join WHEREAS, the Contractor desires to and assist the Government in the initial rational exploration and possible development and utilization for commercial purposes of certain limestone, shale, tuff 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 prompfly and effectively carry out the objectives of this Agreementi NOW THEREFORE, for and in consideration of the foregoing premises, the mulual covenants, terms and condilions hereinafter set forth, it is hereby stipulaled and agreed as follows: SECTION I SCOPE 1.1. This Agreemenl is a Mineral Production Sharing Agreement enlered into pursuant to the provisions of the Act and ils implementing rules and regulations. The primary purpose of this Agreement is lo provid€ for the rational exploration, developmenl and commercial utilization of certain limestone, shale, lutf and other associated mineral deposits existing wilhin the Contract Area, with all necessary services, technology and financing to be furnished or arranged by the Contraclor in accordance with the provisions of this Agreement. The Contractor shall nol, by virtue of this Agreement, acquire any title over the ContracuMining Area withoui prejudice to the acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. 1.2. The Contractor shall undertake and execute, for and on behalf of the Govemment, sustainable mining operalions in accordance with the provisions of this Agreement, and is hereby constituted and appointed, for the purpose of this Agreement, as the exclusive entity to conduct mining operations in the Contract Area '1.3. The Contraclor shall assume all the exploration risk such that if no minerals in commercial quantity are developed and produced, it will not be enti ed to reambursement. 1.4. 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 V hereof;f/ 7 -# ,,,,w( 腏 艹 sEcTtoN DEFINITIONS As used in this Agreement, the following words and terms, whether singular or plural, shall have the following respective meaning 21. Acl refers to Republic Act No. 7942, otherwise known as the "philippine Mining Act of 1995.' 2 2. Aoreement means this Mineral Production Sharing Agreement. 23. Associated Mineral! mean other ores/minerals, which occur togelher wtlh the principal ore/mineral. 2 4. Banoko Senlral means Bangko Sentral ng Pilipinas. 2.5. Eldgqt means an estimate of expenditures to be made by Contractor jn 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) consecuiive months starting with lhe first day of January and ending on December 31. while "Calendar Quartel' means a period of three consecutive months wilh the first calendar quarter starting with the first day of January. 2.8. ep[tnerclel PrclCgliA! means the production of sufficient quantity of minerals lo sustain economic viability of mining operalions reckoned from the date of commercial operation as declared by the Contractor or as stated in the feasibility study, whichever comes first. 2.9. Constitution or Philippine Constitrltion means the 1987 Constitution of the Republic of the Philippjnes adopted by the Constitulional Convention of 1986 on October 15, 1986 and ratified by the People of lhe Repubtic of the Philippines on February 2, 1987. 210. Contract Area means the area onshore or offshore delineated under the Mineral Produciion Sharing Agreement subject to the relinquishment obligations of the Contractor and properly defined by tatitude and longitude or bearing and distance. 2'11. Contraci 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. Contracior means Landtech Mining Resources, lnc. or its assignee or assignees of interest under this Agreement: provided, That the assignment of any of such interest is accomplished pursuant to the pertinent provisions of the implementing rules and regula ons ot te aar{ .=, /v 2.13. Declaration oi Minino Feasibililv means a document proclaiming the presence of mtnerals in a specific site, which are recoverable by socially acceptable, environmentally safe and economic€lly sound methods specified in the Mine Development plan 2.14. Depadment or DENR means the Department of Environment and Natural Resources. 2.15. Director means the Director of Mines and Geosciences Bureau. 2.16. Effective Date means the date of execution of this Agreement by the Contractor and by the Secretary on behalf of the Governmeni 2.17 Envaronment means all facets of man,s surroundings: physical, ecological, aesthelic, cultural, economic, historic institutional and social 2.18. Exoloration means searching or prospecling for mtneral resources by geological, geophysical and geochemical surveys, remote sensing, tesl pitting, trenching, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, extenl, quality and quantity of mineral resources and the feasibality of mining them for profit. 2.19. Exploration Period shall mean lhe period from the Effective Date of this Agreement, which sha 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. Fgrse 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, tockout, ani dispute with surface owners and other labor disputes,;pidemics, earthquake, storm, flood or other adverse weather conditions, explosion, fire. adverse action by the Government or by any of ils instrumentality or subdivision thereof, acl of God or any public enemy and any cause as herein described over which the affected party has no reasonable control. 2.21. Eoreion Exchanqe means any cunency other than the currency of the Republic of the philippines acceptable lo the Government and the Contractor. 2.22. Gove-nmenl means the Government of the Republic of the philippines or any of its agencies and instrumentalities 2.23. Gross Output means lhe actual market value of the minerals or mineral products lrom each mine or mineral land operated as a separale enlity, without any deduclion for minrng, processtng, refining, transporting, handling, marketing or any other expenses: provided, That iiihe 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 dedu;ted: provided further, That in the case of mineral concentrates which are not traOeO ,n,/ -R ift 莓 鞷 commOdity exchanges in the concentrate,the actual marka val reined mineral prOducts cOntaine  韮1:詝 轮 :]L譲 腴 鑒 exchanges 224 a腁 e腡 腵 Cluding rt证 :n莅 腡 :iltt菌 腡 蹶 鞝 :`菌 腸 腡 li若菌 illitili]1,:lli[iliie腷 铥  韮 鏯 黺 鞓 腂 鉮 迂 226 Mn菐 d P葟 duas mean mamls铬 C譝 itt葛 铬 鑺s趔 鞐 蹉 |::: 詋 轖 轢i覻 鑹  , 酠 mm md m臥 銆 葜 轖 鍂 l荍 1邑 228 study, environmental 11:::|]:鞃 腁 闱 腡|1鍤 腶0閁 饭 腡:钚 Ipl:靪 軱鍃]:F軹 processing and mine 银|若 2.29 Notice means notice in writing, telex or telecopy (authentrcated back or confirmation received) ,oores"eo by answer of this Agreement. oi sLn-tZJir""iiif, ,"",,rn .,0 , 230 Ore means naturallv ocdjrnng substance or material from ,",,' whrch , a or etement can be mined and/or-process.; i";;;;;'-' - mineral 2.31. Pollution means any atteration of the physical, chemical and/or properties of any waler *.*l*. liiir"lniiipi biotogical thereto of any ",, :j1r^,-lT1 or any :::"1_"199 tiquid, gaseous or sotiO wastes or "es, unnecessary noise or anv.T:"y:f oo;."tr*or" Joi. aniiroduction of lo create or render such water, arr, and land Js,Jrr or is ritety or injurious ro pubtic heatrh sarety ,"aorr"."-tr frt, detrimental thejr, utilization for domestic, or wertarJ ";;;;ru;;:;.ety afrecr or other legitimate purposes. commercial, i"ar"tri"i, "il;rfirji,recreationat ,.4, Secretary of rhe Department of ffffif;""o}::i" "" Environmenr and 2芨 slale m膇 he Repumctt he Ph p膜 荭 腧 =Lf腒 腧 郃 / / 躑 5 镆 閼 2.34. Work Proqram means a document which presents the plan of malor mining ooeralions and the corresponding expenditures oi in! CJ..,tr".to. in it" Contract Area during a grven perjod of trme. rrcluOini-ine ptan and expenditures for development of hosl and n",gnbolnf .o;r;nrtres and oi tocat geoscience and mining technofogy, o in accordance with the implemeriting ,'^j """"rUritLj-rnA-'"ppron -r"" r."grl"ti""" .i tn i"i SECT:oN腡 : TERM oF ACREEMENT Th s Agreement sha腡 have a te腵 17 13膋 50'3500' 120膋 42'4000腅 18 13膋50'3800" 120葘 2'2200' 19 13膋 5014108" 120膋 42.2371" 20 13腅 50'5042'' 120膋 42.3046" 荊 13腅50'5502' 120膋 42.2262' 22 13腅 50'5739腅 120膋 42'1771腅 23 13膋 50'5648腅 120膋 42'1418' 24 13膋50.5114腅 120膋421063腅 25 43腅 50'5309" 120膋 42.0671" 26 13膋50'5576' 120膋42'0453" 27 13腅50'5687腅 120膋 42'0237腅 28 13膋51'01 19' 120膋 42'0283'' 29 13膋54'0368' 120膋41'5928荊 30 13膋 51'0514' 120膋41'5713腅 31 13膋 51'0969" 120膋44'5043腅 32 13腅51'1269" 120膋41'4714' 33 13膋51'2039" 120膋 41'4006' 34 13膋51'2280腅 120膋 41'4178' 35 13腅51'2819' 120膋 41'3237腅 36腌 13膋51'3491' 120膋 41'3691腅 37 13膋51'3711腅 120膋41'3832腅 38 13膋 51'3802腅 120膋 41'3891' 39 13膋 51'3728' 120膋41'3171腅 40 13膋 51'4133腅 120膋 41'2942 41 13膋51'4354腅 420膋 41'2639膍 42 13膋51'4157腅 120膋41'2368'' 43 13膋 51'4881' 120膋 41'2371膍 44 13膋 51'4604' 120%1'2364" 45 13膋 51'4665' 120膋 41'2149膍 46 13膋 51'4901' 120膋 41'2225' 47 13腅51'5C155' 120%1'2249' 48 13膋 51'5458' 120膋 41'2600' 49 13膋51.5530" 420膋 41'251(荁 50 13腅52'0006腅 420膋 41'2078' 51 13膋 5210544' 120膋 41'2359'' 52 13膋 50'0887腅 420膋 41'2567" 53 13膋52'1457腅 120膋 41'2889' 54 13膋52'0736腅 120膋 41'3372" 55 13腅 52'C635' 420膋 41'3346' Provided, Thal any Barangay that is not coyored by tho requirod Sanggunian Certification(s)/Resolution(s) pursuant to Deparlment Memorandurn'brder No.99-34 is deemed excluded from the C onjr:ad Atea ../. ,ryY 4 .$dk ' -E;& Lr^\\ 膌 sEcTroN v EXPLORATION PERIOD 5.1. Timetable for Exploration - The Contractor shall commence Exploration activities not tater 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 (g) years lor metallic minerals, sub.iect to annual review and approvat 6y the Director .in accordance with the implemeniing rules and regulations oi tne nct. 5 2. Renewal of Exploration period - ln case the Contractor opts for a renewal of its Exploration period, it shall lile prior to the expiration thereof, a renewal application in the Regionat Office concemed, accompanied by lhe mandatory - requirements stipulated in the implementing rules and regulaiions of the Act. The Director may grant the renewal of th; Exploration Feriod on condition that the Contractor has substantially crmplied with the terms and conditions of the Agreement. ln.cases where further exploration is warranled beyond the six (6)- or eight (8)-year period and on condition that the Coniractor has substantj;lly implemented the Exploration and Environmental Work programs as verified by the Bureau, the Director may further grant renewal d the Exploration Period: provided. That the Contractor ihall be reguired to set up a performance surety equivalent to the expenditure iequirement of the Exploration and Environmental Work programs. 5.3. Work ProgJams and Budgets - The Contractor shall stric y compty with the approved Exprorarion and Envrronmentar work programs tbgether with their corresponding Budgets (ptease refer to ANNEXES "4,, and .O-,). The amounl to be spent by the Contractor in conducting Exploration aciivities under the tems of this Agreement during the Exploration Feriod shall be in the aggregate of not less than thal specified for each of the Contract years, as follows: For the Exploration Work program: 2nd Conlracl Year PhP 960,000.00 PhP 1,270,000 00 Total : PhP 2,230,000.00 For the Environmental Work program : PhP 380,000.00 ln the event of renewal of the Exploration period, the amount to be spent every year shall first be agreed upon by the parties. In the event of termination of this Agreement, lhe Contractor shall only be obliged to expend the pro+ata amount for the period of Co.,ti"ii v""r. prior to termination. lf during any Contract year, "*n the Contr""to, "norfO 8 expend more than the amount to be expended as provided above, the excess may be subtracted from the amounl required to be expended by the contractor during rhe succeeding conrract iears ano shouri tire contractor, due to unforeseen circumslanses 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. ' ' 5.4. Relinquishment of Total/portion of the Contract Area _ During the Exploration Period, the Contractor may relinquish totally or partially the -origrnat Contract Area. After the Exploration period and prior to oi upon ipprovat of a Declaratlon of Mining Feasibility by the Direclor, the Contractor shall finally relinquish any portion of the Contract Area not necessary for minini operations and not covered by any Declaration of Minrng Feasibility. 5.5. Final Mining Area - The Director mayallowthe Contractor to hold more than one ('1) final Mining Area subjecl to the maximum timits set under the implementing rules and regulations of the Act: provided, That each final Mining Area shall be covered by a Declaration of Mining Feasibility. 5.6 Decl-araiion of Mining Feasibility _ Within the term of the Exploration period, the Contractor shall file in the Regional Office concerned, the Dectaration of lvlining Feasibility ol the Contract Arealfinal Mining Area supported by Mining Feasibility Study, Three (3)-year DavelopmJnt and ' bonstruction or Commercial Operation Work program, complete geologic report, an application for survey and the pertinent envirorimentlt Compliance Certificale, among other applicable requirements. Failure of the Contractor to submit the Declaralion ot Mining Feasibility during the Exploration period shatl be considered a substantial breach of this Agre;ment. 5.7. Survey ol the Contract Area - The Contractor shall cause the survey o, lhe perimeter of the Contracl Area/final Mining Area through an apptication for survey, compleie wilh requirements, filed in the Regional Office concerned simultaneous with .the submissjon. of the Declaratio-n of Mining Feasibility. Survey retums shall be submitted to the Regionat Oliecioi cincerneo tor approval within one (1) year from receipt of the Order of Survey complete with the mandatory requirements staled in the impf.menting rules and regulalions of the Act. 5 8. Reporting a During the Exploration period, the Contractor shall submit to the Director, through the Regional Director concerned, or"rtud, annual_accomplishment reporls under oath on aff actiur,ls "rO in the Contract Area from the Effective O"t" of ihi. co'niucteo quarterty report sha be submitted not agi""r"nt] fh" the end of each Calendar tater than rn"Jn-fiii'j"v" report sha be submitted euarter while t" "nnr"i "t not tater than thiny """o.irilir"nt each catendar year. Such information 1aO1 dafs from i[" "no ot expenditures, raw "n"l in"iloJori"iiui'f"rnlnciar geophysicat and and processed geologrcal, S"*h;ri*f 'l:50.000 scate. radiometric oata plotteO'on rli copies of originats of "- iJJrf "ilrrirm ""."y t. ;;L"o , ==4:. afft, 1 s ur, ,l*A r._ \. samples, fleld data, copies of originals from drilling reports, maps, environmental work program implementation aod Oetaiiej expenditures showing discrepancies/ d€viations with approved exploration and environmental plans and budgets as well as ail other informalion of any kind collected during the exploration activilies All information submitted to the Bureau shali be subject to the confidentiality clause of this Agreement. b Final Report - The Contractor shall submit to the Director, through the Regional Director concerned, a final report under oath ,po-n 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;th a geologic map of i:50,000 scale at the minimum showing ihe resutts of the exploration Such report shall also include detailed;xpenditures incurred during the Exploration period. In case of diamond drilling, the Contractor shall, upon request of the Director/Regionat DiLctor concerned, submit to the Regaonal Office a quarter of the core samples, whrch shalt be deposited in the Regional Office Core Library for safekeeping and reference. CRelinquishment Report - The Contractor shall submit a separate relinquishment report with a detailed geologic report of the relinquished area accompanied by maps at a scale of 1:5O,OOO and resulls of analyses and detailed expenditures, among others. sEcTtoN Vr DEVELOPITIENT AND CONSTRUCTION PERIOD 61. Timetable - The Contractor shall complete the development of the mine including the construclion of production facilities within thirty six (36) months from the submission of the Declaration of Mining Feasibility, subject to such extension based on justifiable reasons as the Director miy appror", upon recommendalion of the Regional Direct6y qonce,ar6 6.2. Reporting a. Annual - The Contractor shall submit, within stxty (60) davs after December 31 of each year, to the Drrector, through the iegional Director concerned, an annual report, whrch states tnJ malor acirvrles, achievements and detailed expenditures during the yeal" louereo, including maps. assays, rock and mineral analyse_"s and SeoLoqicaf .nO environmental progress reports during t-he OeveLpmini ana Construction period. b Final flnar. Heporl - Report Within(6) Within SlX oevetopment six months from the completion of the and construclion activities, the Contractor shall submit a , r, ={d ro .,..ff'" ll ilnal repoft to the Director, through the Regional Director concerned Such report shall integrale all rnformation in maps ol appropriale scale and quality as well as tn monographs or reports rn accoidance with rnternational standards SECTION VII OPERATING PERIOD 71. Timetable - The Contractor shal submit, within thirty (30) days before - comf,letion of mine development and construction of production facilities, to the Director, 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 sha,l be consider6d a substantial breach of the Agreement. 7.2. Commercial Operation Work program and Budget - Dur,ng lha Operating Period, the Contractor shall submit to the Director. throujh ttre Regionat Director concemed, Work programs and Budgets covering i period of three (3) years each, which shafl be submjtted not later than thirt-y (3b) days bofore the expiration of the period covered by the previous Work irogram. The Contractor shall conduct Mining Operalions and other activrties for the duration of the Operating period rn accordance with lhe duly approved Work Programs and corresponding Budgets 7.3. Expansion and Modification of Facilities _ The Contractor may make expansions, modifications, improvements, and replacemenls of the mining facilities and may add new facilities as the bontractor may consider necessary for lhe operations: provided. That such plans shall be embodied in an appropriate Work program approved by the Oirector. 7 4. Reporting a. Quarterly Reports - Beginning with the first Calendar euarter to owing the commencement of the Op€rating period, the Contractor shall submit, within thirty (30) days after the end of each Calendar euarter, to the Director, through the Regional Director mncerned, a euarterly Report stating the tonnage of producton in terms of ores, concentrates, and their conesponding grades and other types of products; value, destination of sales or exports and to whom sold; lerms of sales and expenditures. b. Annual Reports _ During the Operating period, the Contractor shall submit within sixty (60).days from the Jnd ot each Calenoar year, to the Director, through the Regional Director concemea, an Annual Report indicaling in suFicient detail: - ,/ >KN ; ,Lffi: L" \i b.1. The total lonnage of ore 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, tonnages stockpiled in the mine and elsewhere in the philipptnes, tonnages sold or committed for export (whether actually shipped from the Philippines or not), tonnages actualty shipped from the Philippines (wilh full detaits as to purchaser, destination and terms of sale), and if known to the Conlractor, tonnages refined, processed or manufactured in the Philippines \flith full specifications as to the intermediate products, by- products or final products and of lhe lerms al 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 inveslment 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 vfl FISCAL REGIiIE 8.'1.. General Principle -Thefiscal regime of this Agreement shall be governed by the principle according to which the Government expects a reasonable retum in economic value for the utilization of non-ranewable mineral resources under its national sovereignty while the Contraclor expects a reasonable return on its investment with special account to be taken for the high risk of exploration, the terms and conditions prevailing elsewhers in the industry and any special efficiency to be gained by a particularly good performance of the Contractor 4.2. Registration Fees - Withan fifleen (i5) days upon receipt of the notice of approval of the Agreemenl from the Regional Office concerned, the Contractor shall cause the registration of this Agreement wtth the said Regional Office and pay the regislration fee at the rate provided in the existing rules and regulations. Failure of lhe Contractor lo cause lhe registration of this Agreemenl within the prescribed period shall be sufficienl ground for cancellation of the same. 8.3. Occupation Fees - prior to registration of this Agreemenl and at the same . date every year thereafler, the Contractor shall pay to the Municipal/City Treasurer concerned an occupalion fee over the Coniract Area at thg annugl / ot\il(tr /, -il' ',/ 12 e ^'\'' provided rate in the existing rules and regulations. If ihe fee is not paid on the date specified, the Contractor shall pay a surcharge of twenty five percent (25%) of the amount due in addition to the occupation fees. 4.4. Share of the Governmenl - The Government Share shall be the excise tax on mineral products at the lime of removal and at the rate provided tor in Republic Act No. 7729 amending Section i51 (a) of the National lnlernat Revenue Code, as amended as well as other taxes, duties and fees levied by existing laws. For purposes of determinjng the amount of the herein Governmenl Share, the Conlractor shall strictly comply with the auditing and accounting requirements presffibed 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 Local Governmenl Code of '1991." 8.5. Pricing of Sales - The Contractor shall endeavor to obtain the best achievable price for its production and pay the lowest achievable marketing commissions and related fees. lt shall seek to strike a balance between long-term sales comparable to policies followed by tndependent producers in the international mining industry The Contractor shall likewise seek a balanced distribution among consumers. lnsoiar as sales to Contractor's affiliales are concerned, prices shall be at arm's length standard and competing offers for 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 Contraclor. 86 Associated l\/linerals - If minerals other than limestone, shale and tuff are discovered in commercial quantities in the Coniract Area, the value thereof shall be added to the value of the principal mineral in computing the Government share. sEcTloN tx WORK PROGRAITIS 9.1 Submission to Government - Within the periods slated herein, the Conlractor 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 expenditures which 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 / - -.3J-\ _ rt{t , \xk'' / ,,;a \ 13 program 9.2. Government's Examination and Revision of Work _ Should the Government decide to propose a revision lo a certain specific feature in the Work Program or Budget, it shall, within thirty (30) days after receipt thereof, provide a Notice lo the Contractor specifying in reasonable detail its reasons therefore Promptly thereafter, the Government and Contractor will meet and endeavor to agree on the revision proposed by the Government. ln any event, the revision oi any portion of said Work program or Budget in which the Government shall fail to notify the Contractor of the proposed revision shall, insoiar as possible, be carried out as prescribed herein. lf lhe Govemment should fail within sixty (60) days from receipt thereof to notafy Conlractor 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 Govemmenl and the Conlractor that the details of any Work program may require changes in lhe light of changing circumstances. The Contractor may make such changes: Provided. That il shall not change the general objective ol the Work Program: Provided further, That changes which entail a variance of at least twenty percent (20%) shall be subject to the approval of the Director. 9.4. The Government's approval of a proposed Work Program and Budget will not be unreasonatly withheld SECTION X ENVIRONMENTAL PROTECNON AND MINE SAFETY AND HEALTH 10.1. The Contractor shall manage its Mining Operations in a technicalty, financially, socially, culturally and environmentally responsible m€nner lo achieve the suslainable developmenl objectives and responsibilities as provided for under the implementing rules and regulations of the Act. 10.2. The Contractor shall ensure that the standards of environmental protection are met in the course ofthe Mining Operation. To the extent possible control of pollution and the transformation of the mined-out areas or materials into economically and socially productive folms must be done simultaneously with mining. 10.3. The Contractor shall submit an Environmental Work program during the Exploration Period as prescribed in the implementing rules and regulations of the Aci 10.4. An Environmental Compliance Certiticato (ECC) shall be secured first by the Contractor prior to the conduct of any deyelopment works. construction of production facilities and/or mine production aclivities 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 thF, 1rFs aa Lf( 腌 14 '}T{ jts Agreement. The Contractor shall allocate for initial environment_related capital expenditures approximately ten percent (1Oyo) of the total prolect cost or in such amount depending on the environmental/geological condition, nature and scale of operations and technology to be e;ployed in the Contract Area 10.6. The Contractor shall submit, within thirty (30) days prior to the beginning of every calendar year, an Annual Environmental protection and Enhancement Program (AEPEP), using MGB Form 16-3, which shall be based on the approved EPEP. The AEPEP shall be implemented during lhe year for which it was submitted. To imptement its AEpEp, the Contractor shall allocate annually three to five percent (3o/o-5o/o\ ol ils direct mining and milling costs depending on ihe environmental/geologic condition, nature and scale of operations and technology employed in the Contract Area. 10.7 The Contractor shall establish a Mine Rehabilitation Fund (MRF) based on the financial requirements of the approved EpEp as a reasonable environmenlal deposit to ensure salisfactory compliance with the commitments/slrategies of the EpEp/AEpEp and availability of funds for the performance of the EPEP/AEPEP during the specific project phase. The MRF shall be deposiled as Trust Fund in a goyemment depository bank and shall be used for physic€l and social rehabilitation of areas affected by mining activities and for research on the social, technical and prevenlive 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 hydrogeotogy. 10.9. The Contractor shall set up an Environmental 色 and Safety Office at 腀 minesite manned by qualified personnel to plan, implement and monitor 色 approved EPEP. 10.10.The Contractor shall be responsible in the monitoring of environmental, safety and health condjtions in the Contract Area and shall stricfly comply with all the rules and regutations embodied under DAO No. 2OOO_98, otheMise known as the "Mine Safety and Health Standards ,, 10.11.The Contractor shall be responsible for lhe submission of a final mine rehabilitation and/or decommissioning plans, including its financial requirements and incorporating the details and parliculars set forth in the implementing rutes and regutations of th" \y' ._ f, / 臚 譥 鷭艩 sEcTtoN xt RIGHTS AND OBLIGATIONS OF THE PARTIES 11.'1. Oblagalions of the Conlractorl . a. To exclusively conduct sustainable Mining Operations ,/vithin the Contracl Area in accordance with the provisions of the Act and its implementing rules and regulations; b To conslruct and operate any facilities specified under the Mineral Agreement or approved Work programl c. To determine the exploration, mining and treatment process to be utilized in the Mining Operations; d. To exlract, Temove, 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: To keep accurate technical records aboul the Mining Operations, as well as financial and marketing accounts, and make lhem available to Govemment representatives authorized by the Director for the purpose of assessing lhe performance and compliance of the Contractor with lhe terms ol this Agreement. Authorized representatives of other Govemment Agencies may also have access to such accounts in accordance with existing laws, rules and regulations, To fumish the Bureau all the data gathered 9 and information from lhe Contract Area and that all the books of accounts 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 injuries to persons or properties caused bi l\4ining Operations of the Contractor and indemnify the Governmeni for an! expenses or costs incurred by the Government by reason of any such claims, accounts, demands or actions; ln lhe development of the community. ).1. To recognize and respect the rights, customs and traditions of 腞 indigenous cutlural communites over therr ancestral lands and 艓 z* t'['l' 16 草 to allocate royalty payment of not less than one percent (1%) of the value of the gross oLrtput of minerals soldl To coordinate proper 12with mining cpmmunity authorilies in the development of the neighboring and for those living in the host and communities through social inf.astructure, livelihood programs, education, water, electricity and medicai services. Where traditional self-sustaining income and the community activities are identifled 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 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 (1%) of the gross output inlended for the concerned indigenous cultural communily; To give preference i4to Filipino domicile in the neighboring citizens who have established personnel for its communities, in the hiring of expertise are mining operations. lf necessary skills and currenlly nol available, the Contractor must immediately prepare and undertake a training and recruitment program at ils expense; and To incorporate in the i5Mining expenditures necessary Feasibility Study the planned to implement 0.1) to (i.3) of this Section; k ln the development of Mining Technology and Geosciences: k.1. ln the course of its operations, to produce geological, geophysical, geochemical and other types of maps and reporls that are appropriate in scale and in format and substance which are consislent with the internationally accepted standards and practices. Such maps shall be made available to the scientific communily in the most convenient and cost effective forms, subjecl to the condition that the Contractor may delay release of said information for a reasonable period of time which shall not exceed three (3) years; k2. -Io systematically keep the data generated from the Contracv Mining Area such as cores, assays and other relaled information, including economic and financial data and make them accessible to students, researchers and other persons responsable for developing mining, geoscience and proc€ssing technology sub.iect to the condition that the Contractor mat delay release of dala to the science and technology community/ /t. -s t'lfl / 17 z鱢 within a reasonable period of time which shall not exceed three (3) years; k.3 To transfer to the Govemment or local mining company the appropriate lechnology it may adapt in the exploration, development and commercial utilization of the minerals in the Contract Area; k4. To allocate research and development budget for the advancement of mining technology and geosciences in coordination with the Bureau, research institutions, academe, etc.: and k.5. To replicate data, maps and reports cited in (k.1) and (k.2) and furnish the Bureau for archiving and systematic safekeeping which shall be made available to the science and technology community for conducting research and undertaking oth; 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.1) and (k.2) above; l. To incorporate in the Mining Feasibility Study the planned expenditures necessary to lmpl€ment all the plans and programs set forth in this Agreement; and m. To pay all other taxes and fees mandated by existing laws, rules and regulations 11 2. Righls of the Contractor; a. To conduct Mining Operations within the confines of its Contract/Mining Area in accordance with the tarms and conditions hereof and without interfering with the rights of other Contractors/Lessees/Operators/ permittees/permit Hoiders, b. Possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easemenl rights; c. To use and have access to all declassified geological, geophysical, drilling, production and other data relevant to the mining operations; d. To sell, assign, transfer, convey or otherwjsa dispose of all its rights, interests and obligations under the Agreement subject io the approyal 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 lhe operations of the Contraclor_ I ANffT, 48 /腌 视 臚 subject to applicable laws and regulalions: provided, That if the ,mployment conneclion of such foreign persons with the Contractor . )ases, the applicable laws and regulations on immigration shall apply i,) them. Every time foreign technologies are utilized and where alien er ecutaves are employed, an effective program of training understudies shall be undertaken. The alien employment shall b6 Iimited to technologies requiring highly specialized training and experience subiect to the required approval under existing laws, rules and regulalions: To enjoy easement rights and use of timber, water and other naturat resources in the Contract Area subject to pertinent taws, rules and regulations and the rights of third parties; g Repatriation of capital and remittance of proflts, dividends and inlerest on loans, subject to existing laws and Bangko Sentral ng pilipinas ules and regulations: and h Tir import when necessary all equipment, spare parts and raw m; rterials required in the operations in accordance with existing laws a rd regulations 1 '1 3. Obligatio ts of the Government: 芁 艳腂 3nsure that the Conlractor has the 銯 exercise of the granted Government,s full cooperation in rights to it under this Agreement; b To use its best efforts to ensure the timely issuance of necessary per rits and similar aulhorizing documents for use of lhe surface of the Con' 'act Area, and CTo ( )operate with the Contraclor in its efforts to obtain financing cont( mplated herein from banks or other financial institutions: ,rovided, That such financing arrangements will in no event reduce the Contraclor's obligation on Govemment rights hereunder. sEcTtoN x[ ASSETS AND EQUIPMENT 12.1. The 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, ptant and other installations of a movable nature erected or placed on the Contract Area by the Contractor shall remain the property of the Contractor. The Contractor shall have the right to remove and re-export such malerials and equipment, plant and other installations frogr .7 _rrf\4tr 19 the Phliippines, subject to existing rules and regulations. ln c€se of cessation of Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Conlractor shall have a period of one (1) year from the time of cessation within which to remove its improvements; otherwise, all social infrastructures and facilities shall be turned over or donated tax free to the proper govemment alrthorities, national or local, to ensure that said infraslructures and facilities are continuously maintained and utilized by the host and neighboring communities. sEcTtoN X EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contraclor agrees to employ, to the exlent possible, qualified Fitipino personnel in all types of mining operations for which they are qualifled; and afler Commercial Production commences shall, in consultation and wilh consenl of the Government, prepare and undertake an extensive training programme suitable to Filipino nationals in all levels of employment The objective of said programme sha be to reach within the timet;ble set forth below the following targets of ,Filipinization:, Unsk腡led sk腡 14.2. Any disagreement or dispute which can not be seUed 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) arbitrators. This tribunal shall be constituted as follows: one to be appointed by the Contractor and the other to be appoinled by the Secretary. The first two appointed arbltrators shall consider names of qualified persons until agreement on a mutually acceptable Chairman of the lribunal is selected. Such arbilration shall bs initiated and conducted pursuant to Republic Act No. g76, otherwise known as the 'Arbitralion 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 fifty percent (500/6) of the fees and expenses of the Arbitrators and the costs of arbitration. Each party shall pay its own costs and attornels fee. SECTION XV 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 taxes, fees and/or other charges demandable and due the Government 15.2. This Agreement terminales 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 lhe Agreement's terms and conditions; (d) failure to pay taxes, fees/or charges or financial obligations for two (2) consecutive years; (e) false statement or omission of facts by the Contractor; and (f) any other cause or reason provided under the Act and its jmplementing rules and regulations, or any other relevant laws and regulations. 15.3. All statements made in this Agreement shall be considsred as conditions and essential parts hereof, and any falsehood in said stalements or omission of facis which may atter, change or affecl substantially the fact set forth in said slatements shall be a ground for its revoc€tion and iermination. 15.4. The Contractor may, by giving due noticdd any time during the term of this Agreement, apply for its cance ation dud to causes whjch,;n the opinion of the Contraclor, render contanued mtning operalion no lonoer feasible or viable. ln this case, the Secretary.sha d;cide on the applicaion within lhirty (30) days from notice: provided,_ That the Contractor has met a the financiai, fiscal and leoal oblioations _ - ./ - ,flY ->#... /._./ , It / 21 菇 ``R:腌 15 5 No delay or omissions or course of dealing by the Government shall impair any of its rights under this Agreement, except in the case oi 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 lhe contrary intention is reduced in writing and signed by the party authorized to exercise the waivef. 15.6. ln case of termination, the Contraslor shall pay all the fees and other liabilities due up to the end of the year in which the termination becomes effective. The Contraclor shall immediately carry out the restoration of lhe Contract Area in accordance with good mining industry praclice. 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 contract. 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 Wort programs andlot any modification thereof as approved by the Director. 15.9. The Government may suspend and cancel tax incentives and credits if the Contraclor fails to abide by the terms and conditions of said incentives and credits. SECTION XVI OTHER PROVISIONS 16.1. Any terms and conditions resulting from repeal or amendment of any existing laws or regulation or from the enactment of a law, regulation or administrative order shall be considered a part of this Agreement. 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 10 have been duly given notice, in the case of telex or telecopy, rf answered back or confirmation received, or if delivered Oy tranO, upon'ieceipt or ten ::I:- {1._|. being deposited in the mait, arrmait poslage freparo and aodressed as foflow" rd _:=g_ ,| 1't -/ / 荏 菇 雙 ?_2 腧 lf to the Government: The Secretary Department of Environment and Natural Resources OENR Building, Visayas Avenue Diliman, Quezon City lf to the Contractor: The Chairman Landtech Mining Resources, lnc No. 380 Pine Street, La Marea Hills Subdivision San Pedro, Laguna Either party may substitute or change such address on notice thereof to the other party. 16.3 Governing Law This Agreement and the relation between the parties hereto shall be governed by and construed in accordance wiih the laws of the Republic of lhe Philippines. The Contractor hereby agrees and obtiges itself to compty with the provisions of lhe Act, its implementing rules a;d regulations and other relevant laws and rbgulations. 16.i. Suspension of Obligation a. Any failure or delay on the part of any party in lhe performance of its obligation or duties hereunder shall be excused to the extent attributable to Force Majeure as delined in the Act: provided, That the suspension of Mining Operations due to Force Majeure causes shall be subject to approval by the Director. b. lf N4ining Operations are delayed, curtailed or prevented by such Force Majeure causes, lhen the time for enjoying the rights and carrying out the obligations thereby affected, the term of this Agre€ment and all rights and obligations hereunder shall be extended for a period equal to the period involved. The Party, whose ability to perform its obligations is affected by such Force Majeure causes, shall prompfly give Notice to the ot'ner in writing of any such delay or failure of performance, the expected duration thereof and its anticipated effect and snaff use its efiorts lo remedy such delay. except that neither party shall Oe unaer anv obligation to set e a tabor dispute: provided, ihat rn" ,r"p"n.io, # oblrgation by.,lhe Contraclor shall be subject to prior approvat by the Dnecor.qy' ->f- /-i /腌 苂腏 駌 裪艏 16.5. Amendments This Agreement shall not be annulled, amended or modiried in any respect except by muhral consent in 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 REPUBLIC OF THE PH:LiPPiNES BY: tJtu* ,h. [mau' Eltsea c,/boZilt*i) secrilAry U L' Department of Environment and Natural Resources LANDTECH MINING RESOuRCES,:NC TlN: BYI 膅 花 REYNALDO PEDROZO Charrman SIGNEDIN THE PRESENCE OF: 芥 讦菁 菎 膌 7誂 (Signature over Pnnted Name) 24 ACKNOVVLEDGMENT Republic of the phitippines) Quezon City )SS