腜 莋 ' 莌 腒 1 WHEREAS, the Government desires to avail itself of the financial i resources, technical competence and skill which the Contractor is capable of applying to the mining operations of the project contemplated herein; WHEREAS, the contractor desires to join and assist the Government in the sustainable development and utilization for commercial purposes of certain lim€stone, shale and other associated mineral deposits existing in the contract Area (as herein defined)' l WHEREAS, the contractor has access lo all the financing, technical competence, technology and environmental management skills required to prqmpfly and effectively carry out the objectives of this Agreement; Now, THEREFoRE, for and in consideration of the foregoing premises,rthe mutual covenants, terms and conditions hereinafter set forth, it is hereby stipulated and agreed as follows. SECT10N i n,腒 SCOPE 11 This Agreement is a Mineral Producilon Sharing Agreement entererl into pursuant to the provisions of the Act and its implementing: rules and regulations. The primary purpose of this Agreement is to proyide for the rational exploration, development and commercial utilization of certain limestone, shale and other associated mineral deposits existing wilhin the Contract Area, with all necessary services, technology and financing to be furnished or arranged by the Contractor in accordance with the pioviJions of this Agreement. The Contractor shall not, by virtue of this Agreemr!nt, acquire any title over the contracvMining Area without preiudice to the acfiuisition by the contractor of the land/surface rights through any mode of acquisition provided for by law. 12 The Contractor shall undertake and execute, for and on behalf of the Government, sustainable mining operations in accordance with the provisions of this Agreement, and is hereby constituted and appointerJ, for the purpose of this Agreement, as the exclusive entity to conduct mining operations in the Contract Area. 13 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 reimb u rsement. 14 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 aanal.l- t^,i+k C^^ri^- ance wtth sec10n臉 ^^^ l hereof l 腡 豔 腅 腜 荏 著 苂 腥 SECT:ON l: DEFIN:T10NS "Act" 2.1 refers to Republic Act No. 7942, otherwise known as Mining Act of 1995". 2.2 Aqreeneil means this Mineral Production Sharing Agreement. 2.3 Associqled Minerals mean other ores/minerals which occur p rincipal oreimineral. 2.4 Banoko Sentral means Bangko Sentral ng pilipinas. 腎 2.5 means an estimate of expenditures 賭膡酀 Eg-{qC-L- to be macle by Contractor in mining operations contemplated hereunder to accomplish the Woirf Program for each particular period. 2.6 nll,Calendar Yeiar or Year means a period of twelve (12) consecuiive months " starting with the first day of January and ending on December, 31, while "Calendar Quafter" means a period of three consecutive months with the first calendar quarter starting with the first day of January. 2.7 Commercial Productipl means the production of sufficient quantity of minerals to sustain economic viability of mining operations reckoned from the date of commercial operation as declared by the Contractor or as stated in the t'easibility study, whichever comes first. 2.8 l Coni;titution or Philippjne Constitutjo! means the 1987 Constitrltion of the Republic of the Philippines adopted by the Constitutional Convention of 1986 on October 15, 1986 and ratified by the People of the Republic of the 2.9 Q-qnlBA!--AfgA" means the area r:nshore 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 2-10 Apntagl:eil means a period of twelve (12) consecutive monihs counted from the Effective Date of this Agreement or from the anniversary of such Effective Date. 2.11 2.12 means a document procllirlling the presence of minerals in a specific site, which are recoverable :by socially acceptable, environmentally safe and economically sound methods speci[ied in the Mine Development PIan. | 2.13 Depgftmen-t or DENR means the Department of Environment and Natural Resources. 2.14 Director l means the Director of Mines and Geosciences Bureau. i 2-15 Effeqlye- lAle means the date of execution of this Agreem:ent by the Contractor and by the Secretary on behalf of the Government. iln caie an Exploration PermiUTemporary Exploration Permit had been availeb of by the Contractor, the Effective Date of this Agreement shall be the date of issuance of said Exploration PermiUTemporary Exploration permit. 2.16 Environment means a腡 誴腒 2.33 腶 [an means a腱 腣 艐 艖 7"14'30" 125"38'00" 艐 艗 7"15'30" 125"38'00" 艐 艘 7"15'30" 125"37'30" 艑 艏 7'15'22.50'' 125"37'30" 艑 艐 7"15'22.50" 125"37'00" 艑 艑 7"15'00" 125"37'00" 艑 艒 7"15'00" 125"36'45" 艑 艓 7"14'00" 125"36'45" 艑 艔 7"14'00" 125"37'30" 艑 艕 7"13'30" 125"37'30" 艑 艖 7"13'30" 125"37145" 艑 艗 7"13'00" 125"37'45" SECT10N V 裪 EXPi腣 ORAT:ON PER10D  5.1 Timetable for Exploration - The Contractor shall commence ,Exploration activities not later than three (3) months after the Effective Date fol a period of two (2) years, renewable for like periods but not to exceed a total term of six (6) years for non-metallic minerals and eight (8) years for rnetallic minerals, nigi subject to annual review and approval by the Director to evaluate lcompliarlce iI with the terms and conditions of this Agreement: Provided, That further renewal may be granted by the Secretary under circumstances as defined in theimplementingrulesandregulationsclftheAct. ln case where a Temporary Exploration Permit was issued, the Period of such Temporary Exploration Permit shall be included as part of the lExploration Period of this Agreement. 5.2 : Work Programs and Budgets - The Contractor shall strictly comlty with the approved Exploration and l]nvironmental Work Programs togethdr 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 dui'ing the Exploration Period sha{l be in the aggregate of not less than that specified for each of the Contract years, as follows: For the Exploration Work Program: 1st Contract Year PhP 702,000.001 2nd Contract Year PhP l,298,000.001 Total PhP 2,000,000.001 For the Environme Work Program PhP 3801000.ool 7 5.3 裪5.6 5.7 Reporting a) Periodic Reports - During the Exploration Period, the Contractor shafl submit to the Director through the concerned Regional Director, quarterly and annual accomplishment reports under oath on all activities conducted in the Contract Area from the Effective Date of this Agreement. The quarterly repr:rt shall be submitted not later;than fifteen (15) days at the end of each Calendar Quarter while ithe annual accomplishment report shall be submitted not later than thirty (30) days from the end of each Calencjar Year. Such informatio, r,nrit include detailed financial expenditures, raw and processed i geologTcal, geochemical, geophysical and radiometric data plotted on a map at a minimum 1:50,000 scale, copies of originals of assay results, dupiicated samples, field data, copies of originals from drilling reports, maps, environmental work program implementation and detailed expenditures showing discrepanciesideviations with approved exploration and environmental plans and budgets as well as all other information of any kind collected during the exploration activities. All information submitted to the Elureau shall be sublect to the confidentiality clause of this Agreement. b) Final Report - The Contractor shall submit to the Director ithrougn tne concerned Regional Director, a final report under oat[ upon the expiration of the Exploration Feriocl which shall be in the form and substance comparable to published professional reports of irespectable international institutions and shall incorporate all the fin(ings in the Contract Area including location of samples, assays, chemical analysis,  and assessment of mineral potentials together with a geotogic map of 腅 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 Contracton ihall, upon request of the Director/concerned Regional Director, submit to the Regional Office a quarler of the core samples which shall be deposited in the Regional office core Library for safekeeping and referbnce. c) Relinquishment Reporl - The Contractor shall submit ra separate relinquishment report rryith a detailed geologic report of the relinquished area accompanied by maps at a scale of 1:50,000 an+ results of analyses and detailed expenditures, among others. SECT:ON Vi : 61 铯 腄 any special efficiency to be gained by a particurarry good perfOrrnance of the Contractor. 8'2 Registration Fees - within fifteen (15) days upon receipt of tile notice of approval of the Agreement from the conceined Regionat ,omce, tne Contractor shatl cause the registration of this Agreem"ent with ih;'r;;; Regional office and pay the rigistration fee at tfie rate piovio"i'in-*il existing rures_ .and regulations. Fairure of the" contractoi i",';;r;' ilr; registration of this Agreement within the prescribed period *nrri u" ,rir"i-rj ground for cancellation of ilre sanle. 8'3 occupation , Fees - Prior to registration of this Agreement and at the same 99t" every year thereafter, the contractor snitt pay to tn"l'.lnij,.]i;; MunicipaliCity Treasurer an occupation fee over the Contrr.i ArJr';t'il; annual rate provided in the existing rules and regulations. ir tn" i;"1; ;;t paid on the date specified, the C-ontractor snait pay a *rr.nrrgjl traiiiv five percentum (25%) of the amount due in addition to tn" "t 8'4 Share of the "..rJrfi;;;;;:"" Government - The Government Share 韘shall be the excise tax on mineral products at the time of removal and at the iate lirovided for in Republic Act No. 7729 amending section 151 (a) of tne nLi['h;ijri;;r;i Revenue code, as amended, as weil as other taxes, duties, ,nJ.ruu* i;;;;; by existing laws. -r "-- '!v,vv For purpo.": 9l determining the amount of the herein Governmeni Share, the Contractor shall strictly comply with the auditing and accounting r,eqrirurlniu prescribed under existing laws and regulations. I The Government Share shall be allocated in accordance with Sections 2g0 and 292 of Republic Act No. 7160, othenruise known as f,The Local Government Code of 1991." Pricing of Sales - The Contractor shall 韘endeavor to obtain the bes{ achievable 'o'ttli price for its production and pay the lowest achievable marketi.;;ffi#;id;; and related fees. rt shail seek to strike a barance between r;d:t;;m-;;r;; 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 afflliates are concernecl, pricel unril O* ,i arm's length standard and competing offers for large s.rr* ;;[ ;;;g:;; contracts shall be procured. The Bureiu shall ue furilished a copy or gri saiJ Sales Agreement subject to confidentiality between the Bureau and the Contractor. i SECT10N:X WORK PROGRAMS 9.1 Submission to Government腜 9.2 The Contractor shall submit an Environmental Work Programl during the 10.3 prescribed in the implementing rules and rqgulations of Exploration Period as the Act; i (ECC) i first by the fi.4 An Environmental Compliance Certificate shall be secured Contractor prior to the conduct of any development works, construction of production facilities and/or mine production activities in the Contra0t Area; np[, i 10.5 The Contractor shall submit within thirtv (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,Ue atfected by development, utilization and processing activities under this:Agreement. The Contractor shall allocate for its initial environment-related capital expenditrrres approximately ten percent (10%) of the total project cost or in such amount depending on the environmental/geological condition, nature and scale of operations ind technology to be emptoyeO in the Conitract Area; '1C1.6 prior i of The Contraclor shall submil, within thifiy (30) clays to the 6eginning every calendar year, an Annrral Environmental Protection and Enhancement Program (AEPEP), using MGB Form 16-3, which shall be bdsed on the appioved 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 five percent (3%-5%) of its direct mining and milling costs- depending on the environmental/geologic condition, nature and scale of operationi and technology employed in the Contract Area; . on 10.7 The Contractor shall establish a Mine Rehabilitation Fund (MRF) based the financial requirements of the approved EPEP as a I reasonable environmental deposit to ensure satisfactory compliance i 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 bapk and shall be used for physical and social rehabilitation of areas affected by mining activities ancl for research on the social, technical and preventive aspects of rehabilitation; 10.8 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; 10.9 The Contractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement and monitor i,ts approved EPEP; i 10.10 The Contractor shall be responsible in the nronitoring of environmental, safety and health conditions in the Contract Area ancl shall strictly comply with all the the "Mine Safety and 腍 臊 腞 諌 芒 芋 10.11 The Contractor shall be responsible for the submission of i final mine rehabilitation and/or decommissioning plans, including d its financial requirements and incorporating the details and particulars set lforth in the implementing rules and regulations of the Act. i l SECT:ON Xl RIGHTS AND OBLiGAT!ONS OF THE PARTIES i l誊腂 蹴量hecmma臥 "芧 a) To exclusively conduct sustainable Mining Operations Contract Area in accordance with the provisions of the implementing rules and regulations; b) To construct and operate any facilities specified under ACIrr:ement or approvecl \l/ork Program, c) 銚 腅鍤 腄 鱝 芔 腒貸 迳 1 of cessa腡 as follows: one to be appointed by the Contractor and another to be appointed by the Secretary. The first two appointed arbitrators shall considbr names of qualified persons until agreement on a mutually acceptable Chalrman of the tribunal is selected. Such arbitration shall be initiated and conducted pursuant to Republic Act No. 876, otherwise known as the "Arbitration Act." ln any event, the arbitration shall be conducted applying the suUitantive laws of the Republic of the Philippines. 14.3 Each party shall pay fifty per centum (50%) of the fees and exp€nses of the Arbitrators and the costs of arbitration. Each party shall pay its own costs and attorney's fee. i |腅 15.6 ln case of termination, the Contractor shall peiy 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 Contract Area in accordance with good mining industry practice. || 驍 lf to the Contractor : Txe PnEsTDENT Solro N onrH MrruERRl CoRpoRnrronr R 204, Alegrio Bldg., Pasong Tamo Makati City 葶 Either party may substitute or 膌 膁 鋚腎 lN WITNESS WHEREOF, the Parties hereto have executed this Agredment, as the day and year first above written '"'- ' 'i'' of THE REPUBL:C OF THE PH:L:PP:NES BY: DE0 12跗 2 腝芍 芅芎芔芏芆 艭芁芔芕芒芁腝Resources ;让 譲 | SOLID NORTH CORPC)RAT10N 腅 TIN BY: 裪膉 SIGNEDIN THE PRESENCE OF i 荓 菆 (Signature over Printed Name) 苩 膬 膍腎 荀  芸 躵 腀 閾鹥 腁 public in the City city of of Quezon, Quezon, personallyi aPPappearedappeareo Before me, a Notary for and PersonallYi HEHERSON 'r. ALVAREZ, with community Tax certificate No' 袠 釂 _陝 软 躂