Document:

a50419074ex10-2.htm

Exhibit 10.2

FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

AND

COMMONWEALTH OF KENTUCKY

DEPARTMENT OF FINANCIAL INSTITUTIONS

FRANKFORT, KENTUCKY

	  	
)

	  
	
In the Matter of

	
)

	  
	  	
)

	
CONSENT ORDER

	
PBI BANK

	
)

	  
	
LOUISVILLE, KENTUCKY

	
)

	
FDIC-12-304b

	  	
)

	  
	
(KENTUCKY CHARTERED

	
)

	  
	
INSURED NONMEMBER BANK)

	
)

	  
	  	
)

	  

 

PBI Bank (“Bank”), Louisville, Kentucky, having been advised of its right to a NOTICE OF CHARGES AND OF HEARING detailing the unsafe or unsound banking practices and violations of law, rule, or regulation alleged to have been committed by the Bank, and of its right to a hearing on the charges under section 8(b) of the Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1818(b), and under section 286.3- 690 of the Kentucky Revised Statutes, Ky. Rev. Stat. Ann. Section 286.3-690 (Michie 2006), regarding hearings before the Department of Financial Institutions for the Commonwealth of Kentucky (“KDFI”), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (“STIPULATION”) with representatives of the Federal Deposit Insurance Corporation (“FDIC”) and the KDFI, dated __________, 2012, whereby, solely for the purpose of this proceeding and without admitting or denying any charges of unsafe or unsound banking practices, and without admitting or denying any violations of law, rule, or regulation, the Bank has consented to the issuance of this CONSENT ORDER (“ORDER”) by the FDIC and the KDFI.

 

The FDIC and the KDFI considered the matter and determined to accept the STIPULATION.

 

Having also determined that the requirements for issuance of an order under 12 U.S.C. § 1818(b) and section 286.3-690 of the Kentucky Revised Statutes, Ky. Rev. Stat. Ann. § 286.3-690 (Michie 2010), have been satisfied, the FDIC and KDFI HEREBY ORDER that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns take affirmative action as follows:

 

CAPITAL

 

1.             (a)           As of the effective date of this ORDER, the Bank shall have and maintain its level of Tier 1 capital as a percentage of its total assets (“capital ratio”) at a minimum of nine percent (9.0%) and its level of qualifying total capital as a percentage of risk-weighted assets (“total risk based capital ratio”) at a minimum of twelve percent (12.0%). For purposes of this ORDER, Tier 1 capital, qualifying total capital, total assets, and risk-weighted assets shall be calculated in accordance with Part 325 of the FDIC Rules and Regulations (“Part 325”), 12 C.F.R. Part 325.

 

(b)           While this ORDER is in effect, if either ratio is less than the required minimum required by paragraph (a) above, the Bank shall immediately notify the Supervisory Authorities and within 30 days shall: (1) increase capital in an amount sufficient to comply with paragraph (a), or (2) submit a written plan to the Regional Director of the FDIC Chicago Regional Office (“Regional Director”) and the Commissioner of the Commonwealth of Kentucky, Department of Financial Institutions (“Commissioner”) describing the primary means and timing by which the Bank shall increase its capital ratios up to or in excess of the minimum requirements set forth above, as well as contingency plans. Within 10 days of receipt of any comments from the Regional Director or Commissioner, and after consideration of all comments, the Bank’s board of directors (“Board”) shall approve the written plan, and record such approval in its minutes. Thereafter, the Bank shall implement and fully comply with the written plan.

 

  

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(c)           Any increase in regulatory capital may be accomplished by the following:

 

	 	
(i) 

	
The sale of common stock and noncumulative perpetual preferred stock constituting Tier 1 capital under Part 325; or

 

	 	
(ii) 

	
The elimination of all or part of the assets classified as “Loss” as of January 30, 2012, without loss or liability to the Bank, provided any such collection on a partially charged-off asset shall first be applied to that portion of the asset which was not charged off pursuant to this ORDER; or

 

	 	
(iii)

	
The collection in cash of assets previously charged off; or

 

	 	
(iv)

	
The direct contribution of cash by the directors or the shareholders of the Bank; or

 

	 	
(v) 

	
Any other means acceptable to the Regional Director and the Commissioner; or

 

	 	
(vi) 

	
Any combination of the above means.

 

(d)          If, while this ORDER is in effect, the Bank increases capital by the sale of new securities, the Board shall adopt and implement a plan for the sale of such additional securities, including the voting of any shares owned or proxies held by or controlled by them in favor of said plan. Should the implementation of the plan involve public distribution of Bank securities, including a distribution limited only to the Bank’s existing shareholders, the Bank shall prepare detailed offering materials fully describing the securities being offered, including an accurate description of the financial condition of the Bank and the circumstances giving rise to the offering, and other material disclosures necessary to comply with Federal and state securities laws. Prior to the implementation of the plan and, in any event, not less than 20 days prior to the dissemination of such materials, the materials used in the sale of the securities shall be submitted to the FDIC Registration and Disclosure Section, 550 17th Street, N.W., Washington, D.C. 20429 and to the Commissioner for their review. Any changes requested to be made in the materials by the FDIC or the KDFI shall be made prior to their dissemination.

 

(e)           In complying with the provisions of this paragraph, the Bank shall provide to any subscriber and/or purchaser of Bank securities written notice of any planned or existing development or other changes which are materially different from the information reflected in any offering materials used in connection with the sale of Bank securities. The written notice required by this paragraph shall be furnished within 10 calendar days of the date any material development or change was planned or occurred, whichever is earlier, and shall be furnished to every purchaser and/or subscriber of the Bank’s original offering materials.

 

  

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(f)           The capital ratio analysis required by this paragraph shall not negate the responsibility of the Bank and its Board for maintaining throughout the year an adequate level of capital protection for the kind, quality, and degree of market depreciation of assets held by the Bank.

 

(g)           Should the Bank be unable to maintain the required capital levels specified in subparagraph (a) above, then within thirty (30) days of receipt of written direction from the Regional Director and the KDFI, the Bank shall develop, adopt, and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise immediately obtain a sufficient capital investment into the Bank to fully meet the capital requirements of this paragraph. A copy of the plan required by this paragraph shall be submitted to, and determined to be acceptable by, the Regional Director and the KDFI.

 

REDUCTION OF SUBSTANDARD ASSETS

 

2.             (a)           Within 45 days from the effective date of this Order, the Bank shall adopt and implement a written plan to reduce the Bank’s risk position in each asset in excess of $1,000,000, which is classified as “Substandard” in the Joint Report of Examination as of January 30, 2012. Such plan shall be used to reduce the Bank’s risk position in such assets revealed in subsequent examinations or visitations. A copy of the written plan shall be submitted to the Regional Director and the Commissioner upon its completion. In developing such plan, the Bank shall, at a minimum:

 

	
  

	
(i)

	
Review the financial position of each borrower, including source of repayment, repayment ability, and alternative repayment sources; and

 

	
  

	
(ii)

	
Evaluate the available collateral for such credit, including possible actions to improve the Bank’s collateral position.

 

(b)           Such plan shall include, but not be limited to:

 

	 	
(i) 

	
Target dollar levels to which the bank shall reduce each asset within 6 and 12 months from the effective date of this ORDER; and

 

	 	
(ii) 

	
Provisions for the submission of monthly progress reports to the Board for review and notation in minutes of the meetings of the Board.

 

(c)           As used in this paragraph, “reduce” means to: (1) collect; (2) charge off; (3) sell; or (4) improve the quality of such assets as to warrant removal of any adverse classification by the FDIC and KDFI.

 

ALLOWANCE FOR LOANS AND LEASE LOSSES

 

3.             (a)            Prior to submission or publication of all Reports of Condition and Income required by the FDIC after the effective date of this ORDER, the Board shall review the adequacy of the Bank’s ALLL, provide for an adequate ALLL, and accurately report the same. The minutes of the Board meeting at which such review is undertaken shall indicate the findings of the review, the amount of increase in the ALLL recommended, if any, and the basis for determination of the amount of ALLL provided. In making these determinations, the Board shall consider the FFIEC Instructions for the Reports of Condition and Income and any analysis of the Bank’s ALLL provided by the FDIC or KDFI.

 

  

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(b)            ALLL entries required by this paragraph shall be made prior to any regulatory capital determinations required by this ORDER.

LOAN REVIEW AND GRADING SYSTEM

 

4.            Within 30 days from the date of this ORDER, the Bank shall develop and implement procedures which strengthen the Bank’s loan review function and ensure the timely and accurate grading of the Bank’s credit relationships.

 

LOSS CHARGE-OFF

 

5.            As of the effective date of this ORDER, the Bank shall eliminate from its books, by charge-off or collection, all assets or portions of assets classified “Loss” as of January 30, 2012, that have not been previously collected or charged off. In the event subsequent examinations or visitations classify assets or portions of assets as “Loss”, the Bank shall immediately eliminate such losses from its books. Elimination or reduction of these assets with the proceeds of other Bank extensions of credit is not considered collection for the purpose of this paragraph.

 

REDUCTION OF CONCENTRATIONS

 

6.      The Bank shall continue to implement the written plan to reduce the concentration in commercial real estate.

 

GROWTH PLAN

 

7.             During the life of this ORDER, the Bank shall not increase its total assets by more than 5% during any consecutive three-month period without providing, at least 30 days prior to its implementation, a growth plan to the Regional Director and the Commissioner. Such growth plan, at a minimum, shall include the funding source to support the projected growth, as well as the anticipated use of funds. This growth plan shall not be implemented without the prior written consent of the Regional Director and the Commissioner. In no event shall the Bank increase its total assets by more than 10% annually. For the purpose of this paragraph, “total assets” shall be defined as in the Federal Financial Institutions Examination Council’s Instructions for the Consolidated Reports of Condition and Income.

 

PROHIBITION OF ADDITIONAL LOANS TO CLASSIFIED BORROWERS

 

8.             (a)           As of the effective date of this ORDER, the Bank shall not extend directly or indirectly, any additional credit to, or for the benefit of, any borrow who is already obligated in any manner to the Bank on any extensions of credit (including any portion thereof) that has been charged off the books of the Bank or classified “Loss” so long as such credit remains uncollected.

 

(b)           As of the effective date of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower whose loan or other credit has been classified “Substandard” and is uncollected unless the Board or loan committee has adopted, prior to such extension of credit, a detailed written statement giving the reasons why such extension of credit is in the best interest of the Bank. If only the loan committee adopts the written statement, it must also be presented to the Board and reflected in the Board’s meeting minutes. A copy of the statement shallbe placed in the appropriate loan file and shall be incorporated in the minutes of the applicable Board meeting.

 

  

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DIVIDEND RESTRICTION

 

9.      As of the effective date of this ORDER, the Bank shall not declare or pay any dividend without the prior written consent of the Regional Director and the Commissioner.

 

CORRECTION OF VIOLATIONS

 

10.     (a)            Within 60 days from the effective date of this ORDER, the Bank shall eliminate and/or correct all violations of law, rule, and regulations listed in the Joint Report of Examination dated January 30, 2012, and shall likewise correct, within 60 days, any violations revealed by subsequent examinations or visitations.

 

(b)           Within 60 days from the effective date of this ORDER, the Bank shall implement procedures to ensure future compliance with all applicable laws, rules, and regulations.

 

LIQUIDITY PLAN

 

11.           (a)           Within 60 days from the effective date of this ORDER, the Bank shall create and implement a written contingency funding plan (“Liquidity Plan”). The Liquidity Plan shall identify sources of liquid assets to meet the Bank’s contingency funding needs over time horizons of one month, two months, and three months. At a minimum, the Liquidity Plan shall be prepared in conformance with the Liquidity Risk Management Guidance found at FIL-13-2010 and include provisions to address the issues identified in the ROE.

 

(b)           During the life of this ORDER, the Bank shall submit to the Regional Director and the Commissioner liquidity analysis reports in a format that is acceptable to the Regional Director and the Commissioner on a weekly or more frequent basis. The liquidity analysis reports also shall be submitted to the Board for review and notation in Board minutes.

 

(c)           A copy of the plan required by this paragraph shall be submitted to the Regional Director and the Commissioner.

 

STRATEGIC PLAN

 

12.           (a)           Within 30 days from the effective date of this ORDER, the Bank shall formulate, adopt, and implement a realistic, comprehensive strategic plan. The plan required by this paragraph shall contain an assessment of the Bank’s current financial condition and market area, and a description of the operating assumptions that form the basis for major projected income and expense components. The written strategic plan shall address, at a minimum:

 

	 	
(i) 

	
Strategies for pricing policies and asset/liability management; and

 

	 	
(ii) 

	
Financial goals, including pro forma statements for asset growth, capital adequacy, and earnings.

 

(b)     Within 30 days from the end of each calendar quarter following the effective date of this ORDER, the Bank’s Board shall evaluate the Bank’s actual performance in relation to the strategic plan required by this paragraph and record the results of the evaluation, and any actions taken by the Bank, in the minutes of the Board meeting at which such evaluation is undertaken.

 

  

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(c)     The strategic plan required by this ORDER shall be revised accordingly after review by the Board within sixty (60) days following the end of each calendar year during which the ORDER is in effect.

 

(d)     Copies of the plan and revisions thereto required by this paragraph shall be submitted to the Regional Director and the Commissioner.

 

MANAGEMENT STUDY

 

13.     Within 45 days of the effective date of this ORDER, the Bank shall implement the recommendations of the Management Study conducted on September 30, 2011.

 

COMPLIANCE WITH ORDER

 

14.           (a)           Within 30 days from the effective date of this ORDER, the Board shall have in place a program that will provide for monitoring of the Bank’s compliance with this ORDER.

 

(b)           Following the required date of compliance with subparagraph (a) of this paragraph, the Board shall review the Bank’s compliance with this ORDER and record its review in the minutes of each regularly scheduled Board meeting.

 

PROGRESS REPORTS

 

15.     Within 30 days from the end of each calendar quarter following the effective date of this ORDER, the Bank shall furnish to the Regional Director and the Commissioner written progress reports signed by each member of the Board, detailing the actions taken to secure compliance with the ORDER and the results thereof. Such reports may be discontinued when the corrections required by this ORDER have been accomplished and the Regional Director and the Commissioner have, in writing, released the Bank from making further reports.

 

NOTIFICATION TO SHAREHOLDER

 

16.     Following the effective date of this ORDER, the Bank shall send to its shareholder a copy of this ORDER: (1) in conjunction with the Bank’s next shareholder communication; or (2) in conjunction with its notice or proxy statement preceding the Bank’s next shareholder meeting.

 

  

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This ORDER shall be effective upon issuance

 

The provisions of this ORDER shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof.

 

         The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provision has been modified, terminated, suspended, or set aside by the FDIC and the KDFI in writing.

 

          Pursuant to delegated authority.

 

          Dated:____________________, 2012.

_______________________________       _______________________________

M. Anthony Lowe                                              Charles A. Vice

Regional Director                                                Commissioner

Chicago Regional Office                                    Department of Financial

            Corporation                                                          Institutions

                                                               Commonwealth of Kentucky

7Exhibit 10.3

                              ENGAGEMENT AGREEMENT

THIS AGREEMENT made as of the 30th day of November, 2011.

BETWEEN:
          LA PAZ MINING CORP.
          (the "Company")

                                                               OF THE FIRST PART

AND:
          CHARLES IRIZARRY
          (the " Consultant")

                                                              OF THE SECOND PART

WHEREAS:

A.   The  Company  is a  company  incorporated  in  Nevada  and  engaged  in the
     exploration of minerals.

B.   The Company  wishes to engage the Consultant on the terms and conditions of
     this Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the material
promises and conditions contained in this Agreement, the Company and the
Consultant agree as follows:

1. ENGAGEMENT

The Company hereby engages the Consultant and the Consultant  hereby accepts the
engagement upon the terms and conditions hereinafter set forth.

2. PERIOD OF ENGAGEMENT

Subject to the provisions for termination as hereinafter  provided,  the term of
the engagement shall be deemed full time for a period of two years from the date
of this agreement.
<PAGE>
3. SERVICES

The  Consultant  agrees to serve in the  position  and carry out the  duties and
responsibilities of a Director,  President and Secretary, and perform such other
services as may be designated from time to time by the Company.

4. COMPENSATION

For all services  rendered by the Consultant  under this Agreement,  the Company
shall pay the Consultant a sum of  $10,000.00.  $3,000 of which shall be payable
upon signing of this  agreement and the balance of which shall be payable at the
end of the engagement.

5. N/A

6. TERMINATION OF ENGAGEMENT

     (a)  Termination by the Company

     The Company may at any time during the Period of Engagement  terminate this
     Agreement for cause,  without  notice and without  liability for any claim,
     action or demand upon the happening of one or more of the following events:

          (i)  if the Consultant fails or refuses,  repeatedly, to comply in any
               material  respect  with the  reasonable  policies,  standards  or
               regulations  of the  Company  established  from  time  to time in
               writing and in accordance with this Agreement;

          (ii) if the  Consultant  fails to perform in any material  respect his
               duties   determined  by  the  Company  in  accordance  with  this
               Agreement  and  consistent  with  the  customary  duties  of  the
               Director's engagement;

          (iii)if the Consultant  conducts himself in a wilfully  dishonest,  or
               an unethical or fraudulent manner that materially  discredits the
               Company or is materially detrimental to the reputation, character
               or standing of the Company; or

          (iv) if the  Consultant  conducts any  unlawful or criminal  activity,
               which activity materially discredits the Company or is materially
               detrimental  to the  reputation,  character  or  standing  of the
               Company.

                                       2
<PAGE>
     Notwithstanding the above, the Company may at any time during the Period of
     Engagement terminate this Agreement.

7. PROPERTY OF THE COMPANY

The  Consultant  hereby  acknowledges  and agrees  that all  personal  property,
including without  limitation,  all books,  manuals,  records,  reports,  notes,
contracts,  lists,  and other  documents,  proprietary  information  (as defined
below),  copies of any of the foregoing,  and equipment furnished to or prepared
by the Consultant in the course of or incidental to his  engagement,  including,
without limitation, records and any other materials pertaining to the Company or
its business, belonging to the Company shall be promptly returned to the Company
upon termination of the Period of Engagement.

8. PROPRIETARY INFORMATION AND NON-COMPETITION

     (a)  Proprietary Information

     "PROPRIETARY  INFORMATION" means information about the Company disclosed to
     the Director,  known by the Consultant or developed by the Director,  alone
     or with others, in connection with his engagement by the Company,  which is
     not  generally  known to the industry in which the Company is or may become
     engaged about the Company's products,  processes,  and services,  including
     but not limited to, information  relating to customers,  sources of supply,
     personnel,   sources   or  methods  of   financing,   marketing,   pricing,
     merchandising, interest rates, or sales.

     (b)  Non-Disclosure of Proprietary Information

     The Consultant acknowledges that all Proprietary Information is received or
     developed by him in confidence  and is the property of the Company.  During
     the period of engagement and thereafter,  the Consultant will not, directly
     or indirectly,  except as required by the normal business of the Company or
     expressly consented to in writing by the Company:

          (i)  disclose,  publish or make available, other than to an authorized
               Consultant,  officer, or director of the Company, any Proprietary
               Information;

          (ii) sell,  transfer  or  otherwise  use or  exploit  any  Proprietary
               Information;

          (iii)permit  the  sale,  transfer,  or  use  or  exploitation  of  any
               Proprietary Information by any third party; or

                                       3
<PAGE>
          (iv) retain upon termination or expiration of the Period of Engagement
               any  Proprietary  Information,  any  copies  thereof or any other
               tangible or  retrievable  materials  containing  or  constituting
               Proprietary Information.

     (c)  Disclosure of Proprietary Information

     If, at any time, the Consultant  becomes aware of any unauthorized  access,
     use, possession or knowledge of any Proprietary Information, the Consultant
     shall  immediately  notify the Company.  The  Consultant  shall provide all
     reasonable  assistance to the Company to protect the confidentiality of any
     such  Proprietary  Information  that the  Consultant  may have  directly or
     indirectly  disclosed,  published  or made  available  to third  parties in
     breach of this Agreement,  including, but not limited to, reimbursement for
     any and all  solicitor's  fees that the  Company  may incur to protect  its
     rights therein. The Consultant shall take all reasonable steps requested by
     the Company to prevent the  recurrence of such  unauthorized  access,  use,
     possession or knowledge.

     (d)  Interference with Business

     During the Period of  Engagement,  the Consultant  shall devote  sufficient
     time,  ability and  attention to the  business of the  Company.  During the
     Period of  Engagement,  the Consultant  shall not,  directly or indirectly,
     compete or assist any third party in competing with the Company.  Following
     the Period of Engagement, the Consultant shall not:

          (i)  employ any Proprietary  Information for himself or in the service
               of others or interfere with the Company's  relationship  with its
               clients, purchasers or suppliers;

          (ii) use Proprietary Information to solicit business for himself or in
               the service of others from  clients,  suppliers or  purchasers of
               the Company;

          (iii)in any way breach the  confidence  that the Company has placed in
               the Director;

          (iv) misappropriate any Proprietary Information; or

          (v)  breach any of the provisions of this section.

                                       4
<PAGE>
9. ASSIGNMENT, SUCCESSORS AND ASSIGNS

The Consultant agrees that he will not assign,  transfer or otherwise dispose of
any rights or obligations under this Agreement. Any such purported assignment or
transfer  shall be null and void.  Nothing in this  Agreement  shall prevent the
consolidation of the Company with, or its merger into, any other corporation, or
the sale by the Company of all or substantially all of its properties or assets,
or the  assignment by the Company of this  agreement and the  performance of its
obligations  hereunder to any successor in interest or any  affiliated  company.
Subject to the foregoing,  this Agreement  shall be binding upon and shall enure
to the benefit of the parties and their respective heirs, legal representatives,
successors,  and permitted  assigns,  and shall not benefit any person or entity
other than those enumerated above.

10. POLICY

The Consultant agrees to familiarized themselves with the company's policies and
agrees to abide by these policies.

11. COMPLIANCE WITH LAWS

The Consultant  agrees to comply with all applicable  securities and other laws,
regulations,  policies,  blanket rulings and prescribed forms of each applicable
provincial or other jurisdiction in which the Consultant works in.

12. CONFLICTS OF INTEREST

The  Consultant  agrees to avoid any action or interest that  conflicts or gives
the  appearance  of a conflict  with the  Company's  interests.  A "conflict  of
interest"  exists  whenever  an  individual's  private  interests  interfere  or
conflict in any way (or even appear to interfere or conflict) with the interests
of the Company.  A conflict  situation can arise when an Consultant,  officer or
director  takes actions or has  interests  that may make it difficult to perform
his or her  work for the  Company  objectively  and  effectively.  Conflicts  of
interest may also arise when an  Consultant,  officer or director or a member of
his or her family receives  improper personal benefits as a result of his or her
position with the Company, whether from a third party or from the Company.

In order to avoid potential  conflict of interest,  the Consultant agrees to not
personally receive to themselves any payments, compensation or gifts, other than
gifts of nominal value, from any entity or person that does business or seeks to
do business with the Company.  If any payment or  compensation is offered to the
Consultant  from any other party the  Consultant  must  transfer  the payment or
compensation to the Company.

The Consultant agrees to not use Company property,  Company information or their
position in the Company to further there own personal  opportunities if it comes

                                       5
<PAGE>
at the expense of the good of the Company.  The Consultant agrees to advance the
Company's  interests when the opportunity to do so arises and that they will not
personally or in conjunction with another party compete against the Company.

13. GENERAL PROVISIONS

     (a)  Any notices to be given  hereunder  by either party to the other shall
          be in writing and may be transmitted by personal  delivery or by mail,
          registered  or  certified,   postage   prepaid  with  return   receipt
          requested.  Mailed  notices  shall be  addressed to the parties at the
          address appearing in the introductory  section of this Agreement,  but
          each party may change  that  address by written  notice in  accordance
          with  this  section.  Notice  delivered  personally  shall  be  deemed
          communicated as of the date of actual receipt; mailed notices shall be
          deemed communicated two days after the date of mailing.

     (b)  This Agreement supersedes any and all other agreements, either oral or
          in writing,  between the parties hereto with respect to the engagement
          of the  Consultant  by the Company,  and contains all of the covenants
          and agreements  between the parties with respect to that engagement in
          any manner whatsoever.  Each party to this Agreement acknowledges that
          no representations,  inducements,  promises, or agreements,  orally or
          otherwise,  have been made by any party, or anyone acting on behalf of
          any party, which are not embodied herein, and that no other agreement,
          statement or promise not contained in this Agreement shall be valid or
          binding on either party.

     (c)  The  parties  hereto  agree  and  warrant  to use  best  efforts,  due
          diligence,  and to  maintain  full  disclosure  of all  matters of the
          business and conduct of the parties in respect to this Agreement.

     (d)  The parties  hereunto agree and acknowledge that they have each sought
          separate counsel because the effects of this Agreement are material to
          their  fortunes,  and the  consequences of this Agreement are onerous,
          far reaching and engage serious obligations.

     (e)  Any  modification of this Agreement will be effective only if it is in
          writing and signed by the party to be bound thereby.

     (f)  The failure of either party to insist on strict compliance with any of
          the terms,  covenants,  or conditions of this Agreement by other party
          shall not be deemed a waiver of that term, covenant or condition,  nor
          shall any  waiver or  relinquishment  of any right or power at any one
          time or times be deemed a waiver or  relinquishment  of that  right to
          power for all or any other times.

                                       6
<PAGE>
     (g)  If any  provision  to this  Agreement  is held by a court of competent
          jurisdiction  to be  invalid,  void or  unenforceable,  the  remaining
          provisions  shall  nevertheless  continue in full force  without being
          impaired or invalidated in any way.

     (h)  This Agreement  shall be governed by and construed in accordance  with
          the laws and courts of the State of Nevada.

     (i)  The parties  hereto agree to execute and to cause to be effected  such
          additional  documents  or  matters as shall be  required  to fully and
          effectually   achieve  the  intent  hereof  and  to  achieve   matters
          collateral  hereto including,  but not limited to necessary  corporate
          resolutions,   necessary   regulatory  filings,   specific  management
          agreements,  or such other matters  required  between the parties that
          are  necessary  to effect the  intent of this  Agreement  and  matters
          collateral.

IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date
first written above.

LA PAZ MINING CORP.

------------------------------------------
Authorized Signatory

(SIGNED, SEALED AND DELIVERED BY)

/s/ Charles Irizarry
------------------------------------------
CHARLES IRIZARRY

                                       7

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