腒 WHEREAS, the Contractor has access to all the financing, technical competence, technology and environmental management skills required to promptly and eftbctively carry out the objectives ofthis Agreement. NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants, terns and conditions hereinafter set forth, it is hereby stipulated and agreed as lollows: SECTION I SCOPE ll 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 ofthis Agreement is to provide for the sustainable development afld commercial utilization ofcertain limestone and other related mineral deposits existing within the Contract Area, with all necessary services, technology and financing to be furnished or aranged by the Contractor in accordance with the 腛 provisions of this Agreement. The Contractor shall not, by virtue of this Agreement, acquire any title over the ConrracUMining Area .$r'ithout prejudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. t2 The Contractor shall undertake and execute, for and on behalfofthe Government, sustainable mining operations in accordance with the provisions ofthis Agreement, and is hereby constituted and appointed. for the purpos€ ofthis Agreement. as the exclusive entity to conduct mining operations in the Contract Area. ll The Contractor shall assume all the exploration risk such that if no minerals ln commercial quantity are developed and produced, it will not be entitled ro reimbursement. 1.1 During the term of this Agreement, the total value of production and sale 芏 芆 minerals derived from the mining operations contemplated herein shall 节 芃 accounted for and divided between the Government and the Contractor 芉 芎 accordance with Section VItl hereofl SEC'I'ION II DEFINITIONS As used in this Agreement, the following words and terms . whether singular or plural, 芙 shall have the following respective meaning 腟 : 腒 2.1 14d" refers to Republic Act No. 7942, otherwise known as the "Philippine 腁 MininB Act of 1995" 腁 腝 22 Aereement means this Mineral production Sharing Agreement I \1 ,l lv' , 23 Associated Minerals mean other oreyminerals which occur together with the principal ore/mineral. 24 Banqko Sentral means Bangko Sentral ng pilipinas. 25 BudSrL meenr .n crlim.t. of.xp€nditur.. to b. m.dc by Contrrctor in minins operations contemplated hereunder to accomplish the Work program for each particular period. 苂 腌 腎 艏 Calendar Year or Year means a period of twelve (12) consecutive starting with the first day ofJanuary months and ending on December 31. while..Calendar Quarter" means a period of thrce consecutive months with the first calendar quarter starting with the first day ofJanuary Commercial Prodr.rction means lhe production ofsumcient quantity ofminerals to sustain economic viabilitv of mining operations reckoned from the date of commercial operation as declared by the Contractor or as stated in the feasibility study, whichever comes firsl 28 Constitution or Philippine ( aIS!!IU!iAI means the 1987 Constiturion of rhe Republic of the Philippines adopted by rhe Constitutional Convention of 1986 on October 15, 1986 and ratil'ied by the people ofthe Republic ofthe philippines on 膂 February 2, 1987 腞 2.9 Contract Area means the area onshore or offshore delineated under the Mineral 腞 Production Sharing Agreement subject to the relinquishment obligations of the 腞 Contractor and properly deflned by latitude and longitude or beariniand distance. 2.10 腝 Cont&qlYaq! means a period of twelve (12) consecutive months counted fiom the Effective Date of this Agreement or from the anniversary of such Effective 腝 Date 2.ll Contractor means FR CEMENT CORPORATION or its assignee or assignees \-, of interest under this Agreement: provided, That the assignmeit of any of. srrch interest is accomplished pursuant to the pertinent provisioni ofthe i.pi"."nting rules and regulations ofthe Act 2.12 Dpclaration of Mining Feasibilitv means a document proclaiming the presence minerals in ol_ a specific site that are recoverable by ,;"-iully 'acceptable, environmentally saf'e and economically sound methods sp""inJ'i, tt" l,line Development plan 2.13 DgBqrtun€d qLDENB means the Department of Envi.onment and Natural Resources. 腒 2 14 Diectot means the Director ofMines and Geosciences Bureau 215 Effectiye Date means the date ofexecution ofthis Agreement by the 腁 Contractor :nd ly*the secretary on behalf of the c.r";;;:. -i;';;rJ,_'"e*pror"t;on Permit'/Temporary Exproration permit had b""n uru,J oiuiii" io*"*",o., ,r,. Effective Date otthis Agreemenr,f,arr U" tf," aat" oiir.r*.," Per mir-/Temporary Explorarion permir *-,* " -- ' I "i.ii'irr,or",i", l: l L d 2 16 Environment means all facets of man's surroundings: physical, ecological, aesthetic, cultural, economic, historic, institutional and social. 2 17 Exoloration means searching or prospecting for mineral resources by geological, geophysical and geochemical surveys, remote sensing, test pitling, trenching, drilling, shaft sinking, tunneling, or any other means for the purpose ofdetermining the existence, extent, quality, and quantity of mineral resources and the feasibility of mining them for profit. 2.18 Exploration Period shall mean the time 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 subjeat to the pertinent provisions of the implementing mles and regulations ofthe Act. 2 19 Force Majeure means acts or circumstances beyond the reasonable control ofthe 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 ofits instrumentality or subdivision thereof, act of God or any public enemy and any cause as herein described over which the affected party 腒 has no r€asonable control. 2 20 Foreign Exchange means any currency other than the currency ofthe Republic of the Philippines acceptable to the Government and the Contractor. 腜 腜 腜 2 2l Government means the Government of the Republic of the Philippines or any of 腜 腜 its agencies and instrumenlalities. 腜 腜 腜 腜 2.22 Gross Output means the actual market value of the minerals or mineral products 荶 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.I.F. terms, the actual cost of ocean freight and insurance shall be deducted: Provided funher, That in the case ol' mineral concentrates which are not traded in commodity €xchanges 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 €xchanges, after deducting the smelting ,refining, treatment, insuranc€, transportation and other charg$ incurred in the process of converting mineral concentrates into refined metal traded in those cornmoditv exchanges 2 23 Mine Development refers to work uridertaken to prepare an ore body or a mineral deposit for mining, including the construction of necessary inlrastructure 腔 and related facilities. 2 24 Minerals mean all naturally occurring inorganic substances in solid, Iiquid, gas or any intermediate state excluding energy materials such as coal, petroleum, natural 腟 gas, radioactive materials and geothermal energy 2.25 Mineral Products mean materials derived from mineral ores/rocks and prepared into marketable state by m€rallurgical processes which include beneficiation, cyanidation, leaching, smelting, calcination and other similar processes 腒 腜 4 2.24 MinisrAr.. m..n. rh.t De.tion ofah. Contrsci Ar.. id.ntili.d bv th3 Contr.ctor as defined and delineated in a Survey Plan duly approved by the Director/concemed Regional Director for purposes of development and/or utilization and sites for support facilities 2.27 Minine Ooerations means mining activities involving exploration, feasibility study, environmental impact assessment, development, utilization, mineral processing, and mine rehabilitation 2.28 Nql4e means notice in writing, telex or telecopy (authenticated by answer back or confirmatiofl received) addressed or sent as provided in Section 162 of this Agreement. 2.29 Ore mears naturally occurring substance or material from which a mineral or element can be mined and/or processed for profit. 2.30 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, aiq and land resources harmful, detrimental or 腒public health, safety or welfare or which will adversely alfect their injurious to or other utilization for domestic, commercial, industrial. agricultural, recreational legitimate purposes. 2.31 Sgqlglary means the Secretary of the Department of Environment and Natural Resources. 2.32 S!4a means the Republic ofthe Philippines. 2 33 Work Prosram means a document which presents the plafl 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 fbr development of host and neighboring communities and of local geoscience and V mining technology, as submitted and approved in accordance with the implementing rules aod regulations ofthe Act. SECTION III TERM OI,' AGREEMENT 31 This Agreement shall have a term of twenty-five (25) years from Ell'ective Date, and may be renewed thereafier lbr 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 consent by the parties. In the event the Govemment decides to allow mining operations thereafter by other Contractor, 腟 this must be through competitive pLrblic bidding. Afier due publication of notioe, the Contractor shall have the right to equal the highest bid upon reimbursement of all reasonable expenses ofthe highest bidder. 腜 腒 荊 腒 腛腛 腛腛 腛 醽 SECTION IV CONTRACT AREA 41 Size, Shape, and Location of Contract Area This Agreement covers a total area of thirty six and 4592110000 hectares (36.4592 has.), situated at Dulumbayan, Teres4 fuzal and bounded by the following geographical coordinates (please refer to ANNEX "B" - l:50,000 scale Location Map/Sketch Plan): POINTLATITUDELONCITUDE 14膋33'00''121膋11'45'' l 14膋33'0230''121膋11'45'' 2 14膋33'0580''121膋11'4570'' 3 4 14膋33'0590''121膋11'45'' ' 14膋33'30''121膋11'45腍 5 14膋33'30''121膋11'4840'' 6 121膋11'4840'' 7 14膋33'2720'' 8 14膋33'2720''121膋12'00'' 9 14膋 33'0760''121膋12'00' 腜_ 1014膋33'0760''121膋11'5688'' 14膋33'00''121膋 1111'5790'' SECT10N V EXPLORAT10N PERIOD 51 Timetable lbr Exploration (l) The Contractor shall commencc Exploration activities not later than three months after the Effective Date for a period of 腟 two (2) years, renewable for like periods but not to exceed a totalterm of six (6) years, subject to annual review and approval by the Director to evaluate 膥v compliance with the terms and conditions of this Ageement: Provided, That further renewal may be granted by the Secretary under circumstances as defined in the implementing rules and regulations ofthe Act. ln case where a Temporary Exploration Permit was issued, the Period of such Temporary Exploration Permit shall be included as part ofthe Exploration Period ofthis Agreement. 5.2 Work Programs and Budgets - The Contractor shall strictly comply with the approved Exploration and Environmental Work progams together with their coffesponding Budgets (please refer to ANNEXES ..C,' and ..D"). The amount io be spent by the Contractor in conducting exploration activities under the terms ofthis Agreement during the Exploration period shall be in the aggregate of not less than that specilied for each of the Contract years- as 腟 lollows: 腒 腒 For the Exploration 腁 Work Program. lst Contract Year 良芈 良 279,10000 2nd Contract Year: 良 芈良 1,107.30000 腀 艨 苓 腜腜 腜腜 醽 腜 For the Environmental Work Program PhP 300腁00000 Total In the event of renewal of the Exploration Period, the amount to be spent every year shall first be agreed upon by the panies ln the event oftermination ofthis Agreement, the Contractor shall only be obliged to expend the pro-rata amount lbr the period of such Contract Year prior to termination. lfduring any Contract Year. the Contractor should expend more than the amount to be expended as provided above. the excess may be subtracted li'om the amount required to be expended by the Contractor during the succeeding Contract Years, and should the Contractor, due to untbreseen circumstances or with the consent ofthe Government, expend less during a year, then the deficiency shall be applied to the amount to be expended during the succeeding Contract the Contract Area - During the Exploration 53Total/Portion of Relinquishment of Period. the Contractor may relinquish totally or partially the original Cootract Area. After the Exploration P€riod and prior to or upon approval of the Declaration of Mining Project Feasibility, the Contractor shall finally relinquish any portion ofthe Contract Area not necessary for mining operations and not covered V by any Declaration of Mining Project Feasibility. cause the survey of the 54Area - The Contractor shall Survey of the Contract perimeter of the Contract Area through an application for survey, complete with requirements. filed with the concerned Regional Omce simultaneous with the submission of the Declaration of Mining Project Feasibility. Survey returns shall 膌 膌 be submitted to the concerned Regional Director for approval within one (1) year 腝膌 腝 from receipt of the Order of Survey complete with the maodatory requirements 腝 腀 stated in the implementing rules and regulations ofthe Act. 腁腀 腀 荭 腛 膌 55Exploration Period, the Declaration of Mining Project Feasibility - During the Contractor shall submit to the Director through the concemed Regional Director, a Declaration of Mining Project Feasibility together with a Mining Pro.ied 腝Feasibility Study, a Three (3)-Year Development and Construction or Commercial v Operation Work Program, a complete geologic report of the area and an Environmental Compliance Certificate. The Mining Project Feasibility Study and Work Program are subject to approval by the Director. Failure of the Contractor 1o submit a Declaration of Mining Project Feasibility during the Exploration Period shall be considered a substantial breach of this Agreement. 56 Reporting a) Periodic Repods - During the Exploration Period. the Contractor shall 腟 subnit to thc Director tfuough thc concerned Regional Dilccto,, (ludrlcrly and annual accomplishment reports under oath on all activities conducted in 腾 the Contract Area from the Eflective Date ofthis Agreement The quarterly 腒 report shall be submitted not later than fifteen (15) days at the end of each 腁 Calendar Quarter while the annual accomplishment report shall be submitted 腁 not later than thirty (10) days from the end of each Calendar year. Such information shall include detailed financial expenditures, raw and processed geological, geochemical, geophysical and radiometric data plofied on a map at a minimum I:50,000 scale. copies oforiginals ofassay results, duplicated 醽 samples, lield data, copies of originals fiom drilling repons, maps, environrnental work program implementation and detaiied expenditures showing discrepancievdeviations with approved exploration and environmental plans and budgets as well as all other information ofany kind collected durin8 the exploration activities. AII information submitted to the Bureau shall be subject to the confidentiality clause ofthis Agreement. b) Final Report - The Contractor shall submit to the Director through the concerned Regional Director, a linal 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 inte.national institutions and shall incorporate all the tindings in the Contract Area including location of samples, assays, chemical analysis, and assessment of mineral potentials together with a geologic map of l:50,000 scale at the minimum showing the results of the exploration. Such report shall also include detailed expenditures incurred during the Exploration Pe.iod. tn case of diamond drilling, the Contractor shall, upon request of the Director/concerned Regional Director. submit to the Regional Office a quarter of the core samples which shall be deposited in the Regional Ollice Core Library for safekeeping and reierence. 腒 c) Relinquishment Repon The Contractor shall submit a separate relinquishment report with a detailed geologic report ofthe relinquished area accompanied by maps at a scale of l:50,000 and results of analyses and 腥 detailed expenditures, among others. SECTION VI DEVELOPMENT AND CONSTRUCTTON PERIOD 腒 6I Timetable - The Contractor shall complete the development oithe mine including the construction of production facilities within thirty six (16) months from the submission of the Declaration ol Mining Project Feasibility, subject to such extension based on justifiable reasons as the Director may approve, upon recommendation of the Regional Director. 62 Reporting a) Annual - The Contractor shall submit, within sixty (60) days after December 3l of each year, to the Director through the concemed Regional Director, 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 reports progress during the Development and Construction Period 腟 b) Final Report - Within six (6) months liom 覺 the completion ofthe development and construction activities, the Contractor shall submit a final report to the Director through the concerned Regional Director. Such report shall 腁 腁 integrate all information in maps ofappropriate scale and quality as well as in 腁 monographs or reports in accordance with international standards. I I ri' ll 1l SECTION VII OPERATING PERIOD 71 Timetable - The Contractor shall submit, within thirty (lO) days before compleron of mine development and construction of production facilities, to the Director tlrough the concemed Regional Director, 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 ofth€ Agreement. 72 Commercial Operation Work Program and Budget - During the Operating period, the Contractor shall submit to the Director through the concerned Regional Director, Work Programs and Budgets covering a period ofthree (j) years each. which shall be submirted nor later lhan thirty (10) days before the expiration ofthe period cove.ed by the previous Work Prograrn 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 and any modilication thereof shall be subject to approval by the Director. 腞 73 Expansion and Modification of Facilities - The Contractor may make expansions, 艐 modifications, improvements, and replacements of the mining facilities and may 艐 add new facilities as the Contractor may consider necessary for the operations: 腝艐 Provided, That such plans shall be embodied in an appropriate Work program 腝 approved by the Director. 腒 腀 腟 腀 腜 74 Reporting 腒 腝 a) Quarterly Reports - Beginning with the first Calendar euarter following the commencement ofthe Operating period, the Contractor shall submit, within thirty (30) days after the end of each Calendar euarter. to the Director through the concemed Regional Director, a euarterly Report sfating the V tonnage of production in terms of ores, concentrates, and their coresponding grades and other types ofproducts; value, destination ofsales or exports and to whom sold; terms ofsales and expenditures. b) Annual Repons - During the Operating period, the Contractor shall submit within sixty (60) days from the end of each Calendar year, to the Director through the concemed Regional Directo., indicating in sufficient detail: b.l) The total tonnage ofore reserves, whether proven, probable, or inferred, the total tonnage of ores, kind by kind, broken down 'between tonnage mined, tonnages transported from the minesite and their corresponding destination, 腟 tonnages stockpiled in the mine and elsewhere in the philippiies, tonnages sold or committed for exporr (wherher actually shipped from the phii;p;". 腁 or not), tonnages actually shipped from the philippinis (with full details as to 腀 purchaser, destination 腀 and terms of sale), and ii knowq to the Contralior, 腁腝 tonnages refined, processed or manufactured in the philippines with full 腁 specifications as to the intermediate producls, by_products oi nnut prJu"t. and ofthe terms al which thev were disposed, I tl il I 閫 Wx臠 辦 Tri鉉 轖 l prOgram,including thc investmcnt: 辑 鋟 lT迪  跲 71轒 苨 1銰 諭 釳 ]attd閣 臨 T:F遄 躢蹉 1鉴跫 :酎 鍤襭 p葟 腒 葊 d 陑 觭 諭 迪 鑆 釳1臧 :腡 襷i郝 11限  隦 酷邸 :镩 諭 腧 SECTION VIII FISCAL RxGIMf, 81 Ceneral Principle - The tiscal reuim, shall be bv p.rn.ipr" u".ola,ng'; ;ffi';i:"::']::lYreement soremed rhe econom i c var ue r.i. tr,", iii,,,., ;""'"X:,H:1,fi :"*:"Xr'::tJ":*:: l,il] l: l1::al sov:r:ignty. while the Conrractor expects a reasonable return on rnvestmenr with special account ro be r"t* foi tf," fAf,i;U ffiploiJtl;, its rerms and conditions prevaitine ersewhere in ,h. *" lo be gained bv a particularly i;*fi;;;'un;;;J.iJ,ir:i"o*, giood penormance ofthe Conrracror 82 Registration Fees _ Within fifteen (1s.1 days upon receipt ofthe notice of the MpSA from the concemed i.gionat tiflice, ,#c.r"""i". ofapDroval registration of this Agreement wirh rhe said Regional .i"i.*rri" ,* tegistration Oflice and pay the lee al the rate Droviderl in lhe exislin, *]". r"rrilri"r, ,i]u,,rr. ot'the Conlracror to cause rhe registr,i.,n "* rr 腞 ::::::::: ]:.i,1lar]:ns 腟 p",ioa,r,urr u" ^-i;;;: wirhin the prescribed 艐 *n"i"iiil;'FJ::[:],fl :]:if,::ffi] 腟 83 !11ry1i.".1*. - Prior to registration of this Agreement and at the same V t::":'J:i't'art ptv ro" tt'e conclii' date fl:I,[:' il :::h:,,'i," contract tun''ir"'rc,," provrded in the existing al., und r"ouf-.11" A-rea al rhe annual rate ;peciried. r;;',a;;;;:,;":fl,il ;:i'j"jf,I",*l'#il5;,rl.J or rne amount due in addition to rhe occupalton lees r:11;l#:rif; 84 Share of the Govemment _ The Gor, share shail mineral products ,h;-i;;" ;;;;:Jelnmenr be lhe excise Iax on Acr No 'zzzq ", and at rhe rare provided ror in Ren'rbtic ame-ndl;;;il; i;;'f' *",a"a u. *"ri u.1fi";;;^"",1 ;J".1 )"::,|.""|;f#l,ii:,Jfllevenue code, as For purposes of determining rhe amount ol' lhe helein ( onlra(tor shall strictly comply wilh Governmenl Share lhe prescribed under exist,r; ;;;l.,;,naudiling and accounting requrremenrs $;'-i:;;rffi;r;i ;::,:r*"#T:JilT:: f;i",:::l ::i:?:;::: s:li:? 艏 芮 艏 良 Cll苜 苔 :l:腷 :|:若 迪fT:荀 i醌 1:1[腷 11覸 ::||11:鎥 苦]ltel臨 腡i閈 :k'1靸 r 1() 4 related fees. The Contractor shall seek to strike a balance between long-term sales 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 alliliates are concerned, prices shall be at arm's length standard and competing oll'ers lor large scale and long-term contracts shall be procured. The Bureau shall be furnished a copy of the said Sales Agreement subject to confidentiality between the Bureau and the Contractor. 86pyrite Associated Minerals - Ifminerals other than ore deposits are discovered in commercial quantities in the Contract Area, the value thereofshall be added to the value ofthe principal mineral in computing the Goverffnent share. Sf,CTION Lx WORK PROGRAMS 91 Submission to Government - Within the periods stated herein, the Contractor shall prepare and submit to the Director through the concerned Regional Director, a Work Program and corresponding Budget for the Contract Area stating the Mining Operations and expenditures which the Contractor proposes to carry out during the period covered with the details and particulars set fonh elsewhere in this Agreement or in the supponing documents. 92 Government's Examination and Revision of Work Program - Should the Govemment wish to propose a revision to a certain specific feature in the Work . Program or Budget, it shall, within thirty (30) days after receipt thereot, provide a Notice to the Contmctor speciSing in reasonable detail its reasons therefor. ' Promptly 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 ofsaid Work Program or Budget in which the Government shall lbil to notili the Contractor ofthe proposed revision shall, insoflr as possible, be carried out as prescribed herein. lfthe Government should fail within sixty (60) days liom receipt thereof to notily Contractor ofthe proposed revisions, the Work Program and Budget proposed by the Contractor shall be deemed to be approved. 苨 3 Contractor's Changes to Work Program - It 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, I'hat changes which entail a variance of at least twenty percentum (20%) shall be subject to the approval ofthe Director. The Govemment's approval ofa proposed Work program and Budget will not be unreasonably withield SECT10N X sustainable development objectives and responsibilities as provided for under the implementing rules and regulations ofthe Act. 102 The Contractor shall prepare a plan of mining so that its damage to the environment will be minimal. 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 minirrg; 10.3 The Contractor shall submit an Environmental Work Program during the Exploration Period as prescribed in the implementing rules and regulations of the Act: 104 An Environmental Compliance Certificate (ECC) shall be secured first by the Contractor prior to the conduct of any development works. construction of production facilities and,/or mine production activities in the Contract Area; l0 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 affect€d 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; 腜 10.6 The Contraator shall submit, within thirty (30) days prior to the beginning of every calendar year, an Annual Environmental Protection and Enhancement 腀 Program (AEPEP), using MGB Form 16-3, which shall be based on the approved 腃 膌 EPEP The AEPEP shall be implemented during the year for which it was 腟 腝 submitted. To implement its AEPEP, the Contractor shall allocate annually three to five percent (3%-5%) of its direct mining and milling costs depending on the environmentaygeologic condilion, nature and scale of operations and technology employed in the Contract Area. l0 7 The Contractor shall establish a Mine Rehabilitation Fund (MRF) based on the linancial requirements of the approved EPEP as a r€asonable environmental deposit to ensure satisfactory compliance with the commitmentvstrategies 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 bank and shall be used for physical and social rehabilitation of areas affected by mining activities and for research on the social. technical and preventive aspects of rehabilitation; 108 The Contractor shall set up mitigating measures such as mine waste and mill tailings disposal system, mine rehabilitation or plan, water quality monitoring, etc to minimize land degradation, air and water pollution, acid rock drainage and changes in hydrogeology; 109 The Contractor shall set up an Environmental and Safety OfEce at its minesite manned by qualified personnel to plan, implement and monitor its approved EpEp; 腒 10 l0 The Contractor shall be responsible in the monitoring ofenvironmental safety and health conditions in the Contract Area and shall strictly comply with all the rules and regulations embodied under Mines Administrative Order i.lo. MRD_5l, Series of 1991, otherwise known as the..Revised Mine Safery Rules and Regulations,,; ,t H |]I \l 醽 l0 I I The Contractor shall be responsible for the submission ofa final mine rehabilitation andlor decommissioning plans including its financial requirements and incorporating the details and particulars set forth in the implementing rules and regulations ofthe Act. SECT10N XI payment ofnot less than one percent (19lo) ofthe value ofthe gross output of minerals sold. j.2) To coordinate with proper authorities in the development of the mining community and lbr 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 ofsuch activities, j 3) To allot annually a minimum of one percent (1%) of the direct mining and milling costs 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 (l%) of the gross otttput intended lbr the concerned indigenous cultural community; j.4) To give preference to Filipino citizens who have established domicile in the neighboring communities, in the hiring ofpersonnel for its mining operations. lf necessary skills and expe.tise are currently not available. the Contractor must immediately prepare and undertake a training and recruitment program 腒 腃腝 _ at its expense; 腥 膌 膌 腃 膌 腥 腃 j 5) To iocorporate in the Mining Project Feasibility Study the planned 腃腥 腃 腃 expenditures necessary to implement (i.l) to (i.3) ofthis Section; 腝 腝 腝 腅 腒 腁 k) ln the development of Mining Technology and Geosciences: 腁腒 芒膌 k.1) In the course of its operations, to produce geological, geophysical. 腒 geochemical and other types ofmaps and reports that are appropriate in scale 腟 and in lbrmat and slrbstance which are consistent with the internationally accepted standards and practices Such maps shall be made available to the scientilic community in the most convenient and cost effective forms, subject to the condition that the Contractor may delay release ofsaid information for a reasonable period oftime which shall oot exceed three (3) years, 腒 腌 k2) To systematically keep the data generated from the ContracrMining Area such as cores, assays and other related information, including economic and financial data and make them accessible to students, researchers and other persons responsible for developing mining geoscience and processing technology subject to the condition that the Contractor may delay release of data to the science and techflology community within a reasonable period of time which shall not exceed three (3) years, k.3) To transGr to the Government or local mining company the appropriate technology it may adapt in the exploration, development and commercial utilization ofthe minerals in the Contract Area; k.4) To allocate research and development budget for the advancement of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc ; k 5) To replicate data, maps and reports cited in (k.l) and (k.2) and furnish the Bureau fbr archiving and systematic safekeeping which shall be made available to the science and technology community for conductinlr rescarch |荧 苫 | 腧 and undertaking other activities which contribute to the development of mining, geoscience and processing technology and the corresponding national pool of manpower talents: Provided, however, that the release of data" maps and the like shall be similarly constrained in accordance with (k.l) and (k 2) above, l) To incorporate in the Mining Project Feasibility Study the planned expenditures necessary to implement all the plans and programs set forth in this Agreement; and m)pay To all other taxes and fees mandated by exisiing laws, rules and regulations. I 1.2 Rights ofthe Contractor The Contractor shall have the right. a) To conduct Miring Operations within the confines of its Contract/Mining Area in accordance with the terms and conditions hereof and that it shall not interfere with the rights ofother ContractorJLessees/Operatory Permittees, b) Of 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 declassified geological, geophysical, drilling, production and other data relevanr lo the mining operations. d) To sell, assign, transfer, convey or otherwise dispose ofall its rights, interests and obligations under the Agreement subject to the approval of the Government; e) To employ or bring into the Philippines tbreign 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 V persons with the Contractor ceases, the applicable laws and regulations on immigration shall apply to them. Everytime foreign technologies are utilized and where alien executives are enrployed, an effective program of training understudies shall be undenaken. The alien employment shall be limited to technologies requiring highly specialized training and experience subject to the required approval under existing laws, rules and regulations, To enjoy easement rights and use of timber, water and other natural resources in the Contract Area subject to pertinent laws, rules and regularions and the rights ofthird panies, 腟 g) Ofrepatriation ofcapital and remittance ofprofits, dividends and interest on 膌 loans, subject to existing laws and Bangko Sentral rules and regulations; 腄 and 腁 h) To import when necessary all equipment, spare parts and raw materials required in the operations in accordance with existing laws and regulations I 1.3 Obligation ol-the Covernment 腜腒腝 腀腝 膡腨 腎艫 z(;'t,, 艔腁 The Government shall a) Ensure that the Contractor has the Govemment,s full cooperation in the exercise ofthe rights granted to it under this Agreement. b) Use its best ellorts to ensure the timely issuance of necessary permits and similar authorizing documents for use ol'the surface ol thc Conlract Area and c) To cooperate with the Contractor in its efforts to obtain financirg contemplated herein from banks or other financial institutions: provided, That such financing arrangements will in no event reduce the Contractor,s obligation on Govemment rights hereunder SECTION XII ASSETS AND EQUIPMENT 12 I The Contractor shall acquire for the Mining Operations only such assets that are reasonably estimated to be required in carrying out such Mining Operations. 腜 腜 12.2 All materials, equipment, plant and other installations erected or placed on the 荔 Contract Area ofa movable nature by the 膌腛 Contractor shall remain the property of the Contractor. The Contractor shall have the right to remove and re-ixport such 腜 materials and equipment, plant philippines, 腜 to and other installations Aom the subject 腜 existing rules and regulations In case of cessation of Mining Operations on 荮 public lands occasioned by its voluntary abandonment or withdrawal, 荭腀 the 膜 Contractor shall have a period ofone (l) year from the time of cessation within 腟 腛 which to remove its improvements, otherwise, all social infrastructures 腛 filcilities shall be turned over or donated tax fiee to the proper an 腝 which may alter, 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 of this Agreement, apply for its cancellation due to causes which, in the opinion ofthe 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, lhat the Contrac(or has met all the linancial, liscal and legal obligations. 15.5 No delay or omissions or course ofdealing by the Government shall impair any of its rights under this Agreement, except in the case of a written 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 pany authorized to exercise the waiver. 15.6 ln case oftermination, 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 resto6tion of the 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 fiscal obligations under this Agreement, 15.8 The fbllowing acts or omission, ir et dli.t sha,ll constitute breach of contract upon which the Government may exercise its right to terminate the Agreement. a) Failure of th€ Contractor without valid reason to cornrnence Commercial Production within the period prescribed; and b) Failure ofthe Contractor to conduct mining operations and other activities in accordance with the approved Work Programs and/or any modilication thereofas approved by the Director 15.9 The Government may suspend and cancel tax incentives and credits if the Contractor fails to abide by th€ terms and conditions ofsaid incentives and credits. SECT10N XVi OTHER PROViS10NS 16 1 Any teil腡 received, or ifdelivered by hand, upon receipt or ten days after being deposited in the mail, airmail postage prepaid and addressed as follows: lfto the Government: THE SECRETARY Department of Environment and Natural Resources DENR Building , Visayas Aveoue Diliman, Quezon City lfto the Contractor : THE PRESIDENT FR Cement Corporation 176 Flr. Chatham House Condominium Herrera cor. Valero St., Salcedo Village Makati City 荭 Either party may substitute or change such address on notice thereof to the other party 腜 腜 I6.3 Governing Law 腜 腜 腜 腜 This Agreement and the relation between the parties hereto shall be govemed by 腁腝 and construed in accordance with the laws of the Republic of the philippines Thi Contractor hereby agrees and obliges itself to comply with the provisions of the Act, its implementing rules and regulations and other relivant laws and 腒 regulations. 16 4 Suspension of Obligation a) Any failure or delay on the part of any party in the performance of its 膌 obligation or duties hereunder shall be excused to the extent attributable to ForL.L' Moleure. b) If Mining Operations are delayed, curtailed or prevented by such l;orce Majeure catses. then the time for enjoying the ri;hts and carrying out the obligarions thereby affected. the term of this Agreement and ail rights and obligations hereunder shall be extended for a period equal to the period involved. c) The Party, whos€ ability to perform its obligations is affected by such F.orce Mdjexre catses, shall promptly give Notice to the other in writing of any such delay or failure of performance, the expected duration thereof and its anticipated effect and shall use its efforts to iemedy such delay, except that neither party shall be under any obligation to settte a tabor dispute. 腔 l6 5 Amendments ffii::i:ffl:"iiX J."Jl-",liiril i!;"1ffilli3,or modined in anv respect except I ri'' ll '1 芼 l`膌 WITNf,SS WHEREOF, the Parties hereto have executed this Agreement, as of the lN day and year Iirst above written 腒 腒 腜 腜 ANTON10 H CERILLES Secretary Dcpaltmcnt orEnvirOnmcnt and Natural RcsourccS 膌 / FR CEMENT CORPORAT10N BYi EE SL/t'NG JUl膌 SICNED IN THE PRESENCE OF : t A(腬KNOWi膌 EDCMENT Republic olthe Philippines) Ci D *f O.r c zcrr .y s s Belbre me, a Nota.y Public for and in the City ofQuezon, personally appeared HON. ANTONTO H. CERILLf,S, with Community Tax Certificate No 07460519 issued on January 13, 2000 at Dumalinao, Zamboanga del Sur, in his capacity as Secretary of the Department of Environment and Natural Resources, and SEUNG.JU LEf,, with South Korea Passport No. 00023 12 issued on October 5, 1999 at Korean Embassy in Manila, in his capacity as Plant Manager, both known to me and to me known to be the same persons who ex€cuted the foregoing instrument consisting of twenty one (21) pages, including this acknowiedgment page, and acknowledged to me that the same is their voluntary acts and deeds. IN WITNESS WHEREOF, I have hereunto set my hand and affix my notarial s€al, this 2- 1.tL day of . I un a Lc1^ t_ 膅韊邶 誘L讙 芩 荗 ttLT韂 NTI芲腂 Doc. No 463 莿4腒 o lo腧 芾9 荃菇 莁 膌 腒 荭 Page No ql 腅 gook No. lli Series of l9__26CO 0_ 41181231'I葉