Operator Agreement Made this 12th day of February, 2008
Exhibit
10.2
Made
this
12th
day of
February, 2008
This
Operator Agreement (the “Agreement”) is entered into by the following parties as
of the date written above.
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Between
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Sociedad
Pacific Copper Peru SRL Limitada, a limited liability
partnership, incorporated in the Country of Peru, South America
having its
international administrative office at 0000 X. Xxxxxxx Xxxxx, Xxxxx
000,
Xxxxxx, Xxxxxxx XXX 00000
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(hereinafter
referred to as the “Company”)
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And
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Inversiones
Mineras Xxxxxx., a limited liability partnership, incorporated in
the Country of Peru, South America, having its principal offices
located
at Urbanizacion Xxxx XIII G-2 Cayma, Peru, Arequipa
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(hereinafter
referred to as the
“Operator”)
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WHEREAS,
the Company wishes to employ the Operator to carry out work on the Company’s
properties in Peru as more particularly described herein; and
WHEREAS,
the Operator is prepared to undertake the work for the Company.
NOW
THEREFORE, in consideration of the mutual covenants and agreements contained
in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1.
REPRESENTATIONS
AND WARRANTIES
1.01
The
parties hereto each represent and warrant to the other that:
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(a)
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they
are entities duly formed, organized and validly existing in good
standing
under the laws of the jurisdiction in which they were
incorporated;
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(b)
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they
have all necessary corporate power and authority to enter into
this
Agreement and to carry out its obligations hereunder and the execution
and
delivery of this Agreement and the consummation of the transactions
contemplated hereunder have been duly authorized by all necessary
corporate action and proceedings;
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(c)
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this
Agreement constitutes a valid and binding obligation of each of
them,
enforceable against them in accordance with its terms, provided
that
enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization and other similar laws generally affecting enforceability
of creditors' rights and that equitable remedies such as specific
performance and injunction are in the discretion of the court from
which
they are sought;
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(d)
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neither
party is a party to, bound or affected by or subject to any indenture,
mortgage, lease, agreement, instrument, charter or by-law provision,
or
resolution of a board of directors (or any committee thereof),
statute,
regulation, order, judgment, decree or law which would be violated,
contravened, breached by, or under which default would occur as
a result
of, the execution and delivery of this Agreement or the consummation
of
any of the transactions contemplated herein;
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(e)
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the
Operator represents and warrants and the Company agrees that at
no time
will the Company be the Operator’s sole client or customer for its
services;
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(f)
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notwithstanding
anything contained in this Agreement, the Company has not made,
and does
not make, any representation or warranty of any kind or nature
whatever
concerning (i) the condition of the Properties; or (ii) the nature
or
extent of any environmental issues that may be associated with
the
Properties (as defined
below).
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2.
APPOINTMENT
2.01
The
Company hereby appoints the Operator to carry out certain exploration and
developmental activities on its mineral properties located in the Country of
Peru (the “Properties”) more particularly described in Schedule
A
hereto,
as to which the Operator declares it is professionally qualified and experienced
to carry out such activities.
3.
WORK
PROGRAMS AND BUDGETS
3.01 The
Operator will prepare an annual work program (the “Programs”) to be carried out
on each of the Company’s Properties within 30 days of the execution of this
Agreement and present it to the Company for approval. The Program shall contain
detailed descriptions of each item in the Program and a timeline during which
the work is projected to be carried out. Programs may be segregated into phases
with subsequent phases requiring approval based on the results of the previous
phase. Said Programs shall be accompanied with a budget (the “Budget”) detailing
the cost of each item in the Budget and setting out the estimated dates for
advances to be made by the Company. Said Budget shall include details of the
portion of the Operator’s administration costs required to carrying out the
Programs.
2
3.02
The
Operator shall, 90 days prior the completion of any annual Program, prepare
a
new annual Program with a Budget for the upcoming annual period and submit
it to
the Company for approval. Each new annual Program and Budget shall include
the
balance of any prior Program and Budget expected to be incomplete at the end
of
its annual period.
3.03
Each
annual Program may be modified from time to time based upon results attained
from monthly reports as the work progresses, subject to the agreement of the
parties hereto.
3.04
The
Company shall have 30 days from the receipt of any Program and Budget to approve
or modify the Program and Budget. Any changes to Programs and Budgets will
be
made by the Operator within 15 days and presented to the Company for final
approval which the Company shall deliver within 10 days of receipt.
3.05
The
Operator and the Company shall jointly ensure that the professional consultants
provided by the Company or as contracted by the Operator shall provide a written
log and photographic record of exploration activities and progress while any
Program is in progress and a full independent geological and or engineering
report as would be required by the Company for presentation to investors,
regulatory agencies or such other parties that the Company deems appropriate.
The Company shall be solely responsible to approve the party selected to write
such reports.
3.06
Following
approval of the respective Programs and Budgets, the Company agrees to provide
the Operator with sufficient funding to cover planned expenses 60 days in
advance of actual expenditures.
3.09
Should
an
unforeseen shortfall in funding occur, or should there be an emergency situation
with regard to the Properties, the Company shall provide notice of any such
shortfall to the Operator with
no
less than 30 days notice of the subsequent funding commitment, upon which the
parties hereby agree that the Operator shall
have explicit authority to employ as necessary any such unused project funds
to
terminate all exploration activities, including management and labor contracts,
office personnel, vendor and equipment agreements, and provide for the
repatriation of any foreign consultants, and find suitable storage for any
idled
equipment and vehicles, until such time as funding is sufficient to resume
exploration activities.
3.10 By
written notice given to Operator on or before November 1 of each year that
this
Agreement is in effect, the Company shall have the right to have an independent
firm of certified public accountants audit the expenditures reported under
Programs and Budgets for the preceding 12 month period. Such audit shall be
concluded as promptly as possible.
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4.
OPERATOR
RESPONSIBILTY
4.01
In
carrying out the Programs, the Operator shall be responsible for:
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help
in obtaining visas, work permits, safe passes, and other
required documents
when needed for any expatriate
professional;
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(b)
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providing
housing, necessary domestic services, and per diem and nutritional
needs for workers;
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coordinating
transportation for workers to and from work
sites;
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providing
ancillary labor and technical
support;
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| (m) |
providing
all necessary equipment and
supplies;
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coordinating
importation into the country of any geological and professional equipment,
including I.P. lines, drilling rigs, drill platforms, drill steel
and
bits, GPS receivers and stations, sample bags, etc., all in compliance
with the laws of Peru;
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providing
such other equipment as needed, such as bulldozers for road and platform
building, supply trucks for fuel, water and drill equipment, worker
and
supervisor vehicles, etc.;
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when
necessary, providing portable campsite with all necessary ancillary
staff
and facilities such as outdoor toilets, camp kitchen, and sleeping
quarters;
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ensuring
that all workers are provided with such safety training and equipment
as
required by job description and local regulations, such as gloves,
goggles, hard hat, steel toed boots, sun glasses and sun
block;
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| (r) |
reclamation
of disturbances and general housekeeping relating to entries onto
and
activities affecting the
Properties;
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Providing
for ancillary services:
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securing and compliance with any environmental or special operational permits,
consents or governmental approvals necessary for operations or activities
hereunder
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payment
of all taxes and import duties and related levies on the importation of any
equipment, materials and supplies into the country
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when
necessary, security services
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communications, including cell phones, internet, and fax
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office
services, including secretarial for bookkeeping, records, payroll and payroll
burden, and payment of third party invoices
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banking, including foreign investment justification, bank wires and foreign
currency exchange
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accounting, including un-audited monthly operational statements
and audited
annual statements, payment and recovery of value added taxes, and
payment of all company corporate and individual taxes that can
be credited
to the Company
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secure
storage for sample splits, drill core splits, and any idle
equipment
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shipping services, to external labs for samples and core splits
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key
personnel for field supervision, office management, and
overall project
management as circumstances dictate
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legal,
including filing of necessary documents with authorized government
agencies, payment of annual taxes, notarization of relevant agreements
and documents, and in sum with the consent of the Company; provide
a
legal defense against litigation and litigants and all manner
of plaintiffs
which may threaten or could threaten the integrity of the
mineral properties,
the operating subsidiaries, or any of the officers or key
agents involved
therein.
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It
is understood that Operator provides similar services for other parties
and where feasible administrative costs will be apportioned to each
of the
Operator’s customers as it relates to the total of such administration
costs.
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| 4.05 |
Operator
shall conduct all of its Operations on, and provide services in relation
to, the Properties and other activities hereunder in accordance with
the
best industry practices of safety, sound mining and other applicable
industry standards and practices, and in all material respects in
accordance with the terms and provisions of all Permits and agreements
pertaining to the Properties, and in compliance in all respects with
applicable Laws, except in each case where such failure or noncompliance
would not have a material adverse effect on the
Properties.
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5.
ACCESS
5.01
The
Company shall have access to the Properties and to the records of the Operator,
to review work being carried out on the Properties or to review results obtained
from work carried out on the Properties, as the case may be, provided however,
that reasonable notice is given to the Operator.
6.
TERM
AND TERMINATION
6.01
This
Agreement shall commence on the date first written and remain in effect as
long
as approved Programs are in effect. Either party may terminate this Agreement
on
ninety (90) days written notice; provided, that the Company shall have the
right
to immediately terminate this Agreement for any intentional malfeasance,
deliberate misconduct or grossly negligent act of the Operator which could
affect the Properties in a material fashion.
7.
SALE,
ABANDONMENT OR DISPOSITION OF PROPERTY
7.01
Any
sale,
joint venture, abandonment or other disposition of any of the Company’s
Properties shall be at the sole discretion of the Company. Should the Company
determine to take any such action to dispose of a Property, the Operator shall
provide reasonable assistance to facilitate such actions.
8.
OTHER
ACQUISITIONS/BUSINESS OPPORTUNITIES
8.01
The
Operator, at its discretion, may from time to time find other claim groups
or
mining opportunities in Peru and may elect to bring these claims or
opportunities to the attention of the Company for purchase or other form of
acquisition, provided the Company shall pay the Operator a finder’s fee or other
form of consideration to be negotiated for each completed acquisition. It is
acknowledged and understood that the Operator currently has interests in other
projects and properties in Chile that ownership by the Operator of such
interests are not in conflict with the Properties or business of the Company,
and that Operator has no obligation to present such projects to the Company.
9.
EQUIPMENT
9.01
As
part
of an approved Program and Budget, the Operator may have a need to acquire
equipment to carry out work on the Properties and may require a cash investment
or credit arrangements to secure such equipment for the benefit of the Company.
The Company will use its best efforts to arrange such cash or credit and set
up
a company or other entity, or facilitate some other arrangement to provide
the
equipment and the additional capital to train operators. To the extent that
the
Operator participates in the company or other arrangement set up to own the
equipment, such equipment will then be charged out at prevailing rates to the
Operator to carry out Programs for the Company and others.
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10.
INSURANCE
10.01
Operator
shall at all times maintain, and where feasible require its contractors and
their subcontractors performing work on the Properties to procure and maintain
during the course of any work conducted on the Properties, insurance from an
insurer reasonably satisfactory to the Company, including but not limited to:
Comprehensive
General Liability Insurance, including provisions insuring against the hazards
of premises operations, contractual liability, bodily injury, personal injury,
property damage, and products and completed operations, in amounts as are
generally available and standard in Peru.
Vehicular
Liability Insurance covering all automobiles and other vehicles used in
connection with services rendered hereunder, whether owned, non-owned, leased
or
hired by such contractor insuring against the risks of bodily injury and
property damage amounts as are generally available and standard in
Peru.
Worker’s
Compensation Insurance, as applicable, in accordance with the laws of the
country of Peru, including employer’s liability in amounts as generally required
by law.
To
the
extent that insurance is available and is procured by the Operator, the Operator
shall use its best efforts to provide that such policies name the Company as
an
additional insured thereunder, and the Operator shall furnish to the Company
copies of any insurance policies so obtained.
11.
CONFIDENTIALITY
OF INFORMATION/PRESS RELEASES
11.01 The
Operator shall, subject to the exceptions set out hereinafter, treat all data,
reports, records and other information relating to this agreement and the
Properties as confidential. The Operator, its officers, directors, employees,
consultants or agents will not, without the express written consent of the
Company, disclose to any third party any information concerning the Company
or
results of the operations on the Properties except where such disclosure is
mandatory under the law or is deemed necessary by the Operator’s counsel for the
satisfaction by the Operator of its obligations under applicable securities
law,
and the Operator has, prior to the public disclosure, given the Company a draft
copy of the disclosure.
Without
the prior written consent of the Company, except as required by law and/or
the
rules and regulations of any stock exchange, neither Party shall make any public
announcement, issue any press release, or make any statement to any third party
with respect to this Agreement. To the extent that any public announcement
is
required by law, the Operator shall confer with and provide a copy of such
statement to the Company prior to releasing such statement.
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12.
INDEMNITY
12.01
Operator
agrees to indemnify and hold the Company and its Affiliates and each of their
officers, directors and employees (“Representatives”)
harmless
from and against any and all claims, judgments, liabilities costs and/or losses
that any of them shall sustain by reason of or in connection with the breach
or
default of any of the representations and warranties, covenants or duties of
Operator contained in this Agreement.
13.
ARBITRATION
13.01
Any
controversy between the parties hereto involving any claim arising out of or
relating to this Agreement, will be submitted to and be settled by final and
binding arbitration in Tucson, Arizona, in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association (the “AAA”)
and judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof in the United States or in Chile. Such
arbitration shall be conducted by two arbitrators chosen by the Company and
the
Operator, or failing such agreement, an arbitrator appointed by the AAA. There
shall be limited discovery prior to the arbitration hearing as follows: (a)
exchange of witness lists and copies of documentary evidence and documents
relating to or arising out of the issues to be arbitrated, (b) depositions
of all party witnesses, and (c) such other depositions as may be allowed by
the
arbitrator(s) upon a showing of good cause. Depositions shall be conducted
in
accordance with the Arizona Code of Civil Procedure, the arbitrator(s) shall
be
required to provide in writing to the parties the basis for the award or order
of such arbitrator(s), and a court reporter shall record all hearings, with
such
record constituting the official transcript of such proceedings. All parties
hereto consent to jurisdiction in Tucson, Arizona and agree not to assert
inconvenience of forum as a defence or reason to deny such
jurisdiction.
14.
NOTICES
14.01
Any
notice, election, consent or other writing required or permitted to be given
hereunder shall be deemed to be sufficiently given if delivered or if mailed
by
registered air mail or by fax, addressed as follows:
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In
case
of the Company:
x/x
Xxxxxxx Xxxxxx Xxxx SRL
0000
X.
Xxxxxxx Xxxxx, Xxxxx000,
Xxxxxx,
Xxxxxxx XXX 00000
Fax
#
000-000-0000
Attention:
Xxxxxx Xxxxxxx
In
the
case of the Operator:
Inversiones
Mineras Xxxxxx,
Urbanizacion
Xxxx XIII G-2
Cayma,
Peru, Arequipa
Fax
#
Attention:
Xxxxxx Xxxxxx
and
any
such notice given as aforesaid shall be deemed to have been given to the parties
hereto if delivered, when delivered, or if mailed, on the tenth business day
following the date of mailing, or, if faxed, on the next succeeding day
following the faxing thereof PROVIDED HOWEVER that during the period of any
postal interruption in either the country of mailing or the country of delivery,
any notice given hereunder by mail shall be deemed to have been given only
as of
the date of actual delivery of the same. Any party may from time to time by
notice in writing change its address for the purpose of this
paragraph.
15.
GENERAL
15.01
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.
15.02
This
Agreement shall represent the entire understanding between the parties. No
representations or inducements have been made save as herein set forth. No
changes, alterations, or modifications of this Agreement shall be binding upon
any party until and unless an amendment to this Agreement or a memorandum in
writing to such effect shall have been signed by all parties
hereto.
15.03
The
titles to the articles to this Agreement shall not be deemed to form part of
this Agreement but shall be regarded as having been used for convenience of
reference only.
15.04
The
Schedules to this Agreement shall be construed with and as an integral part
of
this Agreement to the same extent as if they were set forth verbatim
herein.
15.05
This
Agreement shall be governed by and interpreted in accordance with the laws
in
effect in the State of Arizona, USA.
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15.06
This
Agreement shall inure to the benefit of and are binding upon the parties hereto
and their respective successors and permitted assigns. This Agreement may not
be
assigned by either party without the written consent of the other party, which
shall not be unreasonably withheld.
15.07
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the
same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing facsimile signature of a party shall constitute a valid and
binding execution and delivery of this Agreement by such party. Such facsimile
copies shall constitute enforceable original documents.
15.08
Time
shall be of the essence of this Agreement.
IN
WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the
day and year first above written.
Sociedad
Pacific Copper Peru Limitada.
By:
Xxxxxx
X. Xxxxxxx
Xxxxxx
X.
Xxxxxxx
Its:
INVERSIONES
MINERAS XXXXXX
By:
Xxxxxx
Xxxxxx
Xxxxxx
Xxxxxx
Its:
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Schedule
A
Property
Description
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TYPE
OF MINE
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APPROXIMATE
UTM
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MINE
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TOTAL
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PROPERTY
NAME
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LOCATION
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CONCESSION
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N
X E AREA LOCATION
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#
OF TITLE
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OFFICE
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HECTARES
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XXXXXXX
XXXXXXXXX #5
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puquina
map nw quad
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EXPLOITATION
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8.162.000
X 238.500
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01003412x01
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AREQUIPA
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3.819
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XXXXXXX
XXXXXXXXX #7
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puquina
map nw quad
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EXPLOITATION
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8.162.000
X 238.500
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01003460X01
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AREQUIPA
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86.804
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XXXXXXX
XXXXXXXXX #8
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puquina
map nw quad
|
EXPLOITATION
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8.162.000
X 238.500
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01003461X01
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AREQUIPA
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89.985
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XXXXXXX
XXXXXXXXX #12
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puquina
map nw quad
|
EXPLOITATION
|
8.162.000
X 238.500
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01003552X01
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AREQUIPA
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48.000
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XXXXXXX
XXXXXXXXX #15
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puquina
map nw quad
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EXPLOITATION
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8.162.000
X 238.500
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01003579X01
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AREQUIPA
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74.991
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XXXXXXX
XXXXXXXXX #18
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puquina
map nw quad
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EXPLOITATION
|
8.162.000
X 238.500
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01004496X01
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AREQUIPA
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15.329
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XXXXXXX
XXXXXXXXX #21
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puquina
map nw quad
|
EXPLOITATION
|
8.162.000
X 238.500
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10007895
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AREQUIPA
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0.744
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XXXXXXX
XXXXXXXXX #22
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puquina
map nw quad
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EXPLOITATION
|
8.162.000
X 238.500
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50014804
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AREQUIPA
|
77.546
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XXX
XXXXXX #79
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puquina
map nw quad
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EXPLOITATION
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8.162.000
X 238.500
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01004187X01
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AREQUIPA
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599.898
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TOTAL
HECTARES
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997.116
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*
HECTARES ROUNDED TO NEAREST .001
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