WHEREAS, the Govemment desires to avail itself of the financial resources, technical competence and skill, which the Contractor is capable of applying to the mining operaiions of the projecl conlemplated her6in; WHEREAS, the Contractor desares to join and assist the Govemment in the initial rational exploration and possible devolopment and utilization for commercial purposes of iron, gold, silver and olher associated mineral deposits existing in the Contract Area (as herein defined); WHEREAS, the Contraclor has access to all the financing, technic€l competence, technology and environmental management skills required to promptly and effeclively carry out the objectives of this Agreement; NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual mvenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as follows: 腛 sEcTtoN I SCOPE 1.1. This Agreement is a Mineral Produclion Sharing Agreement entered into pursuant to the provisions of the Act and its implementing rules and regulations. The primary purpose of this Agroement is to provide for the rational exploration, development and commercial utilization of iron, gold, silver and other associated mineral d€posits exisling within the Contract Area, with all necessary services, lechnology and financing to be fumished or ananged by the Contractor in accordance with the provisions of this Agreement. The Contractor shall not, by virtue of this Agreement, acquire any title over the ContracUMining Area without prsjudice lo the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law 1.2. The Contraclor shall undertake and execute, for and on behalf of the Govemmenl, sustainable mining operations in accordance with the provisions of this Agreement, and is hereby constituted and appointed, for the purpose of this Agreement, as the exAusive entity to con;ud mjning operations in the Contrad Area. 1.3. The Contractor shall assume all the exploration risk such that if no manerals in commarcjal quantity are developed and produced, ,t *,iinotL to rermbursement "nt,t.O 1.4 During.rhe N lerm of this Agreement. the totar varue of production and sare of w minerals derived from the mining op€rations cont"rpt"tJ n"r"-in Oe accounted for and divided b€hveen the Govemment "natt accordance with Seclion Vlll hereof. and the-Contraaor in 腏 臚 0 ` sEcTroN DEFINITIONS As used in this Agreement, the following words and terms, whether singular or plural, shall have the following respective meaning: 2.1. Ad refers lo Republic Ac1 No. 7942, otherwise known as the'Philippine Mining Act of '1995.' 2.2. Aoreement means this Mineral Production Sharing Agreemant. 2.3. Associated Minerals mean other ores/minerals, which occur together with the principal ore/mineral. 2.4. Banoko Santral means Bangko Ssnlral ng Pilipinas. 2.5. Budoat msans an estimate of exponditures to be made by Contractor in 腝mining operations contemplaied hereunder to accomplish the Work Program for each partiqJlar period. 2.6. Bureau means Mines and Geoscisnces Bureau. 2.7. Calendar Year or Year means a psriod of h^,elve (12) consecutive months starting wath the first day of January and ending on Decamber 31, while "Calendar Quarter" means a period of three consecdive months with the first calendar quartar starling with the tirst day of January. 2.4. Cgmmercial Produclion means ths production of sufficient quantity of minerals to sustain economic viability of mining operations reckoned from the date of commercial operation as declared by the Contractor or as statad in the feasibility study, whichever comes first. 2.9. Constitution or Philipoine Constitution means the 19g7 Constitution ofthe Republic of the phitippines adopted by the Constitutional Convention of 1986 on Octobe|15, 1986 and ratified by ths people of the ReBtblic of the Philippines on February 2, 19OZ . 2.10. g:onl[eq!-]1[c3 means tha area onshore or offshore delineated under the Mineral production Sharing Agreement subject to the relinquishment obligations of the Contractor and properly deti;ed by latitude anO longituOe or bearing and distance. 2'1 l Contr.?c1 Y-e-ar means a psriod of twerve (12) consecutive months counted from lhe Effeclive Date of this Agre€ment or from th" ;;;"";;;;;;i]Ii S Effective Date \rf 鞫2迢 h葛  諭 rlittT醁 饬 闑 l閈 tfttla麽 1若 )rest is accomplished pursuant to the 2.13. Declaration of Minino Proiecl Feasibilitv means a document proclaiming th€ presence of minerals in a specific site, which are recoverable by socially acaeptable, environmentally safe and economically sound methods specified in the Mine Development Plan. 2.14. Oepartment or DENR means the Department of Environment and Natural Resour@s. 2.15. Director means the Oireclor of Mines and Goosciences Bureau. 2.16. Effective Oate means the date of execution of this Agreement by the Contractor and by the Seffeiary on behalf of the Govemment. 217 Environment means all facets of man's surroundings: physical. emlogical, aesthetic, orltural, economic, historic, institutional and social. 2.18. Exoloration means searching or prospecling for mineral resurces by geological, geophysical and geochemical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, enertt, quality and quantity of mineral resour@s and the feasibility of mining them for profit. 2.19. Exploration Period shall mean the period from the Effeciive Date of this Agreement, which shall be for two (2) years, renelvable for like periods but not to exceed a total term of six (6) years for nonmetallic minerals and eight (8) years for metallic minerals, subject to the pertineni provisions of the implementing rules end regulations of the Ac1. 2.20. Force Maieure means acts or circumstances beyond the reasonable control of the Contraclor including, but not limited to war, rebellion, insunection, riots, civil disturbances, blockade, sabolage, embargo, strike, lockout, any dispute with surface owlers and other labor disputes, epidemics, earthquake, storm, flood or other advers€ weather conditions, explosion, fire, adverse action by the Govemmant or by any of its instrumentality or subdivision thereof, ac1 of God or any public enemy and any cause as herein dsscribed over which the affected party has no reasonable contlol. 2.21. Eelgtg!_EIqheogg means any currency othar than the currency of the Republic of the philippines acceptable to the Govemment and the Contractor. 2.22. Goyemmenl means the Government of the Republic of the philippines or any of its agencies and instrumentalities. 2.23. Gross Outout means lhe actual market value of the minerals or ,,in"r"t $ producls from each mine or mineral land operated as a ielarate entity, without any deduclion for mining, processrng, refining, transporting, ' handting, .marketing or any olher ex[enses, prorii"o, inai'it it-" min"rrf" or mineral produols are sold or consigned aOroao Uy ine Contraio, unoer C t.F. terms, the acruat cosr of odan rr"igr,i u" deduc{ed: provided turther, That in the case oi "ri,r'in.il"nJ "n"tt are not traded in commodity .i*irf conJnil"t"" *,hi"t, exchanges in the philippines oi aOlroaO sucn , 腁 local geoscience and mining technology, as submitted and approved in accordance with the implementing rules and regulations of the Acl. SECTION III TER OF AGREEMENT 3.1. This Agreement shall have a term of twenty-rive (25) years from Effective Date, and may be renewed thereafter for another term not exceeding twenty live (25) years. The renewal of this Agreement, as well as the changes in the terms and conditions thereof, shall be upon mutual conssnt by the parties. ln the event lhe Govemment decides to allow mrnrng operations thereafter by other Conlractor, this must be through competitive public bidding. After due publication of notice, the Contraclor shall have the right to equal the highest bid upon reimbursemont of all reasonable expenses of the highesi bidder. sEcToN tv CONTRACT AREA 4.'l.. Size, Shape, and Loc€tion of Contract Area - This Agreement covers a Contract Area of approximately Two Thousand Seventy Seven and 3,084/10,000 (2,077.3084) heclarss, situated in Zamboanga City and bounded by the following geographical coordinates (pleas€ refer to ANNEX "B" - l:5O,000 scate Location Map/Sketch ptan); Comer Latitude Longitude V 艐 7腅 22'00' 122腅12'00' 艑 7腅 26.30'' 122膋12'00腅 艒 7膋 26'30" 122膋 13'00' 艓 7腅 25'45' 122腅 13'00' 艔 7腅 25'45" 122膋 13'30" 艕 7腅 25'ay 122腅 13'30腅 艖 7膋 25'30腅 122膋 14'00腅 艗 7膋 24'00" 122膋 14'00' 艘 7膋 24'00" 122膋 13'00' 艏 7膋 22'001 122膋 13'00腅 SEC膡 oN V EXPLORATloN PER:OD "韙 釟 轁i閣 郠鑘  臨 顨 跻1陮 誏 闋 醽 醈 6芪 term of six (6) years for nonmetallic minerals and eight (8) years for metallic minerals, subject to annual review and approval by the Direclor in accordance with the implementing rules and regulations of the Act. 5.2. Renewal of Exploration Period - ln case the Contractor opts for a rens,val of its Explorataon Period, at shall file prior to the expiration thereof, a renewal application in the Mines and Geosciences Bureau Central Office, accompanied by the mandatory requirements stipulated in the implementing rules and regulations of the Act. The Director may grant the renewal of the Exploration Psriod on condition that the Contrador has substantially complied With the terms and conditions of the Agreement. ln cases where further exploration is wananted beyond the six (6) - or eight (8)-year period and on condition that the Contractor has subsiantially implemented the Exploration and Environmenial Work Programs as verified by the Eureau, the Direclor may further grant renewal of the Exploration Period: Provided, That the Contraclor shall b€ required to set up a performance surety equivalent to the expnditure requirement of the Exploralion and Environmenial Work Programs. V 5.3. Work Programs and Budgets - The Contractor shall stricfly comply with the approved Exploration and Environmental Work Programs together with their mnasponding Budgets (please refer to ANNEXES "C' and ,D,). The amount to be sp€nt by the Contractor in conducting Exploration ac{ivities under the terms of this Agre€ment during the Exploration period shall b€ in the aggregate of not less than that specified for each of the Conlracl Years, as follows: For the Exploration Work Program: lst Contract Year : PhP 6,332,32500 2nd Contrad Year : PhP 21,421,35000 Total : PhP 27,753,67500 For the Environmental Work program : PhP 2.775,56750 ln the event of renewal of the Exploration period, the amount to be sDent every year shall ftrst be agreed upon by the panies. ln the event of termination of this Agreement, the Contractor shall onlv be obliged to expend the pro{ata amount for the period of such ContrJ i""l. prior to termination. lf during any Contract year, tire ContrJ"i expeno more lhan the amount to be expended as provided "frorfO exc€ss may be subtracted trom the amo^unt required above, the Contractor during to be il; N Conlraclor, the succeeding Contracl years. "rp;;;;;y tn. - due to unforeseen circumstances or with "nj-"norfj, expend less duflng a year. then the the consent of the 9_o.Yg.T"nl deficiency sha be applied to the amount to be exoendid during the d""ir"a Years "r"*"016 鑎 7 5.4. Relinquishment of Total/Portion of the Contract Area - During the Exploration Period, the Contractor may relinquish totally or partially the original Contract Area. After the Exploration Period and prior to or upon apprcval of a Declaralion of Mining Project Feasibility by the Direclor, the Contractor shall finally relinquish any portion of the Contrac{ Area not necassary for mining operations and not covered by any Declaration of Mining Projeci Feasibility. 5.5. Final Mining Area - The Director may allow the Contractor to hold more than one (1) final Mining Area sub.iecl to the maximum limits set under the implementing rules and regulations of the Act: Provlded, That each final Mining Area shall be covered by a Declaration of Mining Proiecl Feasibility. 5.6. Oeclaration of Mining Project Feasibility - Within the torm of the Exploration Period, the Contraclor shall file in the Regional Office concerned, the Declaralion of Mining Projecl Feasibility of the Contract Areafinal Mining Area supporled by Mining Project Feasibility Study, Three (3)-Year Development and Construction or Commercial Operation Work Program, complete geologic rsport, an application for survsy and the pertinent Environrnental Compliance Certificate, among other applicable requirements. Failure of the Contraclor to submit the Declaration of Mining POect Feasibility during the Exploration Period shall be considered a substantial breach of this Agreement. 5.7. Survey of the Contract Area - The Contractor shall cause the survey of the perimeter of the Contlad Area/final Mining Area through an application for survey, complete with requirements, fil6d in the Regional Office concemed simullaneous with the submission of the Declaration of Mining project Feasibility. Survey returns shall b€ submitted to the Regional Director @ncerned for approval within one (1) year from receipt of the Order of Survey complete with the mandaiory requirements siated in the implementing rules and regulations of the Ac1. 5.8. Reporting a. During the Exploration period, the Contractor shall submit to the Direclor, through the Regional Director concemed, quarterly and annual ac,complishment reports under oath on all activities conducted in the Contract Area from the Effective Date of this Agreement. The quarterly report shall be submitted not later than fifteen (15) days at the end of each Calendar euarter while the annual accomplishment report shall be submitted not later than thirty (30) days from the end of each Calendar year. Such informatio; shall include detailed financial expenditures, raw anU proceiseJ geological, geochemical, geophysical and radiometric data plotted on a map at a minimum 1:50,000 scale, mpies oF originals of assay results, duplic€ted samples, field data, copies of -originafs ironl drilling reports, maps, environmental work piogram impiementaiion  and detailed expenditures showing discrepaniiesl Oevlations wiin approved exploration and environmenlal plans and budgets as weli :1-rll glhl.ifo1m"tion of any kind co ec{ed ornns theLpl;iation adrvlttes All information submitied to lhe Bureau shall b€ subiecl to the confidentiality clause of this Agreement. |.fi b - The shall submit to the Oirector, through Final Report Contractor the Regional Director concerned, a final report under oath upon the expiration of the Exploration Period which shall be in the form and substance comparable to published professional reports of respectable international institutions and shall incorporate all the findings in the Contract Area including location of samples, assays, chemical analysis, and assessment of maneral potentials together with a geologic map of 1:50,000 scale at lhe minimum showing the results of the exploration. Such report shall also include detailed expendilures incuned during lhe Exploration Period. ln case of diamond drilling, the Contractor shall, upon request of the Director/Regional Director concemed, submit to the Regional Office conc€rned a quarter of the core samples, which shall be deposited in the Regional Office Core Library for safekeeping and reference. C Report - The Contraclor shall submit a separate Relinquishment geologic report of the relinquishment report with a detailed relinquished area accompanied by maps at a scale of 1:50,000 and results of analyses and detailed expenditures, among others. SECTION VI DEVELOPMENT AND CONSTRUCTION PERIOD 6.1. Timetable - The Contractor shall compl€{e the development of the mine including the construction of production facilities within thirty six (36) months from the submission and approval of the Declaration of Mining Project Fsasibility, subjed to such extension based on justifiable reasons as the Director may approve, upon recommendation of the Regional Direclor concerned. 62 Reporting a. Annual - The Contractor shall submit, within sixty (60) days after December 31 of each year, to the Director, lhrough the Regional Director mnc€med, an annual report, \,rfiich states lhe major activities, achievements and detailed expenditures during the year covered, including maps, ass:lys, rock and mineral analyses and geological and environmental progress reports during the Development and Construction Period. b. Final Report - Within six (6) months from the completion of the development and construclion activities, the Contractor shall submit a final report to the Director, through the Regional Oirector ,.,_ conc€rned. Such report shall integrate all informaiion in maps of f) appropriate scale and quality, as well as in monographs or reports in - accrrdanc€ wilh international standards. destination and tarms of sale), and if known to the Contractor, tonnages refined, processed or manufaclured in the Philippines with full specifications as to the intermediate producls, by-products or final products and of the terms at which thoy were disposed; b.2. Work accomplished and work in progress at the end of the year in question with respect to all the installations and facilities related to the utilizalion program, including the investment aclually made or committed; and b.3. Profile of work force, including management and staf, stating particularly lheir nalionaliiies, and for Filipinos, their place of origin (i.e., barangay, town, province, region). The Contrac{or shall also comply \,vith other reporting requirements provided for in the implementing rules and regulations of the Act. sEcTtoN v FISCAL REGIME 8.'1. General Principle - The fiscal regime of this Agreement shall be governed by the principle according to which the Govemment expects a reasonable retum in economic value for the utilization of non{enevable mineral resources under its nalional sovereignty while the Contractor expects a reasonable return on its investment with special account to be taken for the hagh risk of exploration, the terms and conditions prevailing elsewhere in the industry and any sp€cial efficiency to be gained by a p;rticularly good performance of the Contractor. 4.2. Registration Fees - Within fifteen (15) days upon receipt of the notice of approval of lhe Agreement from the Regional Office concemed, the Contraclor shall cause the registration of ihis Agreement with the said Regional Office and pay the registration tee at the rate provided in the existing rules and regulations. Failure of the Conlraclor to cause the rsgistration of this Agreement within the prescribed period shall be sufficient ground for cancellation of the same. 8.3. Occupation Fees - prior to registration of this Agreement and at the same date every year thereafrer, the Contractor shalipay to the Municipaucity Treasurar con@rned an occupation feg over the'Contract Area at the annual rate provided in the existing rules and regulations. lf the fee is not paid on the date specified, the Contraclor shatt-pay a surcnartl o uenty five percent (2S%) of the amount due rn aaaitron io itre -, occuparion tees.- _a.. A.4. Share of the Govemmsnl - The Government Share shall be the excise ta P on mineral products at the time of removal and at ftre rife pio-viOeO tor in Repubtic Act No. 7729 amending Seclion .t51 1a oiln"'llJtiJn"r rnt"r"l Revenue code, as amended, as well as other taxis, ortls anJ iees revieo ,bl^"I':J,:g raws ^lhe Excise Tax snarr oe paio io'rne illrii err"", of lntemal Revenue Ofiice in the province concemed. 11 purposes For of determining the amount of the herein Goyernment Share, the Contraclor shall strictly comply with the auditing and accounting requirements prescribed under existing laws and regulations. The Govarnment Share shall bs allocated in accordance with Seclions 290 and 292 ol Republic Act No. 7160, otheMise known as 'The Local Govemment Code of 'l 991 .' 8.5. Pricing of Sales - The Contracior shall dispose of the minerals and by- produds produced at the highest market price prevailing in the locelity: The Contractor shall also pay the lowest achievable marketing commissions and related fees and shall negotiate for more advantageous terms and conditions subject to the right to enter into long-lerm sales or marketing contracls or foreign exchange and commodity hedging confacts, which lhe Govemmer acknowledges to be acceptable notrvithstanding that the sale price of the minerals and by-products may from time to time be lower, or the terms and conditions of sales are less favorable, than that available elsewhere. The Coniractor shall seek to strike a balance between long- term sales or marketing contracis or foreign exchange and mmmodity hedging contracts comparable to policies follolved by indep€ndent producers in the intemational mining industry. The Contrador shall liketrrise seek a balanced distribution among consumers. lnsofar as sales to Conlractods affiliate(s) are concerned, prices shall be al arm's length standard, and competing offers for large sc€le and long-term contracts shall be procurad. Before any sale and/or shipment of mineral producl is made, existing and future marketing contract(s)/sales agre€ment(s) shall be submitted to the Direclor, copy furnished the Regional Direclor concemed, for regisiration. At the same time, the Contraclor shall [egularly inform the Director in writing of any revisions, changes or additions in said contract(s)/agr6ement(s). The Contractor shall rsflact in its Monthly/euarterly Report on production, Sales and lnveniory of Minerals, as well as in the lntegrated Annual Report, the corresponding registration number(s) of the marketing contracl(s)/agreement(s) goveming the export or sale of minerals 8.6. Associated Minerals - lf minerals other than iron, gold and silyer are discovered in commercial quantilies in the Contract Ar;a, the value thereof shall be added to the value of the principal mineral in computing the Govemmenl share. SECT:ON:X WORK PROGRAMS S Stal腧 he触 he韼 腒 ,s鞵 ::腡 鹏 鿤 1诬 蹘lhe p腧 膈 閣1腵  腧 %遄 趔 臷  轖 韕 镩 腡 闡ltions and expenditures which the 譲 I靈鑹菌 and particr.,lars set forlh elsewhere in this Agreement or in the supporting documents. 9.2. Govemment's Examination and Revision of Work Program - Should the Govemment decide to propose a revision to a certain specmc feature in the Work Program or Budget, it shall, within thirty (30) days afier receipt thereof, provide a Notice to the Contracior specifying in reasonable detail its reasons therefore. Promptly thereaflar, the Govemmant and Contraslor will meet and endeavor to agree on the ravision proposed by the Govemment. ln any evenl, lhe revision of any portion of said Work Program or Budget in which ihe Govemment shall fail to notiry the Contractor of ihe proposed revision shall, insofar as possible, be canied out as prescribed herein. lf the Govemment should fail within sixty (60) days from rsc€ipt thereof lo notify Contraclor of the proposed revisions, ths Work Program and Budget proposed by the Contraclor shall be deemed to be approved. 9.3. Coniraclols Changes io Work Program - lt is recognized by lhe Government and the Contraclor that the details of any Work Program may require changes in the ligfn of changing circumstances. The Contractor may make such changes: Provided, That it shall not change the general objective of the Work Program: Provided further, That changes which entail a variance of at least twenty percent (2006) shall be subject to the approval of the Director. 9.4. The Govemment's approval of a proposed Work program and Budget will not b€ unreasonably withheld. SECTION X ENVIRONMENTAL PROTECNON AND IIIINE SAFEW AND HEALTH V 10.1. The Contractor shall manage its Mining Operations in a technically, Iinancially, socially, culturally and environmentally responsible manner to achieve the sustainable development obiectives and responsibilities as provided for under the implemenling rules and regulations of the Acl. 10.2. The Contractor shall ensure thal the standards of environmental prolection are met in the course of the Mining Operations. To the exent possible, conlrol of pollution and the transformation of the mined_out areas or materials into emnomically and socially productive forms must be done simultaneously with mining 10.3. The Contracdor shall submit an Environmental Work program during the Exploration period as prascrib€d in th€ implemenling ruleJar}c reoulations - ofthaAct - S 10.4. During the Exploration period, the Govemment shall create a multi_secloral :"l9rlL9,g::f-r!3l.sha[ be 6mpower6d to took into rhe;rd; ;d"t" of the exploration activities and iecommend ,itig;ti;g il;;r;;;I.ry adverse environmental impacts. _iz 腏 艏 10.5. An Environmental Compliance Certificate (ECC) shall be secured first by the Contraclor prior to the conduct of any development works, construclion of produdion facilities and/or mine production activities in the Contract Area 10.6. The Contractor shall submit within thirty (30) calendar days after the issuance and receipt of the ECC, an Environmenlal Proleclion and Enhancement Program (EPEP) using MGB Form No. 16-2 covering all araas to be affected by development, utilization and processing aclivities under this Agreement. The Contractor shall alloc€te for its initial enyironment-related capital expenditures approximately tsn psrcent (10%) of the total prqect cost or in such amouni depnding on the environmental/geological condition, nature and scale of operations and technology to be employed in the Contract Area. 10.7. The Contraclor shall submit, within thirty (30) days prior to the beginnang of every c€lendar yeat, afi Annual Environmental Protection and Enhancement Program (AEPEP), using MGB Form 16-3, which shall be based on the approved EPEP. The AEPEP shall be implemented during the year for $,hich it was submitted. To implernent its AEPEP, the Contraclor shall allocate annually three to fiva percent (3016-5016) of its diract mining and milling costs depending on the environmental/geologic condition, nature and scale of operations and technology employed in the Contract Area. '10.8. The Contraclor shall esiablish a Contingent Liability and Rehabilitation Fund (CLRF) shich shall be in lhe form of the Mine Rehabilitation Fund (MRF) and the Mine Waste and Tailings Fee (MWTF). The MRF shall be based on the financial requirements of the approved EPEP as a reasonable environmental deposit to ensure satisfaclory compliance with the commitmentvstrategies of the EpEp/AEpEp and availability of funds for the performance of the EpEp/AEpEp during the 腜 specafic prorect phase. The MRF shall be deposited as Trust Fund in a government depository bank and shall be used for physic€l and social rehabilitation of areas affected by mining aclivities and for res€arch on lhe social. technical and prevantive aspects of rehabilitalion. The MWTF shall be collac{ed based on the amounls of mine waste and mill tailings generated during the conducl of Mining Operations. The MWTF collecied shall acsue to a Mine Waste and Tailings Res€rve Fund and shall be deposited in a govemmenl depository bank for payment of compensation for damagas caused by the Mining Operations. 10.9. The Contractor shall set up mitigating measuros such as mine waste and mill tailings disposal system, mine rehabililation or plan, water quality monitoring, etc. to minimize land degradation, air and rryaler pollution, acid rock drainage and changes in hydrogeology. 10.10. The Contractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement and monitor its approved EPEp. =K- 14 10.1'1.The Contractor shall be responsible in the monitoring of environmental, safety and health conditions an the Contract Area and shall strictly comply with all the rules and regulations embodied under DAO No. 2000-98, otherwise known as the "Mine Safety and Health Standards." '10.12.The Contractor shall be responsible for the submission of a flnal mine rehabilitation and/or decommissioning plans, including its financial requirements and incorporating the details and particulars set forth in the implementing rules and regulations of the Act. SECTION XI RIGHTS AND OBLIGATIONS OF THE PARTIES 1 '1.1. Obligations of the Contractor: a. To exclusively conduct sustainable Mining Operations within the Contracl Area in accordance with lhe provisions of the Act and its implementing rules and regulations; b. To construct and operale any facilities speeified under the Mineral Agreement or approved Work Program; c. To determine the exploration, mining and treatmenl process to be utilized in the Mining Operalions; d. To extract, remove, use and dispose of any tailings as authorized by an approved Work Program, e. To secure all permits necessary or desirable for the purpose of Mining Operations, V f. To keep accurat€ technical records about the Mining Operations, as well as financial and marketing accounts, and make them available to Government rspresentatives authorized by the Director for the purpose of assessing the performanc€ and complianc€ of the Contractor with the terms of this Agreement. Authorized representatives of other Government Agencies may also have access to such accounts in ac@rdance with existing laws, rules and regulations; g. To fumish the Bureau all the data and information gathered from the Contracl Area and that alt the books of accounts lnd records shall be open for inspection; h. To allow access to Govemment during reasonable hours in r\ inspecting the Contract Area and examining pertinenl records for \)\ purposes of monitoring compliance with the t;rms of this Agreement; i. To hold the Govemment free and harmless from all claims and accounts ot all kinds, as well as demands and aciions arising out of the accidents or iniuries to p€rsons or properties causeO Uy l4ining 4 15 腌 r 腁 Operations of the Contractor and indemnify the Government for any expenses or cosls incuned by the Govemmenl by reason of any such claims, accounts, demands or aclions; In the devalopmani of the community: j.l. To recognize and resp€ci the rights, customs and traditions of indigenous cultural communities over their ancestral lands and to allocate royalty payment of not less than one percent (1%) of the value of the gross output of minerals sold; j.2. To coordinate with proper authorities in tha development of the mining community and for those living in the host and neighboring mmmunities through social infrastruclure, livelihood programs, education, water, elec{ricity and medic€l services. Where traditional self-sustaining income and the community aclivities are identified to be present, the Contractor shall assist in the preservation and/or enhancement of such aclivities; .i.3. To allot annually a minimum of one perc,.rt ('lo/o) of the direcl mining and milling costs necessary to implement the activities undertaken in the development of the host and neighboring communilies. Expanses for community development may be charged against the royalty payment of at least one percrnt (1%) of the gross oulput intended for ihe mncemed indiganous cultural communityi j.4. To give preference to Filipino citizens who have established domicile in the neighboring communilies, in the hiring of personnel for iis mining operations. lf necessary skills and expertise are cunently not available, the Contraslor must immediately prepare and underlake a training and recruitment V progfam at its expense; and j.5. To incorporate in the Mining Project Feasibitity Study the planned expenditures necessary to implement 0.i) to (j.3) of this Section; k ln the development of Mining Technology and Geosciences: k.1. In the murse of its operations, to produce geological, geophysic€l, geochemical and other types of maps and reports that are appropriate in scale and in format and substance vyhich are consistent with the intemationally accepted standards and praclices. Such maps shall be made available to the scientitic community in the most @nvenient and cost effective forms, subject to the condition that thef\ Contractor may delay ralease of said informalion for a \-/- reasonable period of time whach shall not exceed three (3) yearsi k.2. To systematic€lly keep tha data generated from the Contracu Mjning Area such as cores, ass€ys and other related 16 information, including economic and financial data and make them acc€ssible to studenls, researchers and other persons responsable for developing mining, gaoscienc€ and processing technology subject to the condition that the Contraclor may delay release of data to the science and technology community within a reasonable period of lime which shall not exceed three (3) years, k3 To transfer to the Government or local mining company the appropriate technology it may adapt in the exploration, developmant and commercial utilization of the minerals in the Contract Area, k4. To allocate resaarch and development budget for the advancemenl of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc.; and k.5. To replicate data, maps and reports cited in (k.1) and (k.2) and fumish the Bureau for archiving and systematic safeke€ping which shall be made available to the science and technology community for conducting research and undertaking other activities \ihich contribute to the development of mining, geoscience and processing technology and the conesponding national pool of manpower talents: Provided, however, that the release of data, maps and the like shall be similarly constrained in a@ordance with (k.1) and (k.2) above; L To inmrporate in the Mining Project Feasibility Study the planned expendilures necessary to implemenl all the plans and programs set forth in this Agraament; and :1 m. To pay all olher taxes and fees mandated by existing laws, rules and regulations. 11.2. Rights of the Contraclor: aTo conduct Mining Operations within the mnfines of its Contracl/Mining Area in accordance with the terms and conditions hereof and withorrt interfering with the rights of other Contractors/Lessaes/Operators/ permittees/permit Hblders: b. Possession of the Contracl Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easament rights; C To use and have acc€ss to all declassified geologrcal. geophysical,(\ drilling. production and other data retevant to the ;inrng;perr[ion.; V d To sell, assign, transfer, convey or otherwise dispose of all its rights, interests and obligations under the Agreement subjecl to"G approval of the Government: 17 r .腅腁 e. To employ or bring into the Philippines foreign technical and specialized personnel, including the immediate members of their families as may be required in the operalions of the Contractor, subjecl to applicable laws and regulalions: Provided, That if the employment connection of such foreign persons with the Contractor ceases, the applicable laws and regulations on immigration shall apply to them. Every time foreign technologies are utilized and where alien executives are employed, an effeclive program of training understudies shall be undertaken. The alien employment shall be limited to technologies requiring highly specialized training and experience subjecl to the required approval under existing laws, rules and regulations; f. To enjoy easemant rights and use of timber, \,yater and other natural resources in the Contract Area subject lo pertinent laws, rules and regulations and the rights of third parties; g. Repatriation of capital and remittance of profits, dividends and interest on loans, subject to exasting laws and Bangko Sentral ng Pilipinas rules and regulations; and h. To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with exisling laws and regulations 'l 'l.3. Obligations of the Government: a. To ensure that the Contraclor has the Government's full cooperation in the exercise of the rights granted to il under this Agreement; b. To use its best efforts to ensure the timely issuance of necessary permits and similar authorizing documents for use of lhe surface of the Contract Arsa; and V c. To cooperate with the Contractor in its contemplated herein from banks efforts lo obtain financing Provided, or other financial institutions: That such linancing anangements vyill in no evant reduce the Contractols obligation on Govemment rights hereunder. SECT:ON X腡 ASSETS AND EQU:PMENT 12i. fhe Contractor shall acquire for the Mining Operations only such assets that are reasonably estimated to be requrred tn carrying out such Mining Operations. 12.2 All materials. equipment, plant and other installations of a movable nature erecled or placed on the Contracl Area by the Contractor shall remain the property of the Contractor. The Contractor shall have the right to remove and re-export such materials and equipment, plant and otheT hstattations from the Ph腡 腊 腌 腁 cessation of Mining Op€rations on public lands occ€sioned by its voluntary abandonment or withdrawal, the Conlraclor shall have a period of one ('1) year from the time of c€ssation within which to remove its improvements; otherwise. all social infrastructures and facilities shall be tumed over or donated tax free to the proper govemment authorities, national or local, io ensure that said infrastructures and facalities are continuously maintained and utilized by the host and neighboring communities. SEC臊 ON X腡: settled by a tribunal of three (3) arbitrators. This tribunal shall be constitr.rted as follows: one to be appoinled by the Contractor and the other to be appointed by ths Secretary. The first two appointed arbitrators shall consider names of qualified p€rsons until agre€ment on a mutually acceptable Chairman of the tribunal is solec{ed. Such arbitration shall be initiated and conducted pursuant to Republic Act No. 876, otherwise known as the 'Arbiiration Ac1." ln any event, th€ arbitration shall be conduc{ed applying the substantive laws of the Republic of the Philippines. 14.3. Each parly shall pay fifty percent (50%) of the fees and expnses of lhe Arbitrators and ihe costs of arbitration. Each party shall pay its own msts and attom6y's fee. sEcTtoN xv SUSPENSION OR TERMINANON OF CONTRACT, TAX INCENTIVES AND CREDITS 15. 1. This Agreement may be suspended for failure of the Contraclor: (a) to comply with any provision or requirement of the Act and/or its implementing rules and regulations; (b) to pay on time the complete taxes, fees and/or other charges demandable and due the Govemment. '152. This Agraement lerminates or may be terminated for the following causes: (a) expiration of its ierm, wheiher original or renewal; (b) wilhdrawal from the Agreement by the Contraclor; (c) violation by the Contractor of the Agreement's terms and mnditions; (d) failure to pay taxes, fses/or chargas or financial obligations for two (2) consecutive yearsi (e) false statement or omission of facts by the Contractor; and (0 any other cause or reason provided under the Acl and its implementing rules and regulations, or any other relevant laws and regulations. 15.3. All statements made in this Agreement shall be considered as mnditions and ess€ntial parts hereof, and any falsehood in said statements or omission of facls $hich may aliar, change or affect substantially the fact set forth in said statements shall be a ground for its revocation and termination. 15.4. The Contractor may, by giving due notice at any time during the term ofthis Agreement, apply for its cancellation due to causes which,ln the opinion of the Contraclor, rendsr continued mining operalion no longer feasible or viable. ln this case, the Sesetary shall decide on the apilic€tion withrn N- thirty (30) days from notice: provided, That the Contractor fias met af f ine \f financial, fiscal and legal obligations. 15.5. No delay or omissions or course of dealing by the Govemment shall impair any of its rights under this Agreement, except in the case of a written waiver. The Govemmenl,s right to seek recourse and retiat bv att other means shall not be construed as a waiver of any succeedini or olher H 20 default unless the contrary intention is reduced in writing and signed by the party authorized to exercise lhe waiver. 15.6. ln case of termination, the Contractor shall pay all the fees and other liabililies due up to the end of lhe year in which the termination becomes effective. The Contractor shall immediately carry out the restoration of tha Contract Area in accordance with good mining industry practice. 15.7. The withdrawal by the Contractor from the Mineral Agreement shall not release it from any and all financial, environmental, legal and fisc€l obligations under this Agreement. 15.8. The following acls or omission, ,nter a/ia shall constitute breach of contract, upon which the Government may exercise ils right to terminate the Agreement: a. Failure of the Contractor without valid reason to commence Commercial Produclion within the period prescribed; and/or b. Failure of the Contractor to conduct mining operations and other aclavities in accordance with the approved Work Programs and/or any modification thereof as approved by the Oirector. 15.9. The Govemmenl may susp€nd and cancel tax incentives and credits if the Contractor fails to abide by the terms and conditions of said incentives and credils. sEcTtoN xvt OTHER PROVISIONS 16.1. Any terms and conditions resulting from rep€al or amsndment of any V existing laws or regulation or from the enactment of a law, regulation or administrative order shall bo considered a part of this Agreement. 16.2. Notice All notices, demands and olher communications required or permitted hereunder shall be made in writing, telex or telempy and shall be deemed to have been duly given notice, in the case of telex or telecopy, if answered back or confirmation raceived, or if delivered by hand, upon ieceipt or ten days after being deposited in the mail, airmaal postage prepaid and addressed as follows: lf to the Government: THE SECRETARY Department of Environmenl and Natural Resources DENR Building, Visayas Avenue Oiliman, Quezon City 豔 腅 膜 腌膜 lf to the Contraclor: THE PRESIDENT Hard Rock Mineral Trading, lnc. 268 Don Mariano Cui St. Capitol Site, Cabu City Either party may substitute or change such address on notice thereof to the other party: Provided, That th€ Contraclor shall, in case of any change of address during the term of this Agre€ment, notify the Direclor in writing. Failure to do such notification shall be deemed as waiver by the Contractor to be infomed about any communications as provided in Seclion 16.2 above. 16.3. Goveming Law This Agraement and the relation bellvsen the parties hsreto shall be govemed by and construed in accordance with the laws of tha Republic of the Philippines. The Contractor hereby agrees and obliges itself to comply with lhe provisions of the Aci, its implementing rules and regulations and other relevant laws and regulations. '16.4. Suspension of Obligation a. Any failure or delay on the part of any party in the pertormance of its obligation or duties hereunder shall be excused to the exteni attributable to Force Maleure as defined in the Act: provided, That the suspension of Mining Operations due to For@ Majeure causes shall be subiect io approval by the Diredor. b. If Mining Oparations ar6 delaysd, curtailed or prsvented by such V For@ Majeure c€uses, then the time for enjoying the rights and carrying out the obligations thareby affected, the isrm of this Agreement and all rights and obligations hereunder shall be extended for a period equal to the period involved. c. The Party, whose ability to perform its obligaiions is affecled by such Force Majeure c€uses, shall promp{y give Notice to the other in writing of any such delay or failure of performance, ths exp€cled duration thereof and its anticipaled affecl and shall use its efforts to remady sucfi delay, exc€pt that neither party shall be under any obligation to setfle a labor dispute: provided, That ths suspension of r Btl:T::" by the Contraclor sha be subiecl ro prior aCCr