Exhibit 10.2
La Lajita Agreement dated as of February 12, 1998
LA LAJITA
THIS AGREEMENT dated as of the 12th day of February, 1998
BETWEEN:
XXXXXX XXXXXX XXXX X.X. DE C.V.
(hereinafter called the "Concessionaire")
AND:
LA MEXICANA RESOURCES S.A. DE C.V., a body corporate and
having an office to received notices at Paseo de la Reforma
000, Xxxxx xx Xxxxxxxxxxx, 00000 Xxxxxx, D.F. (hereinafter
called the "Company")
A. By virtue of an assignment of rights agreement executed on September
20, 1996, between Xx. Xxxxxxxxx Xxxxxxxx Xxxxxxxx and the Concessionaire, the
Concessionaire acquired 100% of the rights derived from the exploration mining
concession of "La Xxxxxxxxx" lot, title 193,536 located in the Municipality of
Pueblo Nuevo, State of Durango (the "La Xxxxxxxxx Agreement"), which
exploitation mining concession's application was filed under file 2/1.3- 1478.
The lot above mentioned shall be called hereinafter the "La Xxxxxxxxx" lot.
B. By virtue of an exploration with purchase option agreement executed on
August 3, 1997, (the "Xxxxxxxxx Agreement") between Xxxxxx Xxxxxxxxxx Xxxx,
acting on his own and representing Messrs. Xxxxxxxxx Xxxxxxxxxx Xxxxxxx and Xxxx
Xxxxxx Xxxxx and the Concessionaire, the Concessionaire acquired an option to
acquire up to a 100% interest in the exploitation mining concession's rights of
the following lots located in the Municipality of Pueblo Nuevo, State of
Durango:
NAME OF LOT TITLE NUMBER
1. Xxxxxxxxx 186,533
2. Ampl. de Guadalupe 205,214
The lot above mentioned in section B.1. shall be called hereinafter the
"Xxxxxxxxx" lot, and the lot mentioned in section B.2. above shall be called
hereinafter the "Ampl. Xxxxxxxxx" lot.
C. By virtue of an assignment of rights agreement executed on November 5,
1997, between Xx. Xxxxxxx Xxxxx Xxxxxxx, and in representation of Xx. Xxxxxxx
Xxxxx Xxxxxxx and Xxx. Xxxxxx Xxxxxx Xxxxx Xxxxxxx and the Concessionaire, the
Concessionaire acquire 100% of the rights derived from the exploitation mining
concession of the "Santo Nino" lot, title 194,007, located in the Municipality
of Pueblo Nuevo, State of Durango (hereinafter the "Santo Nino Agreement") in
which the Concessionaire bind himself to pay Messrs. Xxxxxxx, Xxxxxxx and Xxxxxx
Xxxxxx Xxxxx Xxxxxxx to a 1% net smelter return royalty which is defined below,
in case the Concessionaire desires to exploit the corresponding lot. The lot
above mentioned shall be called the hereinafter the "Santo Nino" lot.
D. By virtue of an assignment of rights agreement executed on November 5,
1997, between Xx. Xxxxxx Xxxxx Xxxxxxxx and the Concessionaire, the
Concessionaire acquired 100% of the rights derived from the exploration mining
concession of the "2 Hermanos" lot, title 194,319,
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located in the Municipality of Pueblo Nuevo, State of Durango, which
exploitation mining concession's application was filed under file 2/1.3-1654
(hereinafter the "2 Hermanos Agreement"), in which the Concessionaire bind him
self to pay to Xx. Xxxxxx Xxxxx Xxxxxxxx to a 1% net smelter return royalty, in
case the Concessionaire exploit the corresponding lot. The lot above mentioned
shall be called hereinafter the "2 Hermanos" lot.
The La Xxxxxxxxx Agreement, the Xxxxxxxxx Agreement, the 2 Hermanos
Agreement, and the Santa Nino Agreement to be known together as the "Underlying
Agreements"
When mention is made indistinctly in this agreement (hereinafter the
"Agreement") of "Lots" or "Mining Lots" or "Property", it shall be understood
this reference is being made to the mining concessions mentioned in sections A,
B, C and D above and when mention is made of "Concession" or "Concession
Rights", it shall be understood that this reference is being made to the rights
of the mining exploitation of the Lots and to the mining exploitation concession
that arise therefrom.
E. The Concessionaire has agreed to grant to the Company the exclusive
right to explore and if applicable develop the Lots, and the exclusive right and
option to acquire up to an undivided 60% right, title and interest in and to the
Property on the terms and conditions hereinafter set forth.
F. The Company has agreed that the Concessionaire shall not have to incur
any further expenditures with respect to the Property until such time as the
Option granted hereby is either exercised or terminated as hereinafter provided.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the covenants hereinafter set forth the parties hereto covenant and agree as
follows:
CLAUSES
1.0 GRANT AND DURATION
1.1 The Concessionaire hereby grants to the Company the sole and exclusive
right and option to purchase an undivided 60% interest in Lots, together with
all rights, privileges and appurtenances pertaining thereto recorded and
unrecorded to which it is entitled in respect thereof (hereinafter called the
"Option").
1.2 The Option herein granted shall be exercised by the Company on or
before February 2, 2000 (the "Expiry Date").
1.3 The duration of this Agreement shall be from February 12, 1998 to
February 2, 2000.
2.0 OPTION PAYMENTS
2.1 In consideration for the exploration rights and, if applicable,
exploitation rights in and to the Xx Xxxxxxxxx, Xxxxxxxxx and Ampl. de Guadalupe
lots, and the Option on those lots, the Company shall cause the following
payments and share issuances to be made to the Concessionaire:
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a) US$50,000 (fifty thousand dollars of the United States of
America) prior to the execution of this Agreement (the receipt
and sufficiency of which is hereby acknowledged by the
Concessionaire);
b) US$25,000 (twenty five thousand dollars of the United States
of America) when any company that has a Mexican subsidiary
into which the interest of the Company in the Property is sold
("Pubco") is listed on a recognized stock exchange or
quotation system (the "Listing Date");
c) US$75,000 (seventy five thousand dollars of the United States
of America) every six months after the Listing Date until the
Expiry Date or until a positive bankable feasibility study is
completed, whichever is the sooner;
d) 250,000 shares of Pubco upon the approval of this Agreement by
any regulatory authority having jurisdiction over this
Agreement;
e) a further 750,000 shares of Pubco within three years of the
Listing Date. The Company agrees to make application for a
minimum of 250,00 shares of Pubco to be issued to the
Concessionaire every six months from the date of the issuance
of the shares pursuant to paragraph (d) herein. The issuance
of any shares pursuant to this section shall be subject to
regulatory approval, if required; and
f) a minimum amount of US$1,500,000 (one million five hundred
thousand dollars of the United States of America) shall be
invested on work commitments, according to the following
budget schedule: US$300,000 by the first year, US$500,000 by
the end of the second year and the remaining US$700,000 by the
end of the third year, provided that any work performed on the
Santa Nino and 2 Hermanos lots shall be applied and counted
toward this work commitment.
2.2 In consideration for the exploration rights and, if
applicable, exploitation rights in and to the Santa Nino and 2 Hermanos lots and
the Option on those lots, the Company shall cause the following payments and
share issuances to be made to the Concessionaire:
a) US$100,000 (one hundred thousand dollars of the United States of
America) on or before September 30, 1998;
b) 100,000 shares of Pubco upon the Listing Date;
c) a further 50,000 shares of Pubco upon the filing of a qualified
engineering report, which engineering report is accepted for filing
by the regulatory authorities, if required, and which engineering
report, on review of the completion of the recommended work program
on the 2 Hermanos and Santa Nino lots, recommends a further work
program on the 2 Hermanos and Santa Nino lots;
d) a further 50,000 shares of the Pubco upon the filing of an
additional qualifiedengineering report, which engineering report is
accepted for filing by the regulatory authorities, if required, and
which engineering report, on review of the completion of the
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recommended work program on the 2 Hermanos and Santa Nino lots,
recommends a further work program on the 2 Hermanos and Santa Nino
lots;
e) a further 200,000 shares of Pubco within three years of the Listing
Date.
The Company shall also be responsible for the payment of value added tax. In
order to calculate the taxes that may arise from the payment of the share
consideration mentioned in this clause, according to the applicable law, the
closing price per share of Pubco, as quoted on the most senior stock exchange or
quotation system on which the shares of Pubco are then listed on the last
trading day immediately prior to the date on which the Company delivers the
shares of Pubco mentioned above to the Concessionaire, shall be used.
It shall be considered that the Company has exercised the Option on the Xx
Xxxxxxxxx, Xxxxxxxxx and Ampl. de Guadalupe lots, upon the Company paying to the
Concessionaire all consideration mentioned in clause 2.1 It shall be considered
that the Company has exercised the Option on the 2 Hermanos and Santa Nino lots,
upon the Company paying to the Concessionaire all consideration mentioned in
clause 2.2.
3.0 OPTION ONLY
3.1 This Agreement is an option only and the doing of any act or the making
of any payment by the Company shall not obligate the Company to do any
further acts or make any further payment.
4.0 ACQUISITION OF INTEREST
4.1 Upon the exercise of the Option by the Company as described in clause
2, the Company shall have acquired an undivided 60% interest in and to
the Lots.
5.0 ASSIGNMENT AGREEMENT
5.1 Upon the exercise of the Option, the Concessionaire shall within 15
calendar days of the date the Company has exercised its Option execute
an assignment agreement before a Notary Public selected by the Company,
assigning an undivided 60% interest in the Property in favor of the
Company. At the request of the Company, the Concessionaire shall
execute the assignment in favor of Newco (as defined below).
6.0 RIGHT OF ENTRY
6.1 During the term of this Agreement, the Company shall have the exclusive
right to explore, and, if applicable, to exploit the Lots and without
restricting the generality of the foregoing and subject to the Company
obtaining appropriate surface rights and governmental authorizations,
the Company shall have the right to:
a) enter upon and inspect the Lots, provided that the
Concessionaire and its representatives shall have the right at
all reasonable times, at its risk and expense, to enter upon
the Lots and inspect the Company's work;
b) carry out exploration and, if applicable, development work on
the Lots;
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c) place and use thereon excavations, openings, shafts, ditches
and drains, and of construct, erect, maintain, use, and at its
election, removing any and all buildings, structures, plants,
machinery, equipment, railroads, roadways, pipelines,
electrical power lines and facilities, stockpiles, waste
piles, tailings ponds and facilities, settlings ponds, and all
other improvements, property and fixtures as may be necessary,
convenient, or suitable for mining, removing, beneficiating,
concentrating, smelting, extracting, leaching, refining and
shipping of ores and minerals thereof, or for any activities
incidental thereto or to any of the rights or privileges of
the Company hereunder; and
d) divert streams, remove lateral and subjacent supports, cave,
subside or destroy the surface or any part thereof; deposit
earth, rocks, waste, lean ore and materials on any parts of
the Lots where it will not interfere with mining, xxxxx the
same, and commit waste to the extent necessary, usual or
customary in carrying out any or all of the above rights,
privileges and purposes.
7.0 WARRANTIES AND REPRESENTATIONS OF THE CONCESSIONAIRE
7.1 The Concessionaire hereby represents and warrants to the Company that:
a) the Property consist of and exploration mining concessions
over the "La Xxxxxxxxx" lot, title 193,536, the "2 Hermanos"
lot, title 194,319, and the exploitation mining concessions
over the "Xxxxxxxxx" Lot, title 186,533, the "Ampl. De
Guadalupe" lot, title 205,214, and the "Santa Nino" lot, title
194,007, and each of the said Lots are duly and validly staked
and recorded pursuant to the laws of Mexico, and are in good
standing on the date hereof and are free and clear of all
liens, charges and encumbrances;
b) the Concessionaire has the right to acquire an undivided 100%
interest in the Property;
c) the Underlying Agreements are in good standing as at the date
hereof;
d) the Concessionaire has the exclusive right to enter into this
Agreement and all necessary authority to dispose of an
interest in and to the Property in accordance with the terms
of this Agreement;
e) there is no agreement respecting the Property to which the
Concessionaire is a party other than this Agreement and no
person, firm or corporation has any interest in the Property
hereunder and no person or entity is entitled to any royalty
or other payment in the nature of rent or royalty on any
minerals, ores, metals or concentrates or any other such
products removed from the Lots, with the exception of the net
smelter return royalties mentioned in the Santa Nino and 2
Hermanos Agreements, as mentioned in clause 11.0 below;
f) all required consents, approvals or conditions precedent to
the acquisition by the Company of an interest in the Property
as contemplated by the terms of this Agreement have been
obtained or satisfied; and
g) there is no adverse claim or challenge to the ownership of or
title to the Property, nor is there any basis thereof, and
there are no outstanding agreements or options to acquire or
purchase the Property or any portion thereof, and no person,
has any royalty or other interest whatsoever in production
from the Lots, with the
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exceptionof the net smelter return royalties mentioned in the
Santo Nino and 2 Hermanos Agreements, as mentioned in the
clause 11.0 below;
7.2 The representations and warranties hereinbefore set out are conditions
on which the parties have relied in entering into this Agreement and shall
survive the acquisition of any interest in the Property by the Company and each
of the parties will indemnify and save the other 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.
8.0 COVENANTS OF THE CONCESSIONAIRE
8.1 During the currency of this Agreement, the Concessionaire covenants and
agrees with the Company to:
a) keep the Underlying Agreements in good standing by making such
payments or share issuances as are required to keep same in
good standing;
b) not do or permit or suffer to be done any act or thing which
would or might in any way adversely affect the rights of the
Company hereunder;
c) make available to the Company and its representatives all
records and files relating to the Lots and permit the
Concessionaire and its representatives at its own expense to
take abstracts therefrom and make copies thereof;
d) cooperate fully with the Company in obtaining any surface and
other rights on or related to the Lots as the Company deems
desirable;
e) promptly provide the Company with any and all notice and
correspondence from government agencies in respect of the
Property and any notices of default from the registered owners
of the Property; and
f) not lien or encumber in any manner the Property.
9.0 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
9.1 The Company represents and warrants to the Concessionaire that:
a) it is a company duly incorporated which is evidenced in
notarial deed 19,689, dated February 12, 1998, granted before
Lic. Xxxx Xxxxx Xxxxxx Xxxxxxxx. Notary Public 102 of the
Federal District and registered in the Public Registry of
Property and Commerce of Federal District, under mercantile
folio 231,942 and in the Public Registry of Mining under
number 72, volume 36, of the Society Mining Book on October
23, 1998, organized and validly subsisting under Mexican law
and is qualified to carry on business in Mexico;
b) it has full power and authority to carry on its business and
to enter into this Agreement and any agreement or instrument
referred to or contemplated by this Agreement; and
c) 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 applicable jurisdiction or
constating documents.
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10.0 COVENANTS OF THE COMPANY
10.1 The Company hereby covenants and agrees with the Concessionaire as
follows:
a) that during the currency of this Agreement it will maintain
the Property in good standing and shall pay all mining duties
on the Property under the Federal Duties Law of Mexico and,
where relevant, it shall conduct exploration work on the Lots
and record all assessment work reports, in the terms of the
Mining Law of Mexico and its Regulations. In the event that
the Company fails to pay the mining duties in respect of the
Property when the same become due and owing, or fails to
record the assessment work report on or before May 20 of each
year, the Concessionaire may, at its option, pay such duties
and record such assessment work reports and the Company agrees
that any amounts so paid by the Concessionaire shall be added
to the purchase price and shall be paid by the Company with
the next option payment, if any, or if no option payment
remains, within one month of payment by the Concessionaire and
to compensate the Concessionaire for any cost incurred for
such recording;
b) conduct all work on or with respect to the Lots in a careful
and miner-like manner and in accordance with all applicable
Federal, State and Municipal laws, rules orders and
regulations, and indemnify and save the Concessionaire
harmless from any and all claims, suits or actions made or
brought against it as a result of work done by or with respect
to the Lots except to the extent that such claims, suits or
actions relate to issues or disputes regarding title to the
Property;
c) that it will properly pay all accounts of every nature and
kind for wages, supplies, Workers' Compensation assessments,
income tax deductions and all other accounts and indebtedness
incurred by it on the Property so that no claim or lien can
arise thereon or upon the ore and minerals contained therein
and it will indemnify the Concessionaire and save it harmless
from any and all loss, cost, actions, suits, damages or claims
which may be made against the Concessionaire in respect of the
operations carried out upon the Lots and that it will
discharge any liens or encumbrances which may arise in respect
of or be recorded against the Property as a result of the
operations of the Company thereon, provided however that the
Company shall have the right to contest the validity of any
such lien or claim of lien;
d) that it will permit the Concessionaire, or the representatives
of the Concessionaire duly authorized in writing, to visit and
inspect at reasonable times and intervals the Lots, and any
data obtained by the Company as a result of its operation
thereon, and to take samples for testing purposes from any
part of the Lots, provided always that the Concessionaire or
its representatives shall abide by the rules and regulations
laid down by the Company relating to matters of safety and
efficiency in its operations and that the Company shall be
under no liability to the Concessionaire or its
representatives for any personal injury, including death, or
any damage to property other than such as might be occasioned
by or through any neglect on the part of the Company, its
servants or agents;
e) that it will keep full, true and accurate reference reports,
maps and other surveys of all exploration, development and
mining work done on or under the Lots;
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f) that it will keep full, true and accurate records of all ore
and waste from the Lots and will take sufficient samples of
ore removed and will make accurate surveys of ore removed, all
in accordance with good mining practice;
g) that it will save and keep the Concessionaire harmless from
all claims, costs, loss or damage which may arise by reason of
injury (including injury resulting in death) to any person
employed by the Company in or upon the Lots or any part
thereof or which may arise by reason of injury (including
injury resulting in death) to any person or damage done to any
property as a result of any work or operations of the Company
or of its possession or occupancy of the Lots; and
h) that Company shall deliver to the Concessionaire all reports
of the studies made by the Company on the Lots within 180 days
from the date of termination of this Agreement for whatever
reason other than the exercise of the Option.
11.0 SURRENDER AND ACQUISITION OF PROPERTY INTERESTS PRIOR TO
TERMINATION OF AGREEMENT
11.1 The Company may at any time, elect to abandon any one or more of the
Lots by giving notice to the Concessionaire of such intention. For a period of
30 days after the date of delivery of such notice the Concessionaire may elect
to have any or all of the Lots in respect of which such notice has been given
transferred to it by delivery of a request therefore to the Company, provided
that such transfer has already taken place in favour of the Company. Any Lots so
transferred, if in good standing at the date hereof or if the Company causes the
same to be placed in good standing after the date hereof, shall be in good
standing under the laws of Mexico for at least 90 days from the date of
transfer. If the Concessionaire fails to make request for the transfer of any
mineral claims as aforesaid within such 30-day period, the Company may then
abandon such Lots without further notice to the Concessionaire. Upon any such
transfer or abandonment the Lots so transferred or abandoned shall for all
purposes of this Agreement cease to form part of the Property and the Company
shall have no further obligations pursuant thereto.
12.0 FORCE MAJEURE
12.1 If the Company is at any time either during the exercise of the Option
or thereafter prevented or delayed in complying with any provisions of this
Agreement by reason of strikes, walkouts, labour shortages, power shortages,
fires, wars, acts of God, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
the Company, then the time limited for the performance by the Company of its
obligations hereunder shall be extended by a period of time equal in length to
the period of each such prevention or delay.
12.1 The Company shall within seven days given notice to the Concessionaire
of each event of force majeure described above, and upon cessation of such event
shall furnish the Concessionaire with notice of that event together with
particulars of the number of days by which the obligations of the Company
hereunder have been extended by virtue of such event of force majeure and all
preceding events of force majeure.
13.0 DEFAULT AND TERMINATION
13.1 Notwithstanding anything in this Agreement to the contrary, if any
party (a "Defaulting Party") is in default of any requirement herein set forth
the party affected by such default shall give written notice to the Defaulting
Party specifying the default and the Defaulting Party shall
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not lose any rights under this Agreement, unless within 30 days after the giving
of notice of default by the affected party the Defaulting Party has failed to
take reasonable steps to cure the default by the appropriate performance and if
the Defaulting Party fails within such period to take reasonable steps to cure
any such default, the affected party shall be entitled to seek any remedy it may
have on account of such default.
13.2 The Company may terminate this Agreement at any time upon 30 days
written notice to the Concessionaire (the "Termination").
13.3 Upon such Termination, all rights, title and interest of the Company
under this Agreement shall terminate, and the Company shall not be required to
make any further payments, or to perform any further obligations of the
Agreement, including those payments in Section 2.1 above, which become due after
the Termination.
13.4 In the event the Concessionaire provides the Company with any notice
received from the registered holders of the Property that any of the Underlying
Agreements is in default (including default for its registration before the
Public Registry of Mining), the Company shall have the right but not the
obligation to rectify such default such as by making payments or share
issuances, and do all acts as required to rectify such default, and the cost of
same may be set off against any payments due to the Concessionaire here in or
the Company may, at its option, demand payment directly from the Concessionaire
for same.
14.0 RIGHTS XXXX XXXXXXXXXXX
00.0 Xxxx Xxxxxxxxxxx, the Company shall leave the Lots within a period of
30 days from the Termination date. The Company shall have the right, within a
period of 30 days following the Termination date, to remove from the Lots all
buildings, plant, equipment, machinery, tools, appliances and supplies which
have been brought upon the Lots by the Company or on behalf of the
Concessionaire, and any such Property not removed within such 30 day period
shall become the property of the Concessionaire.
15.0 CO-CONCESSIONAIRES' OR SHAREHOLDERS' AGREEMENT
15.1 After the exercise of the Option, the Concessionaire and the Company
shall either become fco-concessionaires of the Property or incorporate a new
company ("Newco") that shall acquire the title to the Property:
a) to further explore and, if deemed warranted as herein
provided, to develop the Lots and equip it for commercial
production;
b) to operate the Lots as a mine; and
c) to engage in such other activity as may be considered by the
parties to be necessary or desirable in connection with the
foregoing.
15.2 The parties shall have three months after the exercise of the Option to
negotiate the terms of a co-concessionaires' agreement or to incorporate Newco
and negotiate a shareholders' agreement for the further exploration and
development of the Lots with the intent of putting the Lots into production. The
parties shall use their best efforts to negotiate a structure and an agreement
and do all necessary acts to enter into an agreement. If the co-concessionaires'
agreement or shareholders' agreements, as the case may be, is not finalized
within three months of the exercise of the Option, then the parties will submit
themselves to binding arbitration to determine the structure and to settle the
agreement having regard to the terms of this Agreement.
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15.3 The parties agree that the co-concessionaires' agreement or
shareholders' agreement shall contain terms customary in a relationship of that
nature and shall contain the following terms which are non-negotiable shall form
part of the co-concessionaires' agreement or shareholders' agreement, as the
case may be:
a) the Concessionaire and the Company shall each subscribe for
and pay for their respective portion of the costs of the
shares of Newco, if Newco's incorporation is elected by the
Company;
b) the initial interests of the parties in the Property or Newco,
as the case may be, shall be 60% as to the Company's interest
and 40% as to the Concessionaire's interest provided the
Concessionaire has earned a 100% interest in the Property
pursuant to the Underlying Agreements. For further certainty,
shares of Newco shall be deemed to be an "Interest" or
"Interests" for the purposes of this section 13.3;
c) a party shall be entitled to recover any monies lent by it for
the development of the Property before there is any
distribution of profits to the Concessionaire and the Company;
d) the co-concessionaires' agreement or Newco, as the case may
be, shall be managed by a Management Committee or Board of
Directors, which shall be comprised of one member or director
appointed by each party. The Management Committee or Board of
Directors shall have the power to appoint the operator/manager
of the Property;
e) the members of the Management Committee or Board of Directors
shall have voting power proportional to the interest in the
Property or in Newco held by the party appointing such member
or director;
f) no party shall do, transact, perform or undertake anything in
the name of the other parties or in the name of Newco;
g) nothing contained in the agreement shall, except to the extent
specifically authorized thereunder, be deemed to constitute a
party, an agent or legal representative of any other party.
16.0 SALE OF INTEREST
16.1 The Concessionaire agrees that if the Company decides to sell,
transfer, assign or otherwise dispose of its interest to an arm's length third
party then the Concessionaire shall also sell, transfer, assign or otherwise
dispose of its interest to the arm's length third party at the same price per
percentage interest or share as the Company shall dispose of its interest or
shares to the arm's length third party, provided the sale by the Company is made
at fair market value. If the parties cannot agree on a fair market value, the
matter shall be referred to arbitration which shall be governed by section 17.0.
17.0 ARBITRATION
17.1 All matters of dispute between the Concessionaire acting collectively
and the Company concerning this Agreement which cannot be resolved or settled by
the parties, shall be finally settled by arbitration in Vancouver, British
Columbia. The party desiring arbitration shall appoint
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one arbitrator, and shall notify the other party of such appointment, and the
other party shall within 15 days after receiving such notice, appoint an
arbitrator, and two arbitrators so named, before proceeding to act, shall within
30 days of the appointment of the last appointed arbitrator, unanimously agree
on the appointment of the third arbitrator to act with them and be chairman of
the arbitration herein provided for. If the other party shall fail to appoint an
arbitrator within 15 days after receiving notice of the appointment of the first
arbitrator, the first arbitrator shall be the only arbitrator, and if the two
arbitrators appointed by the parties shall be unable to agree on the appointment
of the chairman, the chairman shall be appointed under the provisions of the
ARBITRATION ACT (British Columbia). Except as specifically or otherwise provided
in this paragraph, the arbitration herein provided for shall be conducted in
accordance with such Act. The chairman or, in the case where only one arbitrator
is appointed, the single arbitrator, shall fix the time and place in Vancouver,
British Columbia, and he shall preside over the arbitration and determine all
questions of procedure not provided for under such Act or this paragraph. After
hearing any evidence or representations that the parties may submit, the single
arbitrator, or the arbitrators, as the case may be, shall make an award and
reduce the same to writing and deliver one copy thereof to each of the parties.
The expense of the arbitration shall be paid in the manner specified in the
award. The parties agree that the award of the majority of the arbitrators, or
in the case a single arbitrator, shall be final and binding upon each of them.
18.0 ASSIGNMENT
18.1 The Concessionaire may not during the term of this Agreement assign any
or a part of its interest in this Agreement or the Property and the Company may
at any time assign its rights contained in this Agreement provided that the
assignor agrees to be bound by the terms and conditions of this Agreement.
19.0 GENERAL TERMS AND CONDITIONS
19.1 If this Agreement is terminated for any cause whatsoever except the
exercise of the Option granted hereby by the Company, the Company shall deliver
to the Concessionaire copies of all reports, data, assay results and other
material relating to its exploration and development work on the Lots.
19.2 For further clarity, where reference is made in this Agreement to the
Concessionaire, the Company's obligations to the Concessionaire shall be
satisfied if the Company makes payments to, delivers or gives notice to, the
person designated in writing to receive such by the Concessionaire from time to
time.
20.0 COVENANT FOR FURTHER ASSURANCES
20.1 The parties hereto hereby covenant and agree that they will execute
such further agreements, conveyances and assurances as may be requisite, or
which counsel for the parties may deem necessary to effectually carry out the
intent of this Agreement.
21.0 ENTIRE AGREEMENT
21.1 This Agreement shall represent the entire understanding between the
parties with respect to the Property. No representations or inducements have
been made save as herein set forth. No changes, alterations, or modifications of
this Agreement shall be binding upon either party until and unless a memorandum
in writing to such effect shall have been signed by all parties hereto.
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22.0 TITLES
22.1 The titles to the paragraphs to this Agreement shall not be deemed to
form part of this Agreement but shall be regarded as having been used for
convenience or reference only.
23.0 LAWS OF AGREEMENT
23.1 This Agreement shall be governed by and interpreted in accordance with
the applicable laws in the Federal District in Mexico for local matters and with
the applicable laws of the Mexican Republic for federal matters.
24.0 ENUREMENT
24.1 This Agreement shall enure to the benefit of and be binding upon the
parties hereto, and their respective heirs, successors, personal representatives
and assigns.
25.0 NOTICES
25.1 Any notice under this Agreement shall be given personally to the
parties at the address set forth on the first page hereof or to such other
address as the parties may hereinafter designate in writing to the other
parties.
IN WITNESS WHEREOF the parties have hereunto caused these presents to be
executed as of the day and year first above written.
XXXXXX XXXXXX XXXX X.X. DE C.V.
PER:
XXXXXXXXXX XXXXXX XXXXXXX
LA MEXICANA RESOURCES S.A. DE C.V.
PER:
AUTHORIZED SIGNATORY
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