EXHIBIT 10.1
RESTATED AGREEMENT OF OCCUPANCY AND USE
This RESTATED AGREEMENT OF OCCUPANCY AND USE (the "Agreement" )is
made
and entered into this______ day of
_____________, 200__, by and between MINERA
RIO GRANDE S.A., with an address located at
Jiron Puerto Pizzaro, Manzana 15,
Lote 5, Urbanizacion Portada del Sol,
Primera Etapa, La Molina, Lima, Peru
("Rio"), and QUILLABAMBA MINING SAC, with
an address located at Sir William's
Court, 851 South Rampart Blvd., Suite 150,
Las Vegas, Nevada 89145
("Quillabamba"). Rio and Quillabamba may be
referred to collectively in this
Agreement as the "Parties" or individually
as a "Party."
Whereas, on November 25, 200__, Rio and Quillabamba entered into
that
certain Agreement of Occupancy and Use (the
"Original Agreement") pursuant to
which Quillabamba was granted the right to
occupy and use that certain land
located at Coyotayoc, Sector Illapani,
Provincia De La Convencio, Cuzco (the
"Camp"), including, but not limited to, its
contents, facilities, buildings,
water supply, utilities, hardware,
software, communications equipment,
machinery, mechanical installations,
infrastructure, vehicles and supplies, as
well as all equipment owned by Rio located
at the Camp as described more fully
in List B to the Original Agreement, in
exchange for Rio's right to use the
equipment owned by Quillabamba located at
the Camp as described more fully in
List A to the Original Agreement.
Whereas, Rio and Quillabamba desire to clarify and restate certain
of
the terms contained in the Original
Agreement.
NOW, THEREFORE, with the foregoing background incorporated herein,
for
valuable consideration, including the
covenants and agreements hereinafter
contained, the receipt and sufficiency of
which are hereby acknowledged, the
parties agree as follows:
1. Quillabamba's Use of Camp and Rio's Equipment. In consideration
of
the rights granted to Rio under Section 2
below, Rio does lease, let and demise
unto Quillabamba, its successors and
assigns, the free, unfettered right to
access and use the Camp, including, but not
limited to, its contents,
facilities, buildings, water supply,
utilities, hardware, software,
communications equipment, machinery,
mechanical installations, infrastructure,
vehicles and supplies, including all
equipment owned by Rio located at the Camp
as described more fully in List B to the
Original Agreement and incorporated
herein as if stated in full and any other
equipment purchased or to be purchased
by Rio for use at the Camp, for the
purposes of exploring, drilling and mining,
and taking, storing, removing and disposing
of such mined materials, and any and
all uses and purposes incidental or related
thereto including, but not limited
to, the right to construct any and all
operations necessary to Quillabamba's use
of the Camp. To the extent necessary,
Quillabamba is hereby granted an easement
and right of way for roads, pipelines,
electrical transmission lines, and any
other uses related to its use of the Camp,
over the Camp and any other lands now
or in the future owned, leased or otherwise
controlled by Rio in the vicinity of
the Camp. Notwithstanding anything here to
the contrary, Rio has the right to
utilize the Camp in conjunction with
Quillabamba and, further, has the right to
enter the Camp for purposes of inspecting
the Camp and its equipment.
2. Rio Use of Quillabamba's Equipment. In consideration for the
rights
granted to Quillabamba under Section 1
above, Quillabamba does grant to Rio, its
successors and assigns, the right to use
the equipment owned by Quillabamba and
located at the Camp as described more fully
in List A to the Original Agreement
and incorporated herein as if stated in
full and any other equipment purchased
or to be purchased by Quillabamba for use
at the Camp for the purposes of
exploring, drilling and mining, and taking,
storing, removing and disposing of
such mined materials, and any and all uses
and purposes incidental or related
thereto.
3. Term and Renewal Option. The term of this Agreement shall be for
of
period of ten (10) years commencing on the
Effective Date of this Agreement (the
"Term"). Quillabamba shall have the option,
at its sole and absolute discretion,
to renew this Agreement for additional
consecutive ten (10) year terms ("Renewal
Term"), under the same terms and conditions
as set forth in this Agreement.
Prior to the expiration of the Term or
any
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Renewal Term, Quillabamba shall notify Rio
of its decision to exercise its
option to renew this Agreement for an
additional ten (10) years; provided,
however, that if Quillabamba fails to
notify Rio of its decision to renew this
Agreement prior to the expiration of the
Term or any Renewal Term, Quillabamba
shall have a grace period of six (6) months
following the expiration of the Term
or any Renewal Term to exercise its renewal
option as provided for herein
without penalty such as loss of rights or
privileges as granted to Quillabamba
under the terms of this Agreement.
4. Availability, Location and Priority of Use of Equipment. The
Parties
hereto agree to keep all machinery,
mechanical installations, infrastructure,
vehicles and supplies, including the
equipment described more fully in Lists A
and B, respectively, to the Original
Agreement, and all other equipment
purchased or to be purchased for use at the
Camp for mining related activities,
at the Camp and readily available for the
other Party's use pursuant to this
Agreement; provided, however, that
Quillabamba shall have priority over Rio with
respect to the use of any and all such
machinery, mechanical installations,
infrastructure, vehicles and supplies
located at the Camp, including the
equipment described more fully in Lists A
and B, respectively, to the Original
Agreement, and any other equipment
purchased or to be purchased for use at the
Camp for mining related activities.
5. Camp Related Costs and Expenses; Payment. The Parties hereto
agree
that all costs and expenses associated with
the Camp operations, including, but
not limited to, costs and expenses
associated with (a) prepping and treatment of
mining samples, processing of ore at the
Recovery Plant, and assaying mining
samples, (b) repairing and maintaining all
machinery, mechanical installations,
infrastructure, vehicles and equipment,
including the equipment described more
fully in Lists A and B, respectively, to
the Original Agreement and any new
equipment purchased or to be purchased by
the Parties hereto, located at the
Camp and used by both Parties solely for
mining related activities; (c)
domestic, kitchen and security personnel;
(d) utilities, including, but not
limited to, electricity, diesel and
gasoline; (e) and taxes, subject to Section
7 below (collectively, the "Camp Costs"),
are beneficial to both Parties and
therefore shall be apportioned as follows:
during months when neither party or
both parties are undertaking mining
operations and activities at the Camp, the
Camp Costs shall be shared equally by the
Parties (i.e. 50% each Party);
provided, however, that during the months
when only one of the Parties hereto is
undertaking mining operations and
activities at the Camp, the Party so operating
shall be responsible for 80% of the Camp
Costs. Quillabamba agrees to pay all
Camp Costs on a monthly basis and to
invoice Rio for its portion of the Camp
Costs in compliance with this Section 5 of
the Agreement, which invoice shall be
paid by Rio within ten (10) days of
receipt.
6. Non-Camp Related Costs. The Parties hereto agree that all costs
and
expenses related to and associated with
non-Camp related activities including,
but not limited to, (a) activities and
operations conducted at the Camp not
related to mining; (b) changes to any
machinery, mechanical installations,
infrastructure, vehicles, equipment or the
like located at the Camp; (c)
purchases of any new machinery, mechanical
installations, infrastructure,
vehicles, equipment or the like for use at
the Camp; and (d) drilling and mining
activities that occur outside the
boundaries of the Camp (collectively, the
"Non-Camp Costs"), shall be the sole
responsibility of, and be paid entirely by,
the Party incurring said Non-Camp
Costs.
7.
Taxes. The Par
