]”.

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The Company and the Optionee represent that the Optionee under the terms and conditions of the Plan is a bona fide Service Provider (as defined in the Plan), entitled to receive Options under TSX Venture Policies.

The Optionee also acknowledges and consents to the collection and use of Personal Information (as defined in the Policies of the TSX Venture Exchange) by both the Company and the TSX Venture (or the NEX, as the case may be) as more particularly set out in the Acknowledgement - Personal Information in use by the TSX Venture (or the NEX, as the case may be) on the date of this Share Option Plan.

QUARTZ MOUNTAIN RESOURCES LTD.

______________________________________
Authorized Signatory

______________________________________
(SIGNATURE OF OPTIONEE)

SCHEDULE B

SHARE OPTION PLAN VESTING SCHEDULE

1.           Options granted pursuant to the Plan to Directors, Officers and all Employees and Consultants employed or retained by the Company for a period of more than six months at the time the Option is granted will vest as follows:

(a)           1/3 of the total number of Options granted will vest six months after the date of grant;

(b)           a further 1/3 of the total number of Options granted will vest one year after the date of grant; and

(c)           the remaining 1/3 of the total number of Options granted will vest eighteen months after the date of grant.

2.           Options granted pursuant to the Plan to an Employee or a Consultant who has been employed or retained by the Company for a period of less than six months at the time the Option is granted will vest as follows:

(a)           1/3 of the total number of Options granted will vest one year after the date of grant;

(b)           a further 1/3 of the total number of Options granted will vest eighteen months after the date of grant; and

(c)           the remaining 1/3 of the total number of Options granted will vest two years after the date of grant.

3.           Options granted to Consultants retained by the Company pursuant to a short term contract or for a specific project with a finite term, will be subject to such vesting provisions determined by the Board of Directors of the Company at the time the Option Commitment is made, subject to Regulatory Approval.

4.           Options granted to Service Providers involved in Investor Relations Activities shall vest in accordance with §3.7 of the Plan.

SERVICES AGREEMENT

This Services Agreement (the “ Agreement ”) is made as of the 2 ^nd day of July, 2010 (the “ Effective Date ”).

BETWEEN:

HUNTER DICKINSON SERVICES INC ., a company incorporated under the federal laws of Canada

(“ HD Services ”),

AND:

QUARTZ MOUNTAIN RESOURCES LTD. , a company incorporated under the laws of British Columbia (the “ Company ”),

(collectively, HD Services and the Company are the “ Parties ” and each is a “ Party ”).

WHEREAS:

NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which consideration each Party acknowledges, the Parties agree as follows:

ARTICLE 1 – ENGAGEMENT

1.01          Engagement

During the term of this Agreement, which shall be determined in accordance with Article 8 (the “ Term ”), the Company hereby engages HD Services, and HD Services accepts such engagement, to provide the Services (as defined and further described in Article 2).

1.02          Standard of Care and Services Provided

          (1)   HD Services shall provide the Services in a proper and workmanlike and efficient manner, in accordance with accepted mining industry and other relevant professional standards, practices and applicable laws and shall exercise the degree of care and skill that a reasonably prudent advisor would exercise in comparable circumstances and shall comply in all material respects with applicable laws. For the avoidance of doubt, HD Services shall not provide any services in respect of which a registration in any capacity would be required under applicable securities laws or other laws, except to the extent provided in Section 2.05(j) . HD Services shall comply with the terms of the Company’s licences, permits, contracts and other agreements pertaining to the material resource properties of the Company and applicable laws.

          (2)   The Company acknowledges that although during the course of providing the Services, HD Services may provide the Company assistance with tax, accounting or legal matters, the Company shall not be relying on HD Services for advice or opinions on tax, accounting or legal matters.

          (3)   The Company specifically acknowledges HD Services shall at no time provide the Company with any tax or accounting advice, opinion, analysis or similar services.

          (4)   The Company specifically acknowledges HD Services shall at no time provide the Company with any legal advice, opinion, analysis or similar services, including with respect to the interpretation or enforcement of any rights, obligations, duties or remedies that the Company may have in any matter and that any communication between the Company and HD Services shall not necessarily be considered to be legally privileged.

          (5)   The Company further acknowledges that any decisions with regards to the use of the Services and any operational or management decisions made by the Company are the sole and final decision of the Company and it shall be the sole obligation of the Company to seek and obtain independent legal advice on any issues regarding the use of the Services or the making or implementation by the Company of any operational or management decisions.

          (6)   The use of the Services by the Company shall not result in the creation of a client-solicitor relationship between the Company and HD Services, including any internal legal counsel employed by HD Services (the “ Internal Counsel ”) and it is understood by the Company that any Internal Counsel has no professional duty to or fiduciary relationship with the Company and that any such duty is owed solely to HD Services. During the course of HD Services providing the Services, the Company may have access to legal work product of Internal Counsel (the “ Internal Legal Product ”). The Company acknowledges that to the extent it has access to any Internal Legal Product, the Company shall not rely on such Internal Legal Product as professional legal advice.

1.03          Independent Contractor

In the performance of the Services, HD Services shall act as an independent contractor and shall not act as agent of the Company except to the extent expressly mandated by the Company and agreed to by HD Services. Nothing herein shall constitute or be construed to constitute or create a partnership or joint venture between HD Services and the Company and/or its affiliates. Where HD Services has been expressly mandated by the Company to incur obligations on behalf the Company, all debts and liabilities to third persons incurred by HD Services in the course of providing the Services in accordance with this Agreement shall be deemed to be the debts and obligations of the Company only and HD Services and its affiliates shall be indemnified by the Company in respect of such debts and liabilities to such third parties. HD Services shall inform third parties with whom it deals on behalf of the Company that it does so on behalf of the Company, and may take any other reasonable steps to carry out the intent of this Section 1.03. For purposes of administration of any Program (as defined below), the status of the Company as manager or operator of any of the Company’s joint ventures and other operating agreements in respect of which it is manager or operator is not intended to be in any way affected by this Agreement. HD Services’ role in relation to any such Program shall solely be as an independent contractor providing advice and services to the Company notwithstanding that it may interact with the staff of or advisors to another party in the joint venture. Save as expressly provided in the foregoing, nothing contained in this Agreement shall be deemed to create any relationship of principal and agent between the parties or to provide either Party with the right, power or authority, whether express or implied, to create any duty or obligation on behalf of the other Party. Nothing contained in this Agreement shall be deemed to create any partnership or joint venture.

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ARTICLE 2 - SERVICES

2.01          Provision of Services

HD Services shall, subject to the terms and conditions hereof, supply technical, geological, corporate communications, administrative and management services as more particularly described in Sections 2.04 and 2.05 (the “ Services ”) to the Company.

2.02          Seconded Employees

HD Services may, from time to time, require that certain of its employees (the “ Seconded Employees ”) be seconded to the Company on the terms and conditions of the secondment agreement set out as Annexure A hereto (the “ Secondment Agreement ”) in order to ensure the level of the Services in accordance with this Agreement. Upon any such request by HD Services, the Company shall execute and deliver to HD Services a Secondment Agreement in respect of each such Seconded Employee.

2.03          HD Contractors

The Parties acknowledge that there are certain independent contractors (the “ HD Contractors ”) who make the services of individuals available to HD Services on the basis that such individuals devote the majority of their time to the business of HD Services and perform duties which would otherwise be performed by employees of HD Services. HD Services may, from time to time, require that certain HD Contractors provide services to the Company on the terms and conditions of the contractor agreement set out as Annexure B hereto (the “ Contractor Agreement ”) in order to ensure the level of the Services in accordance with this Agreement. Upon any such request by HD Services, the Company shall execute and deliver to HD Services a Contractor Agreement in respect of each such HD Contractor.

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2.04           General Corporate Services

Subject to receipt of a written request by the Company in accordance with Section 2.06 which is agreeable to HD Services, HD Services shall:

2.05            Program Services

Subject to receipt of a written request by the Company in accordance with Section 2.06, HD Services shall together with the Company management and such other consultants as the Company chooses to involve, review the resource property portfolio of the Company with a view to making recommendations for the design and implementation of programs of exploration, development and/or mining (“ Programs ”) for the resource properties of the Company. Such recommendations shall be accompanied by reasonable details of the proposed Program, including scheduling, description of activities and budgets. Upon written mutual acceptance of such Program(s) by the Company and HD Services (with or without variations that the Parties may agree upon, and where acceptance is in the sole discretion of each Party), HD Services shall carry out each Program and shall generally:

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2.06           Requests for Services to be Evidenced in Writing

Any Services to be provided by HD Services to the Company shall generally be agreed on an annual basis and shall be initiated by the Company in a non-binding written communication to HD Services and shall indicate the Company’s requirements and expectations in reasonable detail, including required timing. HD Services shall promptly respond to this request with a written proposal and shall mutually agree with the Company upon the level, degree and cost of contracted Services for the next twelve (12) months, such agreement to be evidenced by a document in writing signed by the CEO of the Company and the CEO of HD Services. The Parties shall use their commercially reasonable efforts to develop and agree upon such Services at least ninety (90) days in advance of the annual renewal period of this Agreement. Notwithstanding the foregoing, the Company may at any time request additional Services in writing and the process set out above shall apply to all additional Services requests.

ARTICLE 3 - PAYMENTS TO HD SERVICES

3.01            Services’ Fees and Expenses

          (1)   The Company shall pay a monthly fee (the “ Monthly Services Fee ”) to HD Services for the Services provided to the Company, with the exception of those Services described in Section 3.01(4) which services shall be excluded from the Monthly Services Fee. The Monthly Services Fee shall be calculated on the basis of the time spent by HD Services employees and other staff providing such Services based on the rates set out in the HD Services Charge-Out Rates Schedule attached hereto as Annexure C, which rates may be amended from time to time by HD Services by providing to the Company, on not less than thirty (30) days advance notice, an updated HD Services Charge-Out Rate Schedule.

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          (2)   The estimated fees payable by the Company to HD Services in accordance with Section 3.01(1) shall be included in the budget forming part of any Program approved by the Company in accordance with Section 2.04.

          (3)   HD Services shall promptly notify the Company of any material departure from the budget of an adopted Program (a “ material departure ” for such purposes being an increase above budgeted costs of more than fifteen percent (15%)). Amendments to a Program must be agreed to in writing by the Company and HD Services, including amendments to the budget, failing which the Company may terminate the relevant Program and, in the event of a material departure, may terminate this Agreement in accordance with Section 8.02. Notwithstanding the foregoing but without derogating from the provisions of Section 5.05, HD Services shall not be required to itself bear the cost of any material departures. Nothing contained in this Agreement shall oblige HD Services, in the absence of express agreement to the contrary, to incur any indebtedness for or on behalf of, or advance any credit to the Company.

          (4)   The Company shall pay an annual fee (the “ Annual Communications Fee ”) to HD Services in respect of the Services which relate to public relations, investor communications and branding of the Company and HD Services, including, without limitation, conference fees, promotional materials, and website services, but excludes the time spent by HD Services employees in providing the public relations, investor communications and branding services. The Annual Communications Fee shall be calculated on an annual basis in advance as of December 31 for the upcoming year and shall reflect the Company’s pro rata share of the anticipated public relations, investor communications and branding costs of the Company and the Hunter Dickinson group for the upcoming year. For greater certainty, there shall be no duplication between the amounts payable in respect of the Monthly Services Fee and the Annual Communications Fee. The Annual Communications Fee shall be invoiced in twelve (12) equal monthly instalments.

          (5)   In addition to the Monthly Services Fee and the Annual Communications Fee, the Company shall pay directly or reimburse HD Services in respect of third party expenditures validly incurred by HD Services in connection with the Services and such expenditures shall be invoiced by HD Services monthly on a cost recovery basis.

3.02            Invoices

          (1)   The Company agrees to promptly pay all invoices delivered by HD Services in connection with the fees and expenses described in Sections 3.01 and also agrees to advance funds against written cash calls (in the form of invoices) for reasonably immediate expenditure requirements of HD Services (such as to pay for or secure services, to secure equipment, contractors, deposits and the like) and to honour all agreements which HD Services enters into in good faith on behalf of the Company with third parties in the course of performing the Services.

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          (2)   HD Services shall provide the Company with such further information as it may reasonably request in relation to any amount shown on any invoices delivered in accordance with this Section 3.02, including reasonably satisfactory evidence of any reimbursable costs and expenses. All invoices shall be payable no later than thirty (30) days after presentation.

3.03          Sales Taxes, No Set-offs

The amounts to be billed by HD Services for the Services and third party costs under this Article 3 may be subject to GST, HST or other general sales tax, value added tax or any like service or sales tax or withholding tax which may be payable from time to time. All amounts payable under this Agreement shall be paid by the Company free and clear of any deductions or claims for set-offs. If any amounts are required to be withheld by applicable law, the Company shall be obliged to pay an additional amount over the amount invoiced as shall leave HD Services receiving the same net amount as HD Services invoiced for. Any such additional amount paid for withholding by the Company shall be refunded if recovered by HD Services and HD Services shall promptly apply to recover or reduce any such withholding amounts.

3.04          Interest

If either Party defaults in the payment when due of any sum payable under this Agreement (howsoever determined) the liability of such Party shall be increased to include interest on such sum from the date when such payment is due until the date of actual payment (as well after as before judgment) at the rate of LIBOR plus 4% (four percent). Such interest shall accrue from day to day. For such purposes, “ LIBOR ” means the interest rate per annum for deposits in US dollars for a ninety (90) day period which appears on the Reuters LIBO page (or such other page or pages as may replace that page or pages on that service for the purpose of displaying offered rates of leading banks for London interbank deposits in US dollars) at or about 11:00 a.m. London time on the business day in London before and for value on the first day of such period, provided that, if two or more such offered rates are indicated on such display, LIBOR shall be the rate that equals the arithmetic mean (expressed as a decimal fraction to five decimal places) of such offered rates, and provided further that if such period is not equal to any period shown on such page, LIBOR shall be the rate determined by interpolation from the rates for the next longer and next shorter periods shown on such page, using the number of days as the basis for the interpolation, expressed as a decimal fraction to five decimal places.

ARTICLE 4 - NON EXCLUSIVITY AND OPPORTUNITIES

4.01            Non Exclusive Services

Save as provided in Section 4.02:

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4.02 Opportunities and Confidentiality

          (1)   The Company acknowledges that HD Services shall not have any obligation to provide any information or advice to the Company respecting a resource company, interest in mineral rights, prospects, financing opportunities or other opportunities (“ Opportunities ”) which come to the attention of HD Services, except that for purposes hereof certain Opportunities shall be deemed to be “ Prohibited Opportunities ” as follows:

          (2)   For the purposes of this Section 4.02, Prohibited Opportunities shall be deemed to include Opportunities, mutatis mutandis within the meaning of Sections 4.02(1)(a) to 4.02(1)(c) that are obtained by HD Services’ directors, officers or employees. HD Services will use commercially reasonable efforts to procure that its services contract with any HD Contractor contains materially similar restrictions in relation to Opportunities as are set forth in this Section 4.02 and that the term “Prohibited Opportunities” will include any Opportunities to the extent that such Opportunities are Prohibited Opportunities in accordance with the contract by which HD Services retains the services of such HD Contractor. HD Services shall promptly notify the Company of any Prohibited Opportunities obtained or identified by HD Services during the Term, but nothing herein shall be deemed to be negligence on the part of HD Services if some Prohibited Opportunity is overlooked or not discovered, it being the intention only to prevent HD Services from misappropriating Prohibited Opportunities. An Opportunity which the Company confirms in writing to HD Services that it shall not pursue shall in no event be deemed to be a Prohibited Opportunity.

          (3)   The Company agrees it has no interest whatsoever in any Opportunities which come to the attention of HD Services, other than Prohibited Opportunities. The Company acknowledges that HD Services has entered into agreements similar to this Agreement with other companies or third parties that may be competitors of the Company (“ Competitors ”) and also may receive unsolicited proposals for Opportunities from sources wholly unrelated to the Company. As a consequence, HD Services shall be exposed to Opportunities in the ordinary course and may receive Opportunities as a consequence of services to Competitors. These Opportunities are acknowledged by the Company to be the sole property of HD Services. HD Services is not under any fiduciary or other duty or obligation to the Company or its affiliates which shall prevent or impede it from participating in, or enjoying the benefits of competing endeavours of a nature similar to the business of the Company and the legal doctrines of “corporate opportunity” or “business opportunity” shall have no application in respect of this Agreement. HD Services may in its sole discretion refer Opportunities to the Company from time to time, pursue such Opportunities for its own benefit or refer Opportunities to Competitors or any other person. HD Services shall be under no liability to the Company for, or as a result of, it referring any Opportunities to, or acting as consultant or advisor to, Competitors or the manner in which it resolves competing interests deriving therefrom, unless HD Services has acted in any manner which constitutes fraud, wilful misconduct or negligence.

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4.03            Services Through Agents or Affiliates

HD Services shall have the right to provide the Services, or portions thereof, through agents, affiliates or independent contractors; provided that HD Services shall ensure that such agents, affiliates or independent contractors comply with the terms and conditions of this Agreement that are relevant to the performance of their assigned tasks. HD Services shall ensure that such agents, affiliates or independent contractors contractually are legally responsible for their conduct under the standards applicable to HD Services pursuant to this Agreement.

ARTICLE 5 - INDEMNITY AND LIMIT ON LIABILITY

5.01            Consequential Losses

Neither Party shall be liable to the other for any indirect or consequential loss, loss of profits, decline in earnings, decline in production, loss of opportunities, loss of goodwill or any other indirect damages or loss (“ Consequential Losses ”) related to a breach of this Agreement (notwithstanding the provisions of any legislation in Canada or otherwise and whether or not advised of the possibility of those damages) and whether arising in contract, tort or otherwise, provided that a Claim by any party other than HD Services or the Company (a “ Third Party ”) shall not be considered Consequential Losses for such purposes even if such Third Party’s Claim is itself a Claim for Consequential Losses.

5.02          Company Indemnity

Subject to Sections 5.01, 5.03 and 5.04, the Company hereby indemnifies and saves harmless HD Services and any of its directors, officers, employees, contractors and agents (each, an “ HD Indemnified Person ”) from and against any loss, liability, claim, demand, damage and expense (including reasonable legal fees) (each a “ Claim ” and collectively “ Claims ”) in connection with the provision of the Services.

5.03          Exclusion

The indemnity in Section 5.02 shall not extend or apply to any Claim to the extent that such Claim arises out of any fraud, wilful misconduct or Gross Negligence of an HD Indemnified Person. For purposes of this Agreement “ Gross Negligence ” means any wanton or reckless act or omission not justified by any special circumstances as amounts to a wilful and utter disregard for the harmful and avoidable consequences but shall not include any act or omission of an HD Indemnified Person done or omitted to be done, if resulting from:

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5.04            Limitation of Company’s Liability

          (1)   Notwithstanding anything to the contrary contained in this Agreement except for the provisions set out in Section 5.04(2) the liability of the Company to HD Services and any HD Indemnified Person from and against any Claims in connection with the provision of the Services by HD Services shall not exceed the amount (the “ Cap ”) that is the higher of:

          (2)   Save as expressly set forth in Sections 5.04(2)(c) and 5.04(2)(e), the provisions of Section 5.04(1) shall not limit the liability of the Company to HD Services for any Claims that arise as a result of:

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5.05            HD Indemnity

Subject to Sections 5.01 and 5.06, HD Services hereby indemnifies and saves harmless the Company and any of its directors, officers, employees, contractors and agents for any Claim (a “ Misconduct Claim ”) to the extent that such Claim arises out of the fraud, wilful misconduct or Gross Negligence of HD Services or any of its directors, officers, employees, contractors and agents.

5.06            Limitation of HD Services’ Liability

          (1)   Notwithstanding anything to the contrary contained in this Agreement except for the provisions of Section 5.06(2), the liability of HD Services to the Company arising out of any any Claims in connection with the provision of the Services by HD Services shall not exceed the higher of

          (2)   The provisions of Section 5.06(1) shall not limit the liability of HD Services for any Misconduct Claims.

5.07            Claims

          (1)   In the event that any action, suit or proceeding is brought against either HD Services or the Company (in this Section, an “ Indemnified Party ”) in respect of which indemnity may be sought against the other Party (in this Section, an “ Indemnifying Party ”) in accordance with Section 5.02 or 5.05 as the case may be, the Indemnified Party shall give the Indemnifying Party prompt written notice of any such action, suit or proceeding of which the Indemnified Party has knowledge and the Indemnifying Party shall undertake the investigation and defence thereof on behalf of the Indemnified Party, including employment of counsel acceptable to such Indemnified Party, and make payment of all expenses.

          (2)   No admission of liability and no settlement of any action, suit or proceeding shall be made without the consent of the Indemnifying Party and the Indemnified Parties affected, such consent not to be unreasonably withheld.

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          (3)   Notwithstanding that the Indemnifying Party shall undertake the investigation and defence of any action, suit or proceeding, an Indemnified Party shall have the right to employ separate counsel in any such action, suit or proceeding and participate in the defence thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party unless:

          (4)   It is the intention of the parties to constitute each other as trustee for each other’s directors, officers, employees, contractors and agents under this Article 5 and each Party agrees to accept such trust and to hold and enforce such covenants on behalf of its own directors, officers, employees, contractors and agents.

          (5)   For the purposes of this Article 5:

          (6)   The foregoing rights of indemnification shall not be exclusive of any other rights to which the Indemnified Parties may be entitled as a matter of law or which may be lawfully granted to such Indemnified Parties.

          (7)   Each of the Company (in respect of the policies referenced in Section 5.04(1)(c)) and HD Services (in respect of the policies referenced in Section 9.01) shall use their reasonable commercial endeavours to ensure that the relevant policies of insurance maintained by them contain waivers of subrogation as against one another.

          (8)   The indemnities set out in Section 5.02 or 5.05 shall remain in full force and effect notwithstanding the termination of this Agreement.

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ARTICLE 6 – CONFIDENTIALITY AND INTELLECTUAL PROPERTY

6.01          Confidentiality

          (1)   HD Services acknowledges that the business carried on by the Company is an extremely competitive business, that during the Term HD Services shall receive and be exposed to confidential information belonging to the Company and its affiliates and that disclosure of any such confidential information to third parties could irreparably damage and place the Company at a competitive disadvantage. Such confidential information shall encompass the Company or its affiliates’ proprietary or confidential information disclosed or entrusted to HD Services or developed or generated by HD Services in the performance of the Services, including information relating to the Company or its affiliates’ interests in mineral rights, exploration results, exploration developments, research data, organizational structure, operations, business plans and affairs, technical projects, pricing data, business costs, inventions, trade secrets, names of joint venture partners or other work produced or developed by or for the Company or any of its affiliates, (“ Confidential Information ”). HD Services shall:

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          (2)   Section 6.01(1) shall not apply to any information in the possession of HD Services which, at the relevant time:

          (3)   All business, technical, and like records and information received or generated by HD Services during the Term in relation to the Company or its affiliates shall be delivered to the Company, or destroyed by HD Services upon request by the Company, at any time during the Term and upon the termination of this Agreement. The Company shall continue to own all rights in such Confidential Information.

          (4)   In the event that a Party wishes to refer to the other Party hereunder or its engagement with the other Party in any public statement, news release, shareholder communication or otherwise, it must first seek the other Party’s consent (such consent not to be unreasonably withheld or delayed), in all cases, prior to the release of such reference. During the Term, when referring to HD Services in any promotional or marketing materials, the Company shall use such name or trade names of HD Services, or its affiliates or its associates, and describe HD Services and its affiliates and associates, only as permitted by HD Services. Upon termination of this Agreement, each Party shall immediately cease referring to the other Party and any of its affiliates or associates and shall, unless otherwise required by law, amend, update or withdraw any offering documents, promotional and marketing material or other literature then in use that refers to any agreement or arrangement with the other Party.

          (5)   HD Services acknowledges that to the extent that it may be necessary for the Company to disclose this Agreement to stock exchanges, or other regulatory authorities or otherwise make it public pursuant to applicable securities laws and policies and agrees that the Company may disclose this Agreement in such circumstances upon notice to HD Services; provided that, the Company acknowledges that disclosure of the commercial terms of this Agreement would be to the detriment of HD Services because of the competitive nature of the advisory business and the Company shall use all reasonable efforts consistent with stock exchange and regulatory requirements and securities laws and policies to remove any commercially sensitive fee information relating to this Agreement before filing or otherwise making this Agreement or its terms public.

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6.02          Intellectual Property of HD Services

          (1)   Each Party is the exclusive owner of all valuable industrial and intellectual property rights whether protectable by statute, at common law or in equity, (including any works, inventions (including all patents), trade secrets, know-how, processes, designs, trade marks, trade names, logos, service marks, or copyrights, whether registered or unregistered) (the “ Intellectual Property ”) owned or possessed by it or any of its affiliates as of the Effective Date whether used by it in fulfilling its obligations under this Agreement or otherwise (the “ Background IP ”). Except for any of the Company’s trade-marks, the Parties acknowledge and agree that, except as otherwise expressly agreed to in writing by the Parties, all new and original Intellectual Property created or developed by HD Services during the course of its performance of the Services, including, without limitation, any modification, improvements, or enhancements to either Party’s Background IP, (the “ HD Services IP ”) shall be the sole property of HD Services or its affiliates, as appropriate, and the Company shall have no interest in such HD Services IP except pursuant to Section 6.02(2) . Except for any of the Company’s trade-marks, the Company hereby assigns and transfers to HD Services and agrees to assign and transfer to HD Services, as and when created, all right, title, and interest, including any Intellectual Property, throughout the world, in and to all HD Services IP, to the extent such HD Services IP does not automatically and immediately vest in HD Services.

          (2)   HD Services grants to the Company a non-exclusive, revocable, non-transferable and royalty-free licence to access, use, or copy the Background IP and the HD Service IP but only insofar as is necessary in relation to the Services and such licence and all rights granted under such license shall terminate upon the termination of this Agreement.

ARTICLE 7 - OTHER RIGHTS AND DUTIES OF THE COMPANY

7.01            Access to the Company Properties and Records

For the sole purpose of enabling HD Services to perform the Services and only to the extent required to enable such performance, the Company shall allow HD Services, its employees and authorized agents reasonable access on notice to the Company’s properties, business premises and business records. The Company shall ensure that its employees, and any contractors, consultants, advisors or auditors engaged by it, co-operate fully with HD Services in its performance of the Services. Nothing in this Agreement shall be deemed to allow HD Services automatic access to legally privileged documents.

7.02            Access to HD Services Records

Any authorized representative of the Company shall on reasonable notice to HD Services be provided with full access to all of the records or information of HD Services pertaining to the affairs of the Company. Such access shall be extended to the auditors and other professional advisors of the Company. Nothing in this Agreement shall be deemed to allow the Company automatic access to legally privileged documents.

7.03          Audit

        (1)   The Company shall have the right on reasonable notice of not less than thirty (30) days in any event, to have an independent audit of the relevant business records of HD Services as they relate to the Services provided by HD Services to the Company in order to satisfy itself that any fees and expenses charged to the Company by HD Services under this Agreement have been properly incurred in accordance with Article 3. The Company shall not have the right to audit records and accounts of HD Services related to transactions or operations more than twenty-four (24) months after the calendar year during which the Services were provided. Any audit conducted on behalf of the Company shall be made during HD Services’ normal business hours and shall not interfere with its operations.

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          (2)   In the event that the Parties are unable to agree on the conclusions of the audit, the matter shall be referred for dispute resolution under Article 10. If that process results in a refund of more than five percent (5%) of amounts invoiced by HD Services then HD Services shall not only pay the amount but shall pay for the costs of the audit. A one percent (1%) to five percent (5%) refund adjustment shall result in the audit cost being shared equally and a less than one percent (1%) adjustment shall result in the Company paying for the costs of the audit. All written exceptions to and claims upon or by HD Services for discrepancies disclosed by such audit shall be made not more than ninety (90) days after completion and delivery of such audit, or they shall be deemed waived by the Company or HD Services, as the case may be.

7.04          Mutual Non Solicitation

The Company undertakes that is shall not directly or indirectly, for the Term and for twelve (12) months after the date of termination of this Agreement, solicit any HD Services employee for the purposes of offering employment, unless expressly approved by HD Services in writing. HD Services undertakes that is shall not directly or indirectly, for the Term and for twelve (12) months after the date of termination of this Agreement, solicit any Company employee for the purposes of offering employment, unless expressly approved by the Company in writing.

ARTICLE 8 - TERM AND TERMINATION

8.01            Term

The initial term of this Agreement shall be for a period of two (2) years from the Effective Date, following which this Agreement shall automatically renew for successive one year terms unless earlier terminated as provided in Section 8.02.

8.02          Termination

          (1)   This Agreement may be terminated without cause at any time by either Party giving sixty (60) days notice in writing to the other Party, except that where a the Company is engaged in a material mine construction or expansion program such period shall be extended to one hundred and eighty (180) days notice.

          (2)   Notwithstanding Section 8.02(1), the Company may terminate this Agreement with immediate effect for cause, which shall include:

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ARTICLE 9 – INSURANCE

9.01            HD Services’ Insurance

          (1)  HD Services shall obtain, maintain until expiry or earlier termination of this Agreement or such longer period as may be specified below, and pay the premiums for, the following insurance coverage:

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          (2)   All insurance policies required under Section 9.01(1)(b), (c) and (d) shall provide that 30 days written notice of cancellation shall be given to the Company. HD Services is solely responsible to determine the appropriate type and amount of insurance to carry, but shall maintain, until expiry or earlier termination of this Agreement or such longer period as may be specified in Section 9.01(1), at least the amount and type of insurance specified in this Section 9.01.

          (3)   HD Services shall comply with workers’ compensation or equivalent legislation that is applicable to it, including the payment of assessments and dues thereunder, until expiry or earlier termination of this Agreement.

ARTICLE 10 - DISPUTE RESOLUTION

10.01          Disputes Regarding Reimbursable Costs

Notwithstanding Section 10.02, in the event of any dispute arising between the Parties regarding fees or reimbursable costs claimed by HD Services in accordance with Article 3 and such dispute not having been resolved between the Parties within thirty (30) days from the written notice of such dispute by either Party to the other, such dispute may be referred by either Party to a Chartered Accountant (“ CA ”) to be mutually agreed upon or, failing which, a third CA appointed by two CAs, one of which is chosen by each of the Parties. Such third CA shall act as arbitrator based on the results of the audit work (and such other work as he or she may direct be done) and shall be entitled to make such adjustments as may in the circumstances appear to it to be appropriate and whose decision shall be regarded as the decision of an arbitrator and shall be binding and final upon the Parties. The costs of the CA in deciding such dispute shall be borne by each Party in the same proportion as the cost of the audit in 7.03.

10.02         Other Disputes

Any dispute arising under or in connection with any matter relating to or resulting from the performance of obligations under this Agreement, other than as contemplated by Section 10.01, which has not been resolved by the Parties within thirty (30) days after the date on which either Party delivers written notice to the other Party of such dispute, which notice shall specify in reasonable detail the matter or matters in dispute, shall:

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any of them, from seeking injunctive relief. If the Parties cannot agree to a single arbitrator, then such arbitrator shall be chosen by reference to the Centre. Such arbitration shall include a requirement for the production and discovery of documents and examination for discovery as required by the British Columbia Supreme Court Rules. The place of arbitration shall be Vancouver, British Columbia.

ARTICLE 11 - MISCELLANEOUS

11.01         Notices

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and shall be given by personal delivery, by registered mail or by electronic means of communication addressed to the recipient as follows:

To Hunter Dickinson Services Inc.:

1020 - 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6

Fax: (604) 681 2741

Attention: President

To Quartz Mountain Resources Ltd. :

1020 - 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6

Fax: (604) 684 681 2741

Attention: Secretary

or to such other address, individual or electronic communication number as may be designated by notice given by either Party to the other. Any demand, notice or other communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if given by registered mail, on the third (3rd) business day following the deposit thereof in the mail and, if given by electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the business day during which such normal business hours next occur if not given during such hours on any day. If the Party giving any demand, notice or other communication knows or ought reasonably to know of any difficulties with the postal system that might affect the delivery of mail, any such demand, notice or other communication may not be mailed but must be given by personal delivery or by electronic communication.

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11.02         Further Assurances

Each Party shall from time to time execute and deliver such further documents and instruments and do all acts and things as the other Party may reasonably require to effectively carry out or better evidence or perfect the terms of this Agreement.

11.03         Entire Agreement

          (1)   This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the Parties with respect thereto and any rights that the Company may have at law or equity regarding HD Services’ possession or use of the Confidential Information.

          (2)   Neither this Agreement nor the parties’ performance hereunder shall be deemed to create any special relationship or obligations, including fiduciary obligations, and there are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the Parties, other than as expressly set forth in this Agreement.

11.04         Assignment

This Agreement may not be assigned by either Party without the prior written consent of the other Party. Any assignment shall require the written agreement of the assignee to be bound by the terms hereof.

11.05         Amendments and Waivers

No amendment to this Agreement shall be valid or binding unless set forth in writing and duly executed by the Parties. No waiver of any breach of any provision of this Agreement shall be effective or binding unless made in writing and signed by the Party purporting to give the same and, unless otherwise provided, shall be limited to the specific breach waived.

11.06         Enurement

This Agreement shall enure to the benefit of the Parties and shall be binding upon their successors and permitted assigns.

11.07          Ambiguities

Each of the parties has participated in the drafting of this Agreement and any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the interpretation of this Agreement.

11.08         Enforceability

If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of the provisions shall remain in full force and effect and shall not be affected, impaired or invalidated thereby.

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11.09           Severability

If a provision of this Agreement shall be found to be wholly or partially invalid, this Agreement shall be interpreted as if the invalid provision had not been a part of this Agreement.

11.10         Currency

All dollar figures referred to in this Agreement are Canadian dollars unless specifically noted otherwise.

11.11         Headings, Etc.

The division of this Agreement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof’, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion hereof and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement.

11.12          Expanded Meanings

In this Agreement, unless something in the subject matter or context is inconsistent therewith:

11.13         Governing Law

This Agreement shall be governed by the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

11.14         Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument.

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11.15         Electronic Transmission

Delivery of an executed signature page to this Agreement by either Party by electronic transmission shall be as effective as delivery of a manually executed copy of this Agreement by such Party.

IN WITNESS WHEREOF the Parties have caused this Agreement to be executed as of the Effective Date.

HUNTER DICKINSON SERVICES INC.

By: ________________________________
        Authorized Signatory

QUARTZ MOUNTAIN RESOURCES LTD.

By: ________________________________
        Authorized Signatory

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ANNEXURE A

SECONDMENT AGREEMENT

Employee Secondment Agreement made effective •, between Hunter Dickinson Services Inc . (“ HDSI ”), • (“•”) and the undersigned individual (the “ Employee ”).

1.        Secondment

The Employee will provide employment services to • or its affiliates (the “ Secondment ”). HDSI and the Employee acknowledges that • may, upon written notice to the Employee, second the Employee to its affiliate, • (“•”) and • may in turn, upon written notice to the Employee, second the employee to • (“•”)(•,• or • being in such capacity the “ Employer ”). During the Secondment, the Employee(s) will work under the general direction and supervision of the relevant Employer and will carry out the job duties and functions assigned by such Employer or their contactors and agents. Notwithstanding the Secondment, Employee will remain an employee of HDSI and all decisions regarding the Employee’s employment status will continue to be the sole responsibility of HDSI.

2.         General Obligations of Employee

Employee hereby acknowledges and agrees with • that:

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3.         Acknowledgements of •

• hereby acknowledges that it will promote a safe, secure workplace for Employee when at the Employer’s premises or outside of HDSI’s offices on secondment to the Employer and will ensure Employee is able to perform his or her duties free from harassment and under proper direction.

4.         General

IN WITNESS WHEREOF the parties have executed this agreement as of the date first written above.

Hunter Dickinson Services Inc.

_______________________________________
Authorized Signatory

•

_______________________________________
Authorized Signatory

_______________________________________
[Employee]

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ANNEXURE B

CONTRACTOR AGREEMENT

Services Agreement made effective •, between Hunter Dickinson Services Inc . (“ HDSI ”), • (“•”) and the undersigned individual (the “ Contractor ”).

1.         Contracting

The Contractor will provide corporate and technical services to • or its affiliates (the “ Contracting ”). HDSI and the Contractor acknowledges that • may, upon written notice to the Contractor, assign its rights and obligations hereunder to its affiliate, • (“•”) and • may in turn, upon written notice to the Contractor, assign its rights and obligations as against the Contractor to • (“•”)(•,• or • being in such capacity the “ Client ”). During the Contracting, the Contractor(s) will provide the services requested by such Client or their contactors and agents. Notwithstanding the Contracting, Contractor will also remain an independent contractor to HDSI under a separate services agreement (the “ HDSI Contract ”) and all services provided by the Contractor to HDSI will continue to be the sole responsibility of HDSI.

2.         Independent Contractor

The Parties acknowledge and agree that:

3.         Fees and Expenses

HDSI has a services contract with •, • has in turn contracted with • and • has a services contract with • (such services contracts collectively being the “ Primary Services Contracts ”). Contractor acknowledges that the Client shall pay all remuneration in respect of the Contracting solely in accordance with the relevant Primary Services Contract and HDSI shall remain solely liable to pay the monthly fees, and reimburse the expenses, of Contractor in accordance with the HDSI Contract.

4.         General Obligations of Contractor

Contractor hereby acknowledges and agrees with • that:

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5.         Acknowledgements of •

• hereby acknowledges that it will promote a safe, secure workplace for Contractor when at the Client’s premises or outside of HDSI’s offices while Contracting and will ensure Contractor is able to provide his/her services free from harassment and under proper direction.

6.         Termination

This agreement shall continue until the earlier of:

B-2

IN WITNESS WHEREOF the parties have executed this agreement as of the date first written above.

Hunter Dickinson Services Inc.

_______________________________________
Authorized Signatory

•

_______________________________________
Authorized Signatory

_______________________________________
[Contractor]

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C-1

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