OPTIONEE, IN FORM PROVIDED TO THE OPTIONOR BY THE OPTIONEE AND REASONABLY
SATISFACTORY TO THE OPTIONOR AS TO FORM AND SUBSTANCE, SUBJECT TO THE TERMS OF
THIS AGREEMENT.
THE OPTIONEE SHALL BE ENTITLED TO CAUSE THE FOREGOING TRANSFER
FORMS TO BE REGISTERED IN THE APPROPRIATE MINING REGISTRY IN ORDER TO TRANSFER
THE CLAIMS TO THE OPTIONEE'S NAME.
4.1
IF THE OPTIONEE RECORDS A TRANSFER OF THE
CLAIMS TO ITSELF PRIOR TO EXERCISE OF THE OPTION, THE OPTIONEE SHALL RE-TRANSFER
THE CLAIMS TO THE OPTIONOR OR ITS NOMINEE UPON TERMINATION OF THIS AGREEMENT
UNDER SECTION 11 HEREOF.
4.2
THE OPTIONEE SHALL BE RESPONSIBLE FOR ALL
REASONABLE COSTS ASSOCIATED WITH A TRANSFER OF THE CLAIMS TO ITSELF OR TO THE
OPTIONOR, AS THE CASE MAY REQUIRE.
4.3
IF THE OPTIONOR FAILS TO DELIVER REGISTERABLE
TRANSFERS OF THE CLAIMS TO THE OPTIONEE BY MARCH 31, 2004. THEN UNLESS SUCH
FAILURE IS THE RESULT OF A FAILURE OF THE OPTIONEE TO PROVIDE SUITABLE TRANSFER
DOCUMENTS TO THE OPTIONOR, EACH DATE FOR MAKING ALL CASH PAYMENTS AS SET OUT IN
SUBSECTION 2(B) HEREOF SHALL BE EXTENDED BY THAT NUMBER OF DAYS WHICH IS EQUAL
TO THE NUMBER OF DAYS BETWEEN APRIL 1, 2004 AND THE DATE OF DELIVERY TO THE
OPTIONEE OF THE LAST OF THE RECORDABLE TRANSFERS REQUIRED TO TRANSFER TO THE
OPTIONEE ALL 11 LOTS INCLUDED IN THE CLAIMS.
4
4.4
IF THE PAYMENT DATES IN SUBSECTION 2(B) ARE
EXTENDED AS PROVIDED FOR IN SUBSECTION 4.4, THE OPTIONEE SHALL NOT LOSE ANY
RIGHTS HEREUNDER, NOR SHALL ANY OF THOSE RIGHTS BE SUSPENDED OR DELAYED.
EXERCISE OF OPTION
5.
UPON DELIVERING THE SHARES, COMPLETING
THE EXPENDITURES, MAKING THE CASH PAYMENTS AND PAYING THE TAX ARREARS AS SET OUT
IN SUBSECTIONS 2, 3 AND 4 ABOVE, THE OPTIONEE SHALL HAVE EXERCISED THE OPTION
AND SHALL HAVE ACQUIRED AN UNDIVIDED BENEFICIAL 100% OWNERSHIP OF THE CLAIMS,
SUBJECT TO A 21% NET SMELTER RETURN ROYALTY RESERVED ONTO THE OPTIONOR. NET
SMELTER RETURNS SHALL BE CALCULATED AND PAID IN ACCORDANCE WITH SCHEDULE "B" TO
THIS AGREEMENT.
REPRESENTATIONS WARRANTIES AND CONVENANTS
6.
THE OPTIONOR HEREBY REPRESENTS, WARRANTS
AND COVENANTS TO AND FOR THE BENEFIT OF THE OPTIONEE, WHICH REPRESENTATIONS,
WARRANTIES AND COVENANTS SHALL SURVIVE THE CLOSING OF THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT, THAT:
(A)
THE OPTIONOR OR ONE OR MORE OF THEM HAVE THE RIGHT. TO BECOME THE
BENEFICIAL OWNERS OF A 100% UNDIVIDED INTEREST IN THE CLAIMS FREE AND CLEAR OF
ALL LIENS, CHARGES AND CLAIMS OF OTHERS, EXCEPT FOR THE NSR AND EXCEPT FOR THE
EXCEPTIONS DESCRIBED IN THE LETTER OF LIC. VICTOR GARCIA JIMENEZ TO MR. JOHN S.
BROCK DATED APRIL 18, 1996, ATTACHED HERETO AS ATTACHMENT L;
(B)
EXCEPT AS SET OUT IN SECTION 3 ABOVE, THE CLAIMS ARE IN GOOD
STANDING UNDER THE LAWS OF THE JURISDICTION IN WHICH THE CLAIMS ARE LOCATED AND
THE CLAIMS HAVE BEEN DULY AND PROPERLY STAKED OR OTHERWISE ACQUIRED IN
ACCORDANCE WITH SUCH LAWS;
(C)
TO THEIR KNOWLEDGE, THERE IS NO ADVERSE CLAIM OR CHALLENGE AGAINST