Document:

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of the 12th day of December, 2007,

B E T W E E N:

COMMUNICATE.COM INC. a corporation incorporated under the laws of Nevada, USA

(the “Company”)

 OF THE FIRST PART

- and -

CHANTAL IORIO of the City of Vancouver, in the Province of British Columbia,

(the “Executive”) 

 OF THE SECOND PART

WHEREAS the Company and the Executive wish to enter into this agreement to set forth the rights and obligations of each of them as regards the Executive’s employment with the Company;

NOW THEREFORE this agreement witnesseth that in consideration of the premises and the terms and conditions herein contained, the parties hereto covenant and agree with each other as follows:

1.

Definitions

In this Agreement the following terms shall have the following meanings respectively:

“Affiliates” has the meaning attributed to such term in the Business Corporations Act (British Columbia) as the same is now constituted;

“Agreement” means this agreement as it may be amended or supplemented from time to time, and the expressions “hereof, “herein”, “hereto”, ‘hereunder”, “hereby” and similar expressions refer to this Agreement and unless otherwise indicated, references to sections are to sections in this Agreement;

			
	 
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“Benefits” has the meaning attributed to such term in section 3.6;

“Board” means the board of directors of the Company 

“Business Day” means any day, other than Saturday, Sunday or any statutory holiday in the Province of British Columbia;

Change of Control of the Company” means a transaction or a series of transactions whereby directly or indirectly:

(i)

any Person or combination of Persons acting jointly and in concert (other than the Executive or a corporation controlled directly or indirectly by the Executive) acquires beneficially a sufficient number of securities of the Company to materially affect the control of the Company as provided below. Without limiting the generality of the foregoing, for the purposes of this Agreement, a Person or combination of Persons acting jointly and in concert, holding shares or other securities in excess of the number which, directly or following the conversion or exercise thereof, would entitle the holders thereof to cast 35% or more of the votes attached to all shares of the Company which may be cast to elect directors of the Company, shall be deemed to affect materially the control of the Company, in which case the Change of Control of the Company shall be deemed to occur on the date that is the later of the date that the security representing one more than that required to cast 35% of the votes attached to all shares of the Company which may be cast to elect directors of the Company is acquired or the date on which the Persons acting jointly and in concert agree to so act;

(ii)

the Company shall consolidate or merge with or into, amalgamate with, or enter into a statutory arrangement or business combination with, any other Person (other than a corporation controlled directly or indirectly by the Executive) and in connection therewith, all or part of the outstanding shares of the Company which have voting rights attached thereto shall be changed in any way, reclassified or converted into, exchanged or otherwise acquired for shares or other securities of the Company or any other Person or for cash or any other property and control of the Company is thereby materially affected, as provided above in clause (i), in which case the Change of Control of the Company shall be deemed to occur on the date of closing of the consolidation, merger amalgamation, statutory arrangement or business combination, as the case may be; or 

(iii)

the Company shall sell or otherwise transfer, including by way of the grant of a leasehold interest (or one or more subsidiaries of the Company shall sell or otherwise transfer, including without limitation by way of the grant of a leasehold interest) property or assets aggregating more than 50% of the consolidated assets (measured by either book value or fair market value based on the most recent audited financial statements) of the Company and its subsidiaries as of the end of the most recently completed financial year to any other Person or Persons, in which case the Change of Control of the Company shall be deemed to occur on 

			
	 
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the date of transfer of the assets representing one dollar more than 50% of the consolidated assets; 

other than a transaction or series of transactions which involves a sale of assets of the Company with which the Executive is involved as a purchaser in any manner, whether directly or indirectly, and whether by way of participation in a corporation or partnership that is a purchaser or by provision of debt, equity or purchase leaseback financing (but excluding where the Executive’s sole involvement with such a purchase is the ownership of an equity interest of less than 5% of the acquirer where the acquirer is a public company) and the Executive and Persons acting jointly and in concert with the Executive hold securities of the acquirer which, directly, or following the conversion or exercise thereof, would entitle the holders thereof to cast 5% or more of the votes attached to all shares or other interests of the acquirer which may be cast to elect directors or the management of the acquirer.

“Confidential Information” means all confidential or proprietary information, intellectual property (including trade secrets) and confidential facts relating to the business or affairs of the Company or any of its Affiliates;

“Disability” has the meaning attributed thereto in any disability insurance policy carried on the life of the Executive by the Company, provided that if the Company is not carrying such a disability policy, “Disability” means the mental or physical state of the Executive such that the Executive has been unable due to illness, disease or other mental or physical disability to fulfil his obligations as an employee or officer of the Company either for any consecutive 120 day period or for any period of 180 days (whether or not consecutively) in any consecutive 12 month period, or a court of a competent jurisdiction has declared the Executive to be mentally incompetent or incapable of managing his affairs;

“Effective Date” has the meaning attributed to such term in section 2.1;

“Employment Period” has the meaning attributed to such term in section 2.4;

“Just Cause” means the wilful failure of the Executive to properly carry out his duties after notice by the Company of the failure to do so and an opportunity for the Executive to correct the same within 60 days from the date of receipt of such notice, or theft, fraud, dishonesty or material misconduct by the Executive involving the property, business or affairs of the Company or the carrying out of the Executive’s duties, or the conviction of the Executive for any criminal offence which the Board determines in good faith would adversely affect the Executive’s ability to perform his duties hereunder, including a conviction for an offence which adversely reflects on the integrity or reputation of the Executive or the Company;  

“Person” includes individuals, partnerships, associates, trusts, unincorporated organizations or a regulatory body or agency, government or governmental agency or authority or entity however designated or constituted;

“Salary” has the meaning attributed to such term in section 3.1;

“Special Bonus” has the meaning attributed to such term in section 3.4;

			
	 
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“Termination Without Cause” or “Terminated Without Cause” have the meaning attributed to such terms in section 7.3;

2.

Employment of the Executive

2.1.

To Be Vice President Finance.  The Company shall employ the Executive, and the Executive shall serve the Company, in the position of Vice President Finance (“VPF”), effective as of and from January 7, 2008 (the “Effective Date”), on the terms and conditions and for the remuneration hereinafter set out. In such position, the Executive shall perform or fulfil such duties and responsibilities as the Company may designate from time to time and as are reasonably consistent with the position of a VPF.  In her capacity as an officer and employee of the Company, the Executive shall report to the Chief Executive Officer of the Company (“CEO”).  

2.2.

Performance of Duties.  The Executive hereby agrees to be employed by the Company as herein provided, shall faithfully, honestly and diligently serve the Company and shall, subject to section 2.1 above, carry out such tasks as the Company may from time to time request.  The Executive shall (except in the case of illness or accident) devote all of his working time and attention to his employment hereunder and shall use his best efforts to promote the interests of the Company.

2.3.

Annual Review of this Agreement.  The terms and conditions contained in this Agreement shall be subject to annual review by the CEO and the Board, representatives of whom shall consult with the Executive in the course of such review.  The Board and Executive will negotiate in good faith any changes to the terms and conditions of this Agreement as are appropriate to reflect the value of the services of the Executive to the Company and the success of the Company in establishing and achieving business goals for the Company, provided however, that if the Board recommends an amendment that would constitute a material change in the remuneration or responsibilities of the Executive, with which the Executive does not agree and the Board persists in insisting on such amendment, the Executive will be entitled to treat such event as Termination Without Cause and the provisions of section 7.3 shall thereby apply effective as of the date of such amendment. 

2.4.

Employment Period.  The Executive’s employment hereunder, subject to section 7 hereof, shall be for a five-year term and any extension thereof as agreed by the Executive and the Company, commencing from the Effective Date (the “Employment Period”).  

3.

Remuneration

3.1.

Base Salary.  During the period of the Executive’s employment hereunder, the Company shall pay the Executive a gross base salary (the “Salary”) in the amount of $150,000 in respect of each year thereof, subject to section 3.2 below, payable in equal instalments on the closest Business Day to the middle and the end of each month during such year.  

3.2.

Cost of Living Increase  The Salary shall be increased in respect of each year during the Employment Period commencing October 1, 2008 by a percentage equal to the percentage increase (if any) in the consumer price index, all items for Vancouver, as published 

			
	 
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by Statistics Canada under the authority of the Statistics Act (Canada), for the immediately preceding year.

3.3.

Bonus Remuneration.  The Executive may, in respect of each year of her employment hereunder commencing January 1, 2008, be entitled to a cash bonus of up to 40% of her Salary for such year of employment as determined by the Board in its sole discretion in accordance with the Company’s ongoing programmes and objectives, which shall be paid within 30 days following the date as of when the audited financial statements for such year have been approved by the Board.  

3.4.

Signing and Special Bonus.  As compensation for bonuses otherwise owing to the Executive by his previous employer which will be foregone as a result of the Executive’s employment pursuant hereto, the Company will pay to the Executive a signing bonus of $20,000 on or before the Effective Date.

3.5.

Stock Options.  The Executive will be granted an option to purchase during the Employment Period up to 150,000 common shares of the Company at the then market price on the Effective Date which will be exercisable with respect to 50,000 shares on the first anniversary of the Effective Date and thereafter with respect in each case to 12,500 shares on the last day of each successive three-month period, provided that if the Executive is Terminated without Cause, or is deemed to be Terminated without Cause as provided herein, or dies, all unexercised options will thereupon become exercisable.   

In addition, the Board in its sole discretion will consider each year during the Employment Period the grant of additional options to the Executive to purchase common shares of the Company.

3.6.

Benefits.  The Company shall provide to the Executive, in addition to the Salary and any bonus remuneration, all such benefits (the “Benefits”) as it makes available from time to time to the management and other employees of the Company in accordance with and subject to the terms and conditions of the applicable fund, plan or arrangement relating thereto.  

3.7.

Statutory Deductions.  The Company shall deduct from the Salary, any bonus remuneration and any other payments and allowances provided for herein, all such amounts as are required by law to be withheld and deducted at source and shall remit the same to the required governmental authority or agency.

4.

Expenses  

The Company shall pay or reimburse the Executive for all travel (including business class flights where applicable in accordance with the Company’s policy from time to time) and out-of-pocket expenses reasonably incurred or paid by the Executive in the performance of his duties and responsibilities upon presentation of expense statements or receipts or such other supporting documentation as the Company may reasonably require.

			
	 
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5.

Vacation  

The Executive shall be entitled during each year of his employment hereunder to vacation with pay of six weeks.  Such vacation shall be taken by the Executive at such time as may be acceptable to the Company having regard to its operations, while still attempting to accommodate any reasonable request by the Executive.  Notwithstanding the foregoing, in the event that the Executive’s employment is terminated pursuant to section 7, the Executive shall not be entitled to receive any payment in lieu of any vacation to which he was entitled and which had not already been taken by him except to the extent, if any, of the payments in respect of vacation pay required under applicable law. 

6.

Disability Insurance  

The Company will obtain and maintain disability insurance with respect to the Executive on such terms and in such amount as are normal and reasonable in relation to the Company and the industry in which it operates. 

7.

Termination

7.1.

Termination for Just Cause.  The Company may terminate the employment of the Executive hereunder at any time for Just Cause without notice and without further obligations to the Executive, including without payment of any kind of compensation either by way of anticipated earnings or damages of any kind.

7.2.

Termination by Death.  The Executive’s employment hereunder shall be terminated upon the death of the Executive, in which case the Company shall pay to the estate of the Executive all Salary, bonus and vacation pay earned to the date of death but unpaid, and such Salary and bonus, plus any unpaid portion of the Special Bonus, and shall reimburse his expenses, as would have been paid or reimbursed to the Executive in the event of Termination without Cause.

7.3.

Termination without Just Cause and without Notice.  The Company may terminate the employment of the Executive hereunder, in its sole discretion, without notice and without Just Cause (“Termination Without Cause” or “Terminated Without Cause”), effective immediately upon the date as of when the Executive is advised of such termination, and in such case the Company shall:

(a)

pay the Executive a severance allowance equivalent to the aggregate of:

(i)

one year of the Executive’s then current Salary; and

(ii)

an amount equivalent to the Executive’s annualized entitlement to bonus remuneration as provided below,

in a lump sum within two weeks following the date of such termination;

			
	 
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(b)

pay to the Executive all outstanding vacation pay pursuant to Section 5 above, and any earned but unpaid Salary up to the date of such termination within two weeks of the date of such termination;

(c)

reimburse the Executive for any business expenses incurred by him up to and including the date of such termination following provision by the Executive of applicable receipts; 

(d)

ensure that it has complied with all statutory obligations imposed by applicable law; and

Unless otherwise agreed with the Company, all payments on account of Benefits shall cease and the Company shall be under no further obligation with respect thereto upon the termination of the Executive’s employment hereunder.  For the purpose of clause (ii) of subsection 7.3(a) above, annualized entitlement to bonus remuneration shall be equal to the arithmetic average of the annual bonuses, excluding the Special Bonus, paid or payable to the Executive during the three completed years prior to the year in which his termination occurs, provided that if such termination occurs prior to the completion of three years of the Executive’s employment hereunder, entitlement to bonus remuneration shall be calculated, mutatis mutandis, on the basis of the annual bonuses, excluding the Special Bonus, paid or payable to the Executive in respect of the completed year or years, if any, prior to the year of such termination.  In addition, the Executive shall be paid the outstanding balance of the Special Bonus, if any, which has not been paid to the Executive as of the date of the termination of his employment hereunder.

The payments referred to in subsection 7.3(a) above shall not be subject to set-off or deduction as a result of the Executive obtaining alternative employment following such termination or otherwise mitigating any damages arising from such termination.  Further, such payments are inclusive of all statutory obligations, including statutory termination and severance payments, which may be owed to the Executive.

7.4.

Termination following a Change of Control.  In the event of a Change of Control of the Company, the Executive may elect to resign his employment by giving written notice to the Company within 60 days following the date of occurrence of such Change of Control of the Company, in which event the Executive’s employment hereunder shall be deemed to have been Terminated Without Cause by the Company and the provisions of section 7.3 shall thereby apply effective as of the date of such notice.

7.5.

Termination Without Cause upon Disability.  If the employment of the Executive is terminated by the Company because of a Disability, the Executive shall be deemed to have been Terminated Without Cause and the provisions of section 7.3 hereof shall thereby apply effective as of the date of such termination, provided that the amount payable to the Executive under subsection 7.3(a) hereof shall be reduced by an amount equal to the aggregate amount of any disability benefits payable to the Executive under any disability insurance carried by the Company in respect of the year immediately following the date of such termination.

7.6.

Cessation of Duties and Obligations of the Company.  Unless otherwise agreed, the Executive shall upon receiving any notice of termination of his employment hereunder, 

			
	 
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whether or not purported to constitute prior notice, forthwith cease to perform his duties and responsibilities and cease to attend the Company’s premises.  The Company’s obligations pursuant to this section 7 with respect to the termination of the Executive’s employment hereunder shall commence as of the date of receipt of such notice of termination except where otherwise provided herein.

7.7.

Resignation or Retirement of the Executive.  The Executive shall provide the Company with three months prior written notice of his resignation or retirement from the Company, except in the case of Change of Control of the Company in respect of which section 7.4 hereof is applicable.

7.8.

Material Change in Duties and Responsibilities.  If there has been a material change in the Executive’s duties and responsibilities such as he is required to assume duties that are not consistent with, or to relinquish duties that are consistent with, those set out in section 2.1 or a material reduction in his annual remuneration, and such change is unacceptable to the Executive, the Company shall be considered for all purposes of this agreement to have delivered a notice of Termination Without Cause on the date of such change terminating the Executive’s employment and section 7.3 hereof shall thereby apply effective as of such date.

7.9.

Deductions and Withholdings.  All payments made to the Executive pursuant to this section 7 shall be subject to applicable deductions and withholdings.

7.10.

Complete Satisfaction.  Compliance by the Company with its obligations pursuant to this section 7 hereof shall constitute full and final satisfaction of any entitlement which the Executive may have with respect to the termination of his employment hereunder, including without limitation, any entitlement to notice, pay in lieu of notice or severance, whether arising under contract, statute or otherwise, and the Executive shall have no action, cause of action, claim or demand, either under statutory or common law, against the Company or any other Person as a consequence of such termination.

7.11.

Return of Property.  In the event of the termination of the Executive’s employment hereunder for any reason, including resignation or retirement, the Executive will immediately return to the Company all property of the Company in his possession or under his control.

8.

Inventions, Etc.

The Executive agrees that any and all operational and scientific information, including but not limited to, marketing, business plans, formulae, processes, designs, computer software and programmes and inventions which the Executive may conceive or make or have conceived or made in the course or arising out of his employment with the Company (collectively, the “Works”) shall be and are the sole and exclusive property of the Company and shall be disclosed by the Executive to the Company.  The Executive shall, whenever requested to do so by the Company, and without any obligation on the part of the Company to pay any royalty or other compensation to the Executive, at the Company’s expense execute and sign any and all applications, assignments or other instruments and do all other things which the Company may deem necessary or appropriate:

			
	 
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(i)

in order to apply for, obtain, maintain, enforce or defend letters patent in Canada or in any foreign country for any Works; or

(ii)

in order to assign, transfer, convey or otherwise made available to the Company the sole and exclusive rights, title and interest in and to any Works.

The Executive also agrees to waive in whole any moral rights which it may have in any Works or any part or parts thereof.  

9.

Non-Competition

The Executive shall not during the Employment Period and the 12 months immediately thereafter (except in the event of a Change of Control of the Company), directly or indirectly, in any manner whatsoever including, without limitation, either individually, or in partnership, jointly or in conjunction with any other Person, or as an employee, principal, agent, director or shareholder:

(i)

be engaged in any undertaking;

(ii)

have any financial or other interest (including an interest by way of royalty or other compensation arrangements) in or in respect of the business of any Person; or        

(iii)

advise, lend money to, guarantee the debts or obligations of any Person which carries on a business;

anywhere in Canada which is the same as or substantially similar to or competes with or would compete with the specific businesses carried on by the Company or any of its Affiliates during the Employment Period.

Notwithstanding the foregoing, nothing herein shall prevent the Executive from being engaged in an e-commerce or e-media company or venture that does not derive more than 25% of its revenue from any property, business or operation that competes directly with any of the specific business units of the Company or its Affiliates, nor from owning up to 5% of the issued shares of a corporation, the shares of which are listed on a recognized stock exchange or publicly traded on an over-the-counter market, which carries on a business which is the same as or substantially similar to or which competes with or would compete with the business of the Company or any of its Affiliates.

10.

No Solicitation of Customers  

The Executive shall not, during the Employment Period and for the 12 months immediately thereafter (except in the event of a Change of Control of the Company), directly or indirectly, contact or solicit any designated customers of the Company or any of its Affiliates for the purpose of selling to the designated customers any services or products which are the same as or substantially similar to, or in any way competitive with, the services or products sold by the Company or any of its Affiliates during the Employment Period. For the purpose of this section, 

			
	 
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a designated customer means a Person who was a customer of the Company or of any of its Affiliates during some part of the Employment Period.  

11.

No Solicitation of Employees  

The Executive shall not, during the Employment Period and for the 12 months immediately thereafter (except in the event of a Change of Control of the Company), directly or indirectly, employ or retain as an independent contractor any employee of the Company or any of its Affiliates or induce or solicit, or attempt to induce, any such Person to leave his or her employment.

12.

Confidentiality

The Executive shall not, either during the Employment Period hereunder or at any time thereafter, directly or indirectly, use or disclose to any Person any Confidential Information provided, however, that nothing in this section shall preclude the Executive from disclosing or using Confidential Information, if:

12.1.

the Confidential Information is available to the public or in the public domain at the time of such disclosure or use, without breach of this Agreement;

12.2.

disclosure of the Confidential Information is required to be made by any law, regulation, governmental authority or court; or

12.3.

the Confidential Information was received by the Executive after termination of the Employment Period from a third party who had a lawful right to disclose it to the Executive.

13.

Remedies

The Executive acknowledges that a breach or threatened breach by the Executive of the provisions of sections 8 to 11, inclusive, may result in the Company and its shareholders suffering irreparable harm which is not capable of being calculated and which cannot be fully or adequately compensated by the recovery of damages alone. Accordingly, the Executive agrees that the Company shall be entitled to interim and permanent injunctive relief, specific performance and other equitable remedies, in addition to any other relief to which the Company may become entitled.

14.

Co-operation by Executive

The Executive shall co-operate in all respects with the Company if the question arises as to whether a Disability has occurred. Without limiting the generality of the foregoing, the Executive shall authorize the Executive’s medical doctor or other health care specialist to discuss the condition of the Executive with the Company and shall submit to examination by a medical doctor or other health care specialist selected by the Company, acting reasonably.

			
	 
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15.

Representation of Executive

The Executive represents and warrants to the Company that he is not a party to, or bound by, any agreement or understanding with any other Person that precludes or restricts his ability and entitlement in any way to carry out his duties of employment with the Company as contemplated herein, free and clear of any claims or liabilities of whatsoever nature.

16.

Arbitration

(a)

Any dispute between the parties hereto in respect of the interpretation of this Agreement or otherwise arising under this Agreement which cannot be resolved by the parties acting in good faith within a period of 30 days following the giving of a written notice by one party to the other party hereto (the “Notice Period”) will be determined by arbitration.

(b)

If a dispute is not resolved within the Notice Period, either party hereto may thereafter by written notice delivered to the other party hereto demand arbitration of such dispute as herein provided.

(c)

Upon a demand for arbitration as set forth above, the parties hereto will within 10 days from the date on which notice of the demand is given, appoint a single arbitrator to resolve the dispute and, failing such appointment, either party may apply to have a single arbitrator appointed by the British Columbia International Commercial Arbitration Centre in which case the dispute shall be arbitrated in accordance with such Centre’s Rules of Procedure.

(d)

The place of arbitration will be Vancouver, British Columbia and the decision of the arbitrator will be final and binding upon the parties hereto.

(e)

All costs of the arbitration, other than the costs of any counsel engaged by the Executive, will be for the account of the Company.

17.

Notices

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by prepaid first-class mail, by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided, except that any notice of termination by the Company under section 7 shall be hand-delivered or given by registered mail. Any such notice or other communication, if mailed by prepaid first-class mail at any time other than during a general discontinuance of postal service due to strike, lockout or otherwise, shall be deemed to have been received on the fourth Business Day after the post-marked date thereof, or if mailed by registered mail, shall be deemed to have been received on the day such mail is delivered by the post office, or if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the Business Day following the sending, or if delivered by hand shall be deemed to have been received at the time it is delivered in person to the Executive or to the Company at its address noted below either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the Company. Notice of change of address shall also be governed by this section. In the event of a general discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications shall be delivered by hand or sent by facsimile or other means of electronic 

			
	 
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communication and shall be deemed to have been received in accordance with this section. Notices and other communications shall be addressed as follows:

(a)

if to the Company:

Communicate.com Inc.

Suite 600

1100 Melville Street

Vancouver, British Columbia

V6E 4A6

(b)

if to the Executive:

Chantal Iorio

[redacted]

18.

Headings

The inclusion of headings in this Agreement is for convenience of reference only and shall not affect the construction or interpretation hereof.

19.

Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision thereof.

20.

Entire Agreement

This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement. This Agreement supersedes and replaces all prior agreements if any, written or oral, with respect to the Executive’s employment by the Company and any rights which the Executive may have by reason of any such prior agreement. There are no warranties, representations or agreements between the parties in connection with the subject matter of this Agreement except as specifically set forth or referred to in this Agreement. No reliance is placed on any representation, opinion, advice or assertion of fact made by the Company or its directors, officers and agents to the Executive, except to the extent that the same has been reduced to writing and included as a term of this Agreement. Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid. 

21.

Waiver, Amendment

Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provision nor 

			
	 
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shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

22.

Currency

All amounts in this Agreement are stated and shall be paid in Canadian currency.

23.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

24.

Counterparts

This Agreement may be signed in counterparts and each of such counterparts shall constitute an original document and such counterparts, taken together, shall constitute one and the same instrument.

25.

Acknowledgment

The Executive acknowledges that:

25.1.

the Executive has had sufficient time to review and consider this Agreement thoroughly;

25.2.

the Executive has read and understands the terms of this Agreement and the Executive’s obligations hereunder; and

25.3.

the Executive has been given an opportunity to obtain independent legal advice, or such other advice as the Executive may desire, concerning the interpretation and effect of this Agreement.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.

COMMUNICATE.COM INC.

By:

/s/ C. Geoffrey Hampson

Witness

)

)

)

 

/s/ Chantal Iorio

 

CHANTAL IORIOEX10-1

 

 

 

Effective as from December 12, 2007

between

RECURSOS MARICUNGA S.A.

as Assignor

and

CONSTITUTION MINING CORP.

as Assignee

 

_________________________________

ASSIGNMENT AGREEMENT

__________________________________

 

ASSIGNMENT AGREEMENT

 

THIS ASSIGNMENT AGREEMENT made effective as of the 12th day of December, 2007 is between:

RECURSOS MARICUNGA S.A., a company duly incorporated in Argentina with address for delivery and notice located at Maipú 1210, Piso 5, (C1006ACT), Ciudad Autónoma de Buenos Aires, Argentina (the "Assignor"); and

CONSTITUTION MINING CORP., a corporation organized under the laws of the State of Nevada, United States of America, with address for notice and delivery located at Suite 300-1055 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2E9 (the "Assignee")

RECITALS

          A.           WHEREAS the Assignor is the legal and beneficial holder of the rights and obligations under a Contract for Exploration with Option to Purchase executed with RIO TINTO MINING & EXPLORATION LTD., SUCURSAL ARGENTINA ("Rio Tinto") on April 3, 2007 (the "Agreement"), with regards to the mining properties referred thereto as "Atena 1" and "Atena 2" (the "Property"), located in Departamento Los Andes, Province of Salta, Argentina; a copy of which Agreement is attached hereto as Exhibit I.

          B.           WHEREAS the Assignee is interested in purchasing from the Assignor all of the Assignor's respective rights and obligations under the Agreement, and the Assignor is interested in selling such rights and obligations to the Assignee.

          C.           WHEREAS pursuant to Section Fourteenth (Decimo Cuarto) of the Agreement, the Assignor can freely assign all of its rights and obligations arising from the Agreement to third parties by giving notice to Rio Tinto on the conditions of said assignment, with a minimum term of thirty days in advance to the assignment date; and Rio Tinto must give its consent to the assignment by authentic means, which consent can not be unreasonably withheld.

OPERATIVE PROVISIONS

NOW THEREFORE THIS AGREEMENT WITNESSES THAT the parties hereto agree as follows: 

          Section 1.         Interpretation. 

          1.1        In this Agreement, except as otherwise expressly provided or as the context otherwise requires:

          "Assignee Shares" means the fully paid and non-assessable shares of common stock of the Assignee as duly and validly issued; 

           "Effective Date" means the date first above written;

           "Expenditures" means all direct or indirect costs and expenses incurred by the Assignee in respect of prospecting and exploring the Property after the Effective Date of this Agreement. The certificate of the Controller or other financial officer of the Assignee, together with a statement of Expenditures in reasonable detail, shall be prima facie evidence of such Expenditures;

           "First Stage" means the obligations of the Assignee set forth in Section 4 below, under that term;

           "Force Majeure" has the meaning set forth in Section 6 below;

           "Fourth Stage" means the obligations of the Assignee set forth in Section 4 below, under that term;

           "Second Stage" means the obligations of the Assignee set forth in Section 4 below, under that term;

           "Share Reorganization" has the meaning given it in Section 5 below; and

           "Third Stage" means the obligations of the Assignee set forth in Section 4 below, under that term.

          1.2        For the purposes of this Assignment Agreement, except as otherwise expressly provided or unless the context otherwise requires:

          (i)         the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Assignment Agreement as a whole and not to any particular part, section or other subdivision of this Assignment Agreement;

          (ii)        the headings are for convenience only and do not form a part of this Assignment Agreement nor are they intended to interpret, define or limit the scope or extent of this or any provision of this Assignment Agreement;

          (iii)       any reference to an entity will include and will be deemed to be a reference to any entity that is a permitted successor to such entity;

          (iv)        words in the singular include the plural and words in the masculine gender include the feminine and neuter genders, and vice versa;

          (v)        references to currency are references to United States dollars; and

          (vi)        the time permitted to perform any obligation, requirement or thing to be done "by" a certain date, includes that date.

          Section 2.           Representations and Warranties: 

          2.1          Each Party represents and warrants to the other Parties hereto that:

(a)         it is a company duly incorporated, organized and validly subsisting under the laws of its incorporating jurisdiction;

(b)         it has full power and authority to carry on its business and to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;

(c)         neither the execution and delivery of this Agreement nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with, result in the breach of or accelerate the performance required by, any agreement to which it is a Party; and 

(d)         the execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto or of its constating documents). 

          2.2          The Assignor represents and warrants to the Assignee that:

(a)         the Assignor is the holder of all rights granted to it under the Agreement, and has not assigned, encumbered nor agreed to assign or encumber any of these rights other than to the Assignee under this Assignment Agreement;

(b)         the Assignor undertakes to give all notices and receive all consents necessary to effect the transfer of the Assigned Interest to the Assignee within 30 (thirty) days as from the Effective Date;

(c)         to the best of the knowledge of the Assignor, the Property is free and clear of all liens and encumbrances, and is in good standing under the mining laws of Argentina; 

(d)         to the best of the knowledge of the Assignor, all of the mineral claims comprising the Property have been located in accordance with the mining laws of Argentina, and in accordance with local customs, rules and regulations; and

(e)         there is no litigation, proceeding or investigation pending or threatened against the Assignor with respect to the Property, nor does the Assignor know, or have any grounds to know after due enquiry, of any basis for any litigation, proceeding or investigation which would affect the Property.

          2.3          The representations, warranties and covenants herein-before set out are conditions on which the Parties have relied in entering into this Assignment Agreement and will survive the acquisition of the Assigned Interest..

          Section 3.           Assignment: 

          3.1        The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby acquires from the Assignor, for the Consideration set forth in Section 3 hereof, effective as of the Effective Date of this Assignment Agreement, all of the Assignor's respective rights and obligations under the Agreement (the "Assigned Interest"). 

          3.2        For purposes of complying with Argentine legislation, the Assignor will nominate an Argentine corporation, such corporation intended to become a subsidiary of the Assignee, for purposes of being formally invested with the Assigned Interest (the "Argentine Subsidiary"). 

          3.3        Notwithstanding the paragraph before, from and after the Effective Date of this Assignment Agreement and for purposes hereof, the Assignee shall be considered the owner of all rights and obligations arising from the Agreement, having full and exclusive right to explore, with an option to purchase the Property in accordance to the terms and conditions under the Agreement.

          Section 4.           Consideration. 

          4.1        As consideration for the Assigned Interest received hereof, the Assignee commits to the following obligations to be fulfilled in four stages (the "Consideration"): 

          First Stage:

           (a)         within five business days of the Effective Date, issue 500,000 Assignee Shares to the order and the direction of the Assignor or its appointed nominees;

           (b)         within five business days of the Effective Date, pay $60,000 to the order and the direction of the Assignor or its appointed nominees as consideration for certain previous expenditures on the Property by the Assignor; and

           (c)         incur, or cause to be incurred, by March 15, 2008, Expenditures of not less than an initial aggregate of $240,000 pursuant to a work program or work programs and respecting any of the mineral claim interests comprising the Property.

          Second Stage:

           (a)         by March 15, 2008, issue an additional 1,000,000 Assignee Shares to the order and the direction of the Assignor or its appointed nominees (subject to adjustment for a Share Reorganization under Section 5); and 

           (b)         incur, or cause to be incurred, by March 15, 2009, further Expenditures of not less than an aggregate of $500,000 pursuant to a work program or work programs and respecting any of the mineral claim interests comprising the Property.

          Third Stage:

           (a)         by March 15, 2009, issue an additional 2,000,000 Assignee Shares to the order and the direction of the Assignor or its appointed nominees (subject to adjustment for a Share Reorganization under Section 5); and

           (b)         incur, or cause to be incurred, by March 15, 2010, further Expenditures of not less than an aggregate of $1,000,000 pursuant to a work program or work programs and respecting any of the mineral claim interests comprising the Property.

          Fourth Stage:

           (a)         by March 15, 2010, issue a final 4,000,000 Assignee Shares to the order and the direction of the Assignor or its appointed nominees (subject to adjustment for a Share Reorganization under Section 5); and

           (b)         incur, or cause to be incurred, by March 15, 2011, further and final Expenditures of not less than an aggregate of $2,000,000 pursuant to a work program or work programs and respecting any of the mineral claim interests comprising the Property.

For greater clarity, the obligations to incur, or cause to be incurred Expenditure in this Section 4 shall be counted towards, and shall not be in addition to, the obligations to pay amount to the Titleholder (as that term is defined in the Agreement) under the Agreement.

          4.2        Upon completion of the Assignee's obligations under the First Stage, Assignee may at any time terminate the Assignment Agreement at its sole discretion by giving notice of the termination to the Assignor and shall thereupon be relieved of any further obligations in connection therewith but shall remain liable for obligations which have accrued to the date of notice. 

           (a)         If, under the present provision, the Assignment Agreement is terminated once the Assignee's obligations under the First Stage has been completed but not the Second Stage, Assignee shall cause the Agreement to be transferred from the Argentine Subsidiary to the Assignor or to any of its appointed nominees. For the completion of First Stage, Assignor will recognize and grant Assignee 25 % of undivided beneficial interest with respect to the Assigned Interest. 

           (b)         If, under the present provision, the Assignment Agreement is terminated once the Assignee's obligations under the Second Stage has been completed but not the Third Stage, Assignee will recognize and grant Assignor 50 % of undivided beneficial interest with respect to the Assigned Interest.

           (c)         If, under the present provision, the Assignment Agreement is terminated once the Assignee's obligations under the Third Stage has been completed but not the Fourth Stage, Assignee will recognize and grant Assignor 25 % of undivided beneficial interest with respect to the Assigned Interest.

          4.3        Upon completion of Fourth Stage hereof, the Assignee shall recognize to the Assignor a 1% Net Returns Royalty, where Net Returns Royalty has the meaning set out in Exhibit II (the "Net Returns Royalty"). The Net Returns Royalty will be calculated and paid to the Assignor or to its appointed nominees in accordance with the Exhibit II.

          Section 5.         Assignee Share Adjustment

          5.1        In this section, the terms "record date" where used herein, shall mean the close of business on the relevant date.

          5.2        If and whenever at any time from the Effective Date until the Consideration is cancelled according to the terms of Section 4 hereof, the Assignee:

           (i)         issues Assignee Shares or any securities convertible into Assignee Shares to all or substantially all of the holders of Assignee Shares by way of stock dividend or other distribution, other than the issue from time to time of Assignee Shares or any securities convertible into Assignee Shares by way of stock dividend to stockholders who elect to receive Assignee Shares or any securities convertible into Assignee Shares in lieu of cash dividends in the ordinary course or pursuant to a dividend reinvestment plan;

           (ii)        subdivides, redivides or changes the outstanding Assignee Shares into a greater number of shares; or

           (iii)       combines, consolidates or reduces the outstanding Assignee Shares into a lesser number of shares;

(each of such events being herein called a "Share Reorganization"), the number of Assignee Shares to be issued for completion of the Consideration, and which have not yet been issued, shall be adjusted effective immediately on the record date for the dividend or, in the case of a subdivision, redivision, change, combination, consolidation or reduction, effective immediately on the record date of such event, to the number that is the product of:
(a)         the number of Assignee Shares prescribed for issuance under the relevant provision in Section 4.; and

(b)         the fraction of which:
(i)        the numerator is the total number of Assignee Shares outstanding on that record date before giving effect to the Share Reorganization; and

(ii)       the denominator is the total number of Assignee Shares that are or would be outstanding immediately after that record date after giving effect to the Share Reorganization and assuming all securities convertible in Assignee Shares issued as part of the Share Reorganization had then been converted into or exchanged for Assignee Shares or all rights to acquire Assignee Shares had then been exercised.

          5.3.         For the purpose of determining the number of Assignee Shares outstanding at any particular time there shall be included that number of Assignee Shares which would have resulted from the conversion or exchange at that time of all securities convertible into Assignee Shares (other than any securities convertible into Assignee Shares issued to holders of Assignee Shares by way of a stock dividend or other distribution and otherwise included in computing the denominator in 5.2. (b) (ii).

          Section 6.           Force Majeure

          6.1.         If the Assignee is at any time prevented or delayed in complying with the Consideration provisions under Section 4., by reason of strikes, walk-outs, labour shortages, power shortages, fuel shortages, fires, wars, acts of God, governmental regulations restricting normal operations, shipping delays or any other reason or reasons beyond the control of the Assignee (and for greater certainty excluding factors related to a lack of funding), the time limited for the performance by the Assignee of its obligations hereunder will be extended by a period of time equal in length to the period of each such prevention or delay, provided however that nothing herein will discharge the Assignee from its obligation to timely comply with the cash obligations under Section 4.

          6.2.         The Assignee will within seven days give notice to the Assignor of each event of force majeure under 6.1 and upon cessation of such event will furnish the Assignor with notice to that effect together with particulars of the number of days by which the obligations of the Assignee hereunder have been extended by virtue of such event of force majeure and all preceding events of force majeure.

          Section 7.           Confidential Information

          7.1        No information furnished by the Assignee to the Assignor hereunder in respect of the activities carried out on the Property by the Assignee, will be published by the Assignor without the written consent of the Assignee, but such consent in respect of the reporting of factual data will not be unreasonably withheld, and will not be withheld in respect of information required to be publicly disclosed pursuant to applicable securities or corporate laws. This provision shall terminate three years after the termination of this Assignment Agreement.

          Section 8.           Arbitration 

          8.1        All questions or matters in dispute with respect to the interpretation of this Assignment Agreement will, insofar as lawfully possible, be submitted to arbitration pursuant to the terms hereof using "final offer" arbitration procedures.

          8.2        It will be a condition precedent to the right of any party to submit any matter to arbitration pursuant to the provisions hereof, that any party intending to refer any matter to arbitration will have given not less than 10 days' prior written notice of its intention so to do to the other party together with particulars of the matter in dispute.

          8.3        On the expiration of such 10 days, the party who gave such notice may proceed to commence procedure in furtherance of arbitration as provided in this Section.

          8.4        The party desiring arbitration (the "First Party") will nominate in writing three proposed arbitrators, and will notify the other party (the "Second Party") of such nominees, and the other party will, within 10 calendar days after receiving such notice, either choose one of the three or recommend three nominees of its own. All nominees of either party must hold accreditation as either a lawyer, accountant or mining engineer. If the First Party fails to choose one of the Second Party's nominees then all six names shall be placed into a hat and one name shall be randomly chosen by the president of the First Party and that person if he/she is prepared to act shall be the nominee. Except as specifically otherwise provided in this Section the arbitration herein provided for will be conducted in accordance with the Commercial Arbitration Act (British Columbia). The parties shall thereupon each be obligated to proffer to the Arbitrator within 21 calendar days of his/her appointment a proposed written solution to the dispute and the arbitrator shall within 10 calendar days of receiving such proposals choose one of them without altering it except with the consent of both parties.

          8.6        The expense of the arbitration will be paid as specified in the award.

          8.7        The parties may agree that the award of the arbitrator will be final and binding upon each of them.

          Section 9          Default and Termination 

          9.1        Notwithstanding Section 4.2 hereof, if at any time during the term of this Assignment Agreement either party fails to perform any obligation hereunder or any representation or warranty given by it proves to be untrue, then the other party may terminate this Assignment Agreement (without prejudice to any other rights it may have) providing:
(i)        it first gives to the party allegedly in default a notice of default containing particulars of the obligation which such has not performed, or the warranty breached;

(ii)       the other party does not dispute the default, then if it is reasonably possible to cure the default without irreparable harm to the non-defaulting party, the defaulting party does not, within 30 calendar days after delivery of such notice of default, cure such default by appropriate payment or commence to correct such default and diligently prosecute the matter until it is corrected.

          Section 10.         Notices. 

          10.1      All notices and other communications in connection with this Assignment Agreement must be in writing and given by (i) hand delivery (ii) through a major international courier service, or (iii) facsimile transmissions, in each case addressed as specified below or in any subsequent notice from the intended recipient to the party sending the notice. Such notices and communications will be effective upon delivery if delivered by hand, upon receipt if sent by international courier service, or upon receipt if sent by facsimile transmission. Notices shall be addressed as follows:

 

RECURSOS MARICUNGA S.A., 

Maipú 1210, Piso 5 (C1006ACT) 

Buenos Aires, Argentina

Phone: [●]

Attention: [●]

CONSTITUTION MINING CORP., 

Suite 300-1055 West Hastings Street, 

Vancouver, British Columbia, Canada, 

V6E 2E9

Phone: 604-858-3306

Attention: Dan Hunter

Fax:  604-858-4408

          Section 11.           Governing Law. 

          11.1      THIS ASSIGNMENT AGREEMENT AND ANY DISPUTE ARISING HEREUNDER WILL BE GOVERNED BY THE LAWS OF BRITISH COLUMBIA, CANADA, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF. 

          11.2      EACH OF THE ASSIGNEE AND THE ASSIGNOR HEREBY IRREVOCABLE SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF BRITISH COLUMBIA, CANADA, IN RESPECT OF ANY ACTION OR PROCEEDING BROUGHT AGAINST IT BY THE ASSIGNOR OR THE ASSIGNEE, RESPECTIVELY, ARISING UNDER THIS ASSIGNMENT AGREEMENT. 

          Section 12.         Entire Agreement. 

          12.1      This Assignment Agreement represents the final agreement between the parties with respect to the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.

          Section 13.          Execution in Counterparts. 

          13.1      This Assignment Agreement is executed in two (2) counterparts and by the parties hereto in separate counterparts, each of which when so executed will be deemed to be an original and both of which when taken together will constitute one and the same agreement.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed  as of the date first above written.

 

	
RECURSOS MARICUNGA S.A.

	
By: /s /Willem Anton Hndrik Fuchter

	
Name: Willem Anton Hndrik Fuchter

	
Title:President

	

CONSTITUTION MINING CORP.

	 
	 
	
By:/s/ Daniel Hunter

	
Name: Daniel Hunter

	
Title:  COO

	 

Exhibit I

Contract for Exploration with Option to Purchase executed with RIO TINTO MINING & EXPLORATION LTD., SUCURSAL ARGENTINA on April 3, 2007.

[ENGLISH TRANSLATION]

CONTRACT FOR EXPLORATION WITH OPTION TO PURCHASE 

This Contract for Exploration with Option to Purchase is entered into in the city of Mendoza, on this 3rd day of April, 2007, by and between RIO TINTO MINING & EXPLORATION LTD, ARGENTINE BRANCH, represented for the purposes hereof by its Attorney-in-fact, Mr. Horacio Perez, bearer of Identity Document No. 12,233,217, whose power of attorney was registered on February 10, 2006 under number 95995, page 20, volume 84IL of the Public Registry of Powers of Attorney of the Province of Mendoza, domiciled at Rivadavia 902, Godoy Cruz, Province of Mendoza (hereinafter, the "TITLEHOLDER"), and RECURSOS MARICUNGA S.A., domiciled at Maipú 1210, 5th floor, City of Buenos Aires, represented for the purposes hereof by Mr. Héctor Ponte, in his capacity as Attorney-in-fact, pursuant to the General Power of Attorney attached hereto (hereinafter, "MARICUNGA"). The Parties state as follows: 

WHEREAS

a) The TITLEHOLDER states that: (i) the mining properties identified in Annex I hereto (hereinafter, the "MINING PROPERTIES", term which shall also include any other mining application, title or right included in the future as a part thereof) are registered to its name in the Court of Mines and Commercial Court of Record of the Province of Salta; (ii) the MINING PROPERTIES are free of encumbrances, mortgages, attachments or levies and that all payable mining fees have been paid as of the date hereof; (iii) there is no claim whatsoever regarding the title to the MINING PROPERTIES nor, to the best of its knowledge, are there any grounds for such claims nor are there any other agreements or options for the exploration or exploitation of the MINING PROPERTIES; (iv) there is no factual or legal impediment to the exploration of the MINING PROPERTIES by reason of environmental issues, issues involving the holders of surface rights or third parties or other matters, and the MINING PROPERTIES have up-to-date Environmental Impact Statements and all the necessary authorization and agreements to that end. 

b) MARICUNGA represents to be a company duly organized and in good standing pursuant to the laws of Argentina, with full power and authority to assume and fulfill its obligations hereunder and under any other contract or instrument referred to or contemplated herein; and

c) MARICUNGA desires to obtain from the TITLEHOLDER the exclusive right to explore the MINING PROPERTIES with an option to purchase them, and the TITLEHOLDER desires to grant such rights to MARICUNGA. 

Therefore, the Parties agree to execute this Contract, subject to the following terms and conditions: 

ONE: The TITLEHOLDER gives MARICUNGA the exclusive possession of the MINING PROPERTIES throughout the effective term hereof, authorizing MARICUNGA, its contractors, employees and/or representatives to exercise all rights held by the TITLEHOLDER pursuant to the Argentine Mining Code, including the exclusive right to evaluate the MINING PROPERTIES and perform exploration activities thereon, as well as any other tasks related to the mining activity, in accordance with the method, in the manner and with the scope MARICUNGA may determine at its sole discretion. The TITLEHOLDER or its representatives may access the MINING PROPERTIES. MARICUNGA shall not be liable for any damage or injury the TITLEHOLDER or its representatives may sustain by reason of their visit to the MINING PROPERTIES, except for those caused by MARICUNGA's fault or negligence. 

TWO: As from the effective date of this Contract and throughout its effective term, MARICUNGA shall have the exclusive option to purchase the MINING PROPERTIES (hereinafter, the "Option to Purchase") which shall be considered as automatically exercised at the time at which MARICUNGA (i) makes the payments established in section FOUR in the terms stipulated therein, or (ii) pays in advance the amount mentioned in paragraph 4.5. of section FOUR at any time, in which case it shall also make the other outstanding payments pursuant to said section FOUR if they have not become due and payable as of the date on which such payment in advance was made. Within five (5) days following the date on which the TITLEHOLDER notifies MARICUNGA about the terms and place of payment, MARICUNGA shall make the payment established in paragraph 4.5. Upon payment being credited to the TITLEHOLDER, the TITLEHOLDER shall execute and deliver all documents, make all registrations and filings and take all actions as may be necessary to formalize the assignment or transfer of the MINING PROPERTIES to MARICUNGA, free of any other obligation, encumbrance or lien, within thirty (30) days following the relevant payment. Notarization costs, stamp tax and duties applicable to such assignment or transfer pursuant to applicable tax regulations in the Province of Salta shall be borne by MARICUNGA. 

In addition, and in the case MARICUNGA has exercised the Option to Purchase, the TITLEHOLDER shall be entitled to collect a royalty equivalent to 1% of the Net Smelter Return (NSR) during the life of the mining deposit originated in any of the MINING PROPERTIES, calculated as per the formula included in Annex II. The TITLEHOLDER accepts and represents to know the conditional nature of the royalties established in this paragraph, i.e., that same shall be payable only if the MINING PROPERTIES go into production and consequently, the TITLEHOLDER expressly waives hereat its right to make any claim in connection with such royalties if, for any cause or reason whatsoever, the MINING PROPERTIES do not go into production. 

THREE: The effective term of this Contract shall commence upon execution hereof (hereinafter, the "EFFECTIVE DATE") and shall remain effective for the time necessary to fulfill the provisions of sections ONE, TWO and FOUR. 

FOUR: The aggregate price MARICUNGA shall pay the TITLEHOLDER in consideration for the Right to Explore and Option to Purchase regarding the MINING PROPERTIES, including all mining titles, properties and interests composing same, comprises the following amounts to be paid to the TITLEHOLDER as follows: 

4.1. Upon execution hereof, the amount of US $30,000 (United States dollars thirty thousand), MARICUNGA pays hereat to the TITLEHOLDER, receipt whereof is hereby acknowledged. 

4.2. Twelve (12) months following the EFFECTIVE DATE, the amount of US $50,000 (United States dollars fifty thousand). 

4.3. Twenty-four (24) months following the EFFECTIVE DATE, the amount of US $50,000 (United States dollars fifty thousand).

4.4.  Thirty-six (36) months following the EFFECTIVE DATE, the amount of US $100,000 (United States dollars one hundred thousand).

4.5. Forty-eight (48) months following the EFFECTIVE DATE, the amount of US $1,000,000 (United States dollars one million). This payment shall imply the automatic exercise of the Option to Purchase established in section TWO and consequently, the acquisition of the MINING PROPERTIES, with all the mining interests and properties composing same. 

The TITLEHOLDER shall notify MARICUNGA in writing of the terms and place of payment of the aforementioned amounts in an anticipation of no less than fifteen (15) days to the date on which each payment is to be made.

FIVE: The TITLEHOLDER hereby delivers to MARICUNGA all geological, administrative and legal information in its possession concerning the MINING PROPERTIES which are the subject matter of this Contract.  MARICUNGA undertakes to provide the TITLEHOLDER with all data related to the deposits or evidence of ore discovered during the evaluation and exploration of the MINING PROPERTIES, it being authorized to engage in all relevant proceedings so that, when pertinent, MARICUNGA may register with the Court of Mines and Commercial Court of Record of the Province of Salta the manifestations of discovery made in the area covered by the MINING PROPERTIES and any other mining interest, which shall be registered to the name of the TITLEHOLDER and shall automatically become part of such MINING PROPERTIES and subject to the Option to Purchase and other provisions hereof.

SIX: The TITLEHOLDER voluntarily refrains from performing, during the effective term hereof, acts of disposal of or encumbrance on the MINING PROPERTIES, whichever their nature, including without limitation: sales, transfers, mortgages, assignments, leases and equipment loans. To secure the aforementioned restraint, MARICUNGA is authorized to apply for registration of this Contract with the Court of Mines and Commercial Court of Record of the Province of Salta. Applicable stamp tax and utilities rates pursuant to the tax rules of the Province of Salta for the period running until the exercise of the Option to Purchase the MINING PROPERTIES shall be borne by MARICUNGA. 

SEVEN: During the effective term hereof, MARICUNGA may, at any time, unilaterally waive the Right to Explore and the Option to Purchase and consider this Contract terminated. This decision shall be notified to the TITLEHOLDER by authentic means in an anticipation of no less than thirty (30) calendar days prior to the effective date of termination and the Contract shall be terminated for both parties on the effective date of termination specified in the notice. Such termination shall not give the TITLEHOLDER the right to make any claims for indemnification, damage or loss of profits, except in case of breach by MARICUNGA of the obligation to maintain the MINING PROPERTIES originated before the date of termination. As from the effective date of termination, MARICUNGA shall not be obliged to make the payments established in section FOUR which are pending. In the event that, as of the date of termination, there were any outstanding mining fees or duties, MARICUNGA shall pay the TITLEHOLDER the amounts accrued until the effective  date of termination of the Contract. 

EIGHT: The TITLEHOLDER may consider this Contract terminated in the event MARICUNGA does not make the payments established in section FOUR, without the need for any demand whatsoever, if same are not made within ten (10) days following accrual thereof. 

NINE: Upon termination of the Contract for the reasons established in the preceding sections, MARICUNGA shall return to the TITLEHOLDER possession of the MINING PROPERTIES and shall vacate them within ninety (90) calendar days as from the effective date of termination, removing therefrom, at its own cost, all machinery, tools, equipment, movables and devices brought there. If MARICUNGA fails to do so within the referred term, all such elements shall become the property of the TITLEHOLDER, unless it prefers to remove them from the field at MARICUNGA's cost. Likewise, MARICUNGA shall deliver to the TITLEHOLDER within like term copy of all maps, geological reports, results of assays, drilling logs and other technical data resulting from the exploration and evaluation activities carried out by MARICUNGA. The TITLEHOLDER shall receive possession of the MINING PROPERTIES on an as is basis and in the legal condition then existing, without the right to claim any compensation for damages, loss of profits or otherwise, with the exceptions established herein and particularly, the proviso established in section SEVEN in fine. 

If the CONTRACT were registered, its termination shall be notified by MARICUNGA to the Mining Authority within a term not to exceed thirty days from the TERMINATION DATE. 

TEN: Any knowledge or information obtained by the TITLEHOLDER regarding the results of the exploration activities carried out by MARICUNGA, methods applied, results of analyses, metallurgical assays, location of drillings, discoveries made, technology or inventions used or as a consequence of any activity carried out by MARICUNGA hereunder, shall be held by the TITLEHOLDER in strict secrecy and considered as confidential, unless MARICUNGA releases the TITLEHOLDER, in writing, from this obligation or such information is required from the TITLEHOLDER by state agencies, legally empowered therefor. This confidentiality obligation shall be valid throughout the effectiveness of this Contract. 

ELEVEN: The PARTIES agree that "AREA" shall mean the zone delimited by the outer borders of the MINING PROPERTIES.

Any mining property, right or interest acquired by either Party during the effectiveness of this Contract in the AREA shall be included in the MINING PROPERTIES and consequently, shall be subject to the terms and conditions established in this Contract. 

TWELVE: (i) During the effective term of this Contract, MARICUNGA shall make all efforts to keep the MINING PROPERTIES in good standing as required by mining and environmental laws in place. These obligations include without limitation the payment of the mining fee and measurement expenses, replacement of boundary markers, taxes, payment of bonds and any applicable compensation to the holder of surface rights, expenses or utilities rates, and shall survive until MARICUNGA notifies the TITLEHOLDER of the termination of the Contract. The TITLEHOLDER shall give MARICUNGA and/or whomever it may designate, a Power of Attorney for Administrative Matters with sufficient powers to subrogate in the exercise of the rights and obligations of the TITLEHOLDER in the dossier whereby the MINING PROPERTIES are being handled, including the powers to carry out all acts required by the Argentine Mining Code and other national, provincial and municipal rules, expressly forbidding to abandon or otherwise surrender the MINING PROPERTIES. The said Power of Attorney shall be effective until MARICUNGA definitely returns the MINING PROPERTIES to the TITLEHOLDER or exercises the Option to Purchase. 

(ii) MARICUNGA shall be liable for and shall hold the TITLEHOLDER harmless from and against any damages and/or losses arising from civil, commercial or criminal complaints or labor claims made by individuals engaged by MARICUNGA in connection with business conducted by it in the AREA, as well as from and against damages sustained by third parties, MARICUNGA's personnel, agents, representatives, contractors and/or dependants.

 

(iii) MARICUNGA shall be liable for any environmental damages and any impairment caused to third parties, holders of surface rights or the Government as a result of its activities in the AREA, always provided that such damages occur after the execution of the CONTRACT. MARICUNGA shall acknowledge and assume liability for the restoration, mitigation and/or rehabilitation of environmental damages caused, as per the environmental regulations in force, without this entailing to have things back like they were at the time of the impact.

(iv) MARICUNGA shall annually provide the TITLEHOLDER with information about the works performed by submitting duly documented technical reports on the progress of works.

THIRTEEN: This Contract shall be governed by the Argentine legislation and any discrepancy as to its application and interpretation shall be submitted for settlement purposes to the Ordinary Courts having competent jurisdiction in the City of Mendoza.

FOURTEEN: The Parties may freely assign to third parties all its rights and obligations arising from this Contract and it may likewise associate with third parties, serving written notice on the other Party about the significant conditions of such assignment or association at least thirty (30) calendar days prior to the date of actual assignment. The other Party shall render its consent by authentic means, which consent may not be unreasonably withheld

 

FIFTEEN: SIXTEEN: Any notice under this Contract shall be served by sufficient means to the special domiciles for contractual purposes specified below:

MARICUNGA

Atención: Dr. Hernán M. Zaballa

Maipú 1210, 5to Piso

(C1006ACT) Ciudad Autónoma de Buenos Aires

Argentina

FAX (01) 4314-0399

TITLEHOLDER

Horacio Perez

Rivadavia 901

(5504) Godoy Cruz, Provincia de Mendoza

Argentina

FAX (0261) 422-4525

Either party to this Contract may at any time serve written authentic notice on the other party of any change of domicile. As from the date of effective delivery of notice, the new address shall be regarded as such party's domicile where notices shall be validly served.

In witness whereof, the parties execute three counterparts of this Contract.

 

 

 

	
[Sgd.]                                                         

RECURSOS MARICUNGA S.A.
	
[Sgd.]                                                              

RIO TINTO MINING & EXPLORATION LTD

[Printed:] Horacio Perez- Attorney- Rio Tinto Mining

and Exploration Ltd., Argentine Branch

 

Notarial record: J -00425052

[Sgd.] Maria Adela de Rosas

Notary

Notarial Registry 279

Mendoza

ANNEX I

LIST OF MINING PROPERTIES 

MD Atena 1- Dossier No. 18,108 - Area: 864 hectares

MD Atena 2- Dossier No. 18,249 - Area: 2,812 hectares

LOCATION MAP

Los Andes Department - Province of Salta

 

 

ANNEX II
NET SMELTING RETURN (NSR)

1. DEFINITION: "NSR" o "NET SMELTING RETURN" shall mean the net income or profit actually collected from any source, smelting plant, refinery or the sale of mineral products obtained from the MINING PROPERTIES (hereinafter, the "MINERAL PRODUCTS") after deducting the following expenses from the gross income or profit:

	smelting and refinery expenses (handling, processing, supplies and sampling expenses, costs of smelting tests and arbitration tests, representatives' and arbitrators' fees, fines, shrinkage and any other expense or loss pertaining to the smelting and/or refining process)

	transportation costs (loading, freight, unloading, handling at port, stowage, demurrage at ports, delays, customs expenses, transaction, handling, haulage and insurance) of ore, metals or concentrates of the products obtained from the MINING PROPERTIES to any source, smelting plant, refinery or point of sale;

	commercialization costs;

	insurance costs of MINERAL PRODUCTS; and 

	customs tariffs, compensations, state royalties, ad valorem taxes and taxes in general, be they levied on production or sale of ore or the like, taxes on the use of natural resources existing at the time this Contract becomes effective or created in the future, export and import taxes or duties on the MINERAL PRODUCTS payable to national, provincial or municipal government agencies;

	royalties payable to any government agency or office, be it national, provincial or municipal;

2.      PAYMENT:.   The 1% NSR ROYALTY (hereinafter, the "NSR ROYALTY"), pursuant to Section TWO of this Contract:

2.1. Shall be calculated and paid on a quarterly basis within forty-five (45) days counted as from the commencement of the quarter following that under consideration;

2.2. Each payment of the NSR ROYALTY shall be accompanied by an unaudited accounting report, stating with reasonable detail the calculation thereof, and the TITLEHOLDER shall receive from MARICUNGA, within the three-month period following the end of each fiscal year, an unaudited annual accounting report "ad hoc" (the "ANNUAL ACCOUNTING REPORT") stating with reasonable detail the calculation of the NSR ROYALTY for the last fiscal year showing the credits to and debits against the amount due to the TITLEHOLDER;

2.3. The TITLEHOLDER shall have forty-five (45) days as from receipt of such ANNUAL ACCOUNTING REPORT to request clarifications and/or object to the entries therein, in writing and by authentic means. If the TITLEHOLDER does not request any clarifications or objects to the entries made in the ANNUAL ACCOUNTING REPORT within the stated term, such entries shall thereafter be regarded as correct and unappealable;

2.4. In the event the TITLEHOLDER objects to the ANNUAL ACCOUNTING REPORT and such objections cannot be settled between the Parties, the TITLEHOLDER shall have twelve (12) months following the date on which the ANNUAL ACCOUNTING REPORT is received to have it audited, and audit expenses shall, in principle, be borne by the TITLEHOLDER;

2.5. The audited ANNUAL ACCOUNTING REPORT shall be final and establish the calculation of the NSR ROYALTY for the audited period and shall be binding on the Parties. In the event the amount already paid as NSR ROYALTY were higher than the NSR ROYALTY calculated on the basis of the ANNUAL ACCOUNTING REPORT, MARICUNGA shall deduct the credit balance from the future payments to be made to the TITLEHOLDER as NSR ROYALTY. Otherwise, MARICUNGA shall pay the difference due to the TITLEHOLDER within sixty (60) days following receipt of the audited ANNUAL ACCOUNTING REPORT;

2.6.     Should the ANNUAL ACCOUNTING REPORT prepared by MARICUNGA be accurate within a margin of five percent (5%) upwards or downwards or if it overestimated the NSR ROYALTY amount by more than five percent (5%), the TITLEHOLDER shall bear the audit costs. Conversely, in the event the ANNUAL ACCOUNTING REPORT underestimated the NSR ROYALTY by more than five percent (5%), such audit costs shall be borne by MARICUNGA. If MARICUNGA were under the obligation to pay the audit costs, it shall immediately reimburse the TITLEHOLDER for all audit expenses paid by it in advance. The TITLEHOLDER shall be entitled to examine, upon reasonable notice and during normal business hours, the books and records which are reasonably necessary to ascertain the payment of the NSR ROYALTY from time to time, always provided that such examinations do not interfere with or hinder the operations or proceedings performed by MARICUNGA;

3. OPERATION: MARICUNGA shall, at all times, retain its exclusive right to take, at its sole discretion, all the decisions related to the operation of the MINING PROPERTIES, including, without limitation: (i) methods, type and extension of the mining activity on the MINING PROPERTIES and the processes applied to the minerals, ore, metals, concentrates and the MINERAL PRODUCTS; (ii) the commercialization of such minerals, ore, metals, concentrates and MINERAL PRODUCTS; and (iii) the duration, suspension, interruption or discontinuance of the operation. Consequently, the provisions of this Annex do not modify or imply a waiver or the full or partial granting to the TITLEHOLDER, of MARICUNGA's rights and powers to decide, at its sole discretion, all issues related to the operation of the MINING PROPERTIES under this Contract, or of MARICUNGA's rights and powers in its capacity as owner of the MINING PROPERTIES, if the Option to Purchase is exercised. 

 

 

NOTARIAL RECORD 

NOTARIAL ASSOCIATION - PROVINCE OF MENDOZA

J No. 00425052

I, María Adela de Rosas, Notary Public in charge of Notarial Registry 279 of this City, do hereby CERTIFY as follows: The signatures on the Contract for Exploration with Option to Purchase attached hereto have been affixed before me by: 1) Titleholder Mr. HERMES HORACIO PEREZ, an Argentine citizen, holder of Identity Document (DNI) No. 12,233,217, who appeared in the name and on behalf of RIO TINTO MINING AND EXPLORATION LIMITED, Argentine Branch, domiciled at Rivadavia 902, Godoy Cruz Department, Province of Mendoza, in his capacity as Attorney vested with sufficient powers, as evidenced by the General Broad Power of Attorney which I have had before me, granted by notarial deed on 2/2/06 before Ms. Ruth Margaret Campbell, Notary Public in the City of London, England.  Such notarial deed, upon being duly apostilled, was recorded under number 95,995, on page 20, Volume 841L, of the Register of General Powers of Attorney of the Province of Mendoza. Principal is registered on page 1 of Dossier 3,429 of Corporations, Province of Mendoza; 2) Mr. HÉCTOR LUIS PONTE, an Argentine citizen who exhibited identity document (L.E.) 4,693,210 and appeared in the name and on behalf of RECURSOS MARICUNGA S.A., in his capacity as Attorney vested with sufficient powers, as evidenced by the General Power of Attorney granted by notarial deed No. 57, on 2/1/07 before Notary Public Joaquin E. Urresti, acting in the City of Buenos Aires, in charge of Notarial Registry 501, a duly certified and legalized copy whereof I have had before me. The relevant requirements have been simultaneously met as evidenced by record 315, page 315 of Book No. 12 of Requirements for Authentication of Signatures under my charge, I attest. I issue these presents in the City of Mendoza, on April 3, 2007.

[Sgd.]

Maria Adela de Rosas

Notary

Notarial Registry 279

Mendoza

Exhibit II

NET RETURNS ROYALTY

Pursuant to the Assignment Agreement to which this Exhibit is attached, Assignee (for the purposes herein the "Payee") will be entitled to a royalty equal to one percent (1%) of net returns (the "Net Returns Royalty") payable by Assignor ("Payor") as set forth below.

Net Returns Royalty

A.                  "Net Returns Royalty" means the aggregate of:
1.        all revenues from the sale or other disposition of ores, concentrates or minerals produced from the Property; and

2.        all revenues from the operation, sale or other disposition of any facilities the cost of which is included in the definition of "Operating Expenses", "Capital Expenses" or "Exploration Expenses";

less (without duplication) Working Capital, Operating Expenses, Capital Expenses and Exploration Expenses.

B.                   "Working Capital" means the amount reasonably necessary to provide for the operation of the mining operation on the Property and for the operation and maintenance of the Facilities for a period of six months.

C.                   "Operating Expenses" means all costs, expenses, obligations, liabilities and charges of whatsoever nature or kind incurred or chargeable directly or indirectly in connection with Commercial Production from the Property and in connection with the maintenance and operation of the Facilities, all in accordance with generally accepted accounting principles, consistently applied, including, without limiting the generality of the foregoing, all amounts payable in connection with mining, handling, processing, refining, transporting and marketing of ore, concentrates, metals, minerals and other products produced from the Property, all amounts payable for the operation and maintenance of the Facilities including the replacement of items which by their nature require periodic replacement, all taxes (other than income taxes), royalties and other imposts and all amounts payable or chargeable in respect of reasonable overhead and administrative services.

D.                   "Capital Expenses" means all expenses, obligations and liabilities of whatsoever kind (being of a capital nature in accordance with generally accepted accounting principles) incurred or chargeable, directly or indirectly, with respect to the development, acquisition, redevelopment, modernization and expansion of the Property and the Facilities, including, without limiting the generality of the foregoing, interest thereon from the time so incurred or chargeable at a rate per annum from time to time equal to prime rate established by the Royal Bank of Canada, Main Branch in Vancouver, British Columbia plus 2 percent per annum, but does not include Operating Expenses nor Exploration Expenses.

E.                   "Exploration Expenses" means all costs, expenses, obligations, liabilities and charges of whatsoever nature or kind incurred or chargeable, directly or indirectly, in connection with the exploration and development of the Property including, without limiting the generality of the foregoing, all costs reasonably attributable, in accordance with generally accepted accounting principles, to the design, planning, testing, financing, administration, marketing, engineering, legal, accounting, transportation and other incidental functions associated with the exploration and mining operation contemplated by this agreement and with the Facilities, but does not include Operating Expenses nor Capital Expenses.

F.                   "Facilities" means all plant, equipment, structures, roads, rail lines, storage and transport facilities, housing and service structures, real property or interest therein, whether on the Property or not, acquired or constructed exclusively for the mining operation on the Property contemplated by this Agreement (all commonly referred to as "infrastructure").

G.                   "Commercial Production" means the operation of the Property or any portion thereof as a producing mine and the production of mineral products therefrom (but does not include bulk sampling, pilot plant or test operations).

Payment

                        Net Returns shall be calculated for each calendar quarter in which Net Returns are realized, and payment as due hereunder shall be made within 30 days following the end of each such calendar quarter. Such payments shall be accompanied by a statement summarizing the computation of Net Returns and copies of all relevant settlement sheets. Such quarterly payments are provisional and subject to adjustment within 90 days following the end of each calendar year.  Within ninety days after the end of each calendar year, Payor shall deliver to Payee an unaudited statement of royalties paid to Payee during the year and the calculation thereof. All year end statements shall be deemed true and correct six months after presentation, unless within that period Payee delivers notice to Payor specifying with particularity the grounds for each exception.  Payee shall be entitled, at Payees's expense, to an annual independent audit of the statement by a national firm of chartered accountants, only if Payee delivers a demand for an audit to Payor within four months after presentation of the related year-end statement.

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