Chile Mining Technologies Inc.: Exhibit 10.1 - Filed by newsfilecorp.com






Exhibit 10.1

SECURITIES PURCHASE AGREEMENT 

This SECURITIES PURCHASE AGREEMENT (this
“Agreement”), dated May 8, 2012, is between Chile Mining Technologies
Inc., a Nevada corporation (the “Company”), and each purchaser identified
on Schedule A-1 hereto (each, including their respective successors and
assigns, an “Investor” and collectively, the “Investors”) and,
with respect to certain sections hereof, Euro Pacific Capital, Inc. and Halter
Financial Securities Inc. (the “Lead Placement Agents”).

WHEREAS, this Agreement has been entered into pursuant
to the terms of the Company’s Confidential Private Placement Memorandum, dated
April 23, 2012 (together with any and all amendments and/or supplements thereto,
the “Memorandum”);

WHEREAS, the Lead Placement Agents are acting in such
capacity in connection with the Company’s offering of Notes and Warrants as
described in the Memorandum; 

WHEREAS, the Investors wish to purchase from the
Company, and the Company wishes to sell and issue to the Investors, upon the
terms and conditions stated in this Agreement, up to $3,500,000 (the “Maximum
Amount”) of eleven percent (11%) secured convertible notes (each, a
“Note” and collectively, the “Notes”), which Notes shall be
convertible into shares (the “Conversion Shares”) of the Company’s common
stock, par value $0.001 per share (the “Common Stock”) at $2.00 per
Conversion Share (subject to adjustment as set forth in the Notes), which Notes
shall be in the form attached hereto as Exhibit A; 

WHEREAS, each Investor will also receive a common stock
purchase warrant (each, a “Warrant” and collectively, the
“Warrants”) to purchase such number of shares of Common Stock equal to
fifty percent (50%) of the number of shares of Common Stock that the Note
purchased by such Investor may be convertible into (collectively, the
“Warrant Shares”), at an exercise price of $2.00 per share (subject to
adjustment as set forth in the Warrants), which Warrants shall be in the form
attached hereto as Exhibit B; 

WHEREAS, in order to provide security upon an event of
default under the Notes, the Notes will be secured by the assets of the Company
in the Republic of Chile pursuant to a Security Agreement by and among the
Company and the Lead Placement Agents, dated as of the date hereof and
substantially in the form of Exhibit C hereto (the “Security
Agreement”); and 

WHEREAS, the Company and the Investors are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by the rules and regulations as promulgated by the SEC
under the Securities Act. 

NOW, THEREFORE, in consideration of the mutual terms,
conditions and other agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby agree to the
sale and purchase of the Securities as set forth herein. 

1.     DEFINITIONS. In addition to the terms
defined elsewhere in this Agreement, for all purposes of this Agreement, the
following terms have the meanings indicated in this Section 1. 

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“Affiliate” means, with respect to any specified Person:
(i) if such Person is an individual, the spouse of that Person and, if deceased
or disabled, his heirs, executors, or legal representatives, if applicable, or
any trusts for the benefit of such individual or such individual’s spouse and/or
lineal descendants, or (ii) otherwise, another Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the Person specified. As used in this definition,
“control” shall mean the possession, directly or indirectly, of the power to
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities or by contract or other written instrument.


“Business Day” means any day on which banks located in
New York City are not required or authorized by law to remain closed. 

“Closing Escrow Agreement” means the Closing
Escrow Agreement, dated May 8, 2012, by and among the Company, the Lead
Placement Agents and the Escrow Agent. 

“Company’s Knowledge” means the information and/or other
items that the executives of the Company have actual knowledge of after due
inquiry. 

“Escrow Account” means the escrow account established by
the Escrow Agent pursuant to the Closing Escrow Agreement where funds
representing the Investors’ aggregate Purchase Price shall be held pending the
First Closing. 

“Escrow Agent” means Escrow, LLC. 

“Exchange Act” means the Securities Exchange Act of
1934, as amended. 

“Governmental Body” shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental or administrative division, department,
agency, commission, instrumentality, official, organization, unit, body or
entity) and any court or other tribunal. 

“Intellectual Property” means the Company’s patents,
patent applications, provisional patents, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights,
licenses, formulae, mask works, customer lists, internet domain names, know-how
and other intellectual property, including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems, procedures
or registrations or applications relating to the same. 

“Indebtedness” of any Person means all obligations of
such Person: (i) for borrowed money, (ii) evidenced by notes, bonds, debentures
or similar instruments, (iii) for the deferred purchase price of goods or
services (other than trade payables or accruals incurred in the ordinary course
of business), (iv) under capital leases, and (v) in the nature of guarantees of
the obligations described in clauses (i) through (iv) above of any other Person.


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“Investor” means any person who purchases Securities in
the Offering pursuant to this Agreement. 

“Legal Requirement” shall mean any federal state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the
authority of any national securities exchange upon which the Common Stock is
then listed or traded). Reference to any Legal Requirement means such Legal
Requirement as amended, modified, codified, replaced or reenacted, in whole or
in part, and in effect from time to time, and reference to any section or other
provision of any Legal Requirement means that provision of such Legal
Requirement from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment of such
section or other provision. 

“Lien(s)” means any interest in Property securing an
obligation owed to a Person whether such interest is based on the common law,
statute or contract, and including but not limited to a security interest
arising from a mortgage, lien, title claim, assignment, encumbrance, adverse
claim, contract of sale, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term “Lien” includes but is
not limited to mechanics’, materialmens’, warehousemens’ and carriers’ liens and
other similar encumbrances. For the purposes hereof, a Person shall be deemed to
be the owner of Property which it has acquired or holds subject to a conditional
sale agreement or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes. 

“OTCBB” shall mean the Over-the-Counter Bulletin Board
system. 

“Offering” shall mean the offering and sale of the
Securities pursuant to this Agreement and the Memorandum. 

“Person” shall mean an individual, entity, corporation,
partnership, association, limited liability company, limited liability
partnership, joint-stock company, trust or unincorporated organization. 

“Property” means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible. 

“Purchase Price” means, for each Investor, the principal
amount of the Note purchased hereby as set forth in such Investor’s counterpart
signature page annexed hereto; 

“SEC” means the United States Securities and Exchange
Commission. 

“Securities” means the Notes, the Conversion Shares, the
Warrants and the Warrant Shares. 

“Securities Act” means the Securities Act
of 1933, as amended. 

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“Subsidiaries” shall mean any corporation or other
entity or organization, whether incorporated or unincorporated, in which the
Company owns, directly or indirectly, any controlling equity or other
controlling ownership interest or otherwise controls through contract or
otherwise, including, without limitation, any variable interest entity of the
Company. 

“Trading Day” means: (i) a day on which the Common Stock
is traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if
the Common Stock is not listed on a Trading Market (other than the OTC Bulletin
Board), a day on which the Common Stock is traded in the over the counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on any Trading Market, a day on which the Common Stock is quoted in
the over the counter market as reported by the Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.


“Trading Market” means whichever of the New York Stock
Exchange, the NYSE AMEX, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question. 

“Transaction Documents” shall mean this Agreement, the
Memorandum, the Notes, the Warrants, the Closing Escrow Agreement and the
Security Agreement. 

“Transfer” shall mean any sale, transfer, assignment,
conveyance, charge, pledge, mortgage, encumbrance, hypothecation, security
interest or other disposition, or to make or effect any of the above. 

2.     SALE AND PURCHASE OF SECURITIES. 

2.1.     Subscription for Securities by Investors. Subject
to the terms and conditions of this Agreement, on the Closing Date, each of the
Investors shall severally, and not jointly, purchase, and the Company shall sell
and issue to each Investor, the number of Securities specified by it on its
respective signature page attached hereto in exchange for the Purchase Price.


2.2.     Closings. 

(a)     First Closing. Subject to the terms and conditions
set forth in this Agreement, the Company shall issue and sell to each Investor
listed on Schedule A-1, and each such Investor shall, severally and not
jointly, purchase from the Company on the First Closing Date, a Note in such
principal amount as set forth on the respective signature pages attached hereto
as well as a Warrant evidencing the Investor’s right to purchase the number of
shares of Common Stock reflected opposite such Investor’s name on Schedule
A-1 (the “First Closing”). The date of the First Closing is
hereinafter referred to as the “First Closing Date”.

(b)     Subsequent Closing(s). In the event that the Maximum
Amount is not raised at the First Closing, the Company and the Lead Placement
Agents may mutually agree to have one or more subsequent closings of the Offering (each, a
“Subsequent Closing”) until the Maximum Amount is raised. At each
Subsequent Closing, the Company agrees to issue and sell to each Investor who
executes a signature page hereto, and each such Investor agrees, severally and
not jointly, to purchase from the Company a Note in such principal amount as set
forth on such Investor’s signature pages attached hereto as well as a Warrant
evidencing the Investor’s right to purchase the number of shares of Common Stock
reflected opposite such Investor’s name on Schedule A-1. There may be
more than one Subsequent Closing; provided, however, that the
final Subsequent Closing shall take place within the time periods set forth in
the Memorandum. The date of any Subsequent Closing is hereinafter referred to as
a “Subsequent Closing Date”). 

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(c)     Closing. The First Closing and any applicable
Subsequent Closings are each referred to in this Agreement as a
“Closing”. The First Closing Date and any Subsequent Closing Dates are
sometimes referred to herein as a “Closing Date”. All Closings shall
occur within the time periods set forth in the Memorandum at the offices of
Pillsbury Winthrop Shaw Pittman LLP, 2300 N Street, N.W., Washington, DC 20037,
or remotely via the exchange of documents and signatures.

2.3.     Closing Deliveries. At each Closing, the Company
shall deliver to the Investors purchasing Securities at such Closing, against
delivery by the Investor of the Purchase Price (as provided below), the Notes
and the Warrants. At each Closing, each Investor purchasing Securities at such
Closing shall deliver or cause to be delivered to the Company the Purchase Price
set forth in its counterpart signature page annexed hereto by paying United
States dollars via bank, certified or personal check which has cleared prior to
the applicable Closing or in immediately available funds, by wire transfer to
the Escrow Account pursuant to the Closing Escrow Agreement. 

2.4.     The Notes. The Notes shall have the terms and
conditions and be in the form attached hereto as Exhibit A. Upon an Event
of Default (as defined in the Note), the Investors shall have, in addition to
any rights provided hereunder, the rights provided them under the Transaction
Documents. 

2.5.     The Warrants. The Warrants shall have the
terms and conditions and be in the form attached hereto as Exhibit B.

2.6.     Use of Proceeds. The Company hereby covenants and
agrees that the proceeds from the sale of the Securities shall be used as
provided for in the Memorandum. 

2.7.     Investor Representative. Each Investor, severally
and not jointly, hereby appoints Euro Pacific Capital Inc. (together with its
permitted successors, and in this context, the “Investor
Representative”), as its true and lawful agent and attorney-in-fact to: (a)
enter into any agreement in connection with the transactions contemplated by
this Agreement and any transactions contemplated by the Transaction Documents,
(b) exercise all or any of the powers, authority and discretion conferred on
such Investor under this Agreement or any of the Transaction Documents, (c)
waive any terms and conditions of this Agreement or any of the Transaction
Documents, (d) give and receive notices on such Investor’s behalf and to be such
Investor’s exclusive representative with respect to any matter, suit, claim,
action or proceeding arising with respect to any transaction contemplated by this Agreement or
any Transaction Document, and the Investor Representative agrees to act as, and
to undertake the duties and responsibilities of, such agent and
attorney-in-fact. This power of attorney is coupled with an interest and
irrevocable. The Investor Representative shall not be liable for any action
taken or not taken by it in connection with its obligations under this
Agreement: (i) with the consent of Investors who, as of the date of this
Agreement have subscribed for (or, if a Closing has occurred, as of the date of
the latest Closing own) more than fifty percent (50%) in principal amount of the
outstanding Notes or (ii) in the absence of its own gross negligence or willful
misconduct. If the Investor Representative shall be unable or unwilling to serve
in such capacity, its successor shall be named by those persons holding more
than fifty percent (50%) in principal amount of the Notes who shall serve and
exercise the powers of Investor Representative hereunder.

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3.     ACKNOWLEDGEMENTS OF THE INVESTORS. 

Each Investor, severally and not jointly, acknowledges that:


3.1.     Resale Restrictions. None of the Securities have
been registered under the Securities Act, or under any state securities or “blue
sky” laws of any state of the United States, and, unless so registered, none of
the Securities may be offered or sold by the Investor except pursuant to an
effective registration statement under the Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in each case only in accordance with
applicable state securities laws. 

3.2.     Agreements. Such Investor has received, carefully
read and acknowledges the terms of the Transaction Documents and Memorandum,
including the Risk Factors set forth in the Memorandum. 

3.3.     Books and Records. The books and records of the
Company were available upon reasonable notice for inspection, subject to certain
confidentiality restrictions, by the Investor during reasonable business hours
at its principal place of business, that all documents, records and books in
connection with the sale of the Securities hereunder have been made available
for inspection by it and its attorney and/or advisor(s) and that the Investor
and/or its advisor has reviewed all such documents, records and books to its
full satisfaction and all questions it and/or its advisor may have had been
answered to their respective full satisfaction. 

3.4.     Independent Advice. The Investor has been advised
to consult the Investor’s own legal, tax and other advisors with respect to the
merits and risks of an investment in the Securities and with respect to
applicable resale restrictions, and it is solely responsible (and neither the
Company nor the Lead Placement Agents are in any way, directly and/or
indirectly, responsible) for compliance with: 

(a)     any applicable laws of the jurisdiction in which the
Investor is resident in connection with the distribution of the Securities
hereunder, and 

(b)     applicable resale restrictions. 

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3.5.     No Governmental Review or Insurance. Neither the
SEC nor any other securities commission, securities regulator or similar
regulatory authority has reviewed or passed on the merits of the Securities or
on any of the documents reviewed or executed by the Investor in connection with
the sale of the Securities, and there is no government or other insurance
covering any of the Securities. 

4.     REPRESENTATIONS, WARRANTIES AND
ACKNOWLEDGMENTS OF THE INVESTORS. 

Each Investor, severally and not jointly, represents and
warrants to the Company solely as to such Investor that: 

4.1.     Capacity. The Investor: (i) if a natural person,
represents that the Investor has reached the age of 21 and has full authority,
legal capacity and competence to enter into, execute and deliver this Agreement
and the Transaction Documents to which the Investor is a party and all other
related agreements or certificates and to take all actions required pursuant
hereto and thereto and to carry out the provisions hereof and thereof and, (ii)
if a corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Securities, such entity is duly organized, validly existing and in
good standing under the laws of the state of its organization, such entity has
full power and authority to execute and deliver this Agreement, the Transaction
Documents to which it is a party and all other related agreements or
certificates and to take all actions required pursuant hereto and thereto and to
carry out the provisions hereof and thereof and to purchase and hold the
Securities, the execution and delivery of this Agreement and the Transaction
Documents to which it is a Party have been duly authorized by all necessary
action; or (iii) if executing this Agreement in a representative or fiduciary
capacity, represents that it has full power and authority to execute and deliver
this Agreement and the Transaction Documents to which it is a Party in such
capacity and on behalf of the subscribing individual, ward, partnership, trust,
estate, corporation, or limited liability company or partnership, or other
entity for whom the Investor is executing this Agreement and the Transaction
Documents, and such individual, partnership, ward, trust, estate, corporation,
or limited liability company or partnership, or other entity has full right and
power to perform pursuant to this Agreement and the Transaction Documents to
which it is a Party and make an investment in the Company. 

4.2.     No Violation of Corporate Governance Documents. If
the Investor is a corporation or other entity, the entering into of this
Agreement and the other Transaction Documents to which it is a party and the
transactions contemplated hereby and thereby do not and will not result in the
violation of any of the terms and provisions of any law applicable to, or the
charter or other organizational documents, bylaws or other governing documents
of, the Investor or of any agreement, written or oral, to which the Investor may
be a party or by which the Investor is or may be bound. 

4.3.     Binding Agreement. The Investor has duly executed
and delivered this Agreement and the other Transaction Documents to which it is
a party, and this Agreement and the other Transaction Documents to which it is a
party constitute a valid and binding agreement of the Investor enforceable against the Investor in accordance with
their respective terms, except as such enforceability may be limited by general
principals of equity, or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies. 

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4.4.     Purchase Entirely for Own Account. The Securities
are being acquired for such Investor’s own account, not as nominee or agent, for
investment purposes only and not with a view to the resale or distribution of
any part thereof in violation of the Securities Act, and such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the Securities Act, without prejudice,
however, to such Investor’s right at all times to sell or otherwise dispose of
all or any part of such Securities in compliance with applicable federal and
state securities laws. 

4.5.     Not a Broker-Dealer. Such Investor is neither a
registered representative under the Financial Industry Regulatory Authority
(“FINRA”), a member of FINRA or associated or Affiliated with any member
of FINRA, nor a broker-dealer registered with the SEC under the Exchange Act or
engaged in a business that would require it to be so registered, nor is it an
Affiliate of a such a broker-dealer or any Person engaged in a business that
would require it to be registered as a broker-dealer. In the event such Investor
is a member of FINRA, or associated or Affiliated with a member of FINRA, such
Investor agrees, if requested by FINRA, to sign a lock-up, the form of which
shall be satisfactory to FINRA with respect to the Securities. 

4.6.     Not an Underwriter. Such Investor is not an
underwriter of the Common Stock, nor is it an Affiliate of an underwriter of the
Common Stock. 

4.7.     Investment Experience. Such Investor acknowledges
that the purchase of the Securities is a highly speculative investment and that
it can bear the economic risk and complete loss of its investment in the
Securities and has such knowledge and experience in financial and/or business
matters that it is capable of evaluating the merits and risks of the investment
contemplated hereby. 

4.8.     Disclosure of Information. Such Investor has had an
opportunity to receive, and fully and carefully review, all information related
to the Company and the Securities requested by it and to ask questions of and
receive answers from the Company regarding the Company and its business and the
terms and conditions of the offering of the Securities. Neither such inquiries
nor any other due diligence investigation conducted by such Investor shall
modify, amend or affect such Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement. Such Investor
acknowledges that it has received, and fully and carefully reviewed and
understands all of the Transaction Documents, including, but not limited to, the
Memorandum describing, among other items, the Company, its respective businesses
and risks, the Securities and the offering of the Securities. Investor
acknowledges that it has received, and fully and carefully reviewed and
understands, copies of the SEC Documents, either in hard copy or electronically
through the SEC’s EDGAR system. Such Investor understands that its investment in
the Securities involves a high degree of risk. Such Investor’s decision to enter
into this Agreement has been made based solely on the independent evaluation of
the Investor and its representatives. Such Investor has received such
accounting, tax and legal advice from Persons (other than the Company) as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities. 

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4.9.     Restricted Securities. Such Investor understands
that the sale or re-sale of the Securities has not been and is not being
registered under the Securities Act or any applicable state securities laws, and
the Securities, as applicable, may not be transferred unless: 

(a)     they are sold pursuant to an effective registration
statement under the Securities Act; or 

(b)     they are being sold pursuant to a valid exemption from the
registration requirements of the Securities Act; or 

(c)     they are sold or transferred to an “affiliate” (as defined
in Rule 144, promulgated under the Securities Act (or a successor rule (“Rule
144”)) of such Investor who agrees to sell or otherwise transfer the
Securities only in accordance with this Section 4.9 and who is an accredited
investor, or 

(d)     they are validly sold pursuant to Rule 144. 

Such Investor agrees that such Investor shall only dispose of
any Securities in accordance with all applicable Legal Requirements. Such
Investor further understands that any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and other
than as provided in the Transaction Documents, neither the Company nor any other
Person is under any obligation to register the Securities under the Securities
Act or any state securities laws. Notwithstanding the foregoing or anything else
contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement.


4.10.     Accredited Investor. Such Investor is an
“accredited investor” as defined in Rule 501(a) of Regulation D, as amended,
under the Securities Act (“Regulation D”). 

4.11.     No General Solicitation. Such Investor did not
learn of the investment in the Securities as a result of any public advertising
or general solicitation, and is not aware of any public advertisement or general
solicitation in respect of the Company or its securities. 

4.12.     Brokers and Finders. No Investor will have, as a
result of the transactions contemplated by the Transaction Documents, any valid
right, interest or claim against or upon the Company, any Subsidiary or any
other Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Investor. 

4.13.     Prohibited Transactions. Other than with respect
to the transactions contemplated herein, since the earlier to occur of: (i) the
time that such Investor was first contacted by the Company or any other Person
regarding an investment in the Company and (ii) the thirtieth (30th)
day prior to the date hereof, neither the Investor nor any Affiliate of the
Investor which (x) had knowledge of the transactions contemplated hereby, (y) has
or shares discretion relating to the Investor’s investments or trading or
information concerning such Investor’s investments, including in respect of the
Securities, or (z) is subject to the Investor’s review or input concerning such
Affiliate’s investments or trading decisions (collectively, “Trading
Affiliates”) has, directly or indirectly, nor has any Person acting on
behalf of, or pursuant to, any understanding with such Investor or Trading
Affiliate effected or agreed to effect any transactions in the securities of the
Company or involving the Company’s securities (a “Prohibited
Transaction”). 

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4.14.     Residency. Such Investor is a resident of the
jurisdiction set forth on such Investors signature page hereto. 

4.15.     Reliance on Exemptions. The Investor understands
that the Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities. All of the information which the Investor
has provided to the Company is true, correct and complete as of the date this
Agreement is signed, and if there should be any change in such information prior
to the Closing, the Investor will immediately provide the Company with such
information. 

5.     REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. 

Except as set forth in: (i) the SEC Reports, (ii) the
Memorandum or (ii) the corresponding section of the Disclosure Schedules
delivered to the Investor Representative concurrently herewith, the Company
hereby makes the following representations and warranties as of the date hereof
and as of the Closing Date to each Investor: 

5.1.     Subsidiaries. The Company owns, directly or
indirectly, all of the capital stock of each Subsidiary free and clear of any
Liens, and all the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights.

5.2.     Organization and Qualification. Each of the Company
and the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or financial condition of the Company and the
Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material Adverse Effect”). 

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5.3.     Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company in connection therewith. Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except: (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies. 

5.4.     No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated thereby do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii), such as would not have or reasonably
be expected to result in a Material Adverse Effect. 

5.5.     Filings, Consents and Approvals. Neither Company
nor any Subsidiary is required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any court
or other foreign, federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than (a) applicable Blue Sky filings, (b)
such as have already been obtained or such exemptive filings as are required to
be made under applicable securities laws, (c) such other filings that have been
made pursuant to applicable state securities laws and post-sale filings pursuant
to applicable state and federal securities laws which the Company undertakes to
file within the applicable time periods. Subject to the accuracy of the
representations and warranties of each Investor set forth in Section 4 hereof,
the Company has taken all action necessary to exempt: (i) the issuance and sale
of the Securities, (ii) the issuance of the Warrant Shares upon due exercise of
the Warrants, and (iii) the other transactions contemplated by the Transaction
Documents from the provisions of any stockholder rights plan or other “poison
pill” arrangement, any anti-takeover, business combination or control share law
or statute binding on the Company or to which the Company or any
of its assets and properties may be subject and any provision of the Company’s
Articles of Incorporation or Bylaws that is or could reasonably be expected to
become applicable to the Investors as a result of the transactions contemplated
hereby, including without limitation, the issuance of the Securities and the
ownership, disposition or voting of the Securities by the Investors or the
exercise of any right granted to the Investors pursuant to this Agreement or the
other Transaction Documents. 

11




5.6.     Issuance of the Securities. The Notes are duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens. Upon the due conversion of the Notes, the Conversion
Shares will be validly issued, fully paid and non-assessable free and clear of
all Liens. The Warrants have been duly and validly authorized. Upon the due
exercise of the Warrants, the Warrant Shares will be validly issued, fully paid
and non-assessable free and clear of all Liens. The Company has reserved from
its duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement, the Notes and the Warrants. 

5.7.     Capitalization. Schedule 5.7 to the
Disclosure Schedules sets forth as of the date hereof (a) the authorized capital
stock of the Company; (b) the number of shares of capital stock issued and
outstanding; (c) the number of shares of capital stock issuable pursuant to the
Company’s stock plans; and (d) the number of shares of capital stock issuable
and reserved for issuance pursuant to securities (other than the Notes and the
Warrants) exercisable for, or convertible into or exchangeable for any shares of
capital stock of the Company. All of the issued and outstanding shares of the
Company’s capital stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of pre-emptive rights and were issued in full
compliance with applicable state and federal securities law and any rights of
third parties. No Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. There are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock, other than in connection with the
Company’s stock option plans. The issue and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Investors) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. There are no voting agreements, buy-sell
agreements, option or right of first purchase agreements or other agreements of
any kind among the Company and any of the securityholders of the Company
relating to the securities of the Company held by them. No Person has the right
to require the Company to register any securities of the Company under the
Securities Act, whether on a demand basis or in connection with the registration
of securities of the Company for its own account or for the account of any other
Person. 

5.8.     SEC Reports; Financial Statements. The Company has
filed all reports and registration statements required to be filed by it under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file
such material) (the foregoing materials, including the exhibits thereto, being
collectively referred to herein as the “SEC Reports” and, together with
the Disclosure Schedules to this Agreement and the Memorandum, the
“Disclosure Materials”). As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

12




5.9.     Material Changes. Except as disclosed in the SEC
Reports and the Memorandum, since the date of the latest audited financial
statements included within the SEC Reports the Company and its Subsidiaries have
not: 

(a)     suffered any Material Adverse Effect; 

(b)     suffered any damage, destruction or loss, whether or not
covered by insurance, in an amount in excess of $100,000; 

(c)     granted or agreed to make any increase in the compensation
payable or to become payable by the Company or any of its Subsidiaries to any
officer or employee, except for normal raises for nonexecutive personnel made in
the ordinary course of business that are usual and normal in amount; 

(d)     declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of capital stock of the Company or
any of its Subsidiaries, or declared or agreed to any direct or indirect
redemption, retirement, purchase or other acquisition by the Company or any of
its Subsidiaries of such shares; 

(e)     issued any shares of capital stock of the Company or any of
its Subsidiaries, or any warrants, rights or options thereof, or entered into
any commitment relating to the shares of capital stock of the Company or any of
its Subsidiaries; 

(f)     adopted or proposed the adoption of any change in the
Company’s Certificate of Incorporation or Bylaws; 

13




(g)     made any change in the accounting methods or practices they
follow, whether for general financial or tax purposes, or any change in
depreciation or amortization policies or rates adopted therein, or any tax
election; 

(h)     sold, leased, abandoned or otherwise disposed of any real
property or any machinery, equipment or other operating property other than in
the ordinary course of their business; 

(i)     sold, assigned, transferred, licensed or otherwise disposed
of any of the Company’s Intellectual Property or interest thereunder or other
intangible asset except in the ordinary course of their business;

(j)     been involved in any dispute involving any employee which
would reasonably be expected to result in a Material Adverse Effect; 

(k)     entered into, terminated or modified any employment,
severance, termination or similar agreement or arrangement with, or granted any
bonuses (or bonus opportunity) to, or otherwise increased the compensation of
any executive officer; 

(l)     entered into any material commitment or transaction
(including without limitation any borrowing or capital expenditure); 

(m)     amended or modified, or waived any default under, any
Material Contract; 

(n)     to the Company’s Knowledge, incurred any material
liabilities, contingent or otherwise, either matured or unmatured (whether or
not required to be reflected in financial statements in accordance with GAAP,
and whether due or to become due), except for accounts payable or accrued
salaries that have been incurred by the Company since the date of the latest
audited financial statements included within the SEC Reports, in the ordinary
course of its business and consistent with the Company’s past practices;

(o)     permitted or allowed any of their material property or
assets to be subjected to any Lien;

(p)     settled any claim, litigation or action, whether now
pending or hereafter made or brought; 

(q)     made any capital expenditure or commitment for additions to
property, plant or equipment individually in excess of $100,000, or in the
aggregate, in excess of $250,000; 

(r)     paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets to, or entered into any agreement
or arrangement with any of their Affiliates, officers, directors or stockholders
or, to the Company's knowledge, any Affiliate or associate of any of the
foregoing;

(s)     made any amendment to, or terminated any agreement that, if
not so amended or terminated, would be material to the business, assets,
liabilities, operations or financial performance of the Company or any of its
Subsidiaries; 

14




(t)    
compromised or settled any claims relating to taxes, any tax audit or other tax
proceeding, or filed any amended tax returns; 

(u)     merged or
consolidated with any other Person, or acquired a material amount of assets of
any other Person; 

(v)     entered
into any agreement in contemplation of the transactions specified herein other
than this Agreement and the other Transaction Documents; or

(w)     agreed to
take any action described in this Section 5.9 or which would reasonably be
expected to otherwise constitute a breach of any of the representations or
warranties contained in this Agreement or any other Transaction Documents. 

5.10.     Litigation. There is no action, suit, inquiry,
notice of violation, proceeding or investigation pending or, to the knowledge of
the Company, threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local
or foreign) (collectively, an “Action”) which: (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act. 

5.11.     Labor Relations. Neither the Company nor any
Subsidiary is a party to or bound by any collective bargaining agreements or
other agreements with labor organizations. Neither the Company nor any
Subsidiary has violated in any material respect any laws, regulations, orders or
contract terms, affecting the collective bargaining rights of employees, labor
organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety,
welfare, wages and hours. No material labor dispute exists or, to the knowledge
of the Company, is imminent with respect to any of the employees of the Company
which could reasonably be expected to result in a Material Adverse Effect. 

5.12.     Compliance. Neither the Company nor any
Subsidiary: (i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any order of any court, arbitrator or
Governmental Body, or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business, except in the
case of clauses (i), (ii) and (iii) as would not have or reasonably be expected
to result in a Material Adverse Effect. 

15




5.13.     Regulatory Permits. The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Reports and the
Memorandum, except where the failure to possess such permits would not have or
reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any Material
Permit. 

5.14.     Title to Assets. The Company and the Subsidiaries
have good and marketable title in fee simple or the right under Chilean law, as
the case may be, to all real property owned by them that is material to the
business of the Company and the Subsidiaries and good and marketable title in
all personal property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens, except
for Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable leases
of which the Company and the Subsidiaries are in compliance. 

5.15.     Contracts.

(a)     Except as set forth in the SEC Reports or the Memorandum,
neither the Company nor any of its Subsidiaries is party or subject to, or bound
by: 

(i)     any agreements, contracts or commitments that call for
prospective fixed and/or contingent payments or expenditures by or to the
Company or any of its Subsidiaries of more than $100,000, or which is otherwise
material and not entered into in the ordinary course of business; 

(ii)     any contract, lease or agreement involving payments in
excess of $100,000, which is not cancelable by the Company or any of its
Subsidiaries, as applicable, without penalty on not less than 60 days notice;


(iii)     any contract, including any distribution agreements,
containing covenants directly or explicitly limiting the freedom of the Company
or any of its Subsidiaries to compete in any line of business or with any Person
or to offer any of its products or services; 

(iv)     any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money or pledging
or granting a security interest in any assets; 

(v)     any employment contracts, non-competition agreements,
invention assignments, severance or other agreements with officers, directors,
employees, stockholders or consultants of the Company or any of its Subsidiaries
or Persons related to or affiliated with such Persons; 

16




(vi)     any stock redemption or purchase agreements or other
agreements affecting or relating to the capital stock of the Company or any of
its Subsidiaries, including, without limitation, any agreement with any
stockholder of the Company or any of its Subsidiaries which includes, without
limitation, antidilution rights, voting arrangements or operating covenants;


(vii)     any pension, profit sharing, retirement, stock option or
stock ownership plans; 

(viii)     any royalty, dividend or similar arrangement based on
the revenues or profits of the Company or any of its Subsidiaries or based on
the revenues or profits derived from any material contract; 

(ix)     any acquisition, merger, asset purchase or other similar
agreement; 

(x)     any sales agreement which entitles any customer to a right
of set-off, or right to a refund after acceptance thereof; 

(xi)     any agreement with any supplier or licensor containing any
provision permitting such supplier or licensor to change the price or other
terms upon a breach or failure by the Company or any of its Subsidiaries, as
applicable, to meet its obligations under such agreement; or 

(xii)     any agreement under which the Company or any of its
Subsidiaries has granted any Person registration rights for securities. 

(b)     Schedule 5.15(b) to the Disclosure Schedules
contains a listing or description of all agreements, contracts or instruments,
including all amendments thereto, to which the Company or its Subsidiaries are
bound which meet the criteria set forth in Section 5.15(a) (such agreements,
contracts or instruments, collectively, the “Material Contracts”). The
Company has made available to the Investor Representative copies of the Material
Contracts. Neither the Company nor any of its Subsidiaries has entered into any
oral contracts which, if written, would qualify as a Material Contract. Each of
the Material Contracts is valid and in full force and effect, is enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws affecting
creditors’ rights generally and general principles of equity, and will continue
to be so immediately following the Closing Date.

(c)     Actions with Respect to Material Contracts. 

(i)     Neither the Company nor any of its Subsidiaries has
violated or breached, or committed any default under, any Material Contract in
any material respect, and, to the Company’s knowledge, no other Person has
violated or breached, or committed any default under any Material Contract,
except for violations, breaches of defaults which would not have a Material
Adverse Effect; and 

(ii)     To the Company's knowledge, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or would reasonably be expected to: (A) result in a material violation or
breach of any of the provisions of any Material Contract, (B) give any Person the right to declare
a default or exercise any remedy under any Material Contract, (C) give any
Person the right to accelerate the maturity or performance of any Material
Contract or (D) give any Person the right to cancel, terminate or modify any
Material Contract, except, in each case, as would not have a Material Adverse
Effect. 

17




5.16.     Taxes.

(a)     The Company and its Subsidiaries have timely and properly
filed all tax returns required to be filed by them for all years and periods
(and portions thereof) for which any such tax returns were due, except where the
failure to so file would not have a Material Adverse Effect. All such filed tax
returns are accurate in all material respects. The Company has timely paid all
taxes due and payable (whether or not shown on filed tax returns), except where
the failure to so pay would not have a Material Adverse Effect. There are no
pending assessments, asserted deficiencies or claims for additional taxes that
have not been paid. The reserves for taxes, if any, reflected in the SEC Reports
or the in the Memorandum are adequate, and there are no Liens for taxes on any
property or assets of the Company and any of its Subsidiaries (other than Liens
for taxes not yet due and payable). There have been no audits or examinations of
any tax returns by any Governmental Body, and the Company or its Subsidiaries
have not received any notice that such audit or examination is pending or
contemplated. No claim has been made by any Governmental Body in a jurisdiction
where the Company or any of its Subsidiaries does not file tax returns that it
is or may be subject to taxation by that jurisdiction. To the knowledge of the
Company, no state of facts exists or has existed which would constitute grounds
for the assessment of any penalty or any further tax liability beyond that shown
on the respective tax returns. There are no outstanding agreements or waivers
extending the statutory period of limitation for the assessment or collection of
any tax.

(b)     Neither the Company nor any of its Subsidiaries is a party
to any tax-sharing agreement or similar arrangement with any other Person. 

(c)     The Company has made all necessary disclosures required by
Treasury Regulation Section 1.6011 -4. The Company has not been a participant in
a “reportable transaction” within the meaning of Treasury Regulation Section
1.6011 -4(b). 

(d)     No payment or benefit paid or provided, or to be paid or
provided, to current or former employees, directors or other service providers
of the Company will fail to be deductible for federal income tax purposes under
Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”). 

5.17.     Employees. 

(a)     The Company and its Subsidiaries are not party to any
collective bargaining agreements and, to the Company’s knowledge, there are no
attempts to organize the employees of the Company or any of its
Subsidiaries.

(b)     The Company and its Subsidiaries have no policy, practice,
plan or program of paying severance pay or any form of severance compensation in
connection with the termination of employment services other than as required in
accordance with Chilean law. 

18




(c)     Each Person who performs services for the Company or any of
its Subsidiaries has been, and is, properly classified by the Company or its
Subsidiaries as an employee or an independent contractor. 

(d)     To the Company's knowledge, no employee or advisor of the
Company or any of its Subsidiaries is or is alleged to be in violation of any
term of any employment contract, disclosure agreement, proprietary information
and inventions agreement or any other contract or agreement or any restrictive
covenant or any other common law obligation to a former employer relating to the
right of any such employee to be employed by the Company or any of its
Subsidiaries because of the nature of the business conducted or to be conducted
by the Company or any of its Subsidiaries or to the use of trade secrets or
proprietary information of others, and the employment of the employees of the
Company and its Subsidiaries does not subject the Company or the Company's
stockholders to any liability. There is neither pending nor, to the Company's
knowledge, threatened any actions, suits, proceedings or claims, or, to the
Company’s knowledge, any basis therefor or threat thereof with respect to any
contract, agreement, covenant or obligation referred to in the preceding
sentence. 

5.18.     Employee Benefit Plans. No liability to the
Pension Benefit Guaranty Corporation has been incurred with respect to any Plan
(as defined below) by the Company or any of its Subsidiaries which is or would
be materially adverse to the Company and its Subsidiaries. The execution and
delivery of this Agreement and the issuance and sale of the Securities will not
involve any transaction which is subject to the prohibitions of Section 406 of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), or in connection with which a tax could be imposed pursuant to
Section 4975 of the Code, provided that, if any of the Investors, or any person
or entity that owns a beneficial interest in any of the Investors, is an
“employee pension benefit plan” (within the meaning of Section 3(2) of ERISA)
with respect to which the Company is a “party in interest” (within the meaning
of Section 3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of
ERISA, if applicable, are met. As used in this Section 2.1(ac), the term
“Plan” shall mean an “employee pension benefit plan” (as defined in
Section 3 of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by the Company or any subsidiary or by any
trade or business, whether or not incorporated, which, together with the Company
or any subsidiary, is under common control, as described in Section 414(b) or
(c) of the Code. 

5.19.     Patents and Trademarks. To the knowledge of the
Company and each Subsidiary, the Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and the Memorandum and
which the failure to so have could have or reasonably be expected to result in a
Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by the Company or any
Subsidiary violates or infringes upon the rights of any Person. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable. The
Company and its Subsidiaries have taken reasonable steps to protect the
Company’s and its Subsidiaries’ rights in their Intellectual Property Rights and
confidential information (the “Confidential Information”). Each employee,
consultant and contractor who has had access to Confidential Information which
is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses
as currently conducted or as currently proposed to be conducted has executed an
agreement to maintain the confidentiality of such Confidential Information and
has executed appropriate agreements that are substantially consistent with the
Company’s standard forms thereof. Except under confidentiality obligations,
there has been no material disclosure of any of the Company’s or its
Subsidiaries’ Confidential Information to any third party. 

19




5.20.     Environmental Matters. Neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order
of any Governmental Body relating to the use, disposal or release of hazardous
or toxic substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances (collectively,
“Environmental Laws”), owns or operates any real property contaminated
with any substance that is subject to any Environmental Laws, is liable for any
off-site disposal or contamination pursuant to any Environmental Laws, or is
subject to any claim relating to any Environmental Laws, which violation,
contamination, liability or claim has had or could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate; and there is
no pending or, to the Company’s knowledge, threatened investigation that might
lead to such a claim. 

5.21.     Insurance. The Company and the Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged as described in the
Memorandum. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant increase in cost.


5.22.     Transactions With Affiliates and Employees. Except
as set forth on Schedule 5.22 to the Disclosure Schedules or in
the Memorandum, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than (a) for payment of salary
or consulting fees for services rendered, (b) reimbursement for expenses
incurred on behalf of the Company and (c) for other employee benefits, including
stock option agreements under any stock option plan of the Company. 

5.23.     Private Placement. Assuming the accuracy of the
Investors representations and warranties set forth in Section 4, no registration
under the Securities Act is required for the offer and sale of the Securities by
the Company to the Investors as contemplated hereby. 

5.24.     No Integrated Offering. Neither the Company, nor
any of its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of the Securities Act or any applicable
shareholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated. 

20




5.25.     Brokers and Finders. Other than as described in
the Memorandum, no Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company.

5.26.     No Directed Selling Efforts or General
Solicitation. Neither the Company nor any Person acting on its behalf has
conducted any general solicitation or general advertising (as those terms are
used in Regulation D) in connection with the offer or sale of any of the
Securities. 

5.27.     Questionable Payments. Neither the Company nor any
of its Subsidiaries nor, to the Company’s knowledge, any of their respective
current or former stockholders, directors, officers, employees, agents or other
Persons acting on behalf of the Company or any Subsidiary, has on behalf of the
Company or any Subsidiary or in connection with their respective businesses: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature. 

5.28.     Disclosures. Neither the Company nor any Person
acting on its behalf has provided the Investors or their agents or counsel with
any information that constitutes or might constitute material, non-public
information, other than the terms of the transactions contemplated hereby. The
written materials delivered to the Investors in connection with the transactions
contemplated by the Transaction Documents do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. 

5.29.     Solvency. The Company has not (a) made a general
assignment for the benefit of creditors; (b) filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by its creditors;
(c) suffered the appointment of a receiver to take possession of all, or
substantially all, of its assets; (d) suffered the attachment or other judicial
seizure of all, or substantially all, of its assets; (e) admitted in writing its
inability to pay its debts as they come due; or (f) made an offer of settlement,
extension or composition to its creditors generally. 

5.30.     Related Party Transactions. Except as set forth in
the SEC Reports and the Memorandum: (a) none of the Company or any of its
Affiliates, officers, directors, stockholders or employees, or any Affiliate of
any of such Person, has any material interest in any property, real or personal,
tangible or intangible, including the Company’s Intellectual Property used in or
pertaining to the business of the Company, except for the normal rights of a
stockholder, or, to the knowledge of the Company, any supplier, distributor or customer
of the Company, (b) there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, employees,
Affiliates, or, to the Company's knowledge, any Affiliate thereof, (c) to the
Company’s knowledge, no employee, officer or director of the Company or any of
its Subsidiaries has any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation that competes with the
Company, (d) to the Company’s knowledge, no member of the immediate family of
any officer or director of the Company is directly or indirectly interested in
any Material Contract, or (e) there are no amounts owed (cash and stock) to
officers, directors and consultants (salary, bonuses or other forms of
compensation). 

21




5.31.     Foreign Corrupt Practices Act. None of the Company
or any of its Subsidiaries, nor to the knowledge of the Company, any agent or
other person acting on behalf of the Company or any of its Subsidiaries, has,
directly or indirectly: (a) used any funds, or will use any proceeds from the
sale of the Securities, for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (b)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (c) failed to disclose fully any contribution made by the
Company or any of its Subsidiaries (or made by any Person acting on their behalf
of which the Company is aware) or any members of their respective management
which is in violation of any Legal Requirement, or (d) has violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder which was applicable to the
Company or any of its Subsidiaries. 

5.32.     PFIC. None of the Company or any of its
Subsidiaries is or intends to become a “passive foreign investment company”
within the meaning of Section 1297 of the Code of 1986. 

5.33.     OFAC. None of the Company or any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee, Affiliate or Person acting on behalf of the Company or any of its
Subsidiaries, is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly use the
proceeds of the sale of the Securities, or lend, contribute or otherwise make
available such proceeds to any of the Company’s Subsidiaries, joint venture
partner or other Person or entity, towards any sales or operations in Cuba,
Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the
purpose of financing the activities of any Person currently subject to any U.S.
sanctions administered by OFAC. 

5.34.     Money Laundering Laws. The operations of each of
the Company or any of its Subsidiaries are and have been conducted at all times
in compliance with the money laundering Legal Requirements of all applicable
Governmental Bodies and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any Governmental Body (collectively, the
“Money Laundering Laws”) and no action, suit or proceeding by or before
any court or Governmental Body or any arbitrator involving the Company or any of
its Subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened. 

22




6.     CONDITIONS TO EACH CLOSING OF THE
INVESTORS. 

The obligation of the Investors to purchase the Securities at
any Closing is subject to the fulfillment, to the satisfaction of the Investor
Representative, on or prior to such applicable Closing Date, of the following
conditions, any of which may be waived by the Investor Representative: 

6.1.     Representations and Warranties. The representations
and warranties made by the Company in Section 5 hereof qualified as to
materiality shall be true and correct at all times prior to and on the
applicable Closing Date, except to the extent any such representation or
warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct as of such earlier date,
and, the representations and warranties made by the Company in Section 5 hereof
not qualified as to materiality shall be true and correct in all material
respects at all times prior to and on the applicable Closing Date, except to the
extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct in
all material respects as of such earlier date.

6.2.     Performance of Agreements. The Company shall have
performed in all material respects all obligations and covenants herein required
to be performed by it on or prior to the applicable Closing Date. 

6.3.     Approvals. The Company shall have obtained any and
all consents, permits, approvals, registrations and waivers necessary or
appropriate for consummation of the purchase and sale of the Securities and the
consummation of the other transactions contemplated by the Transaction
Documents, all of which shall be in full force and effect.

6.4.     Judgments, etc. No judgment, writ, order,
injunction, award or decree of or by any court, or judge, justice or magistrate,
including any bankruptcy court or judge, or any order of or by any governmental
authority, shall have been issued, and no action or proceeding shall have been
instituted by any governmental authority, enjoining or preventing the
consummation of the transactions contemplated hereby or in the other Transaction
Documents. 

6.5.     Stop Orders. No stop order or suspension of trading
shall have been imposed by the SEC or any other governmental or regulatory body
having jurisdiction over the Company or the market(s) where the Common Stock is
listed or quoted, with respect to public trading in the Common Stock. 

6.6.     Adverse Changes. Since the date of execution of
this Agreement, no event or series of events shall have occurred that reasonably
could have or result in a Material Adverse Effect or a material adverse change
with respect to the Company or any of its Subsidiaries; 

6.7.     Company Officer Certificate. The Company shall have
delivered a Certificate, executed on behalf of the Company by its Chief
Executive Officer or its Chief Financial Officer, dated as of the applicable
Closing Date, certifying to the fulfillment of the conditions specified in this
Section 6. 

23




6.8.     Company Secretary Certificate. The Company shall
have delivered a Certificate, executed on behalf of the Company by its
Secretary, dated as of the First Closing Date, certifying the resolutions
adopted by the Board of Directors of the Company approving the transactions
contemplated by this Agreement and the other Transaction Documents and the
issuance of the Securities, certifying the current versions of the Articles of
Incorporation and Bylaws of the Company and certifying as to the signatures and
authority of persons signing the Transaction Documents and related documents on
behalf of the Company. The foregoing certificate shall only be required to be
delivered on the First Closing Date, unless any material information contained
in the certificate has changed. 

6.9.     Opinions of Counsel. The Investors and the Lead
Placement Agents shall have received opinions from the Company’s U.S. legal
counsel, dated as of each Closing Date, in such form and substance as agreed to
by the Company and the Lead Placement Agents (it being agreed that such counsel
shall not be required to deliver a “10b-5” or negative assurances letter or
opinion). 

6.10.     Note and Warrants. The Company shall have
delivered the Notes and Warrants being sold at the applicable Closing. 

6.11.     Security Agreement. The Security Agreement shall
have been executed by the parties thereto. 

6.12.     Loan Deferment. The Company shall have entered
into Loan Repayment Agreements, which shall be in the form attached hereto as
Exhibit D, with respect to loans made to the Company by the lenders and
in the amounts set forth on Schedule A-2 hereto. 

6.13.     Minimum Raise. With respect to the First Closing,
a minimum of $2 million in gross proceeds shall have been raised. 

7.     CONDITIONS TO EACH CLOSING OF THE
COMPANY. 

The obligations of the Company to effect the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
applicable Closing Date of the conditions listed below. 

7.1.     Representations and Warranties. The representations
and warranties made by the Investors in Section 4 shall be true and correct in
all material respects at the time of Closing as if made on and as of such date.


7.2.     Corporate Proceedings. All corporate and other
proceedings required to be undertaken by the Investor in connection with the
transactions contemplated hereby shall have occurred and all documents and
instruments incident to such proceedings shall be reasonably satisfactory in
substance and form to the Company. 

7.3.     Agreements. Such Investor shall have completed and
executed this Agreement and the Accredited Investor Questionnaire attached
hereto as Exhibit E, and delivered the same to the Company.

24




7.4.     Purchase Price. The Investors shall have delivered
or caused to be delivered the Purchase Price to the Escrow Account. 

8.     OTHER AGREEMENTS 

8.1.     Board Appointees. Immediately following the
Closing, the Board of Directors of the Company shall appoint James Groh and
Pierre Galoppi to its Board of Directors, and elect Mr. Groh as Chairman of the
Board. 

8.2.     Furnishing of Information. As long as any Investor
owns the Securities, the Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Investor owns Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Investors and make publicly available in accordance with Rule 144(c) such
information as is required for the Investors to sell the Securities under Rule
144. The Company further covenants that it will take such further action as any
holder of Securities may reasonably request, all to the extent required from
time to time to enable such Person to sell the Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144. If the Company fails to remain current in its reporting obligations or
to provide currently publicly available information in accordance with Rule
144(c) and such failure extends for a period of more than five Trading Days (the
date which such five Trading Day-period is exceeded, being referred to as
“Event Date”), then in addition to any other rights the Investor may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the information failure is cured, the Company shall
pay to each Investor an amount in cash, as partial liquidated damages and not as
a penalty, equal to one percent (1.0%) of purchase price paid for the Securities
held by the Investor at the Event Date; provided, however, that in no case will
the aggregate amount of liquidated damages payable to an Investor pursuant to
this Section 8.2 exceed ten percent (10%) of such Investor’s original
investment pursuant to this Agreement. The partial liquidated damages pursuant
to the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an information failure (except in the case of the
first Event Date). 

8.3.     Integration. The Company shall not, and shall use
its best efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Investors, or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market in a
manner that would require stockholder approval of the sale of the Securities to
the Investors. 

8.4.     Securities Laws Disclosure; Publicity. By 9:00 a.m.
(New York time) on the Trading Day following the First Closing Date and each
Subsequent Closing Date, the Company shall issue a press release disclosing the
transactions contemplated hereby and the Closing. By no later than the fourth Trading Day following the First Closing
Date (and on each Subsequent Closing Date if required by applicable law) the
Company will file a Current Report on Form 8-K disclosing the material terms of
this Agreement and the other Transaction Documents (and attach as exhibits
thereto the Transaction Documents) and the Closing. In addition, the Company
will make such other filings and notices in the manner and time required by the
SEC and the Trading Market on which the Common Stock is listed. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Investor,
or include the name of any Investor in any filing with the SEC (other than any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of the Investor
Representative, except to the extent such disclosure is required by law or
Trading Market regulations. 

25




8.5.     Limitation on Issuance of Future Priced Securities.
During the six months following the Closing Date, the Company shall not issue
any “Future Priced Securities” as such term is described by the rules and
regulations of FINRA. 

8.6.     Listing of Securities. The Company agrees that: (i)
if the Company applies to have the Common Stock traded on any other Trading
Market, it will include in such application the Securities, and will take such
other action as is necessary or desirable to cause the Securities to be listed
on such other Trading Market as promptly as possible, and (ii) it will take all
action reasonably necessary to continue the listing and trading of its Common
Stock on a Trading Market and will comply in all material respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the Trading Market.

8.7.     Reservation of Shares. The Company shall maintain a
reserve from its duly authorized shares of Common Stock to comply with its
obligations to issue the Conversion Shares and the Warrant Shares upon
conversion of the Note and exercise of the Warrant, respectively.

8.8.     Further Assurances. The Company will, and will
cause all of its Subsidiaries to, and their management to, use their best
efforts to satisfy all of the closing conditions under Section 7, and will not
take any action which could frustrate or delay the satisfaction of such
conditions. In addition, either prior to or following the Closing, the Company
will, and will cause each of its Subsidiaries to, and its and their management
to, perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby. 

8.9.     Closing Escrow Holdback. The Company and Investors
agree that, from the aggregate gross proceeds that will be delivered to the
Escrow Agent pursuant to the Closing Escrow Agreement, an amount equal to one
(1) year of interest payments on the aggregate outstanding principal of the
Notes as of the Closing (the “Holdback Amount”) shall be retained by the
Escrow Agent and paid to the Investors and otherwise administered in accordance
with the Closing Escrow Agreement until such time as (i) 75% of the of the Notes
have been converted into Common Stock, or (ii) the Notes are fully redeemed.
Promptly following the occurrence of either (i) or (ii) in the preceding
sentence, any remaining portion of the Holdback Amount shall be released to the Company.

26




8.10.     Fair Market Value Letter. The Company will, upon
the reasonable request of Lead Placement Agents’ securities clearing firm,
provide confirmation of the par value of the Notes and Warrants. 

9.     MISCELLANEOUS. 

9.1.     Compensation of Lead Placement Agents, Brokers,
etc. Each Investor acknowledges that it is fully aware that each of the Lead
Placement Agents will receive from the Company, in consideration of their
respective services as placement agents in respect of the offer and sale of the
Securities contemplated hereby: 

(a)     a commission of ten (10%) percent of the aggregate Purchase
Price of the Notes placed by such Lead Placement Agent sold at each Closing,
payable in cash; and 

(b)     a warrant to purchase a number of shares of Common Stock
derived by dividing an amount equal to 10% of the gross proceeds raised at each
Closing, from the sale of the Notes placed by such Lead Placement Agent, by
$2.00. 

It is acknowledged that the Lead Placement Agents may share
such fees and compensation with other placement agents or brokers participating
in the transactions contemplated hereby. In addition, each Investor acknowledges
that it is aware that the Lead Placement Agents will receive from the Company
payment of all of their respective accountable fees and expenses including, but
not limited to, all legal fees and expenses incurred in connection with the
Offering. 

9.2.     Notices. All notices, requests, demands and other
communications provided in connection with this Agreement shall be in writing
and shall be deemed to have been duly given at the time when hand delivered,
delivered by express courier, or sent by facsimile (with receipt confirmed by
the sender’s transmitting device) in accordance with the contact information
provided below or such other contact information as the parties may have duly
provided by notice. 

	(a) 	The Company: 
	 	Minera Licancabur S.A. 
	  	Jorge Canning 1410 
	  	Ñuñoa, Santiago 
	  	Republic of Chile 
	  	Attention: Jorge Orellana Orellana 
	  	  
	  	With a copy to: 
	  	  
	  	Pillsbury Winthrop Shaw Pittman LLP 
	  	2300 N St., N.W. 
	 	Washington, DC 20037 
	  	Attention: Louis A. Bevilacqua, Esq. 
	  	Fax Number: (202) 663-8007 


27





	(b) 	The Investors: 
	  	  
		As per the contact information provided on the
      signature page hereof. 
	  	  
	(c) 	The Lead Placement Agents/Investor
      Representative: 
	  	  
	  	Euro Pacific Capital, Inc. 
	  	88 Post Road West, 3rd Floor 
	  	Westport, CT 06880 
	  	Attention: Mr. Thomas Tan 
	  	Fax Number: (203) 662-9771 
	  	  
	  	With a copy to: 
	  	  
	  	Sheppard Mullin Richter & Hampton LLP

	  	12275 El Camino Real, Suite 200 
	  	San Diego, CA 92130 
	 	Attention: James A. Mercer III,
      Esq. 
	  	Fax Number: (858) 523-6705 


9.3.     Amendments; Waivers. No provision of this Agreement
may be waived or amended except in a written instrument signed, in the case of
an amendment, by the Company and the Investor Representative or, in the case of
a waiver, by the party against whom enforcement of any such waiver is sought
(and if such party is the Investors, then by the Investor Representative). No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right. 

9.4.     Construction. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied
against any party. 

9.5.     Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Investor
Representative. Any Investor may assign any or all of its rights under this
Agreement to any Person to whom such Investor assigns or transfers any
Securities, provided such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions hereof that apply to the
“Investors”. 

9.6.     No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 

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9.7.     Governing Law, Consent to Jurisdiction, etc. All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, New York for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of the any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. EACH PARTY
HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES)
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

9.8.     Survival. The representations and warranties
contained in Section 5.7 to 5.34 shall survive for two (2) years after the
Closing of the transactions contemplated by this Agreement. All other
representations, warranties, covenants and agreements arising out of the
transactions contemplated by this Agreement shall survive the Closing for their
applicable statute of limitations. 

9.9.     Indemnification. 

(a)     The Company agrees to indemnify and hold harmless each
Investor and its Affiliates and their respective directors, officers, employees
and agents from and against any and all losses, claims, damages, liabilities and
expenses (including without limitation reasonable attorney fees and
disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement thereof) (collectively, “Losses”) to which
such Person may become subject as a result of any breach of representation,
warranty, covenant or agreement made by or to be performed on the part of the
Company under the Transaction Documents, and will reimburse any such Person for
all such amounts as they are incurred by such Person. 

29




(b)     Promptly after receipt by any Person (the “Indemnified
Person”) of notice of any demand, claim or circumstances which would or
might give rise to a claim or the commencement of any action, proceeding or
investigation in respect of which indemnity may be sought pursuant to this
Section 9.9, such Indemnified Person shall promptly notify the Company in
writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Person, and
shall assume the payment of all fees and expenses; provided, however,
that the failure of any Indemnified Person so to notify the Company shall
not relieve the Company of its obligations hereunder except to the extent that
the Company is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior written
consent of the Indemnified Person, which consent shall not be unreasonably
withheld, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding. 

9.10.     Execution. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or other electronic transmission, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or other electronic signature page were an original thereof. 

9.11.     Severability. If any provision of this Agreement
is held to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this
Agreement. 

9.12.     Replacement of Securities. If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction and customary and reasonable
indemnity (which shall not include the posting of any bond), if requested. The
Company applicants for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities. 

30




9.13.     Remedies. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, each of the Investors and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agrees to
waive in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate. 

9.14.     Payment Set Aside. To the extent that the Company
makes a payment or payments to any Investor pursuant to any Transaction Document
or a Investor enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred. 

9.15.     Independent Nature of Investors’ Obligations and
Rights. The obligations of each Investor under any Transaction Document are
several and not joint with the obligations of any other Investor, and no
Investor shall be responsible in any way for the performance of the obligations
of any other Investor under any Transaction Document. Nothing contained herein
or in any Transaction Document, and no action taken by any Investor pursuant
thereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Document. Each Investor shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. Each Investor has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. The Company has elected to provide all Investors with the same terms
and Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by the Investors. 

9.16.     Irrevocable Offer. Each Investor agrees that this
Agreement constitutes an irrevocable offer to purchase the Securities of the
Company and that Investor cannot cancel, terminate or revoke this Agreement or
any agreement of Investor made hereunder. This Agreement shall survive the death
or legal disability of Investor and shall be binding upon Investor’s heirs,
executors, administrators and successors. 

[Signature Page Follows] 

31




IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above. 

COMPANY: 

CHILE MINING TECHNOLOGIES INC.


By:
_________________________________
      
Name: 
       Title:

INVESTORS: 

The Investors executing the Signature
Page in the form attached hereto as Annex A and delivering the same to
the Company or its agents shall be deemed to have executed this Agreement and
agreed to the terms hereof. 

Solely with respect to Sections
2.2(b), 2.7 and all of Section 6 hereof: 

EURO PACIFIC CAPITAL INC. 

By:
_________________________________
      
Name: 
       Title:

HALTER FINANCIAL SECURITIES INC.


By:
_________________________________
      
Name: 
       Title:

32




Securities Purchase Agreement 
Investor Counterpart
Signature Page 

The undersigned, desiring to: (i) enter into the Securities
Purchase Agreement, dated as of _____________ , 2012 (the “Agreement”),
among the undersigned, Chile Mining Technologies Inc., a Nevada corporation (the
“Company”), Euro Pacific Capital, Inc. and the other parties thereto, in
or substantially in the form furnished to the undersigned and (ii) purchase the
securities of the Company appearing below, hereby agrees to purchase such
securities from the Company as of the Closing and further agrees to join the
Agreement as a party thereto, with all the rights and privileges appertaining
thereto, and to be bound in all respects by the terms and conditions thereof.


IN WITNESS WHEREOF, the undersigned has executed the
Agreement as of ________________ ___, 2012. 

	 	Name and Address, Fax No. and Social Security No./EIN
      of Investor: 
	 	______________________________________________________
	 	______________________________________________________ 
	 	______________________________________________________
	 	  
	 	Fax No.:
      ______________________________________________________
	 	 
	 	Soc. Sec. No./EIN:
      ______________________________________________________
	 	 
	 	If a partnership, corporation, trust or other
      business entity: 
	 	 
	 	By:
    ______________________________________________________
	 	         Name: 
	 	         Title: 
	 	 
	 	If an individual: 
	 	 
	 	Signature:
      ______________________________________________________
	 	 
	 	Investment Amount (Purchase Price for Notes):
  



	Account Registration Type (check one) 	(complete if applicable) 
	[_]   Individual Account 	Fidelity Account Number:
    ________________
	[_]   Joint Account 	  
	[_]   Individual Retirement Account 	Name of Registered 
	[_]    Corporation/Partnership/Other
	Representative: ________________
	[_]   Trust 	  
	  	Signature:
________________






Schedule A-1 

Schedule of Investors 


	
Name of Investor 	Investment
      
Amount 	
Notes 	
Warrants
  
	HENRY LOUIS SCHAIRER JR 	$40,000 	$40,000 	10,000 
	JOSEPH MCCARTHY MIKI MCCARTHY TOD 	$40,000 	$40,000 	10,000 
	DEVON MILLER 	$40,000 	$40,000 	10,000 
	CHRIS & KIM ENGEN TTEE CHRISTOPHER W & KIMBERLY
      ENGEN FAM TR, U/A 9/14/95 	$40,000 	$40,000 	10,000 
	JAMES LUTTER 	$40,000 	$40,000 	10,000 
	GREG RUHLAND P/ADM HAWAII ISLAND INTERVENTIONAL PAIN MNGMNT
      INC 	$40,000 	$40,000 	10,000 
	SHELBY JORDAN BECKY JORDAN 	$40,000 	$40,000 	10,000 
	PATRICK ROBERT DUROCHER AMY LYNNE DUROCHER 	$40,000 	$40,000 	10,000 
	WILLIAM L BRADLEY ROBIN BRADLEY 	$40,000 	$40,000 	10,000 
	JAMES PUGH 	$50,000 	$50,000 	12,500 
	TYLER JAY CLINTWORTH TOD DEBRA CLINTWORTH 	$50,000 	$50,000 	12,500 
	BRADLEY C WAYBRIGHT ELISABETH C WAYBRIGHT 	$50,000 	$50,000 	12,500 
	MICHAEL SCULLY 	$50,000 	$50,000 	12,500 
	RICHARD P ANTHONY III KIMBERLY J ANTHONY 	$50,000 	$50,000 	12,500 
	JEAN A DAVIDS-OSTERHAUS TTEE JEAN A DAVIDS-OSTERHAUS REV
      U/A 10/3/07 	$50,000 	$50,000 	12,500 
	MARK A OSTERHAUS TTEE THE MARK A OSTERHAUS REV TR U/A
      10/31/07 	$50,000 	$50,000 	12,500 
	BARBARA J PETERSON TTEE REV TR OF BARBARA J PETERSON U/A
      2/4/00 	$50,000 	$50,000 	12,500 
	STEVEN JAY EPSTEIN 	$50,000 	$50,000 	12,500 
	GARY J MAY BETH C MAY TTEE GARY J MAY DMD MSD 401K PSP 	$60,000 	$60,000 	15,000 
	STEPHEN BEN SON SANG RIM SON TOD SOO SUM SON 	$60,000 	$60,000 	15,000 
	BERT HUNTSINGER 	$60,000 	$60,000 	15,000 
	DAVID BRISBIN P/ADM WHITE PINE PRODUCTIONS DBPP 	$60,000 	$60,000 	15,000 
	FRANCIS BRENT MAY P/ADM F BRENT MAY DMD MSD PC PS PLAN 	$80,000 	$80,000 	20,000 
	JAMES T LAMBETH TTEE HI RADIOLOGIC ASSOC 401(K) PS PL FBO
      SCOTT GROSSKREUTZ 	$90,000 	$90,000 	22,500 
	CARTER LAREN 	$100,000 	$100,000 	25,000 
	JAMES A TAMBORELLO JOYCE TAMBORELLO TTEE TAMBORELLO TRUST
      U/A 6/24/98 	$100,000 	$100,000 	25,000 
	REISNER MILLENNIUM INVST LLC 	$100,000 	$100,000 	25,000 
	ROBERT NEAL SPADY LINDA SPADY 	$100,000 	$100,000 	25,000 
	DAMON SUTER MALINDA SUTER TTEE THE SUTER FAMILY TRUST U/A
      4/12/02 	$100,000 	$100,000 	25,000 









	
Name of Investor 	Investment
      
Amount 	
Notes 	
Warrants
  
	JANE TESSA TEN BRINK TTEE TEN BRINK TRUST U/A 10/2/86 	$150,000 	$150,000 	37,500 
	KARAN HOSS TTEE
      KARAN HOSS TRUST U/A 8/9/05 	$200,000 	$200,000 	50,000 
	SALVATORE PIZZINO
    	$50,000 	$50,000 	12,500 
	TOTAL 	$2,120,000 	$2,120,000 	530,000 







Schedule A-2 

Schedule of Lenders 


	
Lender 	Amount of Debt to
      be 
Deferred 
	Jorge Fernando
      Pizarro Arriagada 	CLP$104,579,970 
	Ivan Orlando
      Vergara Huerta 	CLP$165,770,750 
	Jorge Osvaldo
      Orellana Orellana 	CLP$103,985,073 
	Geominco E.I.R.L.
    	CLP$1,409,005,176 
	Importadora y
      Exportadora Bengolea Ltda. 	US$500,000 
	Halter Financial
      Group 	US$190,000 







Exhibit A 

Form of Note 

[attached hereto] 




Exhibit B 

Form of Warrant 

[attached hereto]




Exhibit C 

Form of Security Agreement 

[attached hereto] 




Exhibit D 

Form of Loan Repayment Agreement 

[attached hereto] 




Exhibit E 

Accredited Investor Questionnaire 

[attached hereto]