Chile Mining Technologies Inc.: Exhibit 10.2 - Filed by newsfilecorp.com






Exhibit 10.2

CLOSING ESCROW AGREEMENT 

This CLOSING ESCROW AGREEMENT, dated as of May 8, 2012
(this “Agreement”), is entered into by and among Chile Mining
Technologies Inc., a Nevada corporation (the “Company”), Euro Pacific
Capital, Inc. and Halter Financial Securities Inc. (together the “Placement
Agents”) and Escrow, LLC, a Virginia limited liability company (the
“Escrow Agent”). The Placement Agents and the Company are sometimes each
referred to herein as an “Escrowing Party” and collectively, the
“Escrowing Parties.” 

W I T N E S S E T H: 

WHEREAS, the Company proposes to make a private offering
pursuant to the Securities Act of 1933, as amended (the “Offering”) of up
to $3,500,000 (the “Offering Amount”) of eleven percent (11%) secured
convertible notes (each, a “Note” and collectively, the “Notes”),
which Notes shall be convertible into shares of the Company’s common stock, par
value $0.001 per share, at $2.00 per share (subject to adjustment as set forth
in the Notes), pursuant to a Securities Purchase Agreement, dated as of May 8,
2012, by and among the Company, the investors party thereto (the
“Investors”) and, with respect to certain sections thereof, the Placement
Agents (the “Securities Purchase Agreement”); and 

WHEREAS, the Company and the Placement Agents desire to deposit
all gross proceeds received from subscriptions for the Notes being sold in the
Offering (the “Escrowed Funds”) with the Escrow Agent, to be held in
escrow until joint written instructions are received by the Escrow Agent from
the Company and the Placement Agents, at which time the Escrow Agent will
disburse the Escrowed Funds in accordance with such joint written instructions
(the “Closing”); and

WHEREAS, pursuant to the terms of the Notes, the Company has
agreed to maintain an amount sufficient to satisfy the payment to the Investors
of one annual payment of Interest (as defined in the Notes) due on the aggregate
principal amount of all Notes issued at such Closing (the “Holdback
Amount”) in an escrow account as partial security for the payment
obligations under the Notes; and

WHEREAS, the Escrow Agent is willing to hold the Escrowed Funds
and the Holdback Amount in escrow subject to the terms and conditions of this
Agreement; and

WHEREAS, all capitalized terms used but not defined herein
which are defined in the Securities Purchase Agreement shall have the respective
meanings given to such terms in the Securities Purchase Agreement. 

NOW, THEREFORE, in consideration of the mutual agreements and
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, the parties hereto hereby agree as follows: 




1.     Appointment of Escrow Agent. The Company and the
Placement Agents hereby appoint the Escrow Agent as escrow agent in accordance
with the terms and conditions set forth herein and the Escrow Agent hereby
accepts such appointment. 

2.     Delivery of the Escrowed Funds.

2.1     The Placement Agents and/or the Company will direct the
Investors in the Offering to deliver the Escrowed Funds to the Escrow Agent on
or prior to the Closing of the Offering, addressed to the following account of
the Escrow Agent: 

Domestic Wires 
Virginia
Commerce Bank 
341 E. Market St. 
Leesburg, VA 20175 
ABA#056005253

Account Name: Escrow, LLC 
Account #: 20185758 

International Wires

Correspondent Bank: Wells Fargo Bank 
Address: 707 Wilshire Blvd.
13th Floor

                 
Los Angeles, Ca. 90017 
SWIFT# WFBIUS6WFFX 
Credit Acct: 4121108146

Beneficiary: Virginia Commerce Bank 
FBO Account Name: Escrow, LLC

Account #: 20185758 
Reference: Chile Mining Technologies Inc. 

2.2     (a) All Investors’ checks shall be made payable to “Escrow,
LLC”, as agent for the Company, shall be delivered to the Escrow Agent at the
address set forth on Exhibit A hereto and shall be accompanied by a
written account of subscription in the form attached hereto as Exhibit B
and executed by each Investor (the “Subscription Information”). The
Escrow Agent shall, upon receipt of Subscription Information, together with the
related purchase price being paid by such Investor therefore (the “Investment
Amount”), deposit the related Investment Amount of such Subscription
Information in the Escrow Account for collection; or (b) all funds to be wired
shall be wired to the account set forth in Section 2.1 above and written
Subscription Information shall be faxed or emailed to the Escrow Agent in
accordance with the information provided on Exhibit A. 

2.3     Any checks which are received by the Escrow Agent that are
made payable to a party other than the Escrow Agent shall be returned directly
to the Placement Agents together with any documents delivered therewith.
Simultaneously with each deposit of a check with the Escrow Agent, the Placement
Agents shall provide the Escrow Agent with the Subscription Information to
include the name, address and taxpayer identification number of each Investor
and of the aggregate principal amount of Notes subscribed for by such Investor.
The Escrow Agent is not obligated, and may refuse, to accept checks that
are not accompanied by Subscription Information containing the requisite
information. 

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2.4     In the event a wire transfer is received by the Escrow
Agent and the Escrow Agent has not received Subscription Information, the Escrow
Agent shall notify the Placement Agents. If the Escrow Agent does not receive
the Subscription Information by such Investor prior by close of business on the
third Business Day (days other than a Saturday or Sunday or other day on which
the Escrow Agent is not open for business) after notifying the Placement Agents
of receipt of said wire, the Escrow Agent shall return the funds to such
Investor. 

3.     Escrow Agent to Hold and Disburse Escrowed Funds. The
Escrow Agent will hold and disburse the Escrowed Funds received by it pursuant
to the terms of this Agreement, as follows: 

3.1     Upon receipt of joint written instructions from the Company
and the Placement Agents, in substantially the form of Exhibit C hereto,
the Escrow Agent shall release the Escrowed Funds as directed in such
instructions. 

3.2     In the event this Agreement, the Escrowed Funds or the
Escrow Agent becomes the subject of litigation, the Company authorizes the
Escrow Agent, at its option, to deposit the Escrowed Funds with the clerk of the
court in which the litigation is pending, or a court of competent jurisdiction
if no litigation is pending, and thereupon the Escrow Agent shall be fully
relieved and discharged of any further responsibility with regard thereto. The
Company also authorizes the Escrow Agent, if it receives conflicting claims to
the Escrowed Funds, is threatened with litigation or if the Escrow Agent shall
desire to do so for any other reason, to interplead all interested parties in
any court of competent jurisdiction and to deposit the Escrowed Funds with the
clerk of that court and thereupon the Escrow Agent shall be fully relieved and
discharged of any further responsibility hereunder to the parties from which
they were received. 

3.3     In the event that the Escrow Agent does not receive any
instructions by a date that is 30 days from the date of this Agreement (the
“Escrow Termination Date”), all Escrowed Funds shall be returned to the
parties from which they were received, without interest thereon or deduction
therefrom. 

4.     Escrow Holdback. 

4.1     Pursuant to the terms of the Notes, at the Closing the
Holdback Amount on the aggregate principal amount of all Notes issued at such
Closing, shall be retained by the Escrow Agent in the Escrow Account.
Notwithstanding anything to the contrary contained herein, upon written
notification by one or both of the Placement Agents to the Escrow Agent that an
Event of Default (as defined in the Notes) has been declared by the Placement
Agents with respect to a failure by the Company to make a complete quarterly
interest payment in accordance with the Notes (the “Interest Payment
Notice”), the Escrow Agent shall disburse such portion of the Holdback
Amount to the Investors and in the amounts as set forth in such Interest Payment
Notice. The Interest Payment Notice shall set forth the amount of the interest
payment deficiency and the amount payable to each Investor. 

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4.2     Within fourteen (14) days following the disbursement of the
Holdback Amount in accordance with Section 4.1 hereof, the Company shall deposit
an additional amount equal to the Holdback Amount with the Escrow Agent to be
retained and disbursed in accordance with Section 4.1 hereof. 

4.3     It is acknowledged and agreed that the Placement Agents may
deliver an Interest Payment Notice only following complete fulfillment by the
Placement Agents of all procedures, and the lapse of applicable cure periods,
set forth in the Notes relating to the declaration of an Event of Default under
Section 7(a) of the Notes with respect to a failure by the Company to make a
quarterly interest payment in accordance with the terms of the Notes. 

4.4     On the Maturity Date (as defined in the Notes), at any time
prior to the Maturity Date when 75% of all Notes have been converted or upon the
redemption by the Company of all outstanding Notes, if the Company is not in
breach of any of the Transaction Documents, all remaining funds of the Holdback
Amount, if any, shall be disbursed to the Company promptly, and the Company’s
obligation to maintain the Holdback Amount in escrow under this Article 4 shall
cease. 

5.     Exculpation and Indemnification of Escrow Agent. 

5.1     The Escrow Agent shall have no duties or responsibilities
other than those expressly set forth herein. The Escrow Agent shall have no duty
to enforce any obligation of any person other than itself to make any payment or
delivery, or to direct or cause any payment or delivery to be made, or to
enforce any obligation of any person to perform any other act. The Escrow Agent
shall be under no liability to the other parties hereto or anyone else, by
reason of any failure, on the part of any other party hereto or any maker,
guarantor, endorser or other signatory of a document or any other person, to
perform such person’s obligations under any such document. Except for amendments
to this Agreement referenced below, and except for written instructions given to
the Escrow Agent relating to the Escrowed Funds, the Escrow Agent shall not be
obligated to recognize any agreement between or among any of the parties hereto,
notwithstanding that references thereto may be made herein and whether or not it
has knowledge thereof.

5.2     The Escrow Agent shall not be liable to the Company or the
Placement Agents or to anyone else for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, in good faith and acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report, or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained), which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any of the terms thereof, unless evidenced by
written notice delivered to the Escrow Agent signed by the proper party or
parties and, if the duties or rights of the Escrow Agent are affected, unless it
shall give its prior written consent thereto. 

-4- 




5.3     The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, or of the execution, validity, value or
genuineness of, any document or property received, held or delivered to it
hereunder, or of any signature or endorsement thereon, or for any lack of
endorsement thereon, or for any description therein; nor shall the Escrow Agent
be responsible or liable to the Company, the Placement Agents, or to anyone else
in any respect on account of the identity, authority or rights, of the person
executing or delivering or purporting to execute or deliver any document or
property or this Agreement. The Escrow Agent shall have no responsibility with
respect to the use or application of the Escrowed Funds pursuant to the
provisions hereof. 

5.4     The Escrow Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or persons,
that a fact or an event, by reason of which an action would or might be taken by
the Escrow Agent, does not exist or has not occurred, without incurring
liability to the Company, the Placement Agents, or to anyone else for any action
taken or omitted to be taken or omitted, in good faith and in the exercise of
its own best judgment, in reliance upon such assumption. 

5.5     To the extent that the Escrow Agent becomes liable for the
payment of taxes, including withholding taxes, in respect of income derived from
the investment of the Escrowed Funds, or any payment made hereunder, the Escrow
Agent may pay such taxes; and the Escrow Agent may withhold from any payment of
the Escrowed Funds to the Company to the extent due to the Company in accordance
with the instructions delivered as set forth in Exhibit C such amount as
the Escrow Agent estimates to be sufficient to provide for the payment of such
taxes not yet paid, and may use the sum withheld for that purpose. The Escrow
Agent shall be indemnified and held harmless by the Company against any
liability for taxes and for any penalties in respect of taxes, on such
investment income or payments in the manner provided in Section 5.6. 

5.6     The Escrow Agent and Placement Agents will be indemnified
and held harmless by the Company from and against all expenses, including all
reasonable counsel fees and disbursements, or loss suffered by the Escrow Agent
or Placement Agents in connection with any action, suit or proceedings involving
any claim, or in connection with any claim or demand, which in any way, directly
or indirectly, arises out of or relates to this Agreement, the services of the
Escrow Agent or Placement Agents hereunder, except for claims relating to gross
negligence or willful misconduct by Escrow Agent or Placement Agents or breach
of this Agreement by the Escrow Agent or Placement Agents, or the monies or
other property held by it hereunder. Promptly after the receipt of the Escrow
Agent or Placement Agents of notice of any demand or claim or the commencement
of any action, suit or proceeding, the Escrow Agent or Placement Agents, as
applicable, shall, if a claim in respect thereof is to be made against an
Escrowing Party, notify each of them thereof in writing, but the failure by the
Escrow Agent or Placement Agents, as applicable, to give such notice shall not
relieve any such party from any liability which an Escrowing Party may have to
the Escrow Agent or Placement Agents hereunder.

5.7     For purposes hereof, the term “expense or loss” shall
include all amounts paid or payable to satisfy any claim, demand or liability,
or in settlement of any claim, demand, action, suit or proceeding settled with
the express written consent of the Escrow Agent, and all costs and expenses, including, but not limited to, reasonable counsel
fees and disbursements, paid or incurred in investigating or defending against
any such claim, demand, action, suit or proceeding.

-5- 




6.     Termination of Agreement and Resignation of Escrow
Agent. 

6.1     Termination. This Agreement shall terminate with
respect to the rights and obligations of the Escrow Agent and the Escrowing
Parties regarding the Escrowed Funds upon disbursement of all of the Escrowed
Funds in accordance with the terms hereof. This Agreement shall terminate with
respect to the rights and obligations of the Escrow Agent and the Escrowing
Parties regarding the Holdback Amount upon return of the Holdback Amount to the
Company in accordance with Section 4.4 hereof. 

6.2     Resignation.

(a)     General. The Escrow Agent may resign at any time and
be discharged from its duties as Escrow Agent hereunder by giving the Company
and the Placement Agents at least twenty (20) business days written notice
thereof (the “Notice Period”). 

(b)     Regarding the Escrowed Funds. Prior to the Closing
and with respect to the Escrowed Funds, upon providing the written notice called
for in Section 6.2(a) above, the Escrow Agent shall have no further obligation
hereunder except to hold as depositary the Escrowed Funds that it receives until
the end of the Notice Period. In such event, the Escrow Agent shall not take any
action, other than receiving and depositing the Investors’ checks and wire
transfers in accordance with this Agreement, until the Company and the Placement
Agents have jointly designated a banking corporation, trust company, attorney or
other person as successor escrow agent. As soon as practicable after its
resignation, the Escrow Agent shall, if it receives written notice from the
Company and the Placement Agents within the Notice Period, turn over to a
successor escrow agent appointed jointly by the Company and the Placement Agents
all Escrowed Funds (less such amount as the Escrow Agent is entitled to retain
pursuant to Section 8) upon presentation of the document appointing the new
escrow agent and its acceptance thereof. If no new agent is so appointed within
the Notice Period, the Escrow Agent shall return the Escrowed Funds to the
parties from which they were received without interest or deduction.

(c)     Regarding the Holdback Amount. Following the Closing
and with respect to the Holdback Amount, upon providing the written notice
called for in Section 6.2(a) above, the Escrow Agent shall have no further
obligation hereunder except to hold as depositary the Holdback Amount. In such
event, the Escrow Agent shall not take any action with respect to the Holdback
Amount until the Company and the Placement Agents have jointly designated a
banking corporation, trust company, attorney or other person as successor escrow
agent. As soon as practicable after its resignation, the Escrow Agent shall, if
it receives written notice from the Company and the Placement Agents within the
Notice Period, turn over to a successor escrow agent appointed jointly by the
Company and the Placement Agents the entirety of the Holdback Amount only upon
presentation of the document appointing the new escrow agent and its acceptance
thereof. With respect to the Holdback Amount only, the Escrow Agent shall not be permitted to fully resign until a successor escrow agent is
designated and the Holdback Amount turned over to such successor escrow agent.


-6- 




7.     Form of Payments by Escrow Agent. 

7.1     Any payments of the Escrowed Funds by the Escrow Agent
pursuant to the terms of this Agreement shall be made by wire transfer unless
directed to be made by check by the Escrowing Parties. 

7.2     All amounts referred to herein are expressed in United
States Dollars and all payments by the Escrow Agent shall be made in such
dollars. 

8.     Compensation. Escrow Agent shall be entitled to the
following compensation from the Company: 

8.1     Documentation Fee: The Company shall pay a documentation
fee to the Escrow Agent of $2,000, out of the proceeds of the First Closing.


8.2     Closing Fee: The Company shall pay a fee of $500 to the
Escrow Agent at each Closing. For purposes of this Section 8.2, a Closing shall
mean each time the Escrow Agent receives joint instructions from the Company and
the Placement Agents to disburse Escrowed Funds in accordance with the terms of
this Agreement. 

8.3     Interest: The Company and the Placement Agents acknowledge
and agree that the Escrow Account shall be an interest-bearing account. 

9.     Notices. All notices, requests, demands, and other
communications provided herein shall be in writing, shall be delivered by hand
or by first-class mail, shall be deemed given when received and shall be
addressed to parties hereto at their respective addresses first set forth on
Exhibit A hereto. 

10.     Further Assurances. From time to time on and after
the date hereof, the Escrowing Parties shall deliver or cause to be delivered to
the Escrow Agent such further documents and instruments and shall do and cause
to be done such further acts as the Escrow Agent shall reasonably request (it
being understood that the Escrow Agent shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder. 

11.     Consent to Service of Process. The Escrowing Parties
hereby irrevocably consent to the jurisdiction of the courts of the State of New
York and of any Federal court located in such state in connection with any
action, suit or proceedings arising out of or relating to this Agreement or any
action taken or omitted hereunder, and waives personal service of any summons,
complaint or other process and agrees that the service thereof may be made by
certified or registered mail directed to it at the address listed on Exhibit
A hereto. 

-7- 




12.     Miscellaneous. 

12.1     This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing such
instrument to be drafted. The terms “hereby,” “hereof,” “hereunder,” and any
similar terms, as used in this Agreement, refer to the Agreement in its entirety
and not only to the particular portion of this Agreement where the term is used.
The word “person” shall mean any natural person, partnership, corporation,
government and any other form of business of legal entity. All words or terms
used in this Agreement, regardless of the number or gender in which they were
used, shall be deemed to include any other number and any other gender as the
context may require. This Agreement shall not be admissible in evidence to
construe the provisions of any prior agreement.

12.2     This Agreement and the rights and obligations hereunder of
the parties to this Agreement may not be assigned. This Agreement shall be
binding upon and inure to the benefit of each party’s respective successors,
heirs and permitted assigns. No other person shall acquire or have any rights
under or by virtue of this Agreement. This Agreement may not be changed orally
or modified, amended or supplemented without an express written agreement
executed by the Escrow Agent and the Escrowing Parties. This Agreement is
intended to be for the sole benefit of the parties hereto and their respective
successors, heirs and permitted assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to be, for the benefit
of any third person. 

12.3     This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York. The representations
and warranties contained in this Agreement shall survive the execution and
delivery hereof and any investigations made by any party. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms thereof.

13.     Execution of Counterparts. This Agreement may be
executed in a number of counterparts, by facsimile transmission or other
electronic transmission, each of which shall be deemed to be an original as of
those whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more of the counterparts hereof, individually or taken together, are
signed by all the parties. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES
FOLLOW] 

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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement on the day and year first above written. 

ESCROW AGENT: 

ESCROW, LLC 

By:
_____________________________
      Name:

      Title: 

COMPANY: 

CHILE MINING TECHNOLOGIES INC. 

By: _____________________________

       Name:

       Title:

PLACEMENT AGENTS: 

EURO PACIFIC CAPITAL, INC.

By:
_____________________________
      
Name: 
       Title: 

HALTER FINANCIAL SECURITIES INC. 

By:
_____________________________
       Name:

       Title: 

Chile Mining Closing Escrow Agreement 




EXHIBIT A 
PARTIES TO AGREEMENT 

	Chile Mining Technologies, Inc. 
	c/o Minera Licancabur S.A. 
	Jorge Canning 1410 
	Ñuñoa, Santiago 
	Republic of Chile 
	Attention: Jorge Orellana Orellana 
	Email: jorellana@chilemt.cl 
	  
	Escrow, LLC 
	173 Keith St., Unit 3 
	Warrenton, VA 20186 
	Attention: Johnnie L. Zarecor 
	Telephone: (540) 347-2212 
	Fax: (540) 347-2291 
	Email: jzarecor@escrowllc.net 
	  
	Euro Pacific Capital, Inc. 
	88 Post Road West, 3rd Floor 
	Westport, CT 06880 
	Attention: Mr. Thomas Tan 
	Fax: (203) 662-9771 
	Email: ttan@europac.net 
	  
	Halter Financial Securities Inc. 
	500 West Putnam Ave., Suite 400 
	Greenwich, CT 06830 
	Attention: Nicholas B. Hirsch 
	Telephone: 203-542-7247 
	Fax: 203-542-7701 
	Email: nick.hirsch@halterfinancialsecurities.com
  






EXHIBIT B 

SUBSCRIPTION INFORMATION 

	Name of Investor 	 
	 	 
	Address of Investor 	 
	 	 
	 	 
	 	 
	$ Amount of Notes Subscribed 	 
	 	 
	Subscription Amount Submitted Herewith 	
	 	 
	Taxpayer ID Number/ Social Security Number 	
	 	 
	Signature of Investor 	 






EXHIBIT C 

DISBURSEMENT REQUEST 

Pursuant to that certain Agreement by and among Chile Mining
Technologies Inc., Euro Pacific Capital, Inc., Halter Financial Securities Inc.
and Escrow, LLC, the Company and Placement Agents hereby request disbursement of
funds in the amount and manner described below from Virginia Commerce Bank
account number 01194186, styled Escrow, LLC. 

	Please disburse to: 	 
	  	 
	Amount to disburse: 	 
	  	 
	Form of distribution: 	 
	  	 
	Payee: 	 
	         
                         
               Name: 	 
	         
                         
               Address: 	 
	         
                         
               City/State: 	 
	         
                         
               Zip: 	 
	  	 
	  	 
	  	 
	Please disburse to: 	 
	  	 
	Amount to disburse: 	 
	  	 
	Form of distribution: 	 
	  	 
	Payee: 	 
	         
                         
               Name: 	 
	         
                         
               Address: 	 
	         
                         
               City/State: 	 
	         
                         
               Zip: 	 


Subscriptions Accepted From 

	Investor 	 	Amount 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	Total: 	 	 
    







	Statement of event or condition which calls for this
      request for disbursement: 
	 
	 
	 


COMPANY: 

CHILE MINING TECHNOLOGIES INC.


By:
_______________________________
       Name:

       Title:

PLACEMENT AGENTS: 

EURO PACIFIC CAPITAL, INC.

By:
_______________________________
      
Name: 
       Title: 

HALTER FINANCIAL SECURITIES
INC.

By:
_______________________________
       Name:

       Title: