JOINT VENTURE SHAREHOLDERS AGREEMENT made among

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This Joint Venture Shareholders Agreement is Schedule E to the Option Agreement among Tara Minerals Corp., American Metal Mining, S.A. de C.V., and Carnegie Mining and Exploration Inc. dated August 8, 2011.

JOINT VENTURE SHAREHOLDERS AGREEMENT

made among

TARA MINERALS CORP.

and

AMERICAN METAL MINING, S.A. DE C.V.

and

CARNEGIE MINING AND EXPLORATION INC.

and

[JVC]

and

[MEXCO]

<*> , 20 <*>

2830432

TABLE OF CONTENTS

Page

ARTICLE 1

INTERPRETATION

1.1

Definitions

1.2

Appendices

1.3

Interpretation

ARTICLE 2

THE COMPANY AND ITS SHAREHOLDERS

2.1

Purpose

2.2

Place of Business

2.3

Compliance with Applicable Laws, etc

2.4

Related Party Contracts

2.5

Relationship of Parties

2.6

Competing Business

2.7

Exclusive Vehicle for Undertaking the Project

2.8

Compliance by Agents

2.9

Mexican Mining Law

ARTICLE 3

MANAGEMENT OF THE COMPANY

3.1

Management Structure

3.2

Voting of Shares

3.3

Composition of the Board

3.4

Proceedings of the Board

3.5

Shareholder Meetings

3.6

Matters Requiring Special Approval

3.7

Special Board Approvals and Special Shareholder Approvals

3.8

Adjustment for Inflation

3.9

Marketing

ARTICLE 4

OPERATOR

4.1

Appointment as Operator

4.2

Resignation

4.3

Removal of Operator

4.4

Selection of New Operator

4.5

Transition to New Operator

4.6

NI 43-101 Data

ARTICLE 5

RIGHTS, DUTIES AND STATUS OF OPERATOR

5.1

Status of Operator

5.2

General Duties

5.3

Duties and Obligations of Operator

5.4

Qualifications of Operator

5.5

Shareholders to Keep MexCo in Funds

ARTICLE 6

PROJECT WORK PLANS AND BUDGETS

6.1

Operations Pursuant to Programs

6.2

Preparation of Programs


i

TABLE OF CONTENTS

(continued)

Page

6.3

Approval of Programs

6.4

Monies Spent Ratably

6.5

Emergency Expenditures

6.6

Suspension on Premature Termination of Program

6.7

Failure of Operator to Submit Program

6.8

Periodic Reports

ARTICLE 7

CAPITAL OF AND INTEREST IN JVC

7.1

Shareholder Funding Account

7.2

Initial Shareholder Funding Accounts

7.3

Share Ownership

ARTICLE 8

FUNDING OF OPERATIONS

8.1

General Funding Obligation

8.2

Contribution Demands

8.3

Information

8.4

Election to Contribute

8.5

Election Not to Contribute & Defaults

8.6

Funding of Contribution Demand

8.7

Conversion of Ownership Interest; NSR Royalty

8.8

Security for Loans

ARTICLE 9

DISTRIBUTION OF AVAILABLE CASH FLOW

9.1

Distribution by the JVC

9.2

Form of Distributions

9.3

Financing

ARTICLE 10

FINANCIAL STATEMENTS AND REPORTING

10.1

Audit and Inspection Rights

10.2

Fiscal Year

10.3

Reporting Requirements

10.4

Statement of Cash Flows

10.5

Audited Statements

10.6

Notice from Lender

ARTICLE 11

ISSUANCE AND DISPOSITION OF PROJECT INTERESTS

11.1

General Restriction

11.2

Pre-Emptive Right

11.3

Transfer Within Group

11.4

Encumbrance of Project Interests

11.5

Right of First Refusal

11.6

General Closing Procedures

ARTICLE 12

MUTUAL REPRESENTATION AND WARRANTIES

ARTICLE 13

TERMINATION OF MINING OPERATIONS

13.1

Mine Maintenance Plan

13.2

Mine Closure Plan


ii

TABLE OF CONTENTS

(continued)

Page

13.3

Implementation of Mine Closure Plan

13.4

If Mine Closure Plan Not Approved

ARTICLE 14

TERM AND TERMINATION

14.1

Effectiveness

14.2

Term

14.3

Automatic Termination

14.4

Voluntary Termination

14.5

Ceasing to be a Shareholder

14.6

Effect of Termination

ARTICLE 15

LIQUIDATION

ARTICLE 16

GENERAL

16.1

Cooperation, Further Assurances

16.2

Severability; Conflict with Certificate of Incorporation and By-Laws/Registration

16.3

Confidentiality

16.4

Notice

16.5

Assignment/Benefit

16.6

Dispute Resolution

16.7

Injunctive Relief

16.8

Entire Agreement; No Third-Group Beneficiaries

16.9

Amendment, Waiver; No Rescission

16.10

Governing Law

16.11

Counterparts

16.12

Facsimile Execution

APPENDIX A

PROPERTIES

APPENDIX B

ACCOUNTING PROCEDURE

APPENDIX C

NET SMELTER RETURNS ROYALTY

APPENDIX D

EXCLUDED ASSETS


iii

DRAFT OF JULY 11, 2011

THIS JOINT VENTURE SHAREHOLDERS’ AGREEMENT is made this <*> day of <*> 2011

AMONG:

Tara MINERALS CORP. , a corporation organized under the laws of the State of Nevada

(“ Tara Corp. ”)

AND:

AMERICAN METAL MINING, S.A. DE C.V. , a corporation incorporated under the laws of Mexico,

(“ Tara Mexico ”, and together with Tara Corp., “ Tara ”)

AND:

CARNEGIE MINING AND EXPLORATION, INC. , a corporation organized under the laws of Panama

(“ CME ”)

AND:

<*> , a corporation organized under the laws of <*>

(“ JVC ”)

AND:

<*> , a corporation organized under the laws of Mexico

(“ MexCo ”)

WHEREAS:

On August 8, 2011, CME and Tara entered into an option agreement (the “ Option Agreement ”) pursuant to which CME earned an undivided fifty percent (50%) Ownership Interest in the Project (as defined below) and Tara holds the remaining fifty percent (50%) interest in the Project;

Pursuant to the Option Agreement, CME and Tara formed [insert name of JVC ] an incorporated joint venture company (the “ JVC ”) the share capital of which is held as follows: 50% held by Tara and 50% held by CME, to hold the interest in the Project,

The Option Agreement provides that upon the formation of the JVC, the parties to the Option Agreement shall forthwith enter into a shareholders’ agreement for the management and corporate governance of the JVC;

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NOW THEREFORE in consideration of their respective covenants in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are acknowledged), the parties hereto agree as follows:

ARTICLE 1
INTERPRETATION

1.1

Definitions

In this Agreement, the following terms have the following meanings:

“ Affected Securities ” has the meaning set out such term in Section 11.2.1;

“ Acquiring Party ” has the meaning set out in Section 2.7;

“ Affiliate ” means as to any Person, any other Person which, directly or indirectly, Controls, is Controlled by, or is under common Control with, such Person, provided that JVC will not constitute an “Affiliate” of CME or Tara for the purposes of this Agreement;

“ Agreement ” means this Shareholders Agreement and any agreement supplementing or amending this Agreement which is executed and delivered in accordance with Section 16.9;

“ Applicable Law ” in respect of any Person, property, transaction or event, means all laws, statutes, regulations, common law, judgments, notices, approvals, orders and decrees applicable to that Person, property, transaction or event;

“ Approved Financing Plan ” means any plan for the financing of the Project, as such plan may be approved by the Board in accordance with the terms of this Agreement;

“ Area of Interest ” means Mexico.

“ Assets ” means all the fixtures, tools, vehicles, machinery, equipment and supplies and all other property or rights of any, whether real or personal, of Tara or MexCo, used directly in respect of the exploration, development and mining of the Concessions except for those listed in Appendix D;

“ Board ” means the board of directors of the JVC;

“ Business ” means the business purpose for which the JVC or the MexCo, as applicable, was incorporated, as set forth in Section 2.1 of this Agreement;

“ Business Day ” means any day other than a Saturday, Sunday or statutory holiday in any of Chicago, Illinois or Mexico City, Mexico;

“ CME Group ” means CME and its Affiliates;

“ CME Marketing Agreement ” means an agreement approved by the Board pursuant to which CME shall have the exclusive right to market and arrange for the sale of all Product from the Project; “ Contribution Demand ” has the meaning set out in Section 8.2;

“ Effective Date ” has the meaning set out in Section 14.1;

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“ Encumbrance ” means any interest or equity of any Person (including any right to acquire, option or right of pre-emption) and any mortgage, charge, pledge, lien (other than liens arising by operation of law and securing indebtedness not more than seven (7) days overdue), assignment, hypothecation or other priority interest, deferred purchase, title retention, rental, hire purchase, conditional sale, trust, leasing, sale-and-repurchase and sale-and-leaseback arrangements, rights of set off and any other agreement or arrangement whatsoever having the same commercial or economic effect as security (including any hold-back or “flawed asset” arrangement) over or in any property, asset or right of whatsoever nature and including any agreement for any of the foregoing;

“ Expenditures ” means such expenditures in respect of Operations, as shall have been approved by the Board;

“ Financing Documents ” means all documents executed pursuant to an Approved Financing Plan, as such documents may be supplemented, amended or replaced from time to time in accordance herewith;

“ Fiscal Year ” has the meaning set out in Section 10.2;

“ Governmental Body ” means any national, state, regional, municipal or local governmental department, commission, board, bureau, agency, authority or instrumentality and any Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any of the foregoing entities, including all tribunals, commissions, boards, bureaus, arbitrators and arbitration panels, and any authority or other Person controlled by any of the foregoing;

“ Group ” means the CME Group or Tara Group, as applicable;

“ IFRS ” means the International Financial Reporting Standards promulgated by the International Accounting Standards Board (which include standards and interpretations approved by the International Accounting Standards Board and International Accounting Standards issued under previous constitutions), together with it pronouncements thereon from time to time, and applied on a consistent basis;

“ JVC ” means <*> [ insert name of JVC ], a company incorporated under the laws of a jurisdiction selected by Tara and CME and whose share capital as of the date hereof shall be held 50% by CME and 50% by Tara or nominees thereof;

“ JVC Articles ” means the Articles of Association of the JVC, as they may be amended from time to time by Special Approval;

“JVC Securities” means .securities of the JVC including but not limited to common shares, options and warrants.

“ Majority Board Approval ” means the affirmative vote of a simple majority of those directors present or represented and permitted to vote at a meeting of the Board duly called at which a Quorum was present or represented;

“ Majority Shareholder Approval ” means either the affirmative vote of Shareholders (or their representatives) holding Ownership Interests aggregating more than 50% of the issued Ownership Interests at a meeting of Shareholders duly called at which a Shareholder Quorum was present, or a written resolution of all Shareholders;

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“ Mineral Rights ” means exploration licences, mining licences, mineral concessions, mining leases, surface rights, water rights and other rights relating to, minerals or access to minerals and other forms of mineral title under Applicable Laws, whether contractual, statutory or otherwise;

“ MexCo ” means <*> [ insert name of MexCo ] a corporation formed under the terms of the Option Agreement and incorporated under the laws of Mexico to hold the Project, and which shall be a wholly owned subsidiary of the JVC;

“ Mexican Mining Law ” means the Ley Minera of Mexico and all other codes, laws, rules, regulations governing or affecting the acquisition, exploration, development and exploitation of mining properties in Mexico;

“ Net Revenues ” means for any period the cumulative gross proceeds and revenues derived from the Properties during such period from the sale of Product (but excluding, if applicable, any proceeds attributable to smelting or refining) plus any insurance proceeds, any government grants referable to the Properties and any proceeds received by the Operator during such period from the sale or other disposition of any Products and Assets minus operating expenses. “ New Opportunity Notice ” has the meaning set out in Section 2.7 ;

“ Non-Operator ” means a Shareholder who is not acting as the Operator of the Project;

“ Non-Operator Program ” has the meaning set out in Section 6.7;

“ Notice ” has the meaning set out in Section 16.4;

“ Offer ” has the meaning set out in Section 11.5.3;

“ Operator ” means the operator of the Project;

“ MexCo Articles ” means the Articles of Association of the MexCo, as they may be amended from time to time;

“ Operations ” means every kind of work done or in respect to the production and the abandonment of the Concessions including, investigating, exploring, developing and maintaining the Project, preparing reports, estimates and studies, designing, equipping, improving, surveying, constructing, coring, mining, beneficiation, processing, rehabilitation, reclamation and environmental protection;

“ Ownership Interest ” means at any time the percentage of the issued Shares in the capital of the JVC held by a Shareholder at such time;

“ Person ” means any individual, sole proprietorship, partnership, limited partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, Governmental Authority, and, where the context requires, any of the foregoing when they are acting as trustee, executor, administrator or other legal representative.

“ Product ” means all ores, minerals and mineral products located on, in or under or produced or derived from the Project Area and includes all beneficiated and other mineral products produced or derived therefrom;

“ Project ” has the meaning set out in Section 2.1;

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“ Project Area ” means the land area containing the Properties “ Project Interests ” of any Shareholder means all of the JVC Securities and Shareholder Loans of that Shareholder, and “Project Interest” shall mean any portion thereof;

“ Project Obligations ” of any Shareholder means all of the liabilities and obligations of that Shareholder (i) under this Agreement, (ii) under the Shareholder Loans and (iii) under any sponsor support or guarantee requirements under any Financing Documents;

“ Properties ” means the mining concession set forth in Schedule A hereto, such property being located in the State of Sinaloa, Mexico and being generally known as the Don Roman concession, any other properties in Mexico acquired under the Option Agreement and held by MexCo as of the Effective Date, and any other properties acquired under the terms of this Agreement, together with any renewals thereof and any other form of substitute or successor title thereto, including any Mineral Rights derived from or into which any such licences or interests may have been or may hereafter be converted;

“ Proportionate Share ” means, when used in relation to two (2) or more Shareholders, in proportion to the number of outstanding Shares held by each such Shareholder in the JVC at the relevant time;

“ Quorum ” has the meaning set out in Section 3.4.1;

“ ROFR Buyer ” has the meaning set out in Section 11.5.1;

“ ROFR Notice ” has the meaning set out in Section 11.5.3;

“ ROFR Offer ” has the meaning set out in Section 11.5.1;

“ Related Party Contract ” means any contract, agreement or other transaction between the JVC or the MexCo and one or more other Persons, which Persons include (i) a member of the CME Group or the Tara Group, (ii) a director of the JVC of MexCo or any Person controlled by a director of the JVC or the MexCo or (iii) any member of the family of a director of the JVC or the MexCo or any Person controlled by any such family member;

“ Security ” means a Share, any other common, preferred, special or other share in the capital of JVC issued from time to time, and “JVC Securities” shall have a corresponding meaning;

“ Shareholder ” means any Person holding one or more Shares;

“ Shareholder Loan ” means any loan advanced directly to the JVC by a Shareholder or on its behalf and for its account, as contemplated in the [Approved Financing Plan] or as otherwise required by Section 5.1 or 5.2;

“ Shareholder Loan Notes ” means the promissory notes of JVC payable respectively to the order of each of CME and [Tara], each in principal amount equal to the aggregate amount of any Shareholder Loans owing to CME or [Tara], as applicable, from time to time, as such promissory notes may be amended from time to time by Special Approval;

“ Shareholder Quorum ” has the meaning set out in Section 3.5.1;

“ Shares ” means [common shares] in the capital of the JVC;

“ Special Approval ” means a Special Board Approval or a Special Shareholder Approval;

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“ Special Board Approval ” means the affirmative vote of a 75%of the directors present or represented and permitted to vote at a duly called Board meeting at which a Quorum was present or represented, provided that such majority must include at least one director nominated by each Shareholder that has an Ownership Interest of 20% or more, or approval by an instrument in writing signed by all directors of the relevant Board;

“ Special Shareholder Approval ” means either the affirmative vote of Shareholders (or their representatives) holding Ownership Interests aggregating at least 75% of the issued Ownership Interests at a duly called meeting of Shareholders at which a Shareholder Quorum was present, or a written resolution of all Shareholders;

“ Subject Interests ” has the meaning set out in Section 11.5.1;

“ Tara Group ” means Tara and its Affiliates;

“ Trading Activities ” means entering into forward sale and/or purchase contracts, spot-deferred contracts, option and/or other price hedging and price protection arrangements and mechanisms, and speculative purchases and sales of forward futures and option contracts, both on and off commodity exchanges;

“ US GAAP ” means generally accepted accounting principals in the United States of America; and

“ Work Plan and Budget ” means the Work Plan and Budget as approved by the Board in accordance with Article 7, as amended from time to time.

1.2

Appendices

The following appendices are attached to and incorporated into this Agreement by this reference:

Appendix A

Description of Properties

Appendix B

Accounting Procedure

Appendix C

Net Smelter Returns Royalty

Appendix D

Excluded Assets

1.3

Interpretation

In this Agreement and in the Schedules, except to the extent that the context otherwise requires:

(a)

the Table of Contents and headings are for convenience of reference only and shall not affect the interpretation of this Agreement;

(b)

words and terms importing the plural include the singular and vice versa;

(c)

words importing gender include all genders;

(d)

unless otherwise specified, references to Articles, Sections, sub-sections and Schedules are references to Articles, Sections and sub-sections of, and Schedules to, this Agreement;

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(e)

unless otherwise specified, references to any document or agreement, including this Agreement, shall be deemed to include references to such document or agreement as amended, modified, supplemented or replaced from time to time in accordance with its terms and (where applicable) subject to compliance with the requirements set out herein;

(f)

a reference to any party shall include its successors and permitted assigns;

(g)

a reference to an agreement, law, statute, decree, regulation or other legal instrument shall be construed as a reference to such agreement, law, statute, decree, regulation or other legal instrument as the same may be amended, varied, supplemented, novated, assigned or re-enacted from time to time;

(h)

references to “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, means the ownership of at least 50% of the voting or economic interests in the subject person and/or the ability to control in fact the business and affairs of the subject person;

(i)

a reference to “Person” shall be construed so as to include bodies corporate, unincorporated associations, partnerships and individuals;

(j)

other than in relation to this Clause, the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;

(k)

each of the Schedules hereto shall form an integral part of this Agreement and shall have effect as if set out herein;

(l)

subject to the express provisions of this Agreement, where the “consent”, “approval” or the like of a Party is required under this Agreement, it shall be in writing and may be given or withheld in the absolute discretion of such Party;

(m)

where a Shareholder is required to “use reasonable efforts to procure” an act or omission by the JVC, such Shareholder shall use its reasonable efforts to cause the JVC to commit such act or omission by all means within the reasonable control of such Shareholder or any member of its Group, provided that such Shareholder shall not be obliged to incur any material expenditure or assume material liabilities; and

(n)

all references to currency herein are to US Dollars.

ARTICLE 2
THE COMPANY AND ITS SHAREHOLDERS

2.1

Purpose

The JVC has been established solely for the purposes of holding all of the issued and outstanding shares of a company (“ MexCo ”) which itself has been established for purposes of (i) holding the Properties, (ii) conducting operations at the mills located within the Properties, (iii) exploring and studying the economic feasibility of developing the deposits constituting any part of the Properties in accordance with the Work Plan and Budget, (iv) developing, financing, constructing, owning and operating any mine and associated infrastructure on the Properties as contemplated in the Work Plan and Budget approved in accordance with the terms of this Agreement, and (v) undertaking any other business activities relating, directly or indirectly, to the foregoing (collectively, the “ Project ”). Without restricting

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the powers of the JVC and the MexCo, the Parties intend that the JVC and the MexCo remain a single purpose entity dedicated to the Project.

2.2

Place of Business

The address of the registered office of the JVC shall be situated in a location agreed upon by Tara and CME but may subsequently be moved to another location in the same jurisdiction if approved by the Board in accordance with this Agreement. The JVC may have such other offices and branches as may from time to time be approved by the Board in accordance with this Agreement.

The address of the registered office of the MexCo shall be situated in Mexico but may subsequently be moved to another location in Mexico if approved by the Board in accordance with this Agreement. The MexCo may have such other offices and branches within Mexico as may from time to time be approved by the Board in accordance with this Agreement. The MexCo shall be domiciled in Mexico and shall not conduct business in any jurisdiction other than Mexico, except as may be necessary or incidental to the Project, without the prior approval of the Board given in accordance with this Agreement.

2.3

Compliance with Applicable Laws, etc.

The Shareholders shall:

(a)

use their reasonable efforts to procure that the JVC and the MexCo shall comply in all material respects with all Applicable Laws;

(b)

use their reasonable efforts to procure that the Project shall be operated in a manner consistent with internationally recognized standards and best practices for sustainable development in the mining industry;

(c)

procure that the JVC and the MexCo comply with its obligations under this Agreement and any ancillary agreements;

(d)

use their reasonable best efforts to procure that the JVC and the MexCo shall do or cause to be done all things necessary to obtain and maintain in full force and effect all authorizations issued by any Governmental Body which may at any time be required under Applicable Laws to enable the JVC and the MexCo to conduct its business in accordance with this Agreement and in accordance with any lawful decisions of the Shareholders or the Board; and

(e)

use their reasonable efforts to procure that the JVC and the MexCo shall pay all taxes, assessments and other governmental charges of any kind imposed on or in respect of its income, gains, business or assets and in respect of taxes or other amounts which it is required by Applicable Laws to withhold from amounts paid by it to its employees or any other Person before any penalty or interest accrues on the amount payable and before any lien on the property of the JVC or the MexCo exists as a result of non-payment, provided that nothing herein shall require the JVC and the MexCo to pay or withhold any amount if it is diligently contesting its alleged obligation to do so in good faith through appropriate proceedings and is maintaining appropriate reserves or other provisions in respect of the contested amount as may be required under IFRS or any applicable accounting policy.

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2.4

Related Party Contracts

(a)

All Related Party Contracts shall be entered into upon and subject to terms and conditions that are commercially reasonable and are at least as favourable to the JVC and the MexCo taken as a whole as those that would be reasonably expected to be obtained in an arm’s length transaction between unrelated parties.

(b)

No Shareholder shall enter into any Related Party Contract with the JVC or the MexCo that does not comply with paragraph (a) above.

2.5

Relationship of Parties

Nothing herein shall be construed to create a partnership between or among the Parties or any of them. Except as expressly provided by this Agreement, nothing herein or therein shall be construed to authorize any Party to act as the agent of any other Party, nor to permit any Party to act on behalf of or bind any other Party, nor to give any Party the authority to act for, or to assume or incur any obligations or liabilities on behalf of, any other Party.

2.6

Competing Business

(a)

Subject to Clause 2.7, no Shareholder shall have any obligation to offer or provide to the JVC or any other Shareholder any option or other right or opportunity to pursue or acquire any right, title or interest in any corporate opportunity or business venture prior to pursuing such opportunity or venture for such Shareholder’s own benefit.

(b)

Each Shareholder hereby irrevocably consents to any other Shareholder conducting any business similar to the business of the JVC for its own account or for the account of any other Person unless the conduct of such business is expressly prohibited by the terms of this Agreement.

2.7

Exclusive Vehicle for Undertaking the Project

(a)

During the period specified in paragraph (c) below, if a Shareholder or its Affiliate (the “ Acquiring Party ”) acquires any mineral rights or any interest in mineral rights, any portion of which is within the Area of Interest, it will promptly notify the other Shareholder and provide details concerning such mineral rights including details as to any prior exploration development and/or mining work, terms on which such property or interest was acquired (including the cost) and an assessment of the likely benefits to the JVC (the “ New Opportunity Notice ”).

(b)

The other Shareholder will have a period of thirty days following receipt of a New Opportunity Notice to determine if it wishes such property to be included in the Project for purposes of this Agreement by giving written notice to such effect to the Acquiring Party. Upon receipt of such notice the Acquiring Party will forthwith transfer (or cause to be transferred) such property to the MexCo, and the JVC will reimburse the Acquiring Party for costs incurred by the Acquiring Party to the date of transfer.

(c)

The restriction in paragraph (a) above shall apply to a Shareholder (and all members of its Group) during the period commencing on the Effective Date and ending

at the time such Shareholder ceases to own any Shares;

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(d)

Each of the Shareholders agrees and acknowledges that the restrictions contained in this Clause are reasonable and necessary for the protection of the JVC’s legitimate business interests and the protection by the Shareholders of their legitimate interests in the JVC.

(e)

If the restrictions in this Clause shall be found to be void or voidable but would be valid and enforceable if some part or parts of such restrictions were deleted or modified, such restrictions shall apply with such deletions or modifications as may be necessary to make such restrictions valid and enforceable and having, to the extent possible, the same commercial effect as the restrictions they replace.

2.8

Compliance by Agents

Each Shareholder shall procure that no breach of this Agreement arises as a direct or indirect result of any action or omission by any employee or agent of such Shareholder.

2.9

Mexican Mining Law

The parties agree that if any amendment, re-enactment or replacement of the Mexican Mining Law shall materially affect or otherwise change the manner in which this Agreement operates, the enforceability of this Agreement (or any provision hereof) or otherwise materially and detrimentally affect the rights or interests of any Shareholder under this Agreement or as a holder of Shares, such parties shall negotiate in good faith with a view to amending the terms and conditions of this Agreement (and, if necessary or desirable, the constitutional documents of the MexCo) on a basis that preserves (as near as may be practicable) the rights and interests of all the parties hereunder.

ARTICLE 3
MANAGEMENT OF THE COMPANY

3.1

Management Structure

3.1.1

General . The Board shall supervise the management of the Business of the JVC. Subject to the oversight of the Board, the Operator and its duly authorized officers shall be responsible for the day to day management of the MexCo and shall have authority to act for, or assume any obligation or responsibility on behalf of, the MexCo solely in accordance with the provisions of this Agreement, the Work Plan and Budget or any written resolution of the Board.

3.1.2

Board of MexCo . The board of the MexCo will consist of two representatives of Tara and two representatives of CME, provided that each such representative is authorized to act as director of the MexCo under the laws of Mexico.

3.2

Voting of Shares

3.2.1

The Shareholders shall cause such meetings of the JVC to be held, votes cast, resolutions passed, by-laws enacted, documents executed and all things and acts done to ensure that the arrangements described herein are carried out.

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3.3

Composition of the Board

3.3.1

The Board shall be comprised of five directors of whom three shall initially be nominated by CME and two shall be nominated by Tara, subject to change in accordance with Sections 3.3.2 and 3.6(c). Each Shareholder shall be entitled to nominate one director to the Board as long as its Ownership Interest is at least 25%. In the event of any increase or decrease in the number of directors, to the extent possible, each Shareholder shall be permitted to nominate a number of directors to the Board which is closest (rounding up or down to the nearest whole number) to being proportional to its Ownership Interest, but in any event a Shareholder whose Ownership Interest is more than 50% shall be entitled to nominate the majority of the directors on the Board. Each Shareholder agrees to vote in favour of the other Shareholder’s nominee(s), provided that the nominee is a director, officer, employee or shareholder of the other Shareholder, as provided by this Section 3.3.1 in order to cause their election to the Board.

3.3.2

If following any change in the related Ownership Interests of the Shareholders there has been a change in the entitlement of the Shareholders to nominate directors for election to the Board (calculated on the basis set out in Section 3.3.1), then the Shareholder whose nomination rights have decreased shall promptly cause a sufficient number of its nominee directors to resign in order to c

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