Document:

ex10-1.htm

    
      

    

    Exhibit 10.1

    

    KEY
TECHNOLOGY, INC.

    

    2003
RESTATED EMPLOYEES' STOCK INCENTIVE PLAN

    (as
amended and restated as of November 14, 2007)

    

     

    1. Purpose.

    

    This Restated Employees' Stock
Incentive Plan (the "Plan") is designed to encourage key employees of Key
Technology, Inc. (the "Company") and any subsidiary corporations to acquire or
increase a proprietary interest in the Company, and thus to share in the future
success of the Company's business.  Subsidiary corporation means any
corporation in which 50% or more of the outstanding shares of capital stock are
owned by the Company.  The Plan is intended to attract and retain
outstanding personnel who are in a position to make important and direct
contributions to the success of the Company and to promote a closer identity of
interests between the Company's key employees and its
shareholders.  The Plan was initially adopted in 1989 and was
subsequently amended on multiple occasions.  The Plan is amended and
restated as of November 14, 2007 to increase the total shares that may be issued
under the Plan since inception by 200,000 additional shares, and to qualify
future performance-based awards of restricted stock for exclusion from the
limits on deductible compensation under Section 162(m) of the Internal Revenue
Code.

     

    2. Scope
and Duration of the Plan.

    

    The total number of shares to be issued
to eligible participants under this Plan, including all shares issued prior to
the date of this restatement and shares issuable pursuant to the exercise of
options presently outstanding and previously granted restricted and unvested
stock awards, is 1,550,000 shares of the Company's Common Stock.  If
an option expires or terminates for any reason without having been fully
exercised, the unpurchased shares will be available for other options awarded
under the Plan.  If a restricted stock award is forfeited, in part or
in full, the forfeited shares will again be available for issuance under the
Plan.  Unless the Plan is terminated earlier pursuant to Section
8, it shall terminate on November 11, 2013 and no option or restricted
stock award shall be granted under the Plan after that date.

     

    3. Administration.

    

    The Plan is administered by the
Compensation Committee of the Board of Directors (the "Board"), which shall be
comprised solely of "Non-Employee Directors" as defined in Rule 16b-3(b)(3)(i)
of the Securities Exchange Act of 1934 (the "Committee").

    

    The Committee has the responsibility to
construe and interpret the Plan and to establish and amend such rules and
regulations as it deems necessary or desirable for the proper administration of
the Plan.  Any decision or action taken or to be taken by the
Committee, arising out of or in connection with the construction, interpretation
and administration of the Plan, shall, to the extent permitted by law, be within
its absolute discretion, but subject to the express provisions of the
Plan.  Decisions of the Committee shall be conclusive and binding upon
all recipients of options and restricted stock awards and any person claiming
under or through any recipient of an option or restricted stock
award.

    

    The Committee has the authority,
subject to the terms of the Plan, to determine which persons are eligible for
options and restricted stock awards and those to whom options or restricted
stock awards shall be granted, the type of grant to be awarded, the number of
shares to be covered by each option or restricted stock award, the time or times
at which options or restricted stock awards shall be granted, the fair market
value of shares under option or restricted stock award from time to time, and
the terms and provisions of the instruments evidencing options and restricted
stock awards, including any conditions to exercise, repurchase rights, or any
restrictions which may be imposed applicable to the transfer of the shares to be
acquired upon exercise of options or pursuant to restricted stock
awards.  The Board may take any action which the Committee is
authorized to take under the terms of the Plan.

     

    4. Eligible
Employees.

     

    4.1. Awards
Generally.  Options and restricted stock awards may be granted
to employees and to directors of the Company and any present or future
subsidiary corpora­tions.  In determining the employees to whom
options and restricted stock awards shall be granted, and the number of shares
to be issued on the exercise of an option or the number of shares of restricted
stock to be granted, the Committee shall take into account the duties of the
employees, their present and potential contributions to the success of the
Company, and such other factors as the Committee deems relevant to accomplish
the purposes of the Plan.

     

    4.2. Incentive Stock
Options.   Incentive Stock Options may be granted only to
employees of the Company or any subsidiary corporation.  An Incentive
Stock Option cannot be granted to an employee who, at the time such option is
granted, owns directly or beneficially more than 10% of the total combined
voting power of all classes of stock of the employer corporation or its parent
or any subsidiary.  This limitation shall not apply if, at the time
such Incentive Stock Option is granted, the option price is at least 110% of the
fair market value of the stock subject to the option and such option by its
terms is not exercisable after the expiration of five years from the date such
option is granted.

     

    5. Stock
Options.

     

    5.1. Types of
Grants.  The Committee may grant either Incentive Stock
Options, as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") or Nonstatutory Stock Options.  The Committee has
the sole discretion in deciding which options, if any, shall constitute
Incentive Stock Options.  For options granted under this Plan, the
Committee shall clearly identify each such option as an Incentive Stock Option
or Nonstatutory Stock Option.  Any option not clearly identified as an
Incentive Stock Option shall be deemed a Nonstatutory Stock
Option.  For purposes of the Plan (i) the term "Nonstatutory Stock
Option" means an option other than an Incentive Stock Option and (ii) the
term "employer corporation" means the corporation of which an individual granted
an Incentive Stock Option is an employee.

     

    5.2. Option Price.  The
price of the shares of Common Stock to be issued on exercise of an option shall
be determined by the Committee, and in the case of an Incentive Stock Option,
shall be not less than the fair market value of the shares on the date the
option is granted.  Fair market value of the shares under option shall
be determined by the Committee at the time of each grant of stock options under
the Plan.

     

    5.3. Term of
Options.  The term of each option shall be determined by the
Committee, but shall not be for more than ten years from the date the option is
granted and may be subject to earlier expiration as provided in Sections 5.9 and
5.10.  Each option shall recite the date on which the exercise period
expires.

     

    5.4. Limitation on Amount of Incentive
Stock Options.  In no event shall the aggregate fair market
value (determined at the time such options are granted) of the shares with
respect to which the employee's Incentive Stock Options first become exercisable
during any calendar year under the Plan or under any other stock option plan of
the employee's employer corporation and its parent and subsidiary corporations
exceed $100,000.

     

    5.5. Exercise of
Options.  Subject to Section 8, an option held by an employee
may be exercised only after an employee has remained in the continuous
employment of the Company or a subsidiary corporation for one year after the
date the option is granted.  Thereafter, an option may be exercised at
any time, or from time to time, in whole or in part, except that if an option by
its terms is exercisable in installments, then the provisions of the option
shall control.  After becoming exercisable, if exercisable in
installments, then each installment shall remain exercisable until termination
or expiration of the option.  The price of the shares shall be paid in
full at the time of exercise in cash or, with the consent of the Committee, in
whole or in part in shares of Common Stock of the Company, valued at fair market
value.  Fair market value shall be determined by the
Committee.  Except as provided in Sections 5.9 or5.10, no option
granted to an employee may be exercised unless the holder is then an employee of
the Company or a subsidiary corporation.  An employee shall not have
any of the rights of a shareholder with respect to the shares to be issued on
the exercise of an option until the shares are paid for and the stock
certificate is delivered.  Upon any exercise, prior to issuance and as
a condition thereof the person exercising the option may be required to sign any
form of subscription agreement then authorized by the  Board for use
in connection with shares purchased under this Plan.  Such agreement
may impose such restrictions and repurchase rights as the Board may
determine.

     

    5.6. Nontransferability of Nonstatutory
Stock Options.  Nonstatutory Stock Options granted under the
Plan are not transferable, except by will or by the laws of descent and
distribution, and may be exercised during the employee's life only by the
employee or, if incapacitated, by his guardian or legal
representative.  This section does not apply to Incentive Stock
Options granted under the Plan.

     

    5.7. Nontransferability of Incentive Stock
Options.  Incentive Stock Options granted under the Plan are
not transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and are exercisable during the optionee's lifetime
only by the optionee.  Each Incentive Stock Option shall recite this
restriction.  This section does not apply to Nonstatutory Stock
Options granted under the Plan.

     

    5.8. Instruments Evidencing Options and
Plan Log.  The Committee, in granting options hereunder, may
use such instruments and agreements to evidence such options as it may
determine.  All options to purchase shares of the Company which are
granted under the Plan must be evidenced by an agreement signed by the employee
to whom the option is awarded, all terms of which, to the extent not
inconsistent with the terms of the Plan, shall be as determined by the Committee
in awarding any such option.  The Secretary of the Company shall keep
with the Plan an official Plan Log listing the names of all employees to whom
options have been granted, the date of the award, the number of shares covered
by the option, the purchase price, the vesting schedule, if applicable, and the
number of remaining eligible shares covered by the Plan.

     

    5.9. Termination of
Employment. If the employment of an
employee to whom an option has been granted terminates for any reason other than
death or physical disability, any option unexercised at the date of termination
of employment shall expire except to the extent otherwise expressly authorized
by the Committee.  Whether an authorized leave of absence, military or
governmental service, disability or temporary absence from employment for any
other reason constitutes the termination of employment for purposes of the Plan
shall be conclusively determined by the Committee.

     

    5.10. Death or Disability of an
Employee. If
an employee to whom an option has been granted dies or becomes physically
disabled while employed by the Company or by a subsidiary corporation, the
option may only be exercised (to the extent that the employee was entitled to do
so on the date of his death or disability) by his personal representative or
beneficiary within 90 days after the date of death or termination of employment
due to disability, and the option shall expire to the extent unexercised after
such 90-day period except to the extent otherwise determined by the
Committee.

     

    6. Restricted
Stock Awards.

     

    6.1. General.  The
Committee may grant restricted stock awards to eligible employees and directors
under the Plan.  Each grant of restricted stock shall be evidenced by
a Restricted Stock Agreement between the recipient and the Company in such form
as may be approved by the Committee from time to time.  Shares of
restricted stock awarded under the Plan shall be subject to all applicable terms
of the Plan and may be subject to any other terms and conditions that are not
inconsistent with the Plan as the Committee may determine and as set forth in
the respective Restricted Stock Agreements.  The provisions of the
individual Restricted Stock Agreements entered into with recipients of
restricted stock awards under the Plan need not be identical.

     

    6.2. Payment for
Awards.  Shares of restricted stock may be sold or awarded
under the Plan for such consideration as the Committee may determine at the time
of each award including without limitation past services, future services or
cash.

     

    6.3. Vesting
Conditions.                                           Shares
of restricted stock awarded under the Plan may be subject to
vesting.  Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock
Agreement.  A Restricted Stock Agreement may provide for accelerated
vesting in event of the employee's death, disability, retirement or other
events. 

     

    6.4. Voting and Dividend
Rights.  The holders of shares of restricted stock awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other shareholders.  A Restricted Stock Agreement, however,
may require that the holders of the shares of restricted stock invest any cash
dividends received with respect to such shares in the purchase of additional
shares of restricted stock.  Such additional shares of any restricted
stock so purchased shall be subject to the same conditions and restrictions as
the award with respect to which the dividends were paid.

     

    6.5. Performance-Based
Awards.  The Committee may grant performance-based awards of
restricted stock to employees of the Company.  The number of shares of
each performance-based award, valued at the market price at the date of the
award, may not exceed in aggregate value the amount that is equal to the
recipient's annual base salary at the time of the award.  The
performance criteria of each performance-based award may be based upon Company
sales or revenue, gross margin, net earnings, or return on equity or invested
capital, or any of such performance criteria, as established by the Committee at
the time of each award.

     

    7. Adjustments
for Changes in Capitalization.

    

    Notwithstanding any other provision of
the Plan, in the event of changes in the outstanding shares of Common Stock of
the Company by reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, reorganizations or liquidations, each instrument evidencing an
option and each Restricted Stock Agreement may contain such provisions as the
Committee determines to be appropriate for the adjustment of the number and
class of shares covered by such option or restricted stock award, and as
applicable the option exercise price.  In the event of any such change
in the outstanding shares of Common Stock of the Company, the aggregate number
of shares available under the Plan shall be appropriately adjusted.

     

    8. Events
Accelerating Exercise of Options or Vesting of Restricted Stock.

    

    If the shares of Common Stock of the
Company are changed into or exchanged for shares of stock of another corporation
or are converted to cash pursuant to a plan of merger, partial or complete
liquidation, or dissolution, the Board may in its discretion determine to make
each option then outstanding be exercisable with respect to all or any portion
of the shares of Common Stock covered thereby and without regard to the time the
option has been outstanding, beginning with the date the Board approves or
authorizes such change or conversion and ending two days prior to the effective
date of such change or conversion.  The Board may also, in its
discretion, determine to make each share of restricted stock then subject to
forfeiture be fully vested without regard to the satisfaction of the conditions
specified in the Restricted Stock Agreement.  If, after November 12,
2003, any of the shares of Common Stock of the Company becomes the subject of an
acquisition requiring reporting under Sections 13(d)(1) or 14(d) of the
Securities Act of 1934, the Board may at its discretion determine to make each
option then outstanding be exercisable with respect to all or any portion of the
shares of Common Stock covered thereby and without regard to the time the option
has been outstanding, at any time thereafter, and may determine to make each
share of restricted stock then subject to forfeiture be fully vested without
regard to the satisfaction of the conditions specified in the Restricted Stock
Agreement.

     

    9. Employment
Rights.

    

    Nothing in the Plan or any instrument
evidencing an option or restricted stock award shall confer upon any employee
any right to continue in the employment of the Company or any subsidiary
corporation or shall be construed to interfere in any way with the right of the
Company or any subsidiary corporation to terminate his employment at any time
for any reason.

     

    10. Withholding
Taxes.

    

    To the extent required by applicable
federal, state or local law, an employee or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan.  The Company
shall not be required to issue any shares of Common Stock under the Plan until
such obligations are satisfied.  To the extent that applicable law
subjects an employee to tax withholding obligations, the Committee may permit
such employee to satisfy all or part of such obligations by having the Company
withhold all or a portion of any shares of Common Stock that otherwise would be
issued to him or her or by surrendering all or a portion of any shares of Common
Stock that he or she previously acquired.  Such shares of Common Stock
shall be valued at their fair market value on the date when they are withheld or
surrendered.

     

    11. Amendment.

    

    The Board has the right at any time to
amend, modify or discontinue the Plan.  An amendment of the Plan shall
be subject to the approval of the Company's shareholders only to the extent
required by applicable laws, regulations, rules or requirements of any
applicable governmental authority or listing organization governing the trading
of the Company's Stock.  No amendment, modification or discontinuance
adopted by the Board shall revoke or alter the terms of any valid option or
restricted stock award previously granted in accordance with the Plan without
the consent of the recipient of such award.

    

    The Plan may also be amended or
modified in any respect or discontinued with the approval of a majority of the
shares present and entitled to vote at a shareholder meeting duly called for
such purpose.  However, no amendment, modification or discontinuance
of the Plan may, without the consent of the employee to whom a valid option or
restricted stock award has previously been granted, affect the rights of such
employee under any outstanding option or restricted stock award.

    

    The Plan, the grant and exercise of
options, and the grant of restricted stock awards shall be subject to all
applicable laws, regulations, rules and requirements of applicable authorities
and organizations.  Notwithstanding any provision of the Plan to the
contrary, the Board may in its discretion make such changes in the Plan as may
be required to conform the Plan to such laws, regulations, rules and
requirements of applicable authorities and organizations, subject to the
provisions of the first paragraph of this Section 11.

     

    12. Effectiveness
of the Plan.

    

    The Plan as restated shall become
effective only after it has been approved by the Board of Directors and
subsequently approved, within one year from the date of approval by the Board,
at a shareholders meeting duly called for such purpose.

    

    

    

    

    

    Ronald L. Greenman

    Assistant SecretaryEXHIBIT 10.4  

TO THE NOTARY PUBLIC:

 

Kindly issue in your Registry of Public Deeds one of the MINING CONCESSIONS AND CLAIMS TRANSFER AGREEMENT entered into by and between Ms. MARLENE ORE LAMILLA, single, identified with identity card No. 10147024 and domiciled for this effects at Malecón Cisneros No. 810 Miraflores, Lima, acting duly represented by Mr. Wiston Manuel Saldaña Varas, identified with identity card No. 09550130, as per the power of attorney formalized by public deed granted before the Peruvian consulate of Vancouver, Canada, on November 27, 2007, that is in process of being recorded with the Public Registry Office of Lima and Callao of SUNARP (hereinafter named the
“TITLEHOLDER”); and BLACK TUSK MINERALS PERÚ S.A.C., with taxpayer’s registry number 20517586847 and domiciled for this effects at 408-1199 West Pender Street, Vancouver, BC V6E 2R1, Canada, duly represented by its general manager, Mr. José Santos Rodríguez Pizán, identified with identity card No. 26928562, as per powers of attorney granted in the General Shareholders’ Meeting of BLACK TUSK MINERALS PERU S.A.C. held on December 3, 2007, which minute, Mr. Notary, will be inserted in the public deed of this agreement, for the effects of what it is established in article 17 of the General Corporate Law and article 34 of the Corporation’s Registry regulations approved by Resolution No. 200-2001-SUNARP/SN (hereinafter named “BLACK TUSK”).

 

This agreement is executed under the terms and conditions stated below:

 

	
            One:
 	
            Preamble
 

 

	
            1.1
 	
            The TITLEHOLDER is the titleholder of the following mining concessions: 
 

 

	
            Name
 	
            Code
 	
            Extension (hectares)
 	
            Registration File
 
	
            ALTOCOCHA MINE 1
 	
            01-01324-07
 	
            29.9303
 	
            12089171 (Lima)
 
	
            ALTOCOCHA MINE 3
 	
            01-01326-07
 	
            374.4051
 	
            12089882 (Lima)
 
	
            ALTOCOCHA MINE 4
 	
            01-01327-07
 	
            604.9977
 	
            12089359 (Lima)
 
	
            ALTOCOCHA MINE 5
 	
            01-01328-07
 	
            126.9157
 	
            12089875 (Lima)
 
	
            ALTOCOCHA MINE 7
 	
            01-01598-07
 	
            300.00
 	
            12089522 (Lima)
 
	
            ALTOCOCHA MINE 8
 	
            01-01597-07
 	
            979.7332
 	
            12089420 (Lima)
 
	
            ALTOCOCHA MINE 9
 	
            01-01664-07
 	
            1000.0017
 	
            12089424 (Lima)
 
	
            ALTOCOCHA MINE 11
 	
            01-01666-07
 	
            500.00
 	
            12089535 (Lima)
 
	
            ALTOCOCHA MINE 12
 	
            01-01667-07
 	
            300.00
 	
            12089549 (Lima) 
 
	
            CORVINA
 	
            01-04753-06
 	
            500.00
 	
            11106238 (Huancayo)
 
	
            DELFÍN
 	
            01-04755-06
 	
            200.00
 	
            11106240 (Huancayo)
 
	
            JOSH 1
 	
            01-04754-06
 	
            600.00
 	
            11106239 (Huancayo)
 

 

 

 

Likewise, the TITLEHOLDER is also titleholder of the following mining claims:

 

	
            Name
 	
            Code
 	
            Extension (hectares)
 	
            Registration File
 
	
            ALTOCOCHA MINE
 	
            01-01292-07
 	
            1,000
 	
            Not registered
 
	
            ALTOCOCHA MINE 2
 	
            01-01325-07
 	
            196.7701
 	
            Not registered
 
	
            ALTOCOCHA MINE 10
 	
            01-01665-07
 	
            984.6706
 	
            Not registered
 

 

 

For the effects of this agreement, the mining concessions and the mining pediments detailed in section 1.1, will be jointly referred as the “PROPERTIES”.

 

	
            1.2
 	
            The PROPERTIES were requested under the quadrant system foreseen in Legislative Decree No. 708. Consequently, the area of the PROPERTIES only comprehends the free area available pursuant to their respective mining concession titles (whenever these are granted in the case of the mining claims detailed in section 1.1), without including the area of other mining rights, PROPERTIES or claims located within their perimeter, or that overlap them, nor the area of the ones requested under the regulations in force before Legislative Decree No. 708, which vertexes acquire or would have acquired definitive UTM coordinates, in accordance to what it is established in article 11 of Law No. 26615, in which case they must be mandatory respected by the PROPERTIES.
 

 

	
            1.3
 	
            BLACK TUSK is a company engaged in mining activities and is interested in acquiring the CONCESSIONS.
 

 

	
            Two:
 	
            Purpose of the agreement and price
 

 

	
            2.1
 	
            By means of this instrument and in accordance to articles 163 and 164 of the Mining Law, the TITLEHOLDER, in its condition of titleholder of the PROPERTIES, hereby transfers all its rights and shares in the PROPERTIES to BLACK TUSK. In this sense, BLACK TUSK becomes holder of 100% of the rights and shares of the PROPERTIES. 
 

	
            2.2
 	
            The transfer comprises all the integral and accessory parts that form part or may be generated from the 100% of the rights and shares of the PROPERTIES that are being transferred under this instrument, as well as any and all such rights associated therewith or with the activities carried out therein, as well as any such rights which may exist over surface properties, water, use, easements and all such others as may correspond as a matter of fact or law to the PROPERTIES or the aforesaid mining activities, without limitation whatsoever.
 

	
            2.3
 	
            The price mutually agreed by the parties for the transfer of the PROPERTIES in favor of BLACK TUSK consists in the issuance and delivery of 10’000,000.00 (ten million) common shares of a face value of US$ 0.001 each (which gives a total price of US$ 10,000.00 – ten thousand and 00/100 United States Dollars-- for the acquisition of the PROPERTIES), issued by BLACK TUSK MINERALS INC., a corporation incorporated and existing according to the laws of Nevada, United States of America; in favor of the individuals and/or companies that are listed below, which will receive said shares in the proportion that is hereby detailed and in compliance with the express instructions that in this act are given by the TITLEHOLDER to BLACK TUSK: 
 

 

	
            Name
 	
            Number of shares
 
	
            Stacy De Melt
 	
            2,200,000
 
	
            Leonard Raymond De Melt
 	
            1,500,000
 
	
            Marlene Ore Lamilla
 	
            1,000,000
 
	
            Quo Vadis United Ltd.
 	
            1,000,000
 
	
            Sarabjit Banwait
 	
            1,000,000
 
	
            Jatinder Bal
 	
            1,000,000
 
	
            Jean Sui
 	
            1,000,000
 
	
            Jose Santos Rodriguez Pizán
 	
            1,000,000
 
	
            Benjamín Alejandro Núñez Montañez
 	
            100,000
 
	
            Yevgeny Ore Lamilla
 	
            100,000
 
	
            Juan Manuel Elescano Yupanqui
 	
            50,000
 
	
            Wiston Manuel Saldaña Varas
 	
            20,000
 
	
            Alfonso Alvarez-Calderón Yrigoyen
 	
            20,000
 
	
            Vanessa Contreras Mendoza
 	
            10,000
 
	
            TOTAL
 	
            10,000,000
 

 

It is hereby expressly accepted that with the signature of the parties in this document, the TITLEHOLDER declares that it has received to its entire satisfaction and conformity, 100% of the agreed price for the transference of the PROPERTIES, not having any balance pending of payment, so the TITLEHOLDER will be impeded (and, in any case, it waives to do so expressly) to file any complaint for said concept or any other one related to the execution of the agreement.

 

Likewise, it is hereby expressly declared that the individual price assigned to each of the PROPERTIES for the effects of the transference agreed under this agreement, is the following:

 

 

	
            Name
 	
            Code
 	
            Price (US$)
 
	
            ALTOCOCHA MINE 1
 	
            01-01324-07
 	
            38.00
 
	
            ALTOCOCHA MINE 3
 	
            01-01326-07
 	
            486.00
 
	
            ALTOCOCHA MINE 4
 	
            01-01327-07
 	
            786.00
 
	
            ALTOCOCHA MINE 5
 	
            01-01328-07
 	
            164.00
 
	
            ALTOCOCHA MINE 7
 	
            01-01598-07
 	
            389.00
 
	
            ALTOCOCHA MINE 8
 	
            01-01597-07
 	
            1,272.00
 
	
            ALTOCOCHA MINE 9
 	
            01-01664-07
 	
            1,298.00
 
	
            CORVINA
 	
            01-04753-06
 	
            649.00
 
	
            DELFÍN
 	
            01-04755-06
 	
            259.00
 
	
            JOSH 1
 	
            01-04754-06
 	
            779.00
 
	
            ALTOCOCHA MINE
 	
            01-01292-07
 	
            1,300.00
 
	
            ALTOCOCHA MINE 2
 	
            01-01325-07
 	
            255.00
 
	
            ALTOCOCHA MINE 10
 	
            01-01665-07
 	
            1,287.00
 

 

	
            Name
 	
            Code
 	
            Price (US$)
 
	
            ALTOCOCHA MINE 11
 	
            01-01666-07
 	
            649.00
 
	
            ALTOCOCHA MINE 12
 	
            01-01667-07
 	
            389.00
 

Simultaneously with the execution of this document, the TITLEHOLDER will deliver to BLACK TUSK the invoice, issued according to law, for the price for the transference of the PROPERTIES. 

 

	
            2.4
 	
            BLACK TUSK grants to the TITLEHOLDER the right to receive a net smelter return (NSR) royalty of 1% of the minerals extracted and commercialized from the PROPERTIES, as per established in Annex 1 of this document.
 

 

Without prejudice of the above, in this same act the TITLEHOLDER assigns Mr. LEONARD RAYMOND DE MELT, identified with Canadian passport No. BA000738 and domiciled in Malecón Cisneros No. 810 Miraflores, Lima, as beneficiary of the amount that BLACK TUSK must pay for the royalty (hereinafter, the “BENEFICIARY”). In this sense, in this act the TITLEHOLDER authorizes BLACK TUSK to pay the royalty directly to the BENEFICIARY, without altering the fact that, for all the legal effects that correspond, the TITLEHOLDER will remain as the holder of the right to receive the aforementioned royalty and to comply with what it is established for those effects in Annex 1.

 

	
            2.5
 	
            The parties declare that between the 100% of the rights and shares of the PROPERTIES and the price agreed in section 2.1 above, there is a fair and perfectly equivalency and, therefore, should any difference of more or less appears, the parties donate such among themselves, waiving all actions destined to totally or partially invalidate the legal effects arising from this agreement.
 

 

	
            Third:
 	
            Representations by the TITLEHOLDER
 

 

The TITLEHOLDER hereby expressly makes the following representations:

 

	
            (a)
 	
            
That the  PROPERTIES  are not subject to any liens or  encumbrances,  nor to any
circumstance  that might  restrict  or limit its right to freely  dispose of the
PROPERTIES,  nor to any  injunction,  or judicial or arbitration  measure of any
kind. Likewise, the TITLEHOLDER further represents that it has complied with all
and every  obligations  necessary for  maintaining  the  PROPERTIES’  validity,
provided  that it has  timely  made all the  payments  (with  exception  to what
detailed in section c below) and  fulfilled  all the  requirements  set forth by
applicable law. Likewise, the TITLEHOLDER declares that it has strictly complied
with all the obligations (including environmental  obligations) that a holder of
mining activity must comply under law.
 

	
            (b)
 	
            That the PROPERTIES are not and will not be affected in the future by any contingency that might jeopardize its validity or expose its titleholder to the imposition of sanctions from the mining authorities or to claims from third parties, as a result of the activities conducted in the PROPERTIES by the TITLEHOLDER before the execution of this agreement or as a result of the compliance of the obligations related to the PROPERTIES that corresponded to the TITLEHOLDER in general, included those obligations related to the mining claim administrative proceedings related to the mining pediments referred in section 1.1.
 

 

 

	
            (c)
 	
            Save for the PROPERTIES known as “CORVINA” (code 01-04753-06), “DELFÍN” (code No. 01-04755-06) and “JOSH 1” (code No. 01-04754-06), which validity fees have been paid until year 2006, inclusively, the validity fees and penalties corresponding to the PROPERTIES have been duly and timely paid for until year 2007, inclusively, not existing today any debt or pending payment for that concept or any other. 
 

 

Without prejudice of what has been established in this clause 3, the TITLEHOLDER obliges itself to the most ample obligation to cure that could be applicable.

 

Fourth: Public deed and expenses 

 

	
            4.1
 	
            The TITLEHOLDER irrevocably and unconditionally obliges to execute the public deed to be originated from this agreement, simultaneously to the subscription of this document.
 

 

	
            4.2
 	
            All notarial and registration expenses required to formalize this agreement until registration thereof, shall be borne by BLACK TUSK.
 

 

	
            Fifth:
 	
            Additional stipulations 
 

 

	
            5.1
 	
            As from the date of subscription of this document, BLACK TUSK will be in charge of all the procedures and obligations before the Ministry of Energy and Mines, the Geological, Mining and Metallurgical Institute (INGEMMET, before INACC), the Public Registry and other institutions and instances regarding the PROPERTIES.
 

 

	
            5.2
 	
            All communication amongst the parties will be remitted to the addresses referred to in the introduction of this document. In order for any address modification to be in effect in relation to this agreement, such modification shall be informed through the deliver of a notarized letter. Otherwise, any notification delivered to the domicile here stated will be valid.
 

 

	
            5.3
 	
            
If any  stipulation  of this  agreement  due to any  circumstance  partially  or
totally becomes or is declared void, invalid,  illegal or non-enforceable,  such
stipulation  will be independent  from the other  provisions of this  agreement,
provided that it will not affect the validity or enforceability of any other provisions of this agreement,
as long as the present  contract is not executed in a way that is  substantially
different to the main commercial  agreement  amongst the parties,  in which case
the  parties  shall  amend  such  stipulation  in order  for it to be valid  and
enforceable    in   a   way   as   similar   as   possible   to   the   original
provisions.
 

	
            5.4
 	
            This agreement shall be governed by the laws of the Republic of Peru.
 

 

	
            5.5
 	
            
Any tax resulting from the transfer of the  PROPERTIES  will be assumed by BLACK
TUSK,           with          exception          of          the          Income
Tax that could be generated
by  the  TITLEHOLDER  and  which  will  be  assumed  and  entirely  paid  by the
latter.
 

 

	
            5.6
 	
            Any controversy that could arise amongst the parties regarding the interpretation of the present agreement and/or its fulfillment, including controversies referred to its voidness or validity, which cannot be solved by direct negotiation between the parties in a maximum term of thirty (30) calendar days, shall be submitted to an arbitration of law, conducted by three (3) arbitrators and its award shall be final and not subject of appeal.
 

 

If a written request for arbitration is sent by any of the parties to the other, after failing in the direct negotiation mentioned in the paragraph above, each party shall have ten (10) calendar days to designate an arbitrator and the two so elected shall have an additional ten (10) calendar days from the designation of the second member to designate a third arbitrator who shall chair the Court. In case on of the parties or both arbitrators fail to name an arbitrator within the mentioned terms, the interested party could request the Lima Chamber of Commerce (Cámara de Comercio de Lima) to designate one or more  arbitrator(s) as corresponding.

The Arbitration Court will determine the proceeding rules for the arbitration, in case it doesn’t determine the, the Lima Chamber of Commerce (Cámara de Comercio de Lima) proceeding rules will be applied.

The parties expressly waive the conciliation procedure provided under Law No. 26872, as the latter is voluntary for them. 

 

Mr. Notary, please add the pertinent introduction and conclusion as required by law and forward the corresponding notices to the Public Registry for the recording of this agreement in the registry files of the mining concessions described in section 1.1., and according to what established in section c of article 7 of the Mining Public Registry Regulations, request the preventive recording of this agreement for the mining claims described in section 1.1.

 

	
             
 	
            December 5, 2007 
 

 

  

/s/ Wiston Manuel Saldaña Varas   

	
            Wiston Manuel Saldaña Varas  
 

ID. 09550130

On behalf of Marlene Ore Lamilla

 

/s/ José Santos Rodríguez Pizán  

Black Tusk Minerals Peru S.A.C.

José Santos Rodríguez Pizán 

General Manager 

 

 

 

 

Annex 1  

 

Net Smelter Return Royalty

 

	
            1
 	
            Definitions:  The words and terms defined in the agreement of which this annex forms part, shall have the same meaning for the purposes of this annex, unless specified otherwise. In addition, the following definitions will also apply:
 

	
             
 	
            a.
 	
            “Affiliates”:
 

	
             
 	
            -
 	
            A company, partnership or corporation that is more than 50% owned by one of the parties hereto or is controlled by one of the parties hereto.
 

	
             
 	
            -
 	
            A company, partnership or holding that is owner of more than 50% of, or controls, one of the parties hereto.
 

	
             
 	
            -
 	
            A company, partnership or corporation that is more than 50% owned, or is controlled by, another party who, in turn, owns more than 50% or controls one of the parties hereto.
 

For the purposes of the definition of “control” referred to in this section, the parties hereby expressly agree that control shall mean the right to exercise, directly or indirectly, voting rights regarding the shares or interests of the controlled company which may allow the adoption by the latter of resolutions or valid decisions without requiring the attendance or participation of entities or persons who hold, directly or indirectly, additional votes. Likewise, control shall mean the holding, directly or indirectly, of the power to manage or provide for the management and the policies of the controlled company by means of the title to shares or interests, other voting securities, contracts, voting trusts or by any other means.

	
             
 	
            b.
 	
            “Agreement” shall be the Mining Concessions and Pediments Transfer Agreement of which this annex forms an integral part.
 

	
             
 	
            c.
 	
            “Commercial Production” shall mean the operation of a mine on the PROPERTIES or some part of the same, but it does not include testing operations at a pilot plant. It shall be deemed that Commercial Production has begun on the first day of the month following the first thirty (30) consecutive calendar days during which ore has been produced at the PROPERTIES at an average rate of not less than seventy per cent (70%) of the nominal capacity of the mining facilities.
 

	
             
 	
            d.
 	
            “NSR Royalty” shall mean royalty that THE ACQUIRER shall be required to pay to THE TRANSFEROR as per section 2.4 of the Agreement and that shall be calculated according to the Net Smelter Returns and as per the Agreement and this Annex. Such royalty will only be payable if Commercial Production has been initiated.
 

It is hereby  agreed  that  payment of the NSR  Royalty by THE  ACQUIRER  to the
TRANSFEROR,  does not  include the Value  Added Tax (IGV).  In this  sense,  the
amount of such IGV will be added to the NSR  Royalty  payment  to be made by THE
ACQUIRER, provided that THE TRANSFEROR will be obliged to deliver to THE ACQUIRER the 

corresponding invoices, issued in observance with any and all formalities required by law. 

	
             
 	
            e.
 	
            
“Net Smelter Returns or NSR”
shall mean the net amount,  including  all bonuses  and  subsidies  that a given
smelter, refinery or other buyer of Products pays to THE ACQUIRER; and that will
result  after making the  deduction  of all costs,  expenses and charges paid or
incurred in relation to the Products after concentration  thereof (regardless of
whether those costs had already been deducted by the acquirer of the Products or
incurred in by THE ACQUIRER).
 

 

The costs referred to in the preceding paragraph include, without the following being limitative but merely referential, smelt, treatment and refining costs (including, without limitation, metal losses, impurity penalties and sampling and arbitration services); commissions for the sale of Products and costs related to their sale.

Such costs further include all types of taxes, royalties and/or customs and tariff duties, with the exception of income or similar taxes that THE ACQUIRER is required to pay for the extraction, treatment, transportation, storage, exportation and/or sale of the Products. They also include the costs incurred for the conversion of leachable solutions into cathodes and other similar goods, in addition to the costs incurred in the storage and transportation of the Products from the PROPERTIES to the smelter, refinery and/or final market where the Products are finally placed, or between any such places; and the costs incurred in buying insurance policies or paying freight associated with the Products during transportation or storage.

	
             
 	
            f.
 	
            “Products” shall mean the ore resources extracted and recovered from the PROPERTIES, and the solutions, concentrates or cathodes obtained through leaching or solution extraction or other treatment of the ores extracted and recovered from the PROPERTIES. 
 

The Products shall not include ores extracted outside the PROPERTIES’ area, neither solutions, concentrates nor cathodes obtained from mineralized material extracted outside the PROPERTIES’ area, whether placed in the PROPERTIES for leaching or other treatment, or conveyed to the PROPERTIES for treatment and/or storage.

 

	
            2.
 	
            Date of payment of NSR Royalties: Upon initiation of Commercial Production, payment of the NSR Royalty will be made by THE ACQUIRER to THE TRANSFEROR on a quarterly basis, within fifteen (15) calendar days following the date of delivery of the NSR Royalty’s payment settlements to which the following paragraph is referred to. 
 

 

Within the ten (10) calendar days  following the beginning of each quarter,  THE
ACQUIRER  shall  deliver  to  THE  TRANSFEROR  the  NSR  Royalty’s  payment
settlements  with the  calculation  of the NSR Royalty  determined in accordance
with this annex. Attached to the aforesaid settlement, THE ACQUIRER will deliver
to THE  TRANSFEROR  copies  of the  minerals’  sale  settlements  that  may
correspond,  as well as any other information  supporting the calculation of the
NSR Royalties. 

	
            3.
 	
            
Method  of  payment:  Payment  of the NSR
Royalties shall be made through the delivery of checks issued by THE ACQUIRER to
the order of THE  
 

 

	
             
 	
            
BENEFICIARY.  The delivery of said checks will be made at the
address established for those effects in the Agreement by THE BENEFICIARY. The
payment of the NSR Royalties shall be deemed to have occurred upon receipt by
THE TRANSFEROR of these checks.
 

 

	
            4.
 	
            Observations to the NSR Royalty payment: THE TRANSFEROR may observe the royalty’s payment settlements prepared by THE ACQUIRER within fifteen (15) calendar days following their receipt. If THE TRANSFEROR fails to make any observations to the NSR Royalty payment settlements forwarded by THE ACQUIRER within such fifteen (15) calendar days term, such payment settlements shall be deemed to have been accepted and approved. 
 

 

	
            5.
 	
            Audit: If within the fifteen (15) days term referred to in section 4 of this annex, THE TRANSFEROR made any observations to the NSR Royalty payment settlements submitted by THE ACQUIRER, THE TRANSFEROR and THE ACQUIRER shall make their reasonable best efforts to reach an agreement regarding any differences which may have arisen between them.
 

 

If THE ACQUIRER and THE TRANSFEROR fail to reach an agreement within fifteen (15) calendar days following the date in which THE TRANSFEROR notifies its observations to THE ACQUIRER, the differences between such parties shall be submitted to a final and conclusive analysis of a titled public accountant experienced in the mining industry and that is acceptable for both parties. The expenses for the hiring of such consultant firm shall be initially assumed by THE TRANSFEROR. 

 

The public accountant referred to in the preceding paragraph shall conduct an audit of all the documents supporting the NSR Royalty payment settlements subject to observations by THE TRANSFEROR, as well as of all such other information and/or documents as are necessary to that effect. The audit shall take place at the place to be designated by THE ACQUIRER for those effects and during the business hours of the latter.

 

If the audit reveals that the calculation of the NSR Royalties made by THE ACQUIRER is within a 2.5% range of the audit results, the cost of the audit shall be fully borne by THE TRANSFEROR. However, if the audit reveals that the calculation of the NSR Royalties made by THE ACQUIRER exceeds the 2.5% range of the audit results, THE ACQUIRER shall bear the costs thereof. 

 

In any case, THE ACQUIRER shall pay THE TRANSFEROR – as an NSR Royalty payment – any shortfall determined by the audit, in which case the NSR Royalty payment settlements that had been subject to observations, will be amended in accordance to the results of the audit. Upon completion of the audit and delivery of the results to THE ACQUIRER and THE TRANSFEROR, THE ACQUIRER shall pay, without any interests, any additional NSR Royalties that might have been determined by the audit. Such payment will be made by THE ACQUIRER within fifteen (15) calendar days of receipt of the audit. 

However, if the audit determined that THE ACQUIRER paid NSR Royalties in excess of what is was really obliged to make, THE TRANSFEROR shall reimburse THE ACQUIRER the amount paid in excess by it (without interests) within fifteen (15) calendar days of receipt of the audit. 

 

It is hereby  expressly  agreed that during the term in which the audit is being
conducted,  the term  established  in this annex for THE ACQUIRER to pay the 

NSR
Royalties will not be suspended and, in this sense, THE ACQUIRER should continue
compliance   its   payment   obligation   of  the  NSR   Royalty   when  and  as
applicable.

 

	
            6.
 	
            Sales to an Affiliate of THE ACQUIRER:  Any smelter or refinery owned or controlled by THE ACQUIRER or any Affiliate thereof and/or of the entities controlling THE ACQUIRER, without exception, shall be deemed to be a treatment smelter or refinery for purposes of calculation of the Net Smelter Returns. 
 

 

Net Smelter Returns on Products acquired by such refinery or smelter shall be calculated and determined in accordance with customary treatment smelting and refining practices, as if sold to such smelter or refinery by third parties. However, the amount of such Net Smelter Returns shall not be less of what THE ACQUIRER would have received if the Products had been sold to a smelter or refinery owned by a third party different from THE ACQUIRER or from of an Affiliate of the latter.

 

	
            7.
 	
            Prudent operations:  The ores (even after undergoing some type of treatment) extracted and recovered from the PROPERTIES, may be commingled with ores (even after undergoing some type of treatment) with a similar composition extracted from other mining properties other than the PROPERTIES. 
 

 

All determinations required for the calculation of the Net Smelter Returns, including, without limitation, the metal grade of ores extracted from the PROPERTIES, and the metal grade or amount of metal recovered from such ores, shall be made by THE ACQUIRER in accordance with prudent engineering, metallurgy and cost accounting practices. 

 

*******************

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