MINERAL PRODuCT10N SHAR:NG REEMENT AG No 335-2010-vll 菋   莵 鍃 鎜 麽 苊 _ WHEREAS, the Contractor desires to join and assist the Governmenl in the initial rational exploration and possible development and utilization for commercial purposes of limestone and other associated mineral deposits existing in the Contract Area (as herein defined), WHEREAS, the Contractor has access to all the financing, technical competence, technology and environmental management skills required to promptly and effectively carry out the objectives of this Agreement; NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as follows: sEcTtoN I SCOPE 11 This Agreement is a Mineral Production Sharing Agreement entered into pursuant to the provisions of the Act and its implementing rules and regulations. The primary purpose of this Agreement is to provide for the rational exploration, development and commercial utilization of limestone and other associated mineral deposits existing within the Contract Area, with all necessary services, technology and financing to be furnished or arranged 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 pre.iudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. The Contractor shall undertake and execute. for and on behalf of the Government, responsible mining operations in accordance with the provisions of this Agreemenl, and is hereby constituted and appointed, for the purpose of this Agreement, as the exclusive entity to conduct mining operations in the Contract Area. The Contractor shall assume all the exploration risk such that if no minerals in commercial quantity are developed and produced, it will not be entitled to reimbursement. During the term of this Agreement, the total value of production and sale of minerals derived from the mining operations contemplated herein shall be accounted for and divided between the Government and the Contractor in accordance with Section VIII hereof. SECT10N腡 DEFIN:T:ONS As used in this Agreement,the fo腡 2.1. +! refers to Republic Act No. 7942, otheMise known as lhe.phitippine Mining Act of 1995.' 2.2. Aoreement means this Mineral production Sharing Agreement. 2.3. Asgociated Minerals mean other ores/minerals, which occur together with the principal ore/mineral. 2.4. Banqko Sentral means Bangko Senhal ng pilipinas. 2.5. Budqet means an estimate of expenditures to be made by Contractor in mining operations contemplated hereunder to accomplish the Work Program for each particular period. 2.6. Bureau means Mines and Geosciences Bureau. 2.7. Calendar Year or Year means a period of twelve (12) consecutive months starting with the first day of January and ending on December 31, while "Calendar Quarter" means a period of three consecutive months with the first calendar quarter starting with the first day of January. 2.8. Commercial Production means the production of sufficient quantity of minerais to sustain economic viability of mining operations reckoned from the date of commercial operation as declared by the Contraclor or as stated in the feasibility study, whichever comes first. 2.9. Constitution or Philippine Constitution means the 1987 Constitution of the Republic of the Philippines adopted by the Constitutional Convention of 1986 on Octobe|15, 1986 and ratified by the People of the Republic of the Philippines on February 2, '1987. 2.10. Contract Area means the area onshore or offshore delineated under the Mineral Production Sharing Agreement subject to the relinquishment obligations of the Contractor and properly defined by latitude and longitude or bearing and distance. 2.11. Contract Year means a period of twelve (12) consecutive months counted from the Effective Date of this Agreement or from the anniversary of such Effective Date. 2.12. Contractor means Apo Land and Quarry Corporation or its assignee(s) of interest under this Agreement: Provided, That the assignment of any of such interest is accomplished pursuant to the pertinenl provisions of the implementing rules and regulations of the Act. 2.13. Declaration of Minino Proiect Feasibilitv means a document proclaiming the presence of minerals in a speciflc site, which are recoverable by socially acceptable, environmentally safe and economically sound methods specified in the Project Feasibility Study. 2.14. Department or DENR means the Department of Environment and Natural Resources. 莵 2.15. Director means the D 艏 艏 艬 芎芅色 芁芎 芄 艢芅艏色 艢芅芎 臥 色 芍 腀 趤 荷 腀 艒  膁 腧 膁 膁 2.16. Effective Date means the date of execution of this Agreement by the Contractor and by the Secretary on behalf of the Govern;ent. 2.17. Environment means all facets of man,s surroundings: physical, ecological, aesthetic, cultural, economic, historic, institutional and social. 2.18. Exploretiqn means searching or prospecting for mineral resources by geological, geophysical and geochemical surveys, remote sensing, test pitting, trenching, drilling, shaft sinking, tunneting or any other mejns for the purpose of determining the existence, extent, quality and quantity of mineral resources and the feasibility of mining them for profit. 2.19. Exoloration Period shall mean the period from the Effective Date of this Agreement, which shall be for two (2) years, renewable 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 pertinent provisions of the implementing rules and regulations of the Act. 2.20. Force Maieure means acts or circumstances beyond the reasonable control of the Contractor including, but not limited to war, rebellion, insurrection, riots, civil disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemics, earthquake, storm, flood or other adverse weather conditions, explosion, fire, adverse action by the Government or by any of its instrumentality or subdivision thereof, act of God or any public enemy and any cause as herein described over which the affected party has no reasonable control. 2.2'1. Foreiqn Exchanoe means any cunency other than lhe currency of the Republic of the Philippines acceptable to the Govemment and the Contractor. 2.22. Government means the Government of the Republic of the Philippines or any of its agencies and instrumentalities. 2.23. Gross Outout means the actual market value of the minerals or mineral products from each mine or mineral land operated as a separate entity, without any deduction for mining, processing, refining, transporting, handling, marketing or any other expenses: Provided, That if the minerals or mineral products are sold or consigned abroad by the Contractor under C.l.F. terms, the actual cost of ocean freight and insurance shall be deducted: Provided further, That in the case of mineral concentrates which are not traded in commodity exchanges in the Philippines or abroad such as copper concentrate, the actual market value shall be the world price quotation of the refined mineral products contained thereof prevailing in the said commodity exchanges, after deducting the smelting, refinjng, treatment, insurance, transportation and other charges incurred in the process of converting mineral concentrates into relined metal traded in those commodity exchanges. e/ 2.24. Mine Development ^ refers to work undertaken to prepare an orebody or / a -mineral deposit for mining, including the construction of necessary infrastructure and related lbcilities. \ ,!- , 4 "-^ft'l;;ffr \ "' lt]ilillilillfl fiil fl tilililn fl llitfl lltiltil il sENR027954 2.25. Minerals mean all naturally occurring inorganic substances in solid, liquid, gas or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materiils and geothermal energy. 2.26. Mineral Products mean materials derived from mineral ores/rocks and prepared into marketable state by metallurgical processes which include beneficiation, cyanidation, leaching, smelting, calcination and other similar processes. 2.27. Minino Area means that po(ion of the Contract Area identified by the Contractor as defined and delineated in a Survey plan duly approved by the Director/Regional Director concerned for purposes of development and/or utilization and sites for support facilities. 2.28. Mininq Operations means mining activities involving exploration, feasibility study, environmental impact assessment, development, utilization, mineral processing and mine rehabilitation. 2.29. !9!!99 means notice in writing, telex or telecopy (authenticated by answer back or confirmation received) addressed or sent as provided in Section 16.2 of this Agreement. 2.30. QIq means naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit. 2.31. Pollution means any alteration of the physical, chemical and/or biological properties of any water, air and/or land resources of the Philippines, or any discharge thereto of any liquid, gaseous or solid wastes or any production of unnecessary noise or any emission of objectionable odor, as will or is likely to create or render such water, air, and land resources harmful, detrimental or injurious to public health, safety or welfare or which will adversely affect their utilization for domestic, commercial, industrial, agricultural, recreational or other legitimate purposes. 2.32. Secretarv means the Secretary of the Department of Environment and Natural Resources. 2.33. State means the Republic ofthe Philippines. 2.34. Work Prooram means a document which presents the plan of major mining operations and the corresponding expenditures of the Contractor in its Contract Area during a given period of time, including the plan and expenditures for development of host and neighboring communities and of local geoscience and mining technology, as submitted and approved in accordance with the implementing rules and regulations of the Act. SECT10N腡 : TERM OF AGREEMENT 艳芈芉色軛腨芍芅芎芔芓芈芁腸 / 31 鹏 腃芁芎芄駨 节芅 艶 years from Effective term not exc€eding a^ ",^.-*"-*." -|||||||||||||||||||||||||||||||||||| SENR027954 (25) years. twenty-five The renewal of this Agreement, as well as the changes in the terms and conditions thereof, shall be upon mutual consent by the parties. ln the event the Governmenl decides to allow mining ope€tions thereafter by other Contractor, this must be through competitive public bidding. After due publication of notice, the Contractor shall have the right to equal the highest bid upon reimbursement of all reasonable expenses of the highest bidder. SECT:ON:V CONTRACT AREA Parcel C Corner Longitude Latitude 艐 荏 40膋 11' 0844腅 123膋 3000" 苋 荏 10膋 11. 1563腅 123膋 3000腅 腝节 荏 10膋 11'2281腅 123膋 3000腅 艑 荏 10膋 111 3000腅 123膋 3000腅 艑芁 荏 10膋 11'3000腅 123膋 3855'' 艒 荏 10膋 11'3000' 123膋 4710'' 艒芁 荏 10膋 11'2370腅 123膋 4213腅 艓 荏 10膋 411 1741腅 123膋 3716腅 Parcel D Longitude Corner Latitude 艓 10膋 12' 0000" 123膋 43' 2200" 艑 10膋 12' 0000腅 123膋 43' 41 74" 艒 10膋 12' 1302腅 123膋 43' 4174腅 艓 40膋 12' 1302腅 123膋 43' 4832腅 艔 10膋 12. 2604" 123膋 43' 4832腅 艕 10膋 12' 2604腅 123膋 43' 5490' 艖 10膋 12' 3000腅 123膋 43' 5490' 艗 10膋 12' 3000腅 123膋 44' 0000腅 艘 10膋 12' 3000' 123膋 44' 1139腅 艘芁 10膋 12' 2263腅 123膋 44' 0557腅 艘节 10膋 12' 1525腅 123膋 44' 0000腅 艘艢 10膋 121 0788" 123膋 43' 5893腅 艘芄 10膋 12' 0000腅 123膋 43. 4810腅 艘芅 10膋 11' 5313腅 123膋 43. 4228腅 芌艏 10膋 11' 4576腅 123膋 43. 3646" 艐腝 10膋 111 5057腅 123膋 43' 3024腅 郥 V 10膋 11' 5529腅 123膋 43' 2422腅 醍 10膋 12' 0000腅 123膋 43' 1819腅 Parcel E Longitude Latitude Comer 艐 艓艓 10膋 12'2972腅 123膋 4853腅 艑 艓艓 40膋 12' 2577腅 123膋 2053腅 艒 艓艓 10膋 12' 2420腅 123膋 2350腅 艒芁 艓艓 10膋 12' 1932腅 123膋 1964腅 艓 艓艓 10膋 12' 1444腅 123膋 1578腅 艔 艓艓 10膋 12'1918腅 123膋 0965腅 艔芁 艓艓 10膋 12' 2445腅 123膋 1409腅 趤 蝛 7 蝖譲腡蝖蝖蝛腡腡 蝖 SENR027954 Parcel F Corner Longitude Latitude 艐 艓腏 艗 10膋 11' 4631腅腪 123膋 0000腅 芌芁 艓艮 菒 10膋 11. 5316腅 123膋 0000蝖 艑 艓腏 艏 10膋 12' 0000" 123膋 0000蝖 艑芁 艓艑 艏 10膋 12' 0000蝖 123膋 0543腅 艒 艓腏 膜 10膋 12' 0000蝖 123膋 4086腅 艒芁 艓腏 艕 10膋 111 5316腅 123膋 0543腅 SECT:ON V EXPLORAT:ON PER10D 腌 艏 Timetable for Exploration - The Contractor shall commence Exploration activities not later than three (3) months after the Effective Date for a period of two (2) years, renewable 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 annual review and approval by the Director in accordance with the implementing rules and regulations of the Act. 52 Renewal of Exploration Period - ln case the Contraclor opts for a renewal of its Exploration Period, it shall lile prior to the expiration thereof, a renewal application in the Mines and Geosciences Bureau Central Office, accompanied by the mandatory requiremenls stipulated in the implementing rules and regulations of the Act. The Director may grant the renewal of the Exploration Period on condition that the Contractor has substantially complied with the terms and conditions of the Agreement. Provided, That with or without the filing of the renewal application, the Exploration Period shall, upon its expiration, automatically shift to the next two (2) - year term, and so on. ln cases where further exploration is warranted beyond the six (6) - year or eight (8)-year period and on condition that the Contractor has substantially implemented the Exploration and Environmental Work Programs as verified by the Bureau, the Director may further grant renewal of the Exploration Period: Provided, That the Contractor shall be required to set up a performance surety equivalent to the expenditure requirement of lhe Exploration and Environmental Work Programs. 53 Work Programs and Budgets - The Contractor shall strictly comply with the approved Exploration and Environmental Work Programs together with their corresponding Budgets (please refer to ANNEXES "C" and "D"). The amount to be spent by the Contractor in conducting Exploration activities under the terms of this Agreement during the Exploration Period . shall be in the aggregate of not liss than that specified for each of the y-' Contract Years, a!-tott-ows, I 腒 艠 腁 腒 铈 陑 誂 趤 腜腜腝腝 8 腜腜腝腝 膁 蝛 I蝛腡 !!腡 腡 邢腸 For the Exploration Work Program: 1st Contract Year : PhP 581,000.00 2nd Contract Year : PhP 3,270,000.00 Total : PhP 3,851,000.00 For the Environmentai Work Program : php 394,000.00 ln the event of renewal of the Exploration period, the amount to be spent every year shall first be agreed upon by the parties. ln the event of termination of this Agreement, the Contractor shall only be obliged to expend the pro-rata amount for the period of such Contract Year prior to termination. lf during any Contract Year, the Contractor should expend more lhan the amount to be expended as provided above, the excess may be subtracted from the amount required to be expended by the Contractor during the succeeding Contract Years, and should the Contractor, due to unforeseen circumstances or with the consent of the Government, expend less during a year, then the deficiency shall be applied to the amount to be expended during the succeeding Contract Years. 54 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 approval of a Declaration of Mining Project Feasibility by the Director, the Contraclor shall finally relinquish any portion of the Contract Area not necessary for mining operations and not covered by any Declaration of Mining POect Feasibility. 55- Final Mining Area The Director may allow the Contractor lo hold more than one (1) linal Mining Area subject to the maximum limits set under the implementing rules and regulations of the Act: Provided that each final Mining Area shall be covered by a Declaration of Mining Project Feasibility. 56 Declaration of Mining Project Feasibility - Within the term of the Exploration Period, the Contractor shall file in the Regional Office concerned, the Oeclaration of Mining Project Feasibility of the Contract Area/final Mining Area supported by Project Feasibility Study, Three (3)- Year Development and Construction or Commercial Operation Work Program, complete geologic report, an application for survey and the pertinent Environmental Compliance Certiflcate, among other applicable requirements. Failure of the Contractor to submit the Declaration of Mining Project Feasibility during the Exploration period shall be considered a substantial breach of this Agreement. 57 Survey of the contract Area腝 The ContractOr sha腡 cause the survey of / Order of Survey complete with the mandatory requirements stated in the implementing rules and regulations of the Act. 5.8. Reporting a. During the Exploration Period, the Contractor shall submit to the Director, through the Regional Director concerned, quarterly and annual accomplishment 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 information shall include detailed financial expenditures, raw and processed geological, geochemical, geophysical and radiometric data plotted on a map at a minimum 1:50,000 scale, copies of originals of assay results, duplicated samples, field data, copies of originals from drilling reports, maps, environmental work program implementation and detailed expenditures showing discrepancies/ deviations with approved exploration and environmental plans and V budgets as well as all other information of any kind collected during the exploration activities. All information submitted to the Bureau shall be subject to the confidentiality clause of this Agreement. b. Final Report - The Conlractor shall submit to the Director, through 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 mineral potentials together with a geologic map of 1:50,000 scale at the minimum showing the results of the exploration. Such report shall also include detailed expenditures incurred during the Exploration Period. ln case of diamond drilling, the Contractor shall, upon request of the Director/Regional Director concerned, submit to the Regional Offlce concerned a quarter of the core samples, which shali be deposited in the Regional Office Core Library for safekeeping and reference. c. Relinquishment Report - The Contractor shall submit a separate relinquishment report with a detailed geologic repo( of the 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 complete 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 Feasibility, subjqct to such extension based on justifiable reasons \ \\ -u, ,,.ts--,;ffi,*,, T 10 4 ||||||||||||||||||||||||||||||||腡 SEN R027954 as the Director may approve, upon recommendation of the Regional Director concerned. 6.2. Reporting a. Annual - The Contractor shall submit, within sixty (60) days after December 31 of each year, to the Director, through the Regional Oirector concerned, an annual report, which states the major activities, achievements and detailed expenditures during the year covered, including maps, assays, 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 comptetion of the development and construction activities, the Contractor shall submit a final report to the Director, through the Regional Director concerned. Such report shall integrate all information in maps of appropriate scale and quality, as well as in monographs or reports in accordance with international standards. SECTION VII OPERATING PERIOD 7.1. Timetable - The Contractor shall submit, within thirty (30) days before completion of mine development and construction of production facilities, to the Oirector, through the Regional Director concerned, a Three-Year Commercial Operation Work Program. The Contractor shall commence commercial utilization immediately upon approval of the aforesaid Work Program. Failure of the Contractor to commence Commercial Production within the period shall be considered a substantial breach of the Agreement. 7.2. Commercial Operation Work Program and Budget - During the Operating Period, the Contractor shall submit to the Director, through the Regional Director concerned, Work Programs and Budgets covering a period of three (3) years each, which shall be submitted not later than thirty (30) days before the expiration of the period covered by the previous Work Program. The Contractor shall conduct Mining Operations and other activities for the duration of the Operating Period in accordance with the duly approved Work Programs and corresponding Budgets. 7.3. Expansion and Modification of Facilities - The Contractor may make expansions, modifications, improvements, and replacements of the mining facilities and may add new facilities as the Contractor may consider necessary for the operations: Provided, That such plans shall be embodied in an appropriate Work Program approved by the Director. 7.4. Reporting a. Quarterly with the tirst Calendar Quarler following of the Operating Period, the 腒膜 0,(腒0躥 釅 ':|^腜 ||||||||||||||||||||||||||||||||||||| SENR027954 Contractor sha submit, within thirty (30) days after the end of each Calendar Quarter, to the Director, through the Regional Director concerned, a Quarterly Report stating the tonnage of production in terms of ores, concentrates, and their corresponding grades and other types of products; value, destination of sales oi Jxports and to whom sold; terms of sales and expenditures. b. Annual Reports - During the Operating period, the Contractor shall submit within sixty (60) days from the end of each Calendar year, to the Director, through the Regional Director concerned, an Annual Report indicating in sufficient detail: b.1. The total tonnage of ore reserves, whether proven, probable, or inferred, the total tonnage of ores, kind by kind, broken down belween tonnage mined, tonnages transported from the minesite and their corresponding destination, tonnages stockpiled in the mine and elsewhere in the Philippines, tonnages sold or committed for export (whether actually shipped from the Philippines or not), tonnages actually shipped from the Phitippines (with fu detaits as to purchaser, destination and terms of sale), and if known to the Contractor, tonnages reflned, processed or manufactured in the Philippines with full specifications as to the intermediate products, by-products or final products and of the terms at which they 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 utilization program, including the investment actually made or committed; and b.3. Profile of work force, including management and staff, stating particularly their nationalities, and for Filipinos, their place of origin (i.e., barangay, town, province, region). The Contractor shall also comply with 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 Government expects a reisonable return in economic value for the utilization of non-renewable mineral resources under its national sovereignty while the Contractor expects a reasonable return on its investment with special account to be taken for the high risk of exploration, the terms and conditions prevailing elsewhere in the industry and any special efficiency to be gained by J particularly / good performance of the Contractor. 82 Registration Fees腜 VVithin lfteen (15) days upon receipt of the notice of the Regional Offlce concerned, the 腵 腂  鹏 荂 豸: |||||||||||||||||||||||||||||||||||||||| SENR027954 Contractor shall cause the registration of this Agreement with the said Regional Office and pay the registration fee at the rate provided in the existing rules and regulations. Failure of the Contractor to cause the registration of this Agreement within the prescribed period shall be sufficient ground for cancellation of the same. 83 Occupation Fees - Prior lo registration of this Agreement and at the same date every year thereafter, the Contractor shali pay to the Municipaucity Treasurer concerned an occupation fee 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 Contractor shall pay a surcharge of twenty five percenl (25o/o) of the amount due in addition io the occup;tion fees. 84 Share of the Government - The Government Share shall be the excise tax on mineral products at the time of removal and at the rate provided for in Republic Act No. 7729 amending Section 15l (a) of the National lnternal Revenue Code, as amended, as well as other taxes, duties and fees levied by existing laws. The Excise Tax shall be timely and completely paid to the nearest Bureau of lnternal Revenue Offlce in the province concerned. For purposes of determining the amount of the herein Government Share, the Contractor shall stricfly comply with the auditing and accounting requirements prescribed under existing laws and regulations. The Government Share shall be allocated in accordance with Sections 290 and 292 of Republic Act No. 7160, otheMise known as ,,The Locat Government Code of 1991 ." 85 Pricing of Sales - The Contractor shall dispose of the minerals and by- products produced at the highest market price prevailing in the locality. 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-term sales or marketing contracts or foreign exchange and commodity hedging contracts, which the Government acknowledges to be acceptable notwithstanding 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 Contractor shall seek to strike a balance between long-term sales or marketing contracts or foreign exchange and commodity hedging contracts comparable to policies followed by independent producers in the international mining industry. The Contractor shall likewise seek a balanced distribution among consumers. lnsofar as sales to Contractor's affiliate(s) are concerned, prices shall be at arm's length standard, and competing offers for large scale and long-term contracts shall be procured. Before any sale and/or shipment of mineral product is made, existing and future marketing contract(s)/sales agreement(s) shall be submitted to the Director, copy furnished the Regional Director concemed, for registration. At the same time, the Contractor shall regularly inform the Director in writing of any / revisions, changes or additions in said contract(s)/agreement(s). 腝腍 0膜 0膜  ,,,荰 腏艏 ' 膜 膜'腍膜 膜TI lt膜 膜 腧腜 腅 =` 邨 腅 ''苄 蝛腡 蝖 腡蝖 蝖譲 腡跲 蝛腡 SENR027954 The Contractor shall reflect in its Monthly/euarterly Report on production, Sales and lnventory of Minerals, as well as in the lntegrated Annual Report, .the corresponding registration number(s) of t-he marketing contract(s)/agreement(s) governing lhe export or sale of minerals. 8.6. Associated Minerals - lf minerals other than limestone and other associated mineral deposits are discovered in commercial quantities in the Contract Area, the value thereof shall be added to the value of the principal mineral in computing the Government share. sEcTtoN tx WORK PROGRAMS 9.1. Submission to Government - Within the periods stated herein, the Conkactor shall prepare and submit to the Director, through the Regional Director concerned, a Work program and corresponding Budget for the Contract Area stating the Mining Operations and expenditureJwhich the Contractor proposes to carry out during the period covered with the details and particulars set forth elsewhere in this Agreement or in the supporting documents. 9.2. Government's Examination and Revision of Work program - Should the Government decide to propose a revision to a certain speciric feature in the Work Program or Budget, it shall, within thirty (30) days after receipt thereof, provide a Notice to the Contractor specifying in reasonable detail its reasons therefore. Prompfly thereafter, the Government and Contractor will meet and endeavor to agree on the revision proposed by the Government. ln any event, the revision of any portion of said Work Program or Budget in which the Government shall fail to notify the Contractor of the proposed revision shall, insofar as possible, be carried out as prescribed herein. lf the Government should fail within sixty (60) days from receipt thereof to notify Contractor of the proposed revisions, the Work Program and Budget proposed by the Contractor shall be deemed to be approved. 9.3. Contractor's Changes to Work Program - lt is recognized by the Government and the Contractor that the details of any Work program may require changes in the light 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 negative variance of at least twenty percent (20olo) shall be subject to the approval of the Director. ln case of any positive variance, the Contractor shall submit to 芈芅 Director, through the Regional Director concerned, a copy each of 芈 芅 Work Programs, for information. g.4. The Government's approval of a proposed Work Program and Budget will y.u( not be unreasonably withheld. /' 14 腡蝖 蝛蝖蝖腡蝖蝖蝖腡 腡 SENR027954 sEcTtoN x ENVIRONMENTAL PROTECTION AND MIT{E SAFETY AND HEALTH 10.1. The Contractor shall manage its Mining Operations in a technically, financially, socially, culturally and environmenially responsible manner to achieve the sustainable development objectivej and responsibilities as provided for under the implementing rules and regulations of the Act. 10.2. The Contractor shall ensure that the standards of environmentat protection are met in the course of the Mining Operations. To the extent possible, control of pollution and the transformation of the mined_out areas or materials into economically and socially productive forms must be done simultaneously with minrng. 10.3. The Contraclor shall submit an Environmental Work program during the Exploration Period as prescribed in the implementing rules and regulations of lhe Act. 10.4. An Environmental Compliance Certilicate (ECC) shall be secured first by V the Contractor prior to the conduct of any development works, construction of production facilities and/or mine production activities in the Contract Area. 10.5. The Contractor shall submit within thirty (30) calendar days after the issuance and receipt of the ECC, an Environmental protection and Enhancement Program (EPEP) using MGB Form No. 16-2 covering all areas to be affected by development, utilization and processing activities under this Agreement. The Contractor shall allocate for its initial environment-related capital expenditures approximately ten percent (10%) of the total project cost or in such amount depending on the environmental/geological condition, nature and scale of operations and technology to be employed in the Contract Area. 10.6. The Contractor shall submit, within thirty (30) days prior to the beginning 腛 of every calendar year, an Annual Environmental Protection and Enhancemenl Program (AEPEP), using MGB Form l6-3, which shall be based on the approved EPEP. The AEPEP shall be implemented during the year for which it was submitted. To implement its AEPEP, the Contractor shall allocate annually three to flve percent (3%-5%) of its direct mining and milling costs depending on the environmental/geologic condition, nature and scale of operations and technology employed in the Contract Area. 10.7. The Contractor shall establish a Contingent Liability and Rehabilitation Fund (CLRF) which shall be in the 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 satisfactory compliance with the commitments/strategies of the EPEP/AEPEP and availability of funds for the performance of the EPEP/AEPEP during the specific project phase. The MRF shall be deposited as Trust Fund in a government depository Qank and shall be used for physical and social \ I 15 I -"'r*ix*' T 腡 蝖 illlll[[lllf, lillfl ffi ffi fllllilll sENR027g54 rehabilitation of areas affected by mining activities and for research on the social, technical and preventive aspects of rehabilitation. The MWTF shall be collected based on the amounts of mine waste and mil t{lings generated during the conduct of Mining Operalions. fire MWTF collected shall accrue to a Mine Waste and fa"ilings ieslrve fund and shall be deposited in a government depository Oani fo, fayment ot compensation for damages caused by the Mining Operations. '10.8. The Contractor shall set up mitigating measures such as mjne waste and mill tailings disposal system, mine iehabilitation or plan, water quatity monitoring, etc. to minimize land degradation, air and watei pollution, acid rock drainage and changes in hydrogeology. 10.9. The Contractor shall set up an Environmental and Safetv Office at its minesite manned by qualified personnel to plan, implement and monitor its approved EPEP. 10.10. Th.e.Contractor shall be responsible in the monitoring of environmental, safety and heatth conditions in the Contract Area and;hall stricfly comply with all the rules and regulations embodied under DAO No. 2OOO-Sq otheMise known as the "Mine Safety and Health Standards.', '10.11. The Contractor shall be responsible for the submission of a final 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. sEcTtoN xt RIGHTS AND OBLIGATIONS OF THE PARTIES 1 1. 1. Obligations of the Contractor: a. To exclusively conduct sustainable Mining Operations within the Contract Area in accordance with the provisions of the Act and its implementing rules and regulations; b. To construct and operate any facilities specified under the Mineral Agreement or approved Work Program; c. To determine the exploration, mining and treatment process to be utilized in the Mining Operations; 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; f. To keep accurate technical records about the Mining Operations, as well as financial and marketing accounts, and make them available to Goverfrment representati-ves authorized by the Director I *, |o I '::Sut#r |||||||||||||||||||||||||||||||||||||| SENR027954 for the purpose of assessing the performance and compliance of the Contractor with the terms of this Agreement. Authorized representatives of other Government Agencies may also have access to such accounls in accordance with existing laws, rules and regulations; g To furnish the Bureau all the data and information gathered from the Contract Area and that all the books of accounti and records shall be open for inspection; h To allow access to Government during reasonable hours in inspecting the Contract Area and examining pertinent records for purposes of monitoring compliance with the terms of this Agreement; To hold the Government free and harmless from all claims and accounts of all kinds, as well as demands and actions arising out of the accidents_or injuJies to persons or properties caused Oy trllning Operations of the Contractor and indemnify the Government fo-r any expenses or costs incurred by the Governmenl by reason of any such claims, accounts, demands or actions; ln the development of the community: j.1. To recognize and respect 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 the development of the mining community and for those living in the host and neighboring communities through social infrastructure, livelihood programs, education, water, electricity and medical services. Where traditional self-sustaining income and the community activities are identified to be present, the Contractor shall assist in the preservation and/or enhancement of such activities; j.3. To allot annually a minimum of one percent (1%) of the direct mining and milling cosls necessary to implement the activities undertaken in the development of the host and neighboring communities. Expenses for community development may be charged against the royalty payment of at least one percent (1%) of the gross output intended for the concerned indigenous cultural community; j.4. To give preference to Filipino citizens who have established domicile in the neighboring communities, in the hiring of personnel for its mining operations. lf necessary skills and expertise are currently not available, the Contractor must immediately prepare and undertake a training and 苉艢芕 芍芅芎腨芇芍芍芁色芅艷芐芅芎色芅芁芎芄 艐 腀腀 艐 腀腀 艐 腀腀 艓 腀腀 艥 腀腀 艨 腀腀 | 芢0腒鎡腒 膡,腂,:腒 腎镚R,鯧 膜' 芌艖 菖膜膜:' 膡誧躄:鞣 腁 郬0膡 趤 腡腡 蝖蝛 蝖 腡龺 腡蝖蝛 鷰 SENR027954 porate in the Mining Prolect Feasib腡 ity Study the i5 To inco腵 11.2. Rights of the Contractor: a. To conduct Mining Operations within the confines of its ContracuMining Area in accordance with the terms and conditions hereof and without interfering with the riqhts of other Contractors/Lessees/Operators/ permittees/permit Holders; b. Possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easement rights; c. To use and have access to all declassilied geological, geophysical, drilling, production and other data relevant to the mining operations; d. To sell, assign, transfer, convey or otheMise dispose of all its rights, interests and obligations under the Agreement subject to the approval of the Government; 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 operations of the Contractor, subject to applicable laws and regulations: 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 effective program of training understudies shall be undertaken. The alien employment shall be limited to technologies requiring highly specialized training and experjence subject to the required approval under existing laws, rules and regulations; f. To enjoy easement rights and use of timber, water and other natural resources in the Contract Area subject to pertinenl laws, rules and regulations and the rights of third parties; 腛 g. Repatriation of capital and remittance of profits, interest on loans, dividends and subject to existing 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 existing laws and regulations. 'l 1.3. Obligations of the Government: a. To ensure that the Contractor has the Government's full cooperation in the exercise of the rights granted to it under this Agreement; b. To use its best efforts to ensure the timely issuance of necessary / permits and similar authorizing documents for use of the surface of the Contract Arqai and I I + a?L ^,,.*';,:r:*:;.-;rrr**@!*r \ : | 19 \ffiiil[[1uffi\[lffi$uu\1l\\\\ c. To cooperate with the Contractor in its efforts to obtain financing contemplated herein from banks or other financial institutions; Provided, That such financing arrangements will in no event reduce the Contractor's obligation on Government rights hereunder. sEcTtoN xI ASSETS AND EQUIPMENT 12.1. fhe Contractor shall acquire for the Mining Operations only such assets that are reasonably estimated to be required in carrying out such Mining Operations. '12.2. All materials, equipment, plant and other installations of a movable nature erected or placed on the Contract Area by lhe 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 other installations from the Philippines, subject to existing rules and regulations. ln case of cessation of Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Contractor shall have a period of one (1) year from the time of cessation within which to remove its improvements; otheMise, all social infrastructures and facilities shall be turned over or donated tax free to the proper government authorities, national or local, to ensure that said infrastructures and facilities are continuously maintained and utilized by the host and neighboring communities. sEcTtoN x t EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contractor agrees to employ, to the extent possible, qualified Filipino 腛 personnel in all types of mining operations for which they are qualiried; and after Commercial Production commences shall, in consultation and with consent of the Government, prepare and undertake an extensive training programme suitable to Filipino nationals in all levels of employment. The objective of said programme is to reach within the timetable set forth below the following targets of 'Filipinization:' Unskilled Skilled Clerical Professional Management ("/"\ ("/"\ e/0 ("h) (%) Year 1 100 100 100 75 75 Year 3 100 100 100 80 80 Year 5 100 100 100 85 85 Yeat T 100 100 100 90 90 Year 10 100 100 100 95 95 Yea|15 100 100 100 95 95 13.2. Cost and expenses of training such Filipino personnet and the ]/ / Contractor's own employees shall be included in the Operating Expenses. I I -f* I .^ *rdEn or hhorff 'dl -. tflflflfrliril]|fl{fl flfl ]1ilfli|ilfl |ilil|fl ll sENRO27954 13.3. The Contractor shall not discriminate on the basis of gender and shall respecl lhe right of women workers to pa(icipate in policy and decision_ making processes affecting their rights and benelits. sEcTtoN xtv ARBITRATION 14.1. The Government and the Contractor shall consult with each other in good faith and shall exhaust all available remedies to setfle any and alldisputes or disagreements arising out of or relating to the vaiidity, interpretations, enforceability, or performance of this Agreement before resorting to arbitration as provided for in Section 14.2. below. 14.2. Any disagreement or dispute which can not be setfled amicably within a period of one (1) year from the time the issue is raised by a party shall be settled by a tribunal of three (3) arbilrators. This tribunal shall be constituted as follows: one to be appointed by the Contractor and the other to be appointed by the Secretary. The flrst two appointed arbitrators shall consider names of qualified persons until agreement on a mutually acceptable Chairman of the tribunal is selected. Such arbitration shall be initiated and conducted pursuant to Republic Act No. 876, otheMise known as the "Arbitration Act." ln any event, the arbitration shall be conducted applying the substantive laws of the Republic of the Philippines. 14.3. Each party shall pay flfty percent (50%) of the fees and expenses of the Arbitrators and the costs of arbitration. Each party shall pay its own costs and attorney's fee. SECTION XV 腛 SUSPENSION OR TERMINATION OF CONTRACT, TAX INCENTIVES AND CREDITS 15.1. This Agreement may be suspended for failure of the Contractor: (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 Government. 15.2. This Agreement terminates or may be terminated for the following causes: (a) expiration of its term, whether original or renewal, (b) withdrawal from the Agreement by the Contractor; (c) violation by the Contractor of the Agreement's terms and conditions; (d) failure to pay taxes, fees/or charges 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 Act 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 conditions and essential parts hereof, and any falsehood in said statements or omission of facts wttch may alter, change or affect substantially the fact \ g L 21 ,...*Y;*,ffi ., -l _. _=i I llllllllllfl Ilflilffi mulffifl[]1ff llllillfl fl sENR027954 set forth in said statements shall be a ground for its revocation and termination. 15.4. The Contractor may, by giving due nolice at any time during the term of this Agreement, apply for its cancellation due to causes which, in tne opinion of the Contractor, render continued mining operation no longer feasible or viable. ln this case, the Secretary shall decide on the application within thirty (30) days from notice: provided, That the Contractor has met all the financial, flscal and legal obligations. 15.5. No delay or omissions or course of dealing by the Government shall impair any of its rights under this Agreemenl, except in the case of a writlen waiver. The Government's right to seek recourse and relief by all other means shall not be construed as a waiver of any succeeding or other default unless the contrary intention is reduced in writing and signed by the party authorized lo exercise the waiver. 15.6. ln case of termination, the Contractor shall pay all the fees and other liabilities due up to the end of the year in which the termination becomes effective. The Contractor shall immediately carry out the restoration of the Conlract 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 fiscal obligations under this Agreement. 15.8. The following acts or omission, inter alia shall constitute breach of conlract, upon which the Government may exercise its right to terminate the Agreement: a. Failure of the Contractor without valid reason to commence Commercial Production within the period prescribed; and/or b. Failure of the Contractor to conduct mining operations and other activities in accordance with the approved Work Programs and/or any modification thereof as approved by the Director. 15.9. The Government may suspend and canceltax incentives and credits if the Contractor fails to abide by the terms and conditions of said incentives and credits. SECT:ON XV: OTHER PROVIS10NS 16.2. Notice All notices, demands and other communications required or permitted hereunder shall be made in writing, telex or telecopy and shall be deemed to have been duly given notice, in the case of telex or telecopy, if answered back or confirmation received, or if delivered by hand, upon receipt or ten days after being deposited in the mail, aiimail postage prepaid and addressed as follows: lf to the Government: THE SECRETARY Department of Environment and Natural Resources DENR Building, Visayas Avenue Diliman, Quezon City lf to the Contractor: 腝THE PRESIDENT Ap-o Land and Quarry Corporation 25'" Floor Petron Mega Plaza 358 Sen. Gil J. Puyat Avenue, Makati City Either party may substitute or change such address on notice thereof to the other party: Provided, That the Contractor shall, in case of any change of address during the term of this Agreement, notify the Director in writing. Failure to do such notification shall be deemed as waiver by the Contractor to be informed about any communications as provided in Section 16.2 above. 16.3. Governing Law This Agreement and the relation between the parties hereto shall be governed by and construed in accordance with the laws of the Republic of the Philippines. The Contractor hereby agrees and obliges itself to comply with the provisions of the Act, 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 performance of its obligation or duties hereunder shall be excused to the extent attributable to Forca Majeure as defined in the Act: Provided, That the suspension of Mining Operations due lo Force Majeure causes shall be subject to approval by the Director. b. lf Mining Operations are delayed, curtailed or prevented by such Force Majeure causes, then the time for enjoying the rights and carrying out the obligations thereby affected, the term of this Agreement and all rights and obligations hereunder shall be )riod involved 腂 ' 譊 芯 豸 腡腡 蝖 腡   邢鷴 c. The Party, whose ability to perform its obligations is affected by such Folce Ma./.eure causes, shall promptly give Notice to the oiher in writing of any such delay or failure of performance, the expected duration thereof and its anticipated effect and shall use its efforts to remedy such delay, except that neither Party shall be under any obligation to settle a labor dispute: Provided, That the suspension of obligation by the Contractor shall be subject to prior approval by the Director. 16.5. Amendments This Agreement shall not be annulled, amended or modilied in any respect except by mutual consent jn writing of the herein parties. lN WTNESS WHEREOF, the Parties hereto have executed this Agreement, as of the day and year first above written THE REPUBL:C OFTHE PH:LiPP:NES V By: 膜腀 腀 腀 腀膜 腀 腀 腅 艮芆艤芎芖 Department 腙 ironmeni and Naiural Resources o APO LAND AND QUARRY CORPORAT:ON TIN: 000腝271-703-000 V By: :NCENT ARCENAS PAUL President SIGNED IN THE PRESENCE OF: (Sgnature over Printed Name) 24 ACKNOWLEDGMENT Republic of the Philippines) Quezon City )ss Before me, a Notary Public for and in the City of Quezon, personally appeared HORACIO C. RAMOS, with Community Tax Certificate No. 1822.t963 issued on Januarv 06. 20'10 at Quezon Citv, in his capacity as Secrctary of the Department of Environment and Natural Resources, and PAUL VINCENT ARCENAS, with Community Tax Certificate No. z4_ftt Z,t/c issued on r /rt/ta al Fitcrt T/ C /f1 , in nE-Effiiity as eresident of Apo Land and Quarry Corporation, both known to me and to me known to be the same persons who executed the foregoing instrument consisting of twenty five (25) pages, including this acknowledgment page, and acknowtedged to me that the same is their voluntary acts and deeds. 芵 e腧 )菂hand and afrx my nOla闡 J 钱 裔 16腊 鞢IItESS WHEREOF, |IT靟 豶苜 荥 膜腀 腀 腀 腀裪 腃腅 腀 腀 腀膜 7膜 腝 "莌 腝 0膜 膌 `|,腧 229芣膌 "0 3 腅 芣芤 Pr芦 V 膜 23腅 9M10膌 腧 腒 膌 PN腂 80'8,` it腍 V 間 Doc. No. Page No. Book No. Series of 裪 , 驍 豸1遅 質 邨 lllll腡 跲蝖腡 跻 鍃蝖蝖蝖 腡腡 SENR027054 25