Document:

June 11, 2002

March 15, 2005

       

BAJA MINING CORPORATION 

PRIVATE AND CONFIDENTIAL

Suite 1880, Oceanic Plaza

1066 West Hastings Street

Vancouver, BC  V6E 3X1

Attention: The Board of Directors

Re:

Proposal for Financial Advisory Services

Following our recent discussions, I am pleased to provide the following terms under which Baja Mining Corporation (“Baja”) will retain Endeavour Financial International Corporation (“Endeavour”) on an exclusive basis to provide general corporate financial advice (as “Financial Advisor”) with respect to the financing and development of the Boleo copper/cobalt project (the “Project”) in Baja Sur, Mexico. 

During the course of this engagement, Endeavour will work closely with Baja management to identify and implement various Transactions, which may include, but are not limited to:  

-

Project finance; and/or

-

Corporate debt finance; and/or

-

Convertible debt, mezzanine finance, off-take finance, metal loans or similar financing; and/or

-

High yield debt; and/or

-

Bridge loan; and/or

-

Equity finance.

The Board of Directors

           Page 2

BAJA MINING CORPORATION

   

       

March 2, 2005

Such initiatives are referred to herein as the “Transaction(s)”. 

Duties

Endeavour will provide Baja with advice and assistance regarding the analysis, structuring, marketing, negotiating and closing of a Transaction(s).  It is understood that the specific duties may vary with the type of Transaction undertaken, but in general Endeavour expects to provide the following assistance to Baja: 

1.

Perform a full review of the Project, including reserve/resource information, permitting status, historic expenditures, the status of relevant corporate agreements and obligations and financial data. From a debt financing perspective, identify specific project risks and financing issues and the appropriate mitigation of each.

2.

Prepare financial models for Baja, assessing its debt capacity under various scenarios.  Identify alternate financing structures (including potential equity raisings, debt financing and capital market instruments such as high yield or convertible debt) and associated political risk mitigation structures, off-take and hedging arrangements.  

3.

Provide Baja’s engineering contractor(s) with appropriate guidance in completing and updating of the Feasibility Study to ensure that the finalised study meets all of the necessary banking requirements.

4.

Assist Baja with negotiating and finalising various project documents, including EPCM contracts, off-take contracts and supply contracts to ensure they meet banking requirements.

5.

Assist Baja with the preparation of independent consultant due diligence reviews of the Project and Baja, which will be utilised by financiers. 

6.

Prepare a comprehensive financial model incorporating relevant project parameters and analyse alternative financing structures; this will form the Base Case Model for financing purposes and will provide projected cash flow analysis and valuations for the Project under various scenarios to assess the 

The Board of Directors

           Page 3

BAJA MINING CORPORATION

   

       

March 2, 2005

impact on the final Project design and to ensure the debt component is maximised yet realistic.  Using this Base Case Model, identify alternate financing scenarios and examine various corporate strategies opposite each financing scenario to determine the impact on future corporate cashflows.

7.

Prepare a Financing and Development Plan and incorporate it with the information generated above into an Information Memorandum or similar marketing document that sets out the technical aspects and investment potential of the Project and company for distribution to identified financiers.

8.

Establish a detailed timetable and work schedule with Baja and, at the appropriate time, the lender(s). This work schedule will include a comprehensive schedule of tasks, required documentation and related Transaction duties, as well as coordinate the responsibilities of all Baja and Endeavour-related professionals.

9.

Identify and/or evaluate the financial institutions that currently have both the lending and risk profile capacity to provide funds for the development of the Project.  Manage and lead the marketing process, and assist and participate with management in the preparation, coordination, and presentation of relevant project information to prospective financiers.

10.

Assist Baja with structuring and negotiating key economic and business terms of the proposed Transaction(s) with the most suitable financiers and assess their relative market competitiveness. Assist with negotiating and finalising a Term Sheet/Letter of Intent with a view to negotiating and finalising a Commitment Letter/Definitive Agreement.

11.

Assist Baja and its lawyers with reviewing, in detail, various drafts of Transaction documentation and ancillary agreements to ensure the agreed structure is accurately reflected in the documentation, and to ensure Baja’s future corporate flexibility is not compromised or constrained by these agreements.

The Board of Directors

           Page 4

BAJA MINING CORPORATION

   

       

March 2, 2005

12.

Assist Baja with completing the Conditions Precedent to completing any Transaction undertaken, including, as appropriate, assistance with structuring and negotiating any ancillary requirements such as project insurance policies, cost overrun and hedging facilities, which may be required as a Condition Precedent to closing the Transaction. Ensure that all necessary authorisations and approvals are met in a timely manner and that all country-specific issues have been addressed and managed.

13.

Provide assistance with negotiating and closing the selected Transaction(s).

Disclosure of Engagement

In the event Baja wishes to refer to Endeavour or its engagement with Endeavour in any public statement, news release, shareholder communication or otherwise, it must first seek Endeavour’s approval, in all cases, prior to the release of such reference.

Endeavour acknowledges that is may be necessary for Baja to disclose this agreement or certain aspects of this agreement to stock exchanges, securities commissions or other regulatory authorities in order for Baja to be in compliance with the relevant securities policies.  In such instance, Baja acknowledges that disclosure of the commercial terms of this agreement may be to the detriment of Endeavour because of the competitive nature of the financial advisory business and will remove any specific information relating to the fee structure of this agreement prior to filing this agreement with regulatory or similar authorities. 

Acknowledgement

Baja acknowledges that:

(i)

Endeavour has, or is likely to have, individual, corporate or institutional clients who are shareholders of Baja (the “Clients”);

(ii)

Endeavour acts, and will act, as consultant or financial advisor to other companies (“Competitors”) in the same business as Baja; and

The Board of Directors

           Page 5

BAJA MINING CORPORATION

   

       

March 2, 2005

(iii)

The interests of the Clients or the Competitors may come into conflict with those of Baja.

Endeavour shall be under no liability to Baja for, or as a result of, its acting as consultant or financial advisor to Competitors and Clients, or the manner in which it resolves conflicts of interest deriving therefrom, unless Endeavour has acted in any manner which is dishonest or grossly negligent.

Commercial Terms

Endeavour’s remuneration for the above services is as follows: 

1.

confidential

2.

The granting of 1,000,000 stock options in Baja priced at CAD$0.75 exercisable for a period of five years.  This price will be amended to the issue price of the currently contemplated private placement, if such price is lower than CAD $0.75. The granting of these options shall be subject to regulatory approval.

3.

confidential

4.

confidential

5.

confidential

All or part of the amounts payable to Endeavour pursuant to this agreement may be subject to tax (including goods and services tax and applicable provincial sales taxes).  Where such taxes are applicable, an additional amount equal to the amount of such taxes owing will be charged to and be paid by Baja.

Any amounts due and payable hereunder and outstanding for in excess of forty-five (45) calendar days shall accrue interest at the prevailing LIBOR one month fixing rate for US$ plus three percent (3%), compounding on a monthly basis, both before and after judgment.

Expenses

Endeavour requires that all reasonable out of pocket costs, charges and expenses, including travel, incurred by it in the performance of its obligations under this mandate be 

The Board of Directors

           Page 6

BAJA MINING CORPORATION

   

       

March 2, 2005

reimbursed.  Prior approval will be obtained before incurring any expenses in excess of US$5,000.   

Reporting Requirements

Endeavour will report to Baja on a regular basis in such detail as Baja may reasonably request in connection with Endeavour’s performance of its services hereunder.  Baja will provide to Endeavour such information, documents, data, advice, opinions and representations as Endeavour may reasonably request relating to any Transaction that is the subject of this agreement.  Baja represents and warrants that any information furnished to Endeavour will be true, accurate and complete in all material respects and will not be misleading in any material respect and will not omit any material facts or information which might reasonably be considered to be material.  Baja shall ensure that Endeavour is advised on a timely basis of any material change that may be reasonably considered relevant to this agreement.  

Confidentiality

Endeavour acknowledges that the business carried on by Baja and its subsidiaries is an extremely competitive business and that disclosure of any confidential information about the business or financial affairs of Baja and its subsidiaries would place them at a competitive disadvantage.  Endeavour shall use its reasonable commercial efforts to preserve and protect the confidential nature of any information concerning the business or financial affairs of Baja or any of its dealings, transactions or affairs which may be disclosed to Endeavour by employees, officers or agents of Baja during the duration of this agreement.  Without restricting the generality of the foregoing, Endeavour shall not:

1.

Disclose any of the aforesaid information to third parties without the prior written consent of Baja, provided that such consent shall not be required where the information is disclosed:

2.

To the employees, officers, representatives, agents or professional advisors of Endeavour to enable such persons to assist Endeavour in providing consulting services to Baja hereunder;

The Board of Directors

           Page 7

BAJA MINING CORPORATION

   

       

March 2, 2005

a).

To the employees, officers, agents or professional advisors of Baja or such other persons as Baja management may designate;

b).

Pursuant to any law, statute or regulation, ordinance or administrative, regulatory or judicial order; or

c).

Use any of the aforesaid information for its own purpose or benefit or to the detriment or intended probable detriment of Baja.

The foregoing covenants of Endeavour shall not apply to information which:

1.

Through no act or omission of Endeavour is or becomes generally known or part of the public domain;

2.

Is furnished to others by Baja without restriction on disclosure; or

3.

Is lawfully furnished to Endeavour by a third party without Endeavour’s knowledge of a breach of any restriction on disclosure owed to Baja.

Indemnities

Please see Schedule A attached hereto.

Termination  

If accepted, this agreement between Endeavour and Baja will be in effect for a minimum period of twenty-four (24) months, and shall continue in force on a month-to-month basis, subject to termination on thirty (30) days written notice.  However, Baja may terminate this agreement without prior notice for just cause, which shall include:

1.

Endeavour committing an act of bankruptcy or becoming involved in any fraud or dishonest or serious misconduct in circumstances that would, in the reasonable opinion of Baja, make Endeavour unsuitable to act on behalf of Baja; and

2.

Endeavour failing to comply with any terms of this agreement with such failure not being rectified within fifteen (15) days of receipt of notice thereof from Baja.

The Board of Directors

           Page 8

BAJA MINING CORPORATION

   

       

March 2, 2005

Endeavour may terminate this agreement without prior notice for just cause, which shall include:

1.

Baja committing an act of bankruptcy or becoming involved in any fraud or dishonest or serious misconduct in circumstances that would, in the opinion of Endeavour, make representation of Baja by Endeavour unsuitable;

2.

Baja failing to comply with the terms of this agreement with such failure not being rectified within fifteen (15) days of receipt of notice from Endeavour; and/or

3.

Any order to cease trading in the securities of Baja being made by a competent regulatory authority.

Notwithstanding the above, a breach under Disclosure of Engagement above shall result in Endeavour’s right to terminate this agreement immediately and without notice.

If this agreement is terminated for any reason, Endeavour shall be entitled to receive, and Baja shall pay, Endeavour’s fees and reimbursable expenses to the date of termination.

Transactions After Termination

In the event that, within thirty (30) months of termination, a Transaction is concluded with:

1.

A party contacted in respect of a Transaction by Endeavour or Baja, or one who has contacted Endeavour or Baja in respect of a Transaction involving Baja during the term of this Agreement; or

2.

Any party who is an affiliate of the foregoing; then

Endeavour will be entitled to the Success Fee as though no such termination had occurred.

Severability

If any provision of this agreement is held invalid or unenforceable, in whole or in part, such provision shall be ineffective to the extent of such invalidity or unenforceability 

The Board of Directors

           Page 9

BAJA MINING CORPORATION

   

       

March 2, 2005

without in any manner affecting the validity or enforceability of the remaining provisions hereof.

Binding Agreement

If you are in agreement with the terms of this proposal as outlined herein, please indicate your agreement by signature below, at which time this proposal shall become a binding agreement between the parties and shall be governed by and construed in accordance with the laws of England.

Yours very truly,

ENDEAVOUR FINANCIAL INTERNATIONAL CORPORATION

BILL KOUTSOURAS

Director

AGREED AND ACCEPTED dated this _____ day of March, 2005 on behalf of:

BAJA MINING CORPORATION

 _________________________

Signature

__________________________

Name

__________________________

Title

The Board of Directors

           Page 10

BAJA MINING CORPORATION

   

       

March 2, 2005

SCHEDULE A - INDEMNITY

Baja hereby agrees to indemnify and save Endeavour, its affiliates and its respective directors, officers, employees and agents (collectively, the "Indemnified Parties" and individually, an "Indemnified Party") harmless from and against any and all losses, claims, actions, suits, proceedings, damages, liabilities or expenses of whatsoever nature or kind, including any investigation expenses incurred by any Indemnified Party, to which any Indemnified Party may become subject by reason of the performance of services rendered to Baja hereunder. 

This indemnity will not apply in the event and to the extent that a court of competent jurisdiction in a final judgment shall determine that the Indemnified Party was negligent or guilty of wilful misconduct.

In case any action is brought against an Indemnified Party in respect of which indemnity may be sought against Baja, the Indemnified Party will give Baja prompt written notice of any such action of which the Indemnified Party has knowledge and Baja will undertake the investigation and defence thereof on behalf of the Indemnified Party, including employment of counsel acceptable to such Indemnified Party and make payment of all expenses.

No admission of liability and no settlement of any action shall be made without the consent of Baja and the Indemnified Parties affected, such consent not to be unreasonably withheld.

Notwithstanding that Baja will undertake the investigation and defence of any action, an Indemnified Party will have the right to employ separate counsel in any such action and participate in the defence thereof, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless:

(a)

Employment of such counsel has been authorised by Baja; or

(b)

Baja has not assumed the defence of the action within a reasonable period of time after receiving notice of the action; or 

(c)

The named parties to any such action include both Baja and the Indemnified Party and the Indemnified Party shall have been advised by counsel that there may be a conflict of interest between Baja and the Indemnified Party; or

(d)

There are one or more legal defences available to the Indemnified Party which are different from or in addition to those available to Baja.

Baja hereby constitutes Endeavour as trustee for each other Indemnified Party under this paragraph with respect to such other Indemnified Parties and Endeavour agrees to accept such trust and to hold and enforce such covenants on behalf of such Indemnified Parties.

October 13, 2005

       

BAJA MINING CORPORATION 

PRIVATE AND CONFIDENTIAL

Suite 1880, Oceanic Plaza

1066 West Hastings Street

Vancouver, BC  V6E 3X1

Attention: The Board of Directors

Re:

Proposal for Financial Advisory Services 

As Amended and Restated October 13, 2005

Following our recent discussions, I am pleased to provide the following terms under which Baja Mining Corporation (“Baja”) will retain Endeavour Financial International Corporation (“Endeavour”) on an exclusive basis to provide general corporate financial advice (as “Financial Advisor”) with respect to the financing and development of the Boleo copper/cobalt project (the “Project”) in Baja California Sur, Mexico.   This agreement supersedes the agreement between Endeavour and Baja dated March 15, 2005.

During the course of this engagement, Endeavour will work closely with Baja management to identify and implement various transactions, which may include, but are not limited to:  

-

Project finance; and/or

-

Corporate debt finance; and/or

-

Convertible debt, mezzanine finance, off-take finance, metal loans or similar financing; and/or

The Board of Directors

           Page 12

BAJA MINING CORPORATION

   

       October 13, 2005

-

High yield debt; and/or

-

Bridge loan; and/or

-

Equity finance; and/or

-

Industry equity participation; and/or

-

Joint Venture arrangements.

Such initiatives are referred to herein as the “Transaction(s)”. 

Duties

Endeavour will provide Baja with advice and assistance regarding the analysis, structuring, marketing, negotiating and closing of a Transaction(s).  It is understood that the specific duties may vary with the type of Transaction undertaken, but in general Endeavour expects to provide the following assistance to Baja: 

Debt Finance

14.

Perform a full review of the Project, including reserve/resource information, permitting status, historic expenditures, the status of relevant corporate agreements and obligations and financial data. From a debt financing perspective, identify specific project risks and financing issues and the appropriate mitigation of each.

15.

Prepare financial models for Baja, assessing its debt capacity under various scenarios.  Identify alternate financing structures (including potential equity raisings, debt financing and capital market instruments such as high yield or convertible debt) and associated political risk mitigation structures, off-take and hedging arrangements.  

16.

Provide Baja’s engineering contractor(s) with appropriate guidance in completing and updating of the Feasibility Study to ensure that the finalised study meets all of the necessary banking requirements.

The Board of Directors

           Page 13

BAJA MINING CORPORATION

   

       October 13, 2005

17.

Assist Baja with negotiating and finalising various project documents, including EPCM contracts, off-take contracts and supply contracts to ensure they meet banking requirements.

18.

Assist Baja with the preparation of independent consultant due diligence reviews of the Project and Baja, which will be utilised by financiers. 

19.

Prepare a comprehensive financial model incorporating relevant project parameters and analyse alternative financing structures; this will form the Base Case Model for financing purposes and will provide projected cash flow analysis and valuations for the Project under various scenarios to assess the impact on the final Project design and to ensure the debt component is maximised yet realistic.  Using this Base Case Model, identify alternate financing scenarios and examine various corporate strategies opposite each financing scenario to determine the impact on future corporate cashflows.

20.

Prepare a Financing and Development Plan and incorporate it with the information generated above into an Information Memorandum or similar marketing document that sets out the technical aspects and investment potential of the Project and company for distribution to identified financiers.

21.

Establish a detailed timetable and work schedule with Baja and, at the appropriate time, the lender(s). This work schedule will include a comprehensive schedule of tasks, required documentation and related Transaction duties, as well as coordinate the responsibilities of all Baja and Endeavour-related professionals.

22.

Identify and/or evaluate the financial institutions that currently have both the lending and risk profile capacity to provide funds for the development of the Project.  Manage and lead the marketing process, and assist and participate with management in the preparation, coordination, and presentation of relevant project information to prospective financiers.

23.

Assist Baja with structuring and negotiating key economic and business terms of the proposed Transaction(s) with the most suitable financiers and 

The Board of Directors

           Page 14

BAJA MINING CORPORATION

   

       October 13, 2005

assess their relative market competitiveness. Assist with negotiating and finalising a Term Sheet/Letter of Intent with a view to negotiating and finalising a Commitment Letter/Definitive Agreement.

24.

Assist Baja and its lawyers with reviewing, in detail, various drafts of Transaction documentation and ancillary agreements to ensure the agreed structure is accurately reflected in the documentation, and to ensure Baja’s future corporate flexibility is not compromised or constrained by these agreements.

25.

Assist Baja with completing the Conditions Precedent to completing any Transaction undertaken, including, as appropriate, assistance with structuring and negotiating any ancillary requirements such as project insurance policies, cost overrun and hedging facilities, which may be required as a Condition Precedent to closing the Transaction. Ensure that all necessary authorisations and approvals are met in a timely manner and that all country-specific issues have been addressed and managed.

26.

Provide assistance with negotiating and closing the selected Transaction(s).

Industry Equity or Joint Venture Participation

1.

Review the most favoured Transaction structures and review each as a component of Baja’s overall business strategy.  Select one or more counter-parties that are recommended to achieve the optimal business strategy. In particular Endeavour will review the Transactions with regard to their impact on the proposed senior debt project financing.

2.

Advise Baja on its strategic positioning against a potential counter-party, which could include a response/defence strategy against any solicited or unsolicited offers for Baja, as the case may be.

3.

Initiate discussions with the qualified counter-party(s) and co-ordinate all subsequent contacts, including arrangement for signature of Confidentiality Agreements, co-ordinate the dissemination of information memoranda and other materials.

The Board of Directors

           Page 15

BAJA MINING CORPORATION

   

       October 13, 2005

4.

Assist Baja with undertaking any preliminary due diligence it may need to undertake, including a review of any relevant corporate materials and agreements, detailed financial and technical evaluation of any proposed Transaction, all of which will be required by Baja to evaluate a proposed Transaction.

5.

Assist Baja with negotiating the key economic terms of a Transaction, including, but not limited to, a Heads or Agreement or similar document with respect to any equity participation, loan or offtake or metal sale agreement or similar document. Assist Baja in providing valuation models for the purpose of any proposed equity investment, sale of a project stake or the financial impact of proposed financing, offtake or metal sales contracts.

6.

Work with Baja and its accountants, lawyers and tax advisors to structure the optimal business Transaction for Baja and its shareholders.

7.

Establish a detailed timetable and work schedule with Baja.  This work schedule will include a comprehensive schedule of tasks, required documentation and related Transaction duties, as well as coordinate the responsibilities of all Baja and Endeavour-related professionals.

8.

Assist Baja and its lawyers with reviewing, in detail, various drafts of Transaction documentation and ancillary agreements to ensure the agreed Transaction structure is accurately reflected in the documentation, and to ensure Baja’s future corporate flexibility is not compromised or constrained by these agreements.

9.

Provide any other related financial advice or analysis requested by Baja to assist with the successful closing of a Transaction.

Disclosure of Engagement

In the event Baja wishes to refer to Endeavour or its engagement with Endeavour in any public statement, news release, shareholder communication or otherwise, it must first seek Endeavour’s approval, in all cases, prior to the release of such reference.

The Board of Directors

           Page 16

BAJA MINING CORPORATION

   

       October 13, 2005

Endeavour acknowledges that is may be necessary for Baja to disclose this agreement or certain aspects of this agreement to stock exchanges, securities commissions or other regulatory authorities in order for Baja to be in compliance with the relevant securities policies.  In such instance, Baja acknowledges that disclosure of the commercial terms of this agreement may be to the detriment of Endeavour because of the competitive nature of the financial advisory business and will remove any specific information relating to the fee structure of this agreement prior to filing this agreement with regulatory or similar authorities. 

Acknowledgement

Baja acknowledges that:

(iv)

Endeavour has, or is likely to have, individual, corporate or institutional clients who are shareholders of Baja (the “Clients”);

(v)

Endeavour acts, and will act, as consultant or financial advisor to other companies (“Competitors”) in the same business as Baja; and

(vi)

The interests of the Clients or the Competitors may come into conflict with those of Baja.

Endeavour shall be under no liability to Baja for, or as a result of, its acting as consultant or financial advisor to Competitors and Clients, or the manner in which it resolves conflicts of interest deriving therefrom, unless Endeavour has acted in any manner which is dishonest or grossly negligent.

Commercial Terms

Endeavour’s remuneration for the above services is as follows: 

6.

confidential

7.

The granting of 1,000,000 stock options in Baja priced at CAD$0.35 exercisable for a period of five years.  This price will be amended to the issue price of the currently contemplated private placement, if such price is lower than CAD$0.35.  The granting of these options shall be subject to regulatory approval.

The Board of Directors

           Page 17

BAJA MINING CORPORATION

   

       October 13, 2005

8.

confidential

9.

confidential

10.

confidential

All or part of the amounts payable to Endeavour pursuant to this agreement may be subject to tax (including goods and services tax and applicable provincial sales taxes).  Where such taxes are applicable, an additional amount equal to the amount of such taxes owing will be charged to and be paid by Baja.

Any amounts due and payable hereunder and outstanding for in excess of forty-five (45) calendar days shall accrue interest at the prevailing LIBOR one month fixing rate for US$ plus three percent (3%), compounding on a monthly basis, both before and after judgment.

Expenses

Endeavour requires that all reasonable out of pocket costs, charges and expenses, including travel, incurred by it in the performance of its obligations under this mandate be reimbursed.  Prior approval will be obtained before incurring any expenses in excess of US$5,000.   

Reporting Requirements

Endeavour will report to Baja on a regular basis in such detail as Baja may reasonably request in connection with Endeavour’s performance of its services hereunder.  Baja will provide to Endeavour such information, documents, data, advice, opinions and representations as Endeavour may reasonably request relating to any Transaction that is the subject of this agreement.  Baja represents and warrants that any information furnished to Endeavour will be true, accurate and complete in all material respects and will not be misleading in any material respect and will not omit any material facts or information which might reasonably be considered to be material.  Baja shall ensure that Endeavour is advised on a timely basis of any material change that may be reasonably considered relevant to this agreement.  

The Board of Directors

           Page 18

BAJA MINING CORPORATION

   

       October 13, 2005

Confidentiality

Endeavour acknowledges that the business carried on by Baja and its subsidiaries is an extremely competitive business and that disclosure of any confidential information about the business or financial affairs of Baja and its subsidiaries would place them at a competitive disadvantage.  Endeavour shall use its reasonable commercial efforts to preserve and protect the confidential nature of any information concerning the business or financial affairs of Baja or any of its dealings, transactions or affairs which may be disclosed to Endeavour by employees, officers or agents of Baja during the duration of this agreement.  Without restricting the generality of the foregoing, Endeavour shall not:

3.

Disclose any of the aforesaid information to third parties without the prior written consent of Baja, provided that such consent shall not be required where the information is disclosed:

4.

To the employees, officers, representatives, agents or professional advisors of Endeavour to enable such persons to assist Endeavour in providing consulting services to Baja hereunder;

d).

To the employees, officers, agents or professional advisors of Baja or such other persons as Baja management may designate;

e).

Pursuant to any law, statute or regulation, ordinance or administrative, regulatory or judicial order; or

f).

Use any of the aforesaid information for its own purpose or benefit or to the detriment or intended probable detriment of Baja.

The foregoing covenants of Endeavour shall not apply to information which:

4.

Through no act or omission of Endeavour is or becomes generally known or part of the public domain;

5.

Is furnished to others by Baja without restriction on disclosure; or

6.

Is lawfully furnished to Endeavour by a third party without Endeavour’s knowledge of a breach of any restriction on disclosure owed to Baja.

The Board of Directors

           Page 19

BAJA MINING CORPORATION

   

       October 13, 2005

Indemnities

Please see Schedule A attached hereto.

Termination  

If accepted, this amended and restated agreement between Endeavour and Baja will be in effect for a minimum period of twenty-four (24) months from the date of the original agreement (15th March 2005), and shall continue in force on a month-to-month basis, subject to termination on thirty (30) days written notice.  However, Baja may terminate this agreement without prior notice for just cause, which shall include:

3.

Endeavour committing an act of bankruptcy or becoming involved in any fraud or dishonest or serious misconduct in circumstances that would, in the reasonable opinion of Baja, make Endeavour unsuitable to act on behalf of Baja; and

4.

Endeavour failing to comply with any terms of this agreement with such failure not being rectified within fifteen (15) days of receipt of notice thereof from Baja.

Endeavour may terminate this agreement without prior notice for just cause, which shall include:

4.

Baja committing an act of bankruptcy or becoming involved in any fraud or dishonest or serious misconduct in circumstances that would, in the opinion of Endeavour, make representation of Baja by Endeavour unsuitable;

5.

Baja failing to comply with the terms of this agreement with such failure not being rectified within fifteen (15) days of receipt of notice from Endeavour; and/or

6.

Any order to cease trading in the securities of Baja being made by a competent regulatory authority.

Notwithstanding the above, a breach under Disclosure of Engagement above shall result in Endeavour’s right to terminate this agreement immediately and without notice.

If this agreement is terminated for any reason, Endeavour shall be entitled to receive, and Baja shall pay, Endeavour’s fees and reimbursable expenses to the date of termination.

The Board of Directors

           Page 20

BAJA MINING CORPORATION

   

       October 13, 2005

Transactions After Termination

In the event that, within thirty (30) months of termination, a Transaction is concluded with:

3.

A party contacted in respect of a Transaction by Endeavour or Baja, or one who has contacted Endeavour or Baja in respect of a Transaction involving Baja during the term of this Agreement; or

4.

Any party who is an affiliate of the foregoing; then

Endeavour will be entitled to the Success Fee as though no such termination had occurred.

Severability

If any provision of this agreement is held invalid or unenforceable, in whole or in part, such provision shall be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability of the remaining provisions hereof.

Binding Agreement

If you are in agreement with the terms of this proposal as outlined herein, please indicate your agreement by signature below, at which time this proposal shall become a binding agreement between the parties and shall be governed by and construed in accordance with the laws of England.

Yours very truly,

ENDEAVOUR FINANCIAL INTERNATIONAL CORPORATION

BILL KOUTSOURAS

Director

AGREED AND ACCEPTED dated this _____ day of October, 2005 on behalf of:

BAJA MINING CORPORATION

The Board of Directors

           Page 21

BAJA MINING CORPORATION

   

       October 13, 2005

 _________________________

Signature

__________________________

Name

__________________________

Title

The Board of Directors

           Page 22

BAJA MINING CORPORATION

   

       October 13, 2005

SCHEDULE A - INDEMNITY

Baja hereby agrees to indemnify and save Endeavour, its affiliates and its respective directors, officers, employees and agents (collectively, the "Indemnified Parties" and individually, an "Indemnified Party") harmless from and against any and all losses, claims, actions, suits, proceedings, damages, liabilities or expenses of whatsoever nature or kind, including any investigation expenses incurred by any Indemnified Party, to which any Indemnified Party may become subject by reason of the performance of services rendered to Baja hereunder. 

This indemnity will not apply in the event and to the extent that a court of competent jurisdiction in a final judgment shall determine that the Indemnified Party was negligent or guilty of wilful misconduct.

In case any action is brought against an Indemnified Party in respect of which indemnity may be sought against Baja, the Indemnified Party will give Baja prompt written notice of any such action of which the Indemnified Party has knowledge and Baja will undertake the investigation and defence thereof on behalf of the Indemnified Party, including employment of counsel acceptable to such Indemnified Party and make payment of all expenses.

No admission of liability and no settlement of any action shall be made without the consent of Baja and the Indemnified Parties affected, such consent not to be unreasonably withheld.

Notwithstanding that Baja will undertake the investigation and defence of any action, an Indemnified Party will have the right to employ separate counsel in any such action and participate in the defence thereof, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless:

(e)

Employment of such counsel has been authorised by Baja; or

(f)

Baja has not assumed the defence of the action within a reasonable period of time after receiving notice of the action; or 

(g)

The named parties to any such action include both Baja and the Indemnified Party and the Indemnified Party shall have been advised by counsel that there may be a conflict of interest between Baja and the Indemnified Party; or

(h)

There are one or more legal defences available to the Indemnified Party which are different from or in addition to those available to Baja.

Baja hereby constitutes Endeavour as trustee for each other Indemnified Party under this paragraph with respect to such other Indemnified Parties and Endeavour agrees to accept such trust and to hold and enforce such covenants on behalf of such Indemnified Parties.FIRST GOLDWATER RESOURCES INC

BAJA MINING CORP.

(the "Company")

INCENTIVE STOCK OPTION PLAN

 (the "Plan")

1.

Purpose of the Plan

The purpose of the Plan is to assist the Company in attracting, retaining and motivating "Directors", "Employees" and "Consultants" of the Company (as those terms are defined in TSX Venture Exchange Policy 4.4, and which terms are hereinafter collectively referred to as "Directors, Employees and Consultants") and any of its subsidiaries and to closely align the personal interests of such Directors, Employees and Consultants with those of the shareholders by providing them with the opportunity, through options, to acquire common shares in the capital of the Company.

2.

Implementation

The Plan and the grant and exercise of any options under the Plan are subject to compliance with the applicable requirements of the Exchange and of any governmental authority or regulatory body to which the Company is subject.

3.

Administration

The Plan shall be administered by the Board of Directors of the Company which shall, without limitation, subject to the approval of the exchanges, have full and final authority in its discretion, but subject to the express provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the Plan.  The Board of Directors may delegate any or all of its authority with respect to the administration of the Plan and any or all of the rights, powers and discretions with respect to the Plan granted to it hereunder to such committee of directors of the Company as the Board of Directors may designate and upon such delegation such committee of directors, as well as the Board of Directors, shall be entitled to exercise any or all of such authority, rights, powers and discretions with respect to the Plan.  When used hereafter in the Plan, "Board of Directors" shall be deemed to include a committee of directors acting on behalf of the Board of Directors.

4.

Shares Issuable Under the Plan

Subject to the requirements of the Exchange:

(a)

the aggregate number of shares (“Optioned Shares”) that may be issuable pursuant to options granted under the Plan will not exceed 10% of the number of issued shares of the Company at the time of the granting of options under the Plan; 

(b)

no more than 5% of the issued shares of the Company, calculated at the date the option is granted, may be granted to any one Optionee (as hereinafter defined) in any 12 month period;

(c)

no more than 2% of the issued shares of the Company, calculated at the date the option is granted, may be granted to any one Consultant in any 12 month period;

(d)

no more than an aggregate of 2% of the issued shares of the Company, calculated at the date the option is granted,  may be granted to an Employee conducting "Investor Relations Activities" (as that term is defined in TSX Venture Exchange Policy 1.1) in any 12 month period.

5.

Eligibility

5.01

General

Options may be granted under the Plan to Directors, Employees and Consultants of the Company (collectively the "Optionees" and individually an "Optionee").  Subject to the provisions of the Plan, the total number of Optioned Shares to be made available under the Plan and to each Optionee, the time or times and price or prices at which options shall be granted, the time or times at which such options are exercisable, and any conditions or restrictions on the exercise of options, shall be in the full and final discretion of the Board of Directors.

5.02

Options Granted to Employees, Consultants or Management Company Employees

The Company represents that, in the event it wishes to grant options under the Plan to Employees, Consultants or "Management Company Employees" (as that term is defined in TSX Venture Exchange Policy 4.4), it will only grant such options to Optionees who are bona fide Employees, Consultants or Management Company Employees, as the case may be.

6.

Terms and Conditions

All options under the Plan shall be granted upon and subject to the terms and conditions hereinafter set forth.

6.01

Exercise price

The exercise price to each Optionee for each Optioned Share shall be determined by the Board of Directors but shall not, in any event, be less than the "Discounted Market Price" of the Company's common shares as traded on the Exchange (as that term is defined in TSX Venture Exchange Policy 1.1), or such other price as may be agreed to by the Company and accepted by the Exchange; provided that the exercise price for each Optioned Share in respect of options granted within 90 days of a "Distribution" by a "Prospectus" (as those terms are defined in TSX Venture Exchange Policy 1.1) shall not be less than the greater of the Discounted Market Price and the price per share paid by public investors for listed shares of the Company under the Distribution.

6.02

Reduction in the Exercise Price of Options Granted to Insiders

In the event the Company wishes to reduce the exercise price of any options held by "Insiders" (as that term is defined in TSX Venture Exchange Policy 1.1) of the Company at the time of the proposed reduction, the approval of the disinterested Shareholders of the Company will be required prior to the exercise of any such options at the reduced exercise price.

6.03

Option Agreement

All options shall be granted under the Plan by means of an agreement (the "Option Agreement") between the Company and each Optionee in the form attached hereto as Schedule "A" or such other form as may be approved by the Board of Directors, such approval to be conclusively evidenced by the execution of the Option Agreement by any 

one director or officer of the Company, or otherwise as determined by the Board of Directors.

6.04

Length of Grant

Subject to sections 6.10, 6.11, 6.12, 6.13 and 6.14 all options granted under the Plan shall expire not later than that date which is 5 years from the date such options were granted.

6.05

Non-Assignability of Options

An option granted under the Plan shall not be transferable or assignable (whether absolutely or by way of mortgage, pledge or other charge) by an Optionee other than by will or other testamentary instrument or the laws of succession and may be exercisable during the lifetime of the Optionee only by such Optionee.

6.06

Vesting Schedule for Options Granted to Consultants conducting Investor Relations Activities

An Optionee who is a Consultant conducting Investor Relations Activities who is granted an option under the Plan will become vested with the right to exercise one-quarter (1/4) of the option upon the conclusion of every 3 months subsequent to the date of the grant of the option, such that that Optionee will be vested with the right to exercise one hundred percent (100%) of his option upon the conclusion of 12 months from the date of the grant of the option.  (By way of example, in the event that Optionee did not exercise one-quarter (1/4) of his option at the conclusion of 3 months from the date of the grant of the option, he would be entitled to exercise one-half (1/2) of his option upon the conclusion of 6 months from the date of the grant of the option.)

6.07

Right to Postpone Exercise

Each Optionee, upon becoming entitled to exercise the option in respect of any Optioned Shares in accordance with the Option Agreement, shall thereafter be entitled to exercise the option to purchase such Optioned Shares at any time prior to the expiration or other termination of the Option Agreement or the option rights granted thereunder in accordance with such agreement.

6.08

Exercise and Payment

Any option granted under the Plan may be exercised by an Optionee or, if applicable, the legal representatives of an Optionee, giving notice to the Company specifying the number of shares in respect of which such option is being exercised, accompanied by payment (by cash or certified cheque payable to the Company) of the entire exercise price (determined in accordance with the Option Agreement) for the number of shares specified in the notice.  Upon any such exercise of an option by an Optionee the Company shall cause the transfer agent and registrar of shares of the Company to promptly deliver to such Optionee or the legal representatives of such Optionee, as the case may be, a share certificate in the name of such Optionee or the legal representatives of such Optionee, as the case may be, representing the number of shares specified in the notice.

6.09

Rights of Optionees

The Optionees shall have no rights whatsoever as shareholders in respect of any of the Optioned Shares (including, without limitation, voting rights or any right to receive dividends, warrants or rights under any rights offering) other than Optioned Shares in respect of which Optionees have exercised their option to purchase and which have been issued by the Company.

6.10

Third Party Offer

If at any time when an option granted under the Plan remains unexercised with respect to any common shares, an offer to purchase all of the common shares of the Company is made by a third party, the Company may upon giving each Optionee written notice to that effect, require the acceleration of the time for the exercise of the option rights granted under the Plan and of the time for the fulfilment of any conditions or restrictions on such exercise.

6.11

Alterations in Shares

In the event of a stock dividend, subdivision, redivision, consolidation, share reclassification (other than pursuant to the Plan), amalgamation, merger, corporate arrangement, reorganization, liquidation or the like of or by the Company, the Board of Directors may make such adjustment, if any, of the number of Optioned Shares, or of the exercise price, or both, as it shall deem appropriate to give proper effect to such event.  If because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of shares in the Company for those in another corporation is imminent, the Board of Directors may, in a fair and equitable manner, determine the manner in which all unexercised option rights granted under the Plan shall be treated including, for example, requiring the acceleration of the time for the exercise of such rights by the Optionees and of the time for the fulfilment of any conditions or restrictions on such exercise.  All determinations of the Board of Directors under this section 6.11 shall be full and final.

6.12

Termination for Cause

Subject to section 6.13, if an Optionee ceases to be either a Director, Employee, Consultant or Management Company Employee of the Company or of any of its subsidiaries as a result of having been dismissed from any such position for cause, all unexercised option rights of that Optionee under the Plan shall immediately become terminated and shall lapse, notwithstanding the original term of the option granted to such Optionee under the Plan.

6.13

Termination Other Than For Cause

If an Optionee ceases to be either a Director, Employee, Consultant or Management Company Employee of the Company or any of its subsidiaries for any reason other than as a result of having been dismissed for cause as provided in section 6.12 or as a result of the Optionee's death, such Optionee shall have the right for a period of 90 days (or until the normal expiry date of the option rights of such Optionee if earlier) from the date of ceasing to be either a Director, Employee, Consultant or Management Company Employee to exercise the option under the Plan with respect to all Optioned Shares of such Optionee to the extent they were exercisable on the date of ceasing to be either a Director, Employee, Consultant or Management Company Employee.  Upon the expiration of such 90 day period all unexercised option rights of that Optionee shall immediately become terminated and shall lapse notwithstanding the original term of the option granted to such Optionee under the Plan.

If an Optionee engaged in providing Investor Relations Activities to the Company ceases to be employed in providing such Investor Relations Activities, such Optionee shall have the right for a period of 30 days (or until the normal expiry date of the option rights of such Optionee if earlier) from the date of ceasing to provide such Investor Relations Activities to exercise the option under the Plan with respect to all Optioned Shares of 

such Optionee to the extent they were exercisable on the date of ceasing to provide such Investor Relations Activities.  Upon the expiration of such 30-day period all unexercised option rights of that Optionee shall immediately become terminated and shall lapse notwithstanding the original term of the option granted to such Optionee under the Plan.

6.14

Deceased Optionee

In the event of the death of any Optionee, the legal representatives of the deceased Optionee shall have the right for a period of one year (or until the normal expiry date of the option rights of such Optionee if earlier) from the date of death of the deceased Optionee to exercise the deceased Optionee's option with respect to all of the Optioned Shares of the deceased Optionee to the extent they were exercisable on the date of death.  Upon the expiration of such period all unexercised option rights of the deceased Optionee shall immediately become terminated and shall lapse notwithstanding the original term of the option granted to the deceased Optionee under the Plan.

7.

Amendment and Discontinuance of Plan

Subject to the acceptance of the exchanges, the Board of Directors may from time to time amend or revise the terms of the Plan or may discontinue the Plan at any time, provided that no such action may in any manner adversely affect the rights under any options earlier granted to an Optionee under the Plan without the consent of that Optionee.

8.

No Further Rights

Nothing contained in the Plan nor in any option granted hereunder shall give any Optionee or any other person any interest or title in or to any shares of the Company or any rights as a shareholder of the Company or any other legal or equitable right against the Company whatsoever other than as set forth in the Plan and pursuant to the exercise of any option, nor shall it confer upon the Optionees any right to continue as a Director, Employee or Consultant of the Company or of any of its subsidiaries.

9.

Compliance with Laws

The obligations of the Company to sell shares and deliver share certificates under the Plan are subject to such compliance by the Company and the Optionees as the Company deems necessary or advisable with all applicable corporate and securities laws, rules and regulations.

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