EXCLUSIVE RIGHTS AGREEMENT

 

1.1

Definitions.  For all purposes of this Agreement:

 

(a)

"Closing Date" means the 28th day of May 2013, or such other date as the Parties hereto may mutually agree;

 

(c)

"Payment Shares" means, in the aggregate, 100,000 common shares of VHM, to be issued and held in trust for the benefit of the Vendor in exchange for the Exclusive Rights to mine and process the existing tailings, assignment and sale of the complete and total interest in and to 100 % of the tailings located in and on the Concession # 219074, # 227686, and# 227687 of GIUV.

 

(d)

"Purchase Price" means, in the aggregate, the issuance of the Payment Shares;

 

(f)

“Vendor” means GIUV and any individual or party involved with the Vendor or GIUV who has, or purports to have, any interest of any nature whatsoever in the Concession.

 

(g)

“Concession” means title to the Concession described as the El Diamante Concession # 219074 and # 227686, and # 227687, as per the attached (Schedule “A”) all rights and entitlements, chattels, concessions and mining permits held by GIUV.

 

(h)

“Valley High Mining Company” means a publically traded, reporting company under the US Securities Exchange Act of 1934, as amended, whose common stock trades on the OTC-QB.

 

(i)

“Tailings” also called mine dumps, culm dumps, slimes, tails, refuse, leach residue or slickens means, the materials left over after the process of separating the valuable fraction from the uneconomic fraction (gangue) of an ore.

 

(j)

"Joint Venture" means Grupo Hemas SA de CV, Corporative de Minerales Mexicanos S.A de C.V and the Mining Concessions # 219074 known as El Diamante, # 227686 known as Jaimito and # 227687 known as Yunuen.

 

(a)

"This Agreement" means this Agreement and all Schedules and Exhibits attached hereto;

 

(b)

Any reference in this Agreement to a designated "Article", "Section", "Schedule" or other subdivision refers to the designated Article, Section, Schedule or other subdivision of this Agreement;

 

(c)

The headings used in this Agreement are for convenience only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof;

 

(d)

The words "herein" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision of this Agreement;

 

(e)

Unless otherwise stipulated herein, all references to currency are deemed to mean lawful money of United States of America (USA) and all amounts to be calculated or paid pursuant to this Agreement are to be calculated in lawful money of U.S.A.;

 

(f)

The word "including", when following any general statement term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such work or to similar items or matters, whether or not non-limited language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto but rather refers to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;

 

(g)

Any reference to a statute includes and, unless otherwise specified herein, is a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which has the effect of supplementing or superseding such statute or such regulation;

 

(h)

"Person" means an individual, corporation, body corporate, associate ship, joint venture, association, trust or unincorporated organization or any trustee, executor, administrator or other legal representative.

 

Schedule "A":

Concession Legal Description

 

Schedule "Al":

Copy of Joint Venture Agreement between Grupo Hemas SA de CV and Corporativo de Minerales Mexicanos S.A de C.V.

 

(a)

issue to the Vendors 100,000 “restricted” common shares of VHM (the "Payment Shares") to be held in trust for the Vendor by Whitehall Trust and released and delivered to Vendor upon the Purchaser providing written confirmation to Whitehall Trust of its satisfaction of the test results obtained during the due diligence period.  Purchaser agrees to pay all of the filing and registration costs, including the legal fees associated with the issuance of the Payment Shares as contemplated in this purchase and sale; and

 

(b)

Pay to Vendor the royalty provided in Section 5(c) below herein.

 

(a)

The Purchaser is a company duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the necessary corporate capacity and is fully qualified in Nevada and each other jurisdiction in which it carries on business or holds assets to carry on the business which it now carries on and to hold the assets which it now holds;

 

(b)

The Purchaser has carried on its business in the normal course;

 

(c)

There are no actions, suits proceedings or investigations pending to the knowledge of the Purchaser, threatened against or affecting the Purchaser, at law or in equity, before or by any court, administrative agency or other tribunal or any governmental authority, other than as previously disclosed to the Vendor;

 

(d)

There are no contractual obligations of the Purchaser considered onerous by the Purchaser which have not been disclosed to the Vendor and the Purchaser has no information or knowledge of facts pertaining to the Purchaser which, if known to the Vendor, might reasonably be expected to deter the Vendor from completing the transactions contemplated hereby;

 

(e)

Purchaser is up-to-date and in good standing with respect to all filings required to be made with the Regulatory Authorities.

 

(a)

The Purchaser will, both before and after the Closing Date, execute and do all such further deeds and assurances as may be required in the reasonable opinion of the Vendor's counsel for more perfectly consummating the transactions contemplated herein;

 

(b)

The Purchaser will further the objectives and commercialization of the mining and refining of the tailings locate on the Concession.

 

(a)

The Vendor holds all permits, licenses, concessions, consents and authorities issued by any government or governmental authority which are necessary in connection with the operation of its business and of the ownership of its business and of the ownership of its properties and assets, including but not limited to the Concession;

 

(b)

There has been no material adverse change in the financial condition and position of the Vendor and no damage, loss destruction or other change in circumstances materially affecting the Concession or the Vendor’s right or capacity to carry on business;

 

(c)

The Vendor has not engaged in any transaction nor made any disbursement or assumed or incurred any liability or obligation or made any commitment, including, without limitation, any forward purchase commitment or similar obligation, to make any expenditure which would materially adversely affect the Concession or the Exclusive Right to the tailings in and on the concession;

 

(d)

Other than as set forth herein, the Vendor has not purchased, leased or acquired or agreed to purchase, lease or acquire, any additional Concession or assets and has not sold, transferred, disposed, mortgaged, pledged, charged, leased or otherwise encumbered, or agreed to sell, transfer, dispose of, mortgage, pledge, charge, lease or otherwise encumber, any of its Concession or assets other than those acquired by it or sold, disposed of or encumbered by it in the course of its normal and ordinary day to day business;

 

(e)

With respect to the Concession, the Vendor has not waived or surrendered any right of substantial value and has not made any gift of any of its Concession or assets;

 

(f)

The Vendor has carried on its business in the normal course;

 

(g)

The Vendor does not have outstanding any continuing contractual obligations whatsoever relating to or affecting the Concession other than those contracts entered into by it in the course of its normal and ordinary day to day business;

 

(h)

The Vendor is not in default under or in breach of, or would, after notice or lapse of time or both, be in default under or in breach of, and neither this Agreement nor the consummation of the transactions contemplated hereby will conflict with, constitute a default under, result in a breach of, entitle any person or company to a right of termination under, or result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever upon or against the Concession or assets of the Vendor under its constating documents, any contract, agreement, indenture or other instrument to which it is a party or by which it is bound, any law, judgement, order, writ, injunction or decree of any court, administrative agency or other tribunal or any regulation of any governmental authority, and all such contracts, agreements, indentures, or other instruments are in good standing and the Vendor is entitled to all benefits thereunder;

 

(i)

There are no actions, suits proceedings or investigations pending to the knowledge of the Vendor, threatened against or affecting the Vendor or the Concession, at law or in equity, before or by any court, administrative agency or other tribunal or any governmental authority;

 

(j)

The Vendor has good and marketable title to the Concession and the Concession is free and clear of any liens, charges or encumbrances;

 

(k)

Statements of the Vendor are true and correct in every material respect, and fairly reflect the business, Concession, assets and financial position of the Vendor and the results of its operations and there are no liabilities of the Vendor, contingent or otherwise, not reflected in the Statements of the Vendor;

 

(l)

With respect to the Concession, there are no contractual obligations of the Vendor considered onerous by the Vendor, which have not been disclosed to the Purchaser and the Vendor has no information or knowledge of facts pertaining to the Vendor or the Concession which, if known to the Purchaser, might reasonably be expected to deter the Purchaser from completing the transactions contemplated hereby;

 

(a)

The Vendor has validly obtained and is duly vested with the right to Grant/Sell the Exclusive Rights in and to the tailings located on the El Diamante Concession and the Vendor has full right and authority to enter into this Agreement;

 

(b)

Upon request from the Purchaser and for the exclusive benefit of the Purchaser, the Vendor will take all steps as are reasonably necessary or prudent to obtain, perfect and enforce any and all rights in the Concession. The Vendor will forthwith advise the Purchaser of any new developments or modifications to the Concession and all such new developments and modifications will for all purposes be deemed to be part of the Concession covered by this Agreement; and

 

(c)

The Vendors and Purchaser acknowledge that it is an express condition of the Exclusive Rights Agreement contemplated herein that Vendor will receive a royalty payment of 6% of the net smelter received by the Purchaser less the recovery, refining and trucking costs and other customary operating costs associated with the production derived from the Concession.

 

(d)

The Vendor specifically acknowledge that the Vendor and current management of the Vendor will agree to execute such additional documentation as is required to more particularly satisfy its duties and obligations stated herein upon the reasonable request of Purchaser.

 

(a)

Prior to the Closing Date the Purchaser shall not have become aware of any breach of any of the covenants, warranties or representations of the Vendor set forth herein.

 

(b)

All of the covenants and agreements of the Vendor to be observed or performed on or before the Closing Date pursuant to the terms hereof shall have been duly observed or performed; and

 

(c)

Such documents and other materials (including any materials requested for the Purchaser’s due diligence purposes) in form and content necessary to allow the Purchaser the Exclusive Rights to the tailings located in and on the said concession, from the Vendor to the Purchaser as Purchaser's counsel considers appropriate shall have been delivered by the Vendors to the Purchaser.

 

(a)

That this Agreement and all documents prepared in connection with this Agreement have been duly executed and authorized and are valid and binding on the Purchaser in accordance with their terms;

 

(b)

That the Purchaser has taken all action necessary to issue and release into trust the Payment Shares in accordance with all applicable provisions of the applicable legislation and the constating documents of the Purchaser and that such shares are fully paid and non-assessable and as to all other legal matters pertaining to the Purchaser and the transactions contemplated hereby as the Vendor’s counsel may reasonably require;

 

(c)

All consents, approvals and authorizations of the Regulatory Authorities required in connection with the transactions herein contemplated have been obtained;

 

(d)

Prior to or on the Closing Date the Vendors shall not have become aware of any breach of any of the warranties and representations of the Purchaser set forth herein;

 

(e)

All of the covenants and agreements of the Purchaser to be observed or performed on or before the Closing Date pursuant to the terms hereof shall have been duly observed or performed;

 

(f)

The Purchaser has delivered to the Vendors on the Closing Date all of the documents required to be delivered hereunder; and

 

(c)

Both parties also agree that, should the corporation elect to dissolve, whether voluntarily or involuntarily, then the following provisions will apply:

 

(i)

If no funding or insufficient funding to cause the Project contemplated herein to go forward occurs as purported, then the Exclusive Rights brought forth by GIUV (Vendor) shall be returned in total and without recourse to GIUV; and

 

(ii)

Any and all shares brought forth as a result of this Agreement shall be returned to the Purchaser, without recourse to either party; and

 

(iii)

Not withstanding good faith and best efforts provisions inherent in this Agreement, each party agrees to hold the other harmless for the other’s failure to perform and further agrees to indemnify the other against all actions that may be brought as a result of its own misrepresentations.

Signed, and delivered by:

Captain Hector Mora Gomez CEO