Document:

EX10-1

 

 

 

 

Effective as from March 17, 2008

between

PROYECTOS MINEROS S.A.

as Assignor

and

CONSTITUTION MINING CORP.

as Assignee

 

 

 

_________________________________

ASSIGNMENT AGREEMENT

__________________________________

 

 

 

 

 

 

 

 

 

 

1 of 25

ASSIGNMENT AGREEMENT

 

THIS ASSIGNMENT AGREEMENT made effective as of the 17th day of March, 2008 is between:

PROYECTOS MINEROS 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 certain rights and obligations under a Exploration Contract with Option to Purchase executed with Silvia René Rodríguez (the "Titleholder") on January 19, 2008 (the "Agreement") with regards to the mining properties referred thereto as "Amira" (dossier n&176; 18,794), "Amira Norte" (dossier n&176; 18,832) and Esparta II (dossier n&176; 19,056), located in the Province of Salta, Argentina (the "Properties"); 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 the Titleholder on the conditions of said assignment, with a minimum term of thirty days in advance to the assignment date; and the Titleholder 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. 

           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;

2 of 25

            (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; and

            (v)        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 has obtained all necessary consent from Titleholder to effect the transfer of the Assigned Interest to the Assignee, consent that is hereby attached as Exhibit II;

(c)        to the best of the knowledge of the Assignor, the Properties are free and clear of all liens and encumbrances, and are 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 Properties 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 Properties.

3 of 25

           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 4 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 Properties 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 shall recognize to the Assignor a 1% Net Returns Royalty, where Net Returns Royalty has the meaning set out in Exhibit III (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 III, (the "Consideration").

           Section 5.        Force Majeure

           5.1.        If the Assignee is at any time prevented or delayed in complying with the payment of the Consideration 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.

           5.2.        The Assignee will within seven days give notice to the Assignor of each event of force majeure under Section 5.1 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.

4 of 25

           Section 6.        Confidential Information

           6.1       No information furnished by the Assignee to the Assignor hereunder in respect of the activities carried out on the Properties 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 7.        Arbitration 

           7.1       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.

           7.2       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.

           7.3       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.

           7.4       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.

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

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

           Section 8       Default and Termination 

           8.1       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:

5 of 25

(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.

           8.2       Notwithstanding Section 8.1 before, Assignee may terminate this Assignment Agreement at any time by providing 30 (thirty) days prior written notice to the Assignor. Assignee will not be responsible for any damages that this termination may cause to the Assignor except for those obligations that the Assignee assumes under the present agreement that are prior to the termination date. 

           8.3       Upon termination of this Assignment Agreement by reason of a default of its obligations by the Assignee, or under election of the Assignee under Section 8.2 before, the Assignee will transfer the Assigned Interest back to the Assignor, including but not limited to the Properties, in good standing and free and clear of all charges and encumbrances. Assignee will deliver at no cost to the Assignor within 90 days of such termination date copies of all reports, maps, assay results and other relevant technical data compiled by or in the possession of the Assignee with respect to the Properties and not before furnished to the Assignor. Finally, Assignee will have the right, within a period of 90 days following the termination date of this Assignment Agreement, to remove from the Properties all buildings, plant, equipment, machinery, tools, appliances and supplies which have been brought upon the Properties by or on behalf of the Assignee, and any such property not removed within such 90-day period will thereafter, only if the Assignor elects in writing, become the property of the Assignor.

           Section 9.        Notices. 

           9.1       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:

 

PROYECTOS MINEROS S.A., 

Maipú 1210, Piso 5 (C1006ACT) 

Buenos Aires, Argentina

Phone: + 54 11 4891 2700

Attention: Willem Fuchter

Fax: + 54 11 4311 7025

        + 54 11 4314 0399

6 of 25

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 10.      Governing Law. 

           10.1     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. 

           10.2     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 11.     Entire Agreement. 

           11.1     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 12.     Execution in Counterparts. 

           12.1     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.

	
PROYECTOS MINEROS S.A.

	
By: "Willem Fuchter"

Name: Willem Fuchter

Title:President

	
 

CONSTITUTION MINING CORP.

	 
	
By:  "Daniel Hunter"

Name: Daniel Hunter

Title:  Chief Operating Officer and a director

7 of 25

 

EXHIBIT I

[Exploration Contract with Option to Purchase executed with Silvia René Rodríguez (the "Titleholder") on January 19, 2008 (the "Agreement") with regards to the mining properties referred thereto as "Amira" (dossier n&176; 18,794), "Amira Norte" (dossier n&176; 18,832) and Esparta II (dossier n&176; 19,056), located in the Province of Salta, Argentina]

 

 

 

 

 

 

 

 

8 of 25

 

EXPLORATION CONTRACT WITH OPTION TO PURCHASE

(English Translation)

This contract is entered into in the City of Salta, on January 19, 2008 by and between Silvia René Rodríguez, holder of Identity Document No. 17,747,878, having legal domicile at Avenida Sarmiento No. 636, 3rd floor B (hereinafter the "TITLEHOLDER") and Proyectos Mineros S.A., domiciled at Maipú 1210, 5th floor, City of Buenos Aires, represented herein by Mr. Héctor Luis Ponte, holder of Identity Document (L.E.) No. 4,693,210, in his capacity as attorney in fact, (hereinafter "PMSA"), and both of them jointly referred to as the Parties, represent as follows:

WHEREAS

a) TITLEHOLDER represents that (i) the mining properties identified in Schedules I and II hereto (hereinafter the "MINING PROPERTIES") have been registered in its name with the Court of Record having jurisdiction over Mines and Commercial Matters in and for the Province of Salta; (ii) the MINING PROPERTIES are free and clear of liens, mortgages, attachments or charges and that no mining fees (cánones) are outstanding as of the date of this Contract; (iii) no claims whatsoever are currently pending with regard to title to the MINING PROPERTIES and that, to the best of her knowledge, there are no reasons which may serve as grounds for said claims or any agreements or options related to exploration or exploitation of the MINING PROPERTIES and (iv) there are no matters of fact or law preventing the MINING PROPERTIES from being explored, whether of an environmental nature, connected with holders of surface rights or third parties, that the relevant Environmental Impact Reports have been submitted with regard thereto, including all necessary authorizations and agreements granted and executed in that connection, except for the Esparta II discovery statement which was applied for on January 3, 2008 and which is currently pending. 

b) PMSA represents that it is a duly organized and existing company under the Argentine laws, having full power and authority to assume and comply with its obligations hereunder and any other contract or instrument referred to or contemplated hereby; and 

9 of 25

c) PMSA is interested in obtaining from TITLEHOLDER the exclusive right to explore the MINING PROPERTIES with an option to purchase 90% thereof and TITLEHOLDER is also interested in conferring said rights to PMSA. 

NOW THEREFORE, the parties have agreed to enter into this Contract pursuant to the following terms and conditions:

ONE: TITLEHOLDER grants PMSA exclusive possession of the MINING PROPERTIES for the effective term hereof, authorizing PMSA, its contractors, employees and/or agents, to exercise all the rights pertaining to TITLEHOLDER therein in accordance with the Argentine Mining Code, including the exclusive right to evaluate the MINING PROPERTIES and perform exploration activities and any other works related to mining activities pursuant to the method, in the manner and within the scope as determined by PMSA at the exclusive discretion thereof. TITLEHOLDER or agents thereof shall be entitled to enter the MINING PROPERTIES. PMSA shall not be held liable for any damages sustained by the TITLEHOLDER or agents thereof as a consequence of any visit to the MINING PROPERTIES, except where said damages should have been due to fault or negligence attributable to PMSA. 

TWO: As from the effective date of this Contract and during the whole term hereof, PMSA shall have the exclusive option to acquire 90% (Ninety percent) of the MINING PROPERTIES (hereinafter the "Purchase Option"), which option shall be deemed to have been automatically exercised as from the moment PMSA shall: (i) effect all payments established in section FOUR pursuant to the terms and conditions set forth therein, or (ii) advance payment of the amount set forth in 4.5. of section FOUR at any time, in which case PMSA shall effect payment of all other outstanding amounts in accordance with said section FOUR to the extent said amounts have not become due and payable as of the date of said advance payments. As from execution hereof, at any time and prior to exercise of the Purchase Option, PMSA shall organize a new company in the type of a Corporation (Sociedad Anónima) pursuant to Law 19,550 (hereinafter "NEWCO"). As from its organization, the equity interest in the NEWCO shall be represented as follows: 90% of shares for PMSA (or any other person as elected thereby) and 10% of the shares for TITLEHOLDER. Within a ten-business-day term following incorporation of the NEWCO, TITLEHOLDER shall contribute 100% of the MINING PROPERTIES to the NEWCO, in which opportunity PMSA (or the person appointed thereby as NEWCO shareholder) shall create a pledge upon the shares held thereby representing 90% of the NEWCO capital stock in favor of TITLEHOLDER. Shares shall be released or discharged from said pledge upon exercise of the Purchase Option pursuant to the terms and condition hereof. TITLEHOLDER shall execute and deliver all documentation and shall perform all necessary registrations and take any other action as may be necessary for the purposes of formalizing the acts set forth herein, in order for the MINING PROPERTIES to be transferred to the NEWCO free and clear of obligations, liens and encumbrances within 10 business days from. All costs related to the execution of the relevant notarial deeds, stamp taxes and all other rates applicable to the transactions contemplated herein in accordance with tax laws in force in the Province of Salta shall be borne by PMSA. 

10 of 25

All necessary investments required to carry out the project shall be made by PMSA until the feasibility stage, and thereafter TITLEHOLDER shall contribute an amount equivalent to 10% of interest held thereby.

In addition, and in the event the Purchase Option should have been exercised, TITLEHOLDER shall be entitled to sell its 10% share to third parties provided, however, that PMSA shall have a priority right regarding acquisition of said 10% share for the same value as offered by said third parties to TITLEHOLDER.

THREE: The effective term hereof shall commence upon execution of this Contract (hereinafter the EFFECTIVE DATE) and shall remain in full force and effect for the whole term as may be necessary for the fulfillment of conditions set forth in sections ONE, TWO and FOUR.   

FOUR: The aggregate price to be paid by PMSA to TITLEHOLDER in consideration for the Exploration Right and Purchase Option regarding 90% of the MINING PROPERTIES, including all title, property and mining rights made an integral part thereof, shall consist in the following amounts which shall be paid to TITLEHOLDER pursuant to the terms and conditions set forth hereinbelow: 

11 of 25

4.1 Within 5 days following execution hereof, the amount of USD 20,000 (Twenty Thousand United States Dollars) to be deposited in the account as specified for such purposes herein by TITLEHOLDER.

4.2 After twelve (12) months counted as from the EFFECTIVE DATE, the amount of USD 75,000 (Seventy-five Thousand United States Dollars).

4.3 After twenty-four (24) months counted as from the EFFECTIVE DATE, the amount of USD 150,000 (One Hundred and Fifty Thousand United States Dollars).

4.4 After thirty-six (36) months counted as from the EFFECTIVE DATE, the amount of USD 200,000 (Two Hundred Thousand United States Dollars).

4.5 After forty-eight (48) months counted as from the EFFECTIVE DATE, the amount of USD 1,000,000 (One Million United States Dollars). By means of this payment, the Purchase Option established in section TWO shall be deemed to have been automatically exercised and consequently such 90% of NEWCO shares upon which the pledge has been created shall be released or discharged from said pledge pursuant to the provisions set forth in section TWO. 

TITLEHOLDER shall serve written notice upon PMSA specifying the method and place of payment of the amounts set forth herein at least fifteen (15) days in advance of payment due date. 

FIVE: TITLEHOLDER herein delivers to PMSA all geologic, administrative and legal information in possession of TITLEHOLDER regarding the MINING PROPERTIES being the subject-matter hereof. PMSA undertakes to provide TITLEHOLDER all information related to deposits or evidence of ore discovered during evaluation and exploration of the MINING PROPERTIES, being further authorized to carry out all necessary proceedings required in order for PMSA, if applicable, to register the statements of discoveries in MINING PROPERTIES areas with the Court of Record having jurisdiction over Mines and Commercial Matters in and for the Province of Salta in addition to any other mining right, which shall be registered in the name of TITLEHOLDER and shall be automatically made a part of the MINING PROPERTIES and consequently subject to the Purchase Option and other provisions hereof. 

12 of 25

SIX: TITLEHOLDER voluntarily undertakes to refrain, during the effective term hereof, from engaging in acts to dispose of property or creating any liens and encumbrances upon the MINING PROPERTIES whatsoever, irrespective of the nature thereof, including without limitation, sales, transfers, mortgages, assignments, leases and loans. To secure the abovementioned restraint, PMSA is hereby authorized to apply for registration of this Contract with the Court of Record having jurisdiction over Mines and Commercial Matters in and for the Province of Salta. Applicable stamp tax and applicable utilities rates pursuant to the tax rules of the Province of Salta for the period running until the exercise of the Purchase Option of the MINING PROPERTIES shall be borne by PMSA. 

SEVEN: During the effective term hereof, PMSA shall be entitled to resolve unilaterally and at any time, abandonment of the Exploration Right and Purchase Option thus terminating this Contract. Sufficient notice of said decision shall be given to TITLEHOLDER at least thirty (30) calendar days in advance of the date of effective termination and this Contract shall be deemed to have been terminated by both parties on the effective date of termination as specified in the notice. Upon termination as provided for hereunder, TITLEHOLDER shall have no entitlement whatsoever to claim compensation, damages or loss of profits, except in the event of default by PMSA upon maintenance obligations regarding the PROPERTIES arising prior to termination date. As from the effective termination date, PMSA shall not be bound to effect such payments set forth in section FOUR as may be outstanding. In the event that upon termination date any mining fees or mining duties remained outstanding, PMSA shall pay TITLEHOLDER the amounts due and payable as of the effective termination date hereof. 

EIGHT: TITLEHOLDER shall be entitled to consider this Contract terminated upon failure by PMSA to effect any of the payments set forth in section FOUR after third (30) calendar days from sufficient notice in writing by TITLEHOLDER demanding fulfillment of payment obligations. 

13 of 25

NINE: Upon termination hereof as a consequence of any of the grounds contemplated in the foregoing sections, PMSA shall return 90% of its shares held in the NEWCO to TITLEHOLDER, free of any liens and encumbrances and PMSA shall further vacate the MINING PROPERTIES within ninety (90) calendar days counted as from the date of effective termination, removing from the MINING PROPERTIES, at its own expense, all machines, tools, equipment, personal property and devices introduced therein. Upon failure by PMSA to perform said acts within the specified term, all such elements shall become the property of TITLEHOLDER, unless TITLEHOLDER should resolve to remove them from the property at PMSA expense. Furthermore, within the abovementioned term, PMSA shall further deliver to TITLEHOLDER copies of all maps, geological reports, test results, drilling records and all other technical data resulting from exploration and evaluation activities carried out by PMSA. TITLEHOLDER shall be delivered possession of the MINING PROPERTY in the physical and legal condition as the MINING PROPERTIES may enjoy at the time, without any right whatsoever to claim damages, loss of profits or any other type of compensation irrespective of nature thereof, subject to the exceptions set forth herein and particularly the exception established under section SEVEN in fine. 

In the event this Contract should have been registered, notice of termination hereof shall be served by PMSA upon the Mining Authorities within a term not to exceed thirty days from TERMINATION DATE. 

TEN: Any knowledge or information acquired by TITLEHOLDER with regard to the results of exploration activities performed by PMSA, methods applied, results of analysis, metallurgical tests, location of drillings, discoveries made, technology or inventions applied or arising as a consequence of any activities performed by PMSA hereunder shall not be disclosed by TITLEHOLDER and shall be kept strictly confidential thereby, unless PMSA should discharge TITLEHOLDER from said obligation in writing or unless TITLEHOLDER should be required to provide said information to any government agencies being legally empowered to require so. This confidentiality commitment shall be valid during the whole effective term hereof.

ELEVEN: The Parties agree that "AREA" shall mean the area defined by the external borders of the MINING PROPERTIES.

14 of 25

Any mining property, right or interest acquired by either Party during the effective term hereof within the AREA shall be made a part of the MINING PROPERTIES and consequently subject to the terms and conditions set forth hereunder. 

TWELVE: (i) During the effective term hereof, PMSA shall make all efforts to maintain the MINING PROPERTIES effective as required by the mining and environmental laws currently in force. These obligations include, but are not limited to, payment of mining fees and survey costs, replacement of boundaries, taxes, payment of guaranties and any other compensation applicable to holders of surface rights, expenses or utilities rates. This obligation shall remain in full force and effect until notice has been served by PMSA upon TITLEHOLDER regarding termination of the contract. TITLEHOLDER shall grant PMSA, and/or any other persons designated thereby, a Power of Attorney for Administrative Proceedings conferring sufficient subrogation powers regarding exercise of rights and obligations connected with the proceedings pending with regard to the MINING PROPERTIES, under an express provision prohibiting abandonment or waiver of the MINING PROPERTIES, taking any actions as required by the Argentine Mining Code and other national, provincial and municipal regulations and until restoration or final exercise of the purchase option.

(ii) PMSA shall be liable for and shall hold TITLEHOLDER harmless against liability arising from damages and/or losses arising from civil, commercial or criminal proceedings or labor claims filed by any person hired as a consequence of the activities conducted by PMSA in the AREA, and for any damages sustained by third parties, PMSA personnel, contractors, representatives, employees and/or agents thereof; 

(iii) PMSA shall be liable for environmental damage and harm caused to third parties, holders of surface rights or the Government, and arising from the activities conducted in the AREAS, provided that said damages should be caused during the effective term hereof and as a consequence of PMSA activities. PMSA shall acknowledge and shall be in charge of restoration, mitigation and/or remediation of environmental damage in accordance with the effective environmental laws. Such provision shall not be construed as the obligation of reinstatement of identical conditions as existing prior to occurrence of the environmental impact.

15 of 25

 (iv) PMSA shall provide annual reports to TITLEHOLDER for the purposes of informing the latter about works performed by means of technical progress reports having been duly documented.  

THIRTEEN: This Contract shall be governed by Argentine laws and any controversies arising from application and construction hereof shall be submitted to the jurisdiction of the Courts of First Instance in and for the City of Salta.

FOURTEEN: PMSA shall freely assign to third parties all the rights and obligations arising herefrom and shall be further entitled to associate with third parties for the purposes of performance hereof, serving written notice upon TITLEHOLDER of material conditions governing such assignment or associations at least thirty (30) calendar days in advance of the assignment effective date. TITLEHOLDER shall be entitled to assign the rights and obligations applicable thereto under the terms of this Contract subject to prior written consent by PMSA, which consent shall not be unreasonably withheld.

FIFTEEN:  Any notices to be given hereunder shall be made by any sufficient means to the following special-contractual domiciles: 

PMSA

At. Mr. Hernán M. Zaballa

Maipú 1210, 5to. Piso

(C1006ACT) Ciudad Autónoma de Buenos Aires

Argentina

FAX (01) 4314-0399

 

TITLEHOLDER

Silvia René Rodríguez

Av. Sarmiento No 636, 3&176; Piso B

Salta - Capital (C/P 4400)

Argentina

FAX 0387-4223605

16 of 25

Either party shall serve sufficient notice at any time upon the other party in writing for the purposes of informing about the change of domicile thereof. As from the date of effective delivery of said notice, the new domicile as specified in the notice shall be regarded as the domicile of said party for the purposes of notices.

In witness whereof, three counterparts are signed by the Parties to only one effect and with the same contents. 

[Signed]

PROYECTOS MINEROS S.A.

[Signed] 

SILVIA RENÉ RODRÍGUEZ

Certification [illegible]

 

[Signed]

ELSA LILIANA BENITEZ

Civil Law Notary Public 

Register No 61.

SALTA 

 

 

 

17 of 25

SCHEDULE I

LIST OF MINING PROPERTIES

 

FILE No 18,794 - MINE AMIRA

FILE No 18,832 - MINE AMIRA NORTE

FILE No 19,056 - MINE ESPARTA II

 

 

 

 

 

 

 

 

 

 

 

 

 

18 of 25

SCHEDULE II

LOCATION MAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19 of 25

20 of 25

 

SPECIAL NOTARIAL RECORD. CERTIFICATION OF SIGNATURE

Salta. Notaries Public Association

A 00645837

In the City of Salta, Capital City of the Province of Salta, Argentine Republic, on this nineteenth day of January of the year two thousand and eight, I, ELSA LILIANA BENITEZ in my capacity as Civil Law Notary Public, Notarial Registry No. 61, hereby CERTIFY that the signatures appearing in the instrument attached to this Notarial Record and consisting in a CONTRACT are genuine and have been affixed by SILVIA RENÉ RODRÍGUEZ, holder of National Identity Document No. 17,747,878 and HECTOR LUIS PONTE, holder of National Identity Document No 4,693,210 in my presence and entered in the Book of Record No ONE Page No 146 and 147, Records No 1,168 and 1,169, I attest. SILVIA RENÉ RODRÍGUEZ appearing on her own behalf and HECTOR LUIS PONTE acting in the name and on behalf of the company PROYECTOS MINEROS S.A., with special domicile at Maipú No 1210, fifth floor in the City of Buenos Aires and appearing in his capacity as Attorney in fact thereof, as evidenced by the Notarily Recorded General Power of Attorney No 57 dated February 1, 2007, authorized by the Civil Law Notary Public Esteban Urresti practicing in the City of Buenos Aires, which Power of Attorney, having been duly certified and produced in my presence, confers sufficient powers to perform this act, I attest.

[Signed]

ELSA LILIANA BENITEZ

Civil Law Notary Public 

Register No 61.

SALTA 

 

 

21 of 25

 

EXHIBIT II

[Consent given to the assignment agreement by Titleholder]

 

 

 

 

 

 

 

 

 

22 of 25

[English Translation]

Ms. Silvia René Rodriguez

Sarmiento 636 -3rd Floor Suite B

Salta

Argentina 

Re.: Notice of assignment of 

Exploration Contract with Purchase 

Option dated January 19, 2008 

executed by and between Silvia René 

Rodriguez and Proyectos Mineros 

S.A. (the "Contract")

 

Dear Ms. Rodriguez,

This is to notify you in terms of section Fourteen of the Contract that Proyectos Mineros S.A. (f/k/a Recursos Maricunga S.A., the "Assignor") has assigned the Contract to Constitution Mining Corp. (the "Assignee") for it to develop, through its domestic subsidiary, the project related to the mining properties which are the subject-matter of the Contract, known as "Amira, Amira Norte and Espartaco II" (the "Assignment"). 

As required in the aforementioned section of the Contract, please be informed that the material conditions for the Assignment are as follows: 

            (i) Unconditional assumption by the Assignee of all the obligations under the Contract and ratification of all its terms;

            (ii) Commitment to make the necessary investments to establish the project's potential.

In this sense, please sign these presents at foot as evidence of your consent to the Assignment.

Yours sincerely,

[Signed]

Proyectos Mineros S.A.

 

I sign this note as evidence of my consent

to the aforementioned Assignment of the 

Contract in terms of section Fourteen

[Signed]

Silvia René Rodriguez

Date: 

23 of 25

EXHIBIT III

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 Properties; 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 Properties 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 Properties 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 Properties 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 Properties 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.

24 of 25

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 Properties or not, acquired or constructed exclusively for the mining operation on the Properties contemplated by this Agreement (all commonly referred to as "infrastructure").

G.                    "Commercial Production" means the operation of the Properties 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.

 

 

 

 

25 of 25ex10-1.htm

    Exhibit
10.1

     

    LITERARY PURCHASE
AGREEMENT

    

    This
Literary Purchase Agreement ("Agreement") is entered into as of April 1, 2007,
between Buzz Kill, Inc. ("Purchaser"), which is or shall become by the start of
principal photography a signatory to the WGA Agreement and Seasmoke, Inc.
("Lender") f/s/o Steven Kampmann and Matt Smollon (“Smollon”) (collectively
hereinafter referred to as “Seller") with respect to the acquisition of all
right, title, and interest in and to the screenplay and all rewrites and
polishes thereof written by Seller presently entitled "Buzz Kill" (the
screenplay together
with the title, themes, contents, characters, stories, rewrites, polishes and
all elements contained therein are herein referred to as the “Property") for the
production of a theatrical motion picture currently entitled "Buzz Kill" (the
"Picture").

    

    A.           CONDITIONS
PRECEDENT:

    

    All of
Purchaser’s obligations hereunder are conditioned upon (i) Purchaser’s approval
of the chain of title attendant to the Property, and (ii) Purchaser’s receipt of
a fully executed copy of this Agreement, the Assignment and the Certificate of
Authorship attached hereto as Exhibits "A” and “B" respectively.

    

    1.           PURCHASE:

    

    
      1.1           Fixed Compensation.
Purchaser shall pay to Seller, as full and complete consideration for all of the
rights granted hereunder the following: (a) to Lender (i) Six Thousand Two
Hundred Fifty Dollars ($6,250) payable one-third (1/3) upon execution of this
Agreement with the remaining two-thirds (2/3) payable upon Purchaser’s receipt
of the entire financing for the Picture and (ii) a "Deferral" in the amount of
Twelve Thousand Seven Hundred Thirty One Dollars ($12,731) which shall be due
and payable according to the Definition and Application of Proceeds to be
attached hereto as Exhibit “C”; and (b) to Smollon (i) Six Thousand Two Hundred
Fifty Dollars ($6,250) payable one-third (1/3) upon execution of this Agreement
with the remaining two-thirds (2/3) payable upon Purchaser’s receipt of the
entire financing for the Picture and (ii) a "Deferral" in the amount of Twelve
Thousand Seven Hundred Thirty One Dollars ($12,731) which shall be due and
payable according to the Definition and Application of Proceeds to be attached
hereto as Exhibit "C".

    1.2           Contingent
Compensation. If Purchaser or its assignees, licensees or successors
produces or causes the Picture to be produced, in addition to the amount set
forth in Paragraph 1.1 above, Lender and Smollon shall each receive an amount
equal to three and one-half percent (3.5%) of one hundred percent (100%) of the
"Net Proceeds", which shall be defined, calculated, due and payable in
accordance with Purchaser’s standard definition, subject to good faith
negotiations by in any event on a most favored nations basis with any other Net
Proceeds participant.

    

    
      1.3           Box Office Bonus. If
the Picture is released as a theatrical motion picture and if the Picture’s
North American (i.e., the United States and Canada) theatrical box office
receipts (as reported in weekly Variety or EDI) reach or exceed Fifteen Million
Dollars ($15,000,000) then Purchaser shall pay to Seller the amount of Twenty
Five Thousand Dollars ($25,000) and an additional Twenty Five Thousand Dollars
($25,000) thereafter for each Fifteen Million Dollars ($15,000,000) in
theatrical box office receipts (as reported in weekly Variety or EDI) reached
thereafter. All amounts paid to Seller pursuant to this Paragraph 1.3 shall be
applicable against Seller’s Net Proceeds
Participation.

    2.           WRITING
SERVICES

    

    2.1           Rewrite and Polish.
Purchaser shall have an irrevocable option to engage Seller as an employee for
hire to write one or more rewrites (each a "Rewrite") of the Property and one or
more polishes (each a "Polish") thereof and Seller hereby agrees to render such
writing services. Seller’s services pursuant to this Paragraph 2.1 shall be on
an exclusive basis during all writing periods and on a non-exclusive but first
priority basis at all other times. Seller shall prepare each Rewrite and/or
Polish upon Purchaser’s written notice thereof  (subject to Seller’s
then existing professional availability) in accordance with and subject to the
reasonable instructions, directions and writing schedule designated by
Purchaser.

    

    2.2           Rewrite and Polish
Fees. Provided that Seller fully and faithfully performs all services
required hereunder and is not otherwise in material uncured default hereof,
Seller shall be paid in accordance with the minimum requirements of the
applicable provisions of the Writers Guild of America Basic Agreement. Any
rewrite or polish shall be due two (2) weeks before the commencement of
principal photography of the Picture.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.           GRANT OF
RIGHTS.

    

    
      3.1           Rights in the
Property. Contingent upon Seller’s receipt of the Fixed Compensation as
set forth in Paragraph 1.1 above, Seller hereby sells, grants, conveys and
assigns to Purchaser, its successors, licensees and assigns exclusively and
forever all rights throughout the world in and to the Property. Purchaser may in
its discretion make any and all changes in, additions to, and deletions from the
Property in the exercise of its rights hereunder and Seller waives any rights of
“droit morale" it may have therein. The rights granted to Purchaser include,
without limitation, all motion picture rights (including all silent, sound,
dialogue and musical motion picture rights), all television motion picture
rights and other television rights, throughout the world, in and to the Property
and in and to the copyright thereof and all renewals and extensions of
copyright. Included among the rights granted to Purchaser hereunder (without in
any way limiting the grant of rights hereinabove made) are the following sole
and exclusive rights throughout the world:

    3.1.1           To
make, produce, adapt, sell, lease, rent, reissue, perform and generally deal in
and with the Property and to copyright one or more motion picture adaptations or
versions based in whole or in part on the Property, of every size, gauge, color
or type, whether produced for exhibition theatrically, non-theatrically or
otherwise, including musical motion pictures and remakes of sequels and prequels
to any motion pictures produced hereunder, and for such purposes to record and
reproduce and license others to record and reproduce, in synchronization with
such motion pictures, spoken words taken from or based upon the text or theme of
the Property and any and all kinds of music, musical accompaniments and/or
lyrics to be performed or sung by performers in any such motion picture and any
and all other kinds of sound and sound effects.

    

    3.1.2           To
exhibit, perform, rent, lease and generally deal in and with any motion picture
produced hereunder: (i) by all means or technical processes whatsoever, whether
now known or hereafter devised including, by way of example only, film, tape,
disc, wire, audio-visual cartridge, cassette or television (including
commercially sponsored, sustaining and subscription or pay-per-view television,
or any derivative thereof); and (ii) in any place whatsoever, including homes,
theaters and elsewhere, whether or not a fee is charged, directly or indirectly,
for viewing any such motion picture.

    

    3.1.3           To
broadcast, transmit and reproduce the Property or any adaptation or version
thereof (including, but not limited to, any motion picture produced hereunder
and/or any script or other material based on or utilizing the Property or any of
the characters, themes or plots thereof), by means of television or any process
analogous thereto whether now known or hereafter devised (including, but not
limited to, commercially sponsored, sustaining and subscription, or pay-per-view
television), through the use of motion pictures produced on films or by means of
magnetic tape, wire, disc, audio-visual cartridge or any other device now known
or hereafter devised and including such television productions presented in
series or serial form, and the exclusive right generally to exercise for
television purposes all the rights granted to Purchaser hereunder for motion
picture purposes.

    

    3.1.4           For
the foregoing purposes, to use all or any part of the Property and any of the
characters, plots, themes and/or ideas therein contained, and the title of the
Property and any title or subtitle of any component of the Property, and to use
said titles or subtitles in connection with any motion picture or other version
or adaptation whether or not the same is based on or adapted from the Property
and/or as the title of any musical composition contained in any such motion
picture or other version or adaptation.

    

    3.1.5           To
use and exploit, in any and all media, commercial and merchandise tie-ups and
recordings of every kind and nature and of any sort and nature arising out of or
connected with the Property and/or motion picture or other versions and/or the
title or titles thereof and/or the characters thereof and/or their names or
characteristics.

    

    3.1.6           All
rights, licenses, privileges and property herein granted to Purchaser shall be
cumulative and Purchaser may exercise or use any or all of said rights,
licenses, privileges and property simultaneously with or in connection with or
separately and apart from the exercise of any other of said rights, licenses,
privileges and property. If Seller hereafter makes or publishes or permits to be
made or published any revision, adaptation, translation or dramatization or
other versions of the Property, then Purchaser shall have and Seller hereby
grants to Purchaser without payment therefor all of the same rights therein as
are herein granted Purchaser. The term "motion picture" shall be deemed to mean
and include any present or future kind of motion picture production with or
without sound recorded and reproduced synchronously therein, whether the same is
produced on film or by any other method or means now or hereafter used for the
production, exhibition and/or transmission of any kind of motion picture
production.

    

    3.2           Name, Likeness, Etc.
Purchaser shall have the perpetual right to use and authorize others to use the
name, voice and approved likeness of Seller and approved biographical
information (provided that Seller provides Purchaser therewith in a timely
manner as required by Purchaser) pertaining to Seller for advertising and
publicity purposes in connection with any use or proposed use of the Property,
the Picture or any other motion picture, television program or other production
based on the Property, provided that Seller shall not be portrayed as using or
directly or indirectly endorsing any product or service without Seller’s prior
written consent.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.           REPRESENTATIONS AND
WARRANTIES.

    

    Subject
to Article 28 of the WGA Basic Agreement and except for any material provided by
or on behalf of Purchaser for inclusion in the Picture, Seller hereby represents
and warrants that:

    

    4.1           Seller
is the sole and exclusive owner of all of the rights herein granted to Purchaser
in and to the Property, and Seller has the full and exclusive right, power and
authority to enter into and perform this Agreement and to convey all of the
rights hereby conveyed to Purchaser;

    

    4.2           Seller
is not subject to any obligation or disability which could or
might  prevent Seller from performing all of the covenants and
conditions to be kept or performed by Seller hereunder, and Seller has not
heretofore made nor will Seller hereafter make any grant, assignment,
commitment, agreement or do any act which could or might materially interfere
with the full and complete enjoyment by Purchaser of Seller’s services hereunder
or the rights granted hereunder;

    

    4.3           The
Property is wholly original with Seller in all respects and no part thereof has
been taken from or based upon any other literary, dramatic or musical material
or any motion picture or television production (except for material in the
public domain) and to the best of Seller’s knowledge, will not in any way
infringe upon or violate any copyright, common law rights or literary, dramatic
or motion picture rights of, or constitute a defamation or invasion of the
rights of privacy and/or publicity of any person, firm or corporation
whatsoever;

    

    4.4           No
part of the rights herein conveyed to Purchaser have in any way been encumbered,
conveyed, granted or otherwise disposed of, and the same are tree and clear of
any liens or claims whatsoever and to the best of Seller’s knowledge, there are
no claims, litigation or other proceedings pending, outstanding or threatened
which might in any way prejudice, interrupt, impair, limit, diminish or
interfere with the rights granted to Purchaser hereunder;

    

    4.5           The
Property has not previously been exploited in any medium of communication (other
than in printed screenplay form); and

    

    4.6           The
Property is and shall be wholly protected by copyright in the United States, is
not and shall not be in the public domain and may be protected elsewhere so far
as the laws of other countries provide copyright in the United States for such
protection.

    

    5.           INDEMNIFICATION.

    

    Subject
to Article 28 of the WGA Basic Agreement, Seller hereby indemnifies and agrees
to hold Purchaser, its directors, employees, agents, successors, assigns and
licensees harmless from and against any and all judgments, liabilities, damages,
penalties, losses, claims and expenses (including reasonable outside attorneys’
fees and disbursements) arising out of or in connection with any breach by
Seller of any of his respective warranties, representations or agreements
contained in this Agreement.

    

    Purchaser
shall defend, indemnify and hold harmless Lender and Seller and Seller’s
directors, employees, agents, successors, assigns and licensees from and against
any and all claims, demands, liabilities, damages, losses, costs and expenses
(including reasonable outside attorney’s fees) arising out of the development,
pre-production, production, completion and exploitation of the Picture and/or
any element thereof (other than those arising out of any breach of Seller’s
representations, warranties and agreements).

    

    6.           CREDITS.

    

    
      In the
event the Picture is produced and provided that Seller is not in default hereof,
Seller shall be accorded writing credit in accordance with the minimum
requirements of the Writers Guild of America Basic Agreement. Subject to the
foregoing, all other aspects of Seller’s credit (if any) shall be determined in
the sole discretion of Purchaser, if applicable, or the third party distributor
and/or financier of the Picture. Purchaser shall use best efforts to
contractually obligate the distributor(s) of the Picture to comply with the
provisions contained in this Paragraph 6. No casual or inadvertent failure by
Purchaser, nor any failure by a third party, to accord Seller credit hereunder
shall be deemed to be a breach of this
Agreement.

 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.           UNION AGREEMENT AND
MEMBERSHIP.

    

    To the
extent that any provision in this Agreement conflicts with the mandatory
provisions of any collective bargaining agreement applicable to and binding upon
Purchase in connection with any rights granted to Purchaser by Seller herein, or
in connection with the rendition of Seller’s services hereunder (including,
without limitation, the WGA Agreement) (the "Union Agreement"), the Union
Agreement shall prevail; provided, however, that in the event of such conflict,
the affected provisions of this Agreement so affected shall be curtailed and
limited only to the extent necessary to permit compliance with the minimum
mandatory terms and conditions of the Union Agreement. If, pursuant to the Union
Agreement, Seller is entitled to any payment in addition to or greater than
those set forth herein, then any such additional or greater payment made by
Purchaser shall, except to the extent expressly prohibited by such collective
bargaining agreement, be considered as an advance against and deducted from any
such sum which may subsequently become payable to Seller hereunder. If in
determining the payments to be made hereunder, there is required any allocation
of the compensation paid to Seller as between Seller’s various services, Seller
agrees to be bound by such allocation as may be made by Purchaser in good faith.
Purchaser shall acquire the maximum rights permitted to be acquired pursuant to
the Union Agreement. Seller agrees to the content of any and all waivers that
Purchaser may obtain from any relevant union. Seller warrants and represents
that Seller is a member in good standing of the Writers Guild of America.
Purchaser shall not be entitled to apply overscale compensation for Seller’s
services in connection with the Picture in reduction of any other payments due
to Seller under the Agreement or of any union or guild residual payments or to
cross collateralize contingent compensation with union or guild residual
payments or vice versa. Company agrees to pay on behalf of Seller directly to
the proper authority concerned all applicable WGA union pension, health and
welfare fund contributions; provided, however, in no event shall the aggregate
amount of such payments exceed the total of all similar payments which Purchaser
would be required to make had Purchaser employed Seller directly. Any such
payments will be treated by Purchaser for United States federal, state and local
tax purposes as additional income paid by Purchaser to Seller as if Seller made
such payment to the proper authority concerned.

    

    8.           PREMIERES/FESTIVALS.

    

    Upon the
condition that Seller shall fully perform all services and obligations required
to be performed by Seller hereunder, and provided that Seller is not in material
uncured default hereunder, Company shall invite Steven Kampmann and Matt Smollon
and one (1) non-business related guest each to attend one (1) major U.S.
"celebrity" premiere of the Picture and all "first tier" film festival
screenings of the Picture. In the event such premiere is more than one hundred
(100) miles from Seller’s then current place of residence, Purchaser shall use
reasonable good faith efforts to require the distributor of the Picture to
provide Seller with the following: (i) one (1) round-trip air transportation, if
available and if used, for Seller (only if such transportation is provided to
other non-cast members); (ii) reasonable hotel accommodations (room and tax
only) (only if such accommodations are provided to other non-cast members); and
(iii) reasonable expenses incurred in connection with or arising from the
attendance of Seller at any such premiere and/or A festival (only if such
expenses are reimbursed for any other non-cast member). Notwithstanding the
foregoing, Seller’s travel and expenses hereunder shall be on a favored nations
basis with any non-cast member of the Picture. If Lender and/or Steven Kampmann
receive the same or similar benefits under the terms of a "Director Agreement"
between Purchaser and Lender dated April 13, 2007, then Lender and/or Steven
Kampmann shall be only entitled to such premiere invitations so as not cause a
duplication of benefits accorded to Lender
and/or Steven Kampmann hereunder.

     

    9.           REMEDIES.

    

    
      Seller
agrees that the rights and privileges granted to Purchaser hereunder are of a
special, unique, unusual, extraordinary and intellectual character involving
skill of the highest order which gives them a peculiar value, the loss of which
may be reasonably or adequately compensated by damages in an action at law, and
that a breach by Seller of any of the provisions contained herein may cause
Purchaser to suffer irreparable injury and damage. Seller hereby expressly
agrees that Purchaser will be entitled to seek injunctive and other equitable
relief to prevent or cure any breach or threatened breach of this Agreement by
Seller. Resort by Purchaser to injunctive or equitable relief, however, will not
be construed as a waiver of any of the rights which Purchaser may have against
Seller for damages or otherwise. The waiver by either party of any breach hereof
shall not be deemed a waiver of any prior or subsequent breach hereof. All
remedies of either party shall be cumulative and the pursuit of one remedy shall
not be deemed a waiver of any other remedy. Notwithstanding the foregoing, in
the event of any breach or alleged breach of this Agreement by Purchaser,
Seller’s sole right shall be to seek the recovery of money damages, and Seller
shall not have the right to terminate or rescind this Agreement or in any way to
enjoin or restrain the development, production, distribution, exhibition,
advertising or exploitation of the Picture or any of the other rights granted to
Purchaser hereunder.

    

     

    10.           NO OBLIGATION TO
PROCEED.

    

    Nothing
contained herein shall in any way obligate Purchaser to utilize the Property,
use Seller’s services hereunder or to include the results and proceeds of
Seller’s services in the Picture, or to produce, exhibit, advertise or exploit a
motion picture, television program or any other work based on the
Property.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.           ASSIGNMENT.

    

    Purchaser
shall have the right to assign this Agreement, in whole or in part, in any
manner and to any party as Purchaser shall determine in its sole discretion;
provided, that Purchaser’s assignee is a "major" or "mini-major" motion picture
company or television network or cable television company (as such terms are
commonly understood in the entertainment industry); otherwise Purchaser shall
remain secondarily liable. Seller may not assign this Agreement, except for a
one (1) time only right to assign the receipt of the compensation received
hereunder to a third party.

    

    12.           ADDITIONAL
DOCUMENTS.

    

    
                     
Seller shall deliver to Purchaser the Assignment and the Certificate of
Authorship attached hereto as Exhibits "A" and "B" respectively, duly executed
by Seller, and any amendments or modifications thereto required by Purchaser
and, at Purchaser’s request, any and all further assignments and other
instruments consistent herewith reasonably necessary or desirable to carry out
the purposes and intent of this Agreement. Seller hereby irrevocably appoints
Purchaser (which appointment shall be coupled with an interest) the true and
lawful attorney-in-fact of Seller to execute, acknowledge and deliver any such
assignment or instrument if Seller shall fail or refuse to execute, acknowledge
or deliver same, following written notice and an opportunity to review and
negotiate any such assignments or instruments.

    13.           NOTICES.

    

    All
notices hereunder shall be in writing and shall be deemed given hereunder on the
date delivered by hand or facsimile or a date forty-eight (48) hours after the
date mailed by certified mail. Until further notice, the addresses of the
parties shall be as follows:

    

    
      	
              Seller:

            	
              Seasmoke,
      Inc.

              c/o
      Elkins & Elkins

              16830
      Ventura Boulevard, Suite 300

              Encino,
      CA 91436

            
	 
      	 
      
	
              With
      a copy to:

            	
              Benchmark
      Entertainment

              8721
      W Sunset Boulevard, PH#1

              West
      Hollywood, CA 90069

              Attn.:
      Albert Beveridge

               

            
	 
      	
              Myman
      Abell Fineman Fox Greenspan Light, LLP

              11601
      Wilshire Blvd., Suite 2200

              Los
      Angeles, CA 90025-1758

              Attn.:
      Thomas J. Fineman, Esq.

               

            
	 
      	
              Matt
      Smollon

              473
      Prospect Street

              South
      Orange, NJ 07079

               

            
	 
      	 
      
	
              Purchaser:

            	
              Buzz
      Kill, Inc.

              4
      Park Avenue, Suite 16K

              New
      York, NY 10016

              Attn.:
      Thomas Hanna

               

            
	 
      	 
      
	
              With
      a copy to:

            	
              Emerson
      E. Bruns, PLLC

              1790
      Broadway, 20th Floor

              New
      York, NY 10019

              Attn.:
      Emerson E. Bruns, Esq.

               

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    14.           INSURANCE.

    

    Purchaser
shall cause Lender and Seller (including Steven Kampmarm and Smollon personally)
to be added as an additional insureds under the Picture’s general liability,
workman’s compensation and errors and omissions policy in connection with the
Picture, if any, subject to the terms and conditions of said policy, including
any deductible or policy limits; provided, however, the inclusion of Seller on
such policy will not relieve Seller from a breach of Seller’s representations,
warranties and indemnities contained herein.

    

    15.           SUBSEQUENT
PRODUCTIONS.

    

     If
within seven (7) years after the initial general theatrical release (if any) of
the Picture, if Purchaser or its assignee elects (in its sole discretion) to
have written a screenplay for the initial live action theatrical sequel to
and/or the initial live action theatrical prequel to and/or the initial live
action theatrical remake of the Picture (collectively a "Theatrical Production")
and provided Seller received sole "Written by" or “Screenplay by" credit for the
Picture upon Final Credit Determination and is then active as a writer in the
theatrical motion picture industry and is available as, when and where
reasonably required by Purchaser, then Purchaser shall first negotiate in good
faith (within Purchaser’s standard parameters, but in no event upon financial
terms for Seller writing services less favorable to Seller than the financial
terms for Seller’s writing services set forth in this Agreement) with Seller on
the screenplay for the first such Theatrical Production. If  Purchaser
and Seller fail to agree on terms for Seller’s services on such Theatrical
Production within thirty (30) days following Purchaser’s service of notice on
Seller of the commencement of negotiations therefor, if Seller is unavailable,
or if Seller elects not to write, then Purchaser shall have the right to engage
another writer(s) and shall have no further obligation to Seller. If Purchaser
and Seller enter into an agreement for the initial Theatrical Production, such
agreement shall contain a provision substantially similar to this Paragraph
15.

     

    16.           DVD.

    

    Upon
condition that Seller shall fully perform all of the required services and
material obligations required to be performed by Seller hereunder and that
Seller is not in material, uncured default hereunder, Seller shall be entitled
to two (2) DVDs of the Picture upon commercial availability of the
same.

    

    17.           TRAVEL.

    

    If Seller
shall be required by Purchaser to travel to a remote location more than one
hundred (100) miles from Seller’s principal residence, Purchaser shall provide
each Seller with one (1) round-trip transportation (if used), by air, (if
available and if appropriate) (only if such transportation is provided to other
non-cast members; provided, however, that in no event shall Seller that no such
transportation shall be accorded if traveling within the state of New
Jersey),  plus hotel accommodations (room and tax only) (only if such
accommodations are provided to other non-cast members), reasonable expenses
incurred in connection with or arising from the attendance of Seller in the
remote location (only if such expenses are reimbursed for any other non-cast
member) and ground transportation to and from the airport, hotel (if any) and
from the hotel to the set and between locations (only if such transportation is
provided to any other non-cast member). The class of travel and accommodation
for Seller’s travel hereunder will be no less favorable than that for any other
party, including, without limitation, Purchaser’s producers.

    

    18.           REVERSION/TURNAROUND.

    

    In the
event that Purchaser has paid to Seller the Fixed Compensation but principal
photography of the Picture has not commenced, subject to force majeure
extensions, within eighteen (18) months from the date Purchaser pays Seller the
Fixed Compensation hereunder, Seller shall have the right thereafter to
repurchase from Purchaser on a quitclaim basis all of Purchaser’s rights in the
Property by written notice to Purchaser accompanied by instruments in a form
reasonably satisfactory to Purchaser (a) guaranteeing full payment to Purchaser
of an aggregate
amount equal to all payments made to Seller hereunder and under any other
agreement between Seller and Purchaser no later than commencement of principal
photography of the first production based on the Property, plus interest on such
aggregate amount at the average commercial lending rate charged from time to
time by Purchaser’s principal lenders through the date of repayment, and (b)
assuming all executory obligations in connection with the
Property and any productions based thereon, and indemnifying Purchaser with
respect to all claims and liabilities which may arise in connection with the
Property and any productions based thereon.

    

    19.           MISCELLANEOUS.

    

    19.1           The
titles of the paragraphs of this Agreement are for convenience only and shall
not in any way affect the interpretation of this Agreement.

    

    19.2           This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts entered into and fully performed
therein.

    

    19.3           This
Agreement contains the entire understanding of the parties hereto relating to
the subject matter hereof and supersedes any prior understandings or agreements
of the parties. Seller acknowledges that no representation or agreement not
expressly contained in this Agreement has been made by Purchaser or any of its
agents, employees or representatives. This Agreement may not be modified or
amended except in writing signed by the party to be charged.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

                                                                                  BUZZ
KILL, INC.:

    

    

    

                                                                                  By:
/s/Thomas
Hanna

                                                                                  An
Authorized Signatory

    

    

                                                                                  SEASMOKE,
INC.:

    

    

    

                                                                                  By:
/s/ Steven
Kampmann            

                                                                                  An
Authorized Signatory

                                                                                  EIN
#: 95-3670317

    

                                                                                  /s/
Matt
Smollon                            

                                                                                  MATT
SMOLLON

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]