purposes of cerlain feldspar and olher associated mineral d€posits existing in thB Contrac, Area (as herein defin6d); WHEREAS, the Conlraclff has acc€ss to all the finencing, technical competonca, technology and environmental managemant skills required to prompfly and effe.lively carry out the objectives of this Agreemanti NOW, THEREFORE, for and in mnsid€ration of the foregoing premises, the mutual covenants, terms and conditions hereinafter set forth, it is hereby stipu,ated snd agreed as follows: sEcTtoN r SCOPE 1.1. This A€|reement is a Mineral production Sharing AgreBmont snterod into pursuant to th6 provisions of lhe Ad and its implam€nting rules and regulations. The primary purpos€ of this Agreement is to provide for the rational exploration, dev6lopmenl and commercial utilization of certain feldspar and other associated mineral daposils exisling within the Contract Area, wilh all necessary services, technology and financing to be fumishod or ananged by the Contractor in accordan@ with lhe provisions of this Agrcemsnt lhe Contrac.tor shall not, t y virtuo of this Agreement, acquire any tille over th6 ContracvMining Area withod prejudic4 to the acquisition by the Contraclor of the land/surface rights through any mode of icquisition provided for by law. 1.2. fhe Contractor shall undertaka and oxsculo, for and on bahalf of the . Governmert, sustainable mining opsrations in accodance with the provisions of this Agre€menl, and is hereby constitutod and appointed, for tho purpose of this Agreemoni, as the exclusivo €,ntity to condud mining operations in tha Contract Area. 1.3. The Contractor shall assume all tha B4eloration risk such lhat lf no minerats in commercial quantity are developad and produced it will not b€ enlilled to reimburssment. 14 DLrring the term of this Agreement, the total value of production and sale of minerals derived from the mining operations contamptated heroin Shall be accounted for and divided between the Govemment and the Coniractor in accordance \.yith Seclion Vlll hereof. M 2 q "-1 SECT10N 11 DEF,NIT10NS As used in this Agreement,the fo腡 2.13. Daclaration- of. Minlnq Feasibili.ty means a document proclaiming the pres€nce oJ minetals in a specilic site, wrrich are recoverable by s&iatty acc€ptable, -snvironmentally safe and economically sound methods spocired in the Mine Development plan. 2.14. Deoartrnent or OENR means the Doparlment of Environmsnt and Natural Resourcss. 2.'15. Director means the Direclor of Minas and Geosciences Buraau. 216. Efeclivs Dqte means the dsto of exscrrtion cf this Agreemeri by the Contraclor and by the Secretary on behatf of lhe Govemmenl. 2.17, Environmsnt m6ans all facets of man'€ sunoundings: physical, ecological, a6sthslic, cullural, economic, historic, institutioflal end social. 2.18. boloration means searching or pmspecting for mineral resourcas by goological, geophysical and geocfiemical surveys, remoto sensing, test pitting, trenching, drilling, shaft sinking, iunnsling or any othor msans for the purpose of detomining the existence, oxtent, quality and qusntity of mineral resourcBs and the feasibility of mining thorn tor profit. 2.19. $oloration Pariod shall mean the period from the Effectivs Date of this Agreemont, which shall b6 for two (2) years, ranewable for like pariods but not to excoed a total term of six (6) years for nonmetallic minerals and 6ight (8) years for m€tallic minorals. subjea{ to the pertiner provisions of the implemor ing rulas and regulations of th€ Act. 2.20. Force Maisure maans acts or circumstances b€yond th6 reasonable control . of th6 Conlractor including, but not limited lo war, rsbellion, insuneciion, riots, civil disturbancas, blockade, sabotage, embargo, strike, lockout, €ny disputo with surface owners and other labor dispute6, apidsrflics, earthquake, storm, flood or other adverse weather conditions, explosion, fire, advorse adion by the Govemment or by any of its instrurnenlalily or suMivision thereof, ac1 of GoC or any public snemy 8nd any cause as h€rein doscribed over which the affectod party has no reasonable control. 2.21. Foroion Exchanoo means any o:nency other than tho cunency of the Republic of the Philippines acc€ptable to lho Govemmenl and the Contmctor- 2-22. Govemment m€ans lhe Govemm€nt of the R€public of lhe philippines or any of its agencies and inslrumantallties. 2.23. Gross Output means tho actual markel value of tho minerals or minsral producls ftom eacfi mine or minaral land operaied as a soparale entity, without any deduclion for mining, processing, rofining, transporting, handlin!, , markeling or any other oxpenses: providod, Fl.lat if the minerals or mineril products 6re sold or consigned abroad by tfl€ Contrador und€r C.l.F. term6, ' the ac{ual cost of ocean fraight and insuran@ shall b6 deducled: providdd furthsr That in the c€sa of minoral coricentrates which ar6 nol lraded in commodity exchanges in the philippines or abroad such as coppsr concer{rate, the aclual market value shall be the world prico quotation of lhe 4 (1'' refined mineral products containod thereof provailing in the said commodily oxchanges, affer deducting the sme,ling, rsfining: treatmenl, insuranoe, transporlation and other charges incurred in the process of mnverting minerai concenirates into refined metal tradod in thos6 commodity excianges. 2.24. Mife Developmont rsfers lo work undertak€n to prepare an ore body or a minaral deposit for mining, including thB construction of neceisary infraslruclure and relatad faciliti6s. 2 25 lt{lgIa[g maan ell naturally occuning inorganic substences in solid, liquid, gas or any intermediate state €xcluaing energy materials such as coat, petroleum, natural gas, redioactive materials and geothormal energy. 2.26. M.lnslgl-Pfqglgcr!9 mean matarials derived from mineral oraa/rocks end prepared into maIketablo state by metalturgical process€s, u/hich include beneficiation, cyanidalion, leaChing, smelting. calcinalion and other similar processes. 2.27 . Minino Ai.ea means that portion of the Contract Area idenlified by the Contrador as defined and delineated in a Survey plan duly approved by th6 DircBtor/Regional Direc{or concerhod fol purposas of devetopment ancUor utilization and sites for support faciliti6s. 2.28. Minino Operations means mining ectivitias involving exploralion, fgasibiltty sludy, onvironrnonlal impact asses$ment, developrnent, utilization, mineral procassing and mine rehabililation 2.29. Notice means nolice in writing, tel6x or telecopy (autheflticated by answer back or confirmation rec,eived) addressed or senl as provid€d in SeAion 16.2 . of this Agreemont. 2.3O. Ote means naturally occurring sut stancs or material from u/hich a minoral o[ element can bB mined snd/or procBssad for profit. 2.31. Pollution means any altoration of the physical, chemical and/or biological propsrties of aoy water, air and/or land resourcos of tha phiiippines, or-any discharge thereto of any liquid, gaseous or solid wastos or any pmduction of unnecessary noise or any emission of objeclionable odor, as will or is likely to create or render such water, air, and land reaources harmful, detrirnentai or injurious to public health, safety or \a,olfarB or which r,r4ll adversely affect their utilization for domestic, mmmotdal, industrial. agricultural, rocreational or other legitimate purposes 2.32. SeqlglAry means the Secr€tary of the Department of Environment and Natural Resourcos. 2.33. Slate means the Repubtic ofths phitippinss. 2.34. WoIk Prooram meens a document which presents tha plan of major mining ' operations and the conesponding expenditures of the Contractor in its Contracl Area during a given period of time, including the plan and expendilures for development of hosl and neighboring communities ahd of 5 苩 辦 geosciBnco local and mining tschnology, as submitted and approved accondance with the implemonling rulos and regulations of the Ac.t. SECT10N腡: TERM OF ACR=EMENT 31 This A9ement sha腡 sEcTtoN v EXPLORATION PERIOD 5.1 Timalable for bploration - The Contrador sh€ll commonce Exploratron activities nol later than three (3) months after the Effec{iye Date for a ;eriod of llo (2) fears, renewable for like poriods bul not to exce€d a to{al tarm of six (6) yoars for nonmatallic minorals and eight (E) years for malallic minarals, subjact to annual roview and approval by the Oirector .in accordance with tho implsmenting rules and r6gulalions of the Act. 52 Renewal of Explorstion Period - ,n c€se th€ Contractor opts for a r€nswal of its Exploration Period, it shall lile prior lo tho sxpiration thereof, a r6newgl application in the Regional Otfice concemed, accompanied by tha mandatory requirements stipulated in the implomenting rules and regulations of ths Ad. The Oireclff may grani the renewal of the Exploration ioriod on condition that tha Contrac{or has substantially complied with tho terms and conditions of ths Agreement. ln cases where further exploration is waranied beyond tho six (6)- or aight (8)-year period and on condition that th€ Coniractor has iui:stantiilly implernented the Exploration and Envimnmental Work programs ss verifisd by th€ B_ureau, th6 Director may further granl rsnewal oi tho Exploration Period: Provided, That the Contraclor shall bo requirad to s6t ,p performance surety aquivaler( lo the €xporditurs requiremont of " Exploration and Environrnental Work Programs. the Work Programs and Budgets - The Contractor shall stricfly comply with the approved Exploralion and Environmental Work programs together with their corrssponding Budgets (please refer to ANNEXES "C, and .D,,). The amount lo be spent by lhe Contrector in conducting Exploration activities under th6 torms of this Agreement during lhe Exploration period shall be in the aggrggate ot not loss than that spacified lor Bach of the Contrac{ years, as follows: For the Exploration Work Program: znd Contract Ysar PhP 978,800 00 : PhP 130,000,00 Total : PhP 1,108,800.00 For the Envimnmental Work Program : php 1 .l1,OOO.OO ln the 6venl of renawal of the Exploration psriod, th6 amount to be sp€nl every year shall firsl be agreed upon by the partigs. ln ths event of termination of this AgrBornent, the Contractor shall only be obliged to expend the pro-rata amount for lhe poriod of such Contract Vear prior to termination. lf during any Contract year, the Con{r8clor should expend more than the amount to be oxpended as provided abovo, the oxcess D may be subtracted from the amount required to be sxpended by the Contractor-during the.succeeding Contract Vears, and should tne Contraaor, due to unforeseen cirdlmstanses or with the consent ot the Govemmont, expend loss during a y€ar, then tha dsficiency shall b€ appliod to the amount to be expended during the succaeding Contract years. 54 Relinquishment of Total/Portion of the Contract Area - Durino the ExDloration Period, the Contractor may relinqui$h tota y or parlia y lhe;riglnat bontracl Area. After the Exploration lreriod and prior to oi upon approval of a Declaration of Mining Feasibitity by th6 Director, the Contracdoi shall finalty relinquish any porlion of the Contracl Aree not necessery for mining operations and not covered by any Declaralion of Mining Feasibility. 55 Final Mining Area - The Director may allow lhe Contractor to hold more lhan one (1) final Mining Area sufrject to the maximum limits set under the implementing rulos and regulations of the Act: provided, That each finat Mining Ar€a shall be covered by a Oeclaration of Mining Fsasibility. 156 Declaration of Mining Feasibility - Wthin the t€rm of the Exploration period, the Contractor shall fil6 in the Rogional Office concemed, the Declaration of Mining Feasibility ot the Contracl Area/final Mining Area suppffted by Mining Feasibility Study, Three (3)-year Development and Conshuction or Commercial Operation Work Program, complete geologic report, an application for sulvoy and lhe perlinont Environmentel Compliance Certificato, among other applic€bla requirements. Failure of the Contractor to submit the Declaration oi Mining Feasibility during the Exptoration period shall be considered a substantial broach of this Agreement. 5.7. Survey of the Contract Area - tho Contractor shall cause tho survey of the perimeter of the Contract Area/final Mining Area thmugh an application for survey, complete with reguirements, filed in the R€gional Ofiice concemod simullaneous with the submission of the Declaration of Mining Feasibilily. Survey ratums shall bs submitted to the Rsgional Director concemad for approval within one ('1) yoar from receipl of the Order r,f Survay complete with the mandatory requiroments stated in tho implemonting rules and regulations of the Act. 芒 艗 腒腃 Reporting a. During the Exploration Period, the Contractor shall submil to the Oirec.tor, through the Regional Direclor concemed, quarterly and annual accomplishmen{ reports under oath on all activities conducled in ihe Contracl Area from the Efiadive Date of this Agr€omsnt. The quarterly report shall be submitted not later than fifteon (.t 5) days at the ond of each C€lendar Quartor whi16 tho annual accomplishment roport shall be submitted not later than thirty (30) days from the and of each Calondar Year. Such information shell includa dotailod financial expenditures. raw and processed goologic€|. geochemic€I, goophysica, and radiometric data plottsd on a map at a minimum 1:50,000 scala, copies of originals of assay reliults, duplicated samples, field data, copies of originals from drilling reports, maps, environmental work program implementation and detailsd expendilures fr 8 ,6 遹 showing discrspancies/ deviations with approved sxploration and environmental plans and budgets as weil as ili other idormetion .,f .n" kind collected during the exptoralion activities. nrf lnformaiLir submitted to the Bursau shall be subiecl to the confidenlialily clauso of this Agreement. , 苉 - Final Reporl The Conlractor shall submil to the Director. thrcuoh the Regional Oirector concemed, a linal report under oaih ,poi. tt" e&iration of lhe Exploration period which shall be in tha finm and substance comparable to published professional reports of respectable international institutions and shell incoeorete all the findings in lhe Con(ract Area induding location of samples, assays. -chemical analyliis, and assessmant of minoral potantials togeth€r with a geologic nrap of 'l:50,000 scale at th6 minimum shourind the rBsults of the exploration. Such roport shall also include detailed axpondiluras incurrBd during the Exploration Period ln csse of diamond dnllino the Contractor shall, upon requ€st of the Director/Regional Di;ctor concamad, submit to the Rsgional ffice a quarler of the core samples, which shall bB dopositod in the Rogional Ofnoo Coro Library for safekeaping and reference. RFlinquishment Report - Th6 Contraclor sl"iall submit a separaio r€linquishment report with a detail6d g€ologic reporl of the rslinquished area a@ompanied by maps at a scale of 1:5O.O0O and rosulis of analys€s and detair6d expenditures, among olhers. SECT10N 蝙 61 62 and quality, as well as in monographs or reports in accordance with intemational standards sEcTloN v OPERATING PERIOD 71. Tim€table - The Contrac{or shall submit, within thirty (30) days before complBtion of mine devatopment and construction ol pr;dicti6n facilities, to the Oireclor, thmugh the Regional Director concemod, a Thre€_year Commercial Operation Work program. ThB Corirac.tor shall commence @mmercial utilization immediately upon approval of the afora3aid Work Program. Failura ot tha Contrector to commonce Commercial produclion wilhin lho period shall be consid€red a substantial broacfi of the Agraement. 7.2. Commercial Operalion Wlrk Program and Budget - During the Operating P€nod, tho Contractor shall submit to the Direclor, through lho Regional D-irgctor concEmed, Work Programs and Budgets covering a p€riod oflhreo (3) years eacfi, which shs b€ submiltod not later than thirty (3ir) days before the expiration of the period covered by the previous Work irogram. - Tha Contractor shall conduct Mining Operations and other activitiss for the duration of the Op€rating Period in accordance with th6 duly approved Work Programs and conBsponding Budgets. 73 Expansion and Modification of Faciliti$ - The Contrador may make exparsions, modmcations, improvsmsnts, and roplacements of lho mining facililies and may add new facilities as th€ Coniractor may considei necsssary for the operations: Providad, That such plans shall be embodied in an appropriate Work Program approved by th€ Director. 74 Reporting a. Quarterly Rsport6 - Beginning with th6 first Cal6ndar euarter following the commencement of tho OpeEting period, lhe Contraclor sha,l submit, within thirty (30) days after the end of each Calendar euarter, to the Director, through lho Rogional DirEctor concomed, a euarterly Report staling the tonnage of produclion in lerms of oras, concenlrates, and their corrogponding grades and oth6r typ€s of products; valus, destination of sal6s or olports and to wrrom sold; tsrmg of seles and expenditur$. b. Annual Rsports - During the Oparating p€riod, the Conlractor shall submit within sixly (60) days from the end of 6ach Calendar ye,ar, to tho Dirac{or, through lhe Ragional Direclor concernod, an Annual Roport indicating in sufficient detail: b.1 . The total tonnage of ore ras€fves, whether provon, probable, or infened, the total tonnage of ores, kind by kind, brokon down bolween tonnaga minod, tonnaoes transportod from th6 minasito and their conesponding destination, tonnagas 40 (Y stockpited in the mine and elsowhere in tho philippinBs, lonnages sold or committed for export (whethor actually iliippod fiom th€ phitippines or not), tonnagss iauattv stripped tom tne Philippines (with tull detarts as to purchas;, Oditination ano terms of sale). and if known to the Contraclor, tonnages refin€d, processed or manufectured in the philippine; with full specmcations as to the intormedigto producls, by_products or final products and of the terms at which they were dliposed; b.2. Work accomplished and work in progress at the 6nd of tE ysar in qusstion with rospect to all the ins(allations and facitities relaled to the utilization program, including lhB investm€nt aclually made or cornmitted; and b.3. Profilo of work forc€, including managsment and slaff, stating particularly their nationalities, and for Filipinos, their place of origin (i.e., barangsy, town, provinco, region). The Contraclor shall also comply with olhor rBporling requiremants Drovided for in lhe implementing tules and rsgulations of th6 Ac1. SEGT|ON Vl[ FISCAL REGIME 81 Genoral Principle - Th3 fiscal regime of this Agre€ment shall be govemad by tha principle according to whiclr the Govemmant expects a raaso-nable retum in economic yalue for the utilization of non-ronewabls minaral re,sourc€s under its national sovareignty whilB lhr) Contractor expects a reasonabla rsturn on its investment with spocial account to be taken for lho high risk of exploraiion, the terms and condilions prevailing elsewh€re in th€ industry and any special efficiancy to b€ gained by a particularly good performance of tho Conlractor 82 Registration Fe6s - Within fifreBn (15) days upon receipt of the notice of approval of the Agregment from tho Regional Office concemed, the Contraclor shall causa the rBgistration of this Agre€mant \ivith th€ said Regional Otfice and pay the rogistratim f6s at the rate provid€d in tho axisting rules and regulations. Fallure of the Contractor to cause the registration of this Agreement within the proscrib6d period shall be sufficiont ground for cancellation of the same. 83 Occupation Fees - Prior to registration of this Agrsemer and al the same date overy year thereaftor, the Contractor shall pay to the Municipaucity Treasuror concBmed an occupation fee over tho Contract ArEa at th6 annual rate provided in the existing rules and regulations. lf ths fee is not paid on th€ dato sp€cified, the Contraclor shall pay a surchargo of twanty five i:ercent (25%) of tho amount due in addilion to the occr.lpetion f8es. 84: Share of thB Govemment - The Govemment Shara shall ba tho axcisa tax on mineral products at the timg of removal ard at the rate provided for in 菅 Rspublic Aci No. 7729 amendino Saclion 15.1 (a) of th6 National lntemal Revenue codg, as amended a6 w;tr as ottrer taxdsloJa"1"JiJ"Ji""i"o ov existing laws. For purposes of determining the amount of ths herein Govemment Share, the Conkaclor sha stric y com-ply with the aurtitrng anj ac-c;u-;iin.s-r;o-rirlr"rt. prescribed undar 6xisting laws and r€gulations. The Govemment Share shall be allocated in accordance with Seclions 29O and 292 ol Republic Act No. 7i60, olherwise fnown as-.fri' Locet Government Code of 1991.' Pricing of SalEs - The Contractor shall endeavor to obtain the best achievabla price for.ils. production and pay the lo.vest achisveble marketing commissions and rolaled fees. lt shall s€ek to striko a balance beh,t/een l;no_term sates compsrable to policies followed by indsp€ndent producers in the inlsmational mining industry. The Contraclor shall likewise seek a balancad distribution among consumers. lnsofar as sales to Contracto/s affiliates are concemgd, prlce"s sfraii Oe at arm"s length _slandard and competing offers for large scale and long_term contracis shall be procurad. The Bureau shall b6 tumish€d s copy ot th; said Sal6s Agr€ernent subj6c.t to confidor iality betureen the gurolru anO tne Contraclor. 86 Associated Minerels - lf minerals other than fsldsper are discovered in commercial quantitios in the Contract Aroa, th€ value theroof shall be added to tho value of the principal mineral in computing the Gou"rnroni "nlre. sEcTtoN tx WORK PROGRAIVIS 91 Submission to Govemm€ni - Within the periods statad heroin, tho Cor ractor shall prepare and submit to the Diredor, through the Rogional Direcror corEemed, a Work Program end corrosponding Budget for the Controct Area stating the Mining Oporations and expenditures which 01e Contractor proposes to carry out during lhe pariod mvgred wiih the d€tails and particulars s6t forth olsewhere in this Agrooment or in th€ supporting documenls. 92 Govemment's Examination and Revision of Work pmgram - Should the Govemment decide to propose a ravision to a cortain sp-ecific teatuie in ttre Work.Program or Budqet, it sha , within thirty (30) days sfter receipt th€reot provid€ a Notice lo the Contractor spocifying rn reasonable detail iis reasons thersfore. Promptly theroafter, th€ Govemmenl and Contraclor will msot and endoayor to agree on lhe rsvision proposed by tho Govsmment. ln any evBnt, the revision of.any portion of said Work program or Bu&st in which the .Golemment shall fait to notify the Contractor of the propojed ravision shall, insofar as possible, bs carriod out as prescribod herein. lf the Govemment should fail within sixty (60) day3 from receipt thareof to notify 苂 腥 $ Contractor of the proposed revisions, the Worft program and Budgot proposed by the Contrador shall be deemed lo be approv&. 93program Contractor's Changes lo Work - lt is recognizsd bv the Government and the Contractor that the details of any Work program may require changres in the light ol changing circumstancos. The Contraetor" may mako sucir changes: Provided, That it shall not change tho general obj6di;e of the Work Program: Provided further, That changee which-ont8il a variance of at least twenty parcsnt (20%) shalt be subjec{ to ths approval of the Director. 94 The Government's approval of a proposed Work program and Budget will not be unreasonably withheld. sEcTtoN X ENVIRONMENTAL PROTECTION AND UINE SAFETY AND HEALTH '10.'1. The Contrsctor shall manage its Mining Operations in a technically, financially, socially, culturally and onvironmontally rosponsible manner to achieve the sustainable development objedives and responsibililies as provided for under tha implementing rules and regulations of the Act. '10.2. The Contractor shall ansure that the standards of environmental protection are met in iha course of the Mining Op€ration. To the extent possibie, contml of pollution and lhe transformation of lhe minod-oul ar6as or materiels into economically and socially produc,tive foms must be done simultaneously with mining 10.3. The Contractor shall submit an Environmental Work program during the Exploration Period as prescribed in the implomenting rules and regulations of the Act. '10.4. An Environmental Compliance Certificate (ECC) sha be sea.Irad first by the Contraclor prior to tho conduct of any developmant works, construclion of production facilities and/or mine produclion ac{ivilies in the Contracl Area. 10.5. The Contractor shall submit within thi.ty (30) calendar days afrar the issuance and receipt of the ECC, an Environmenlal protoction and Enhancement Program (EPEP) using MGB Form No. '16-2 covering alt areas to be affecled by developmant, utilization and processing adivaties undar this Agreemont. The Contractor shall allocate for ils inilial environmont-related capital expendilures approximataly ten percont (10%) of fie total project cosl or in such amount depending on the environm€ntal/geological condition, nature and scale of operations and technology to be employed in tha Contracl Aroa. 10.6. The Contractor shall submit, within thirty (90) days prior to the beginning of evBry calsndar year, an Annual Environmental protection and Enhancemont . Program (AEPEP), using MGB Form 16-3, which shall be based on the approved EPEP. The AEpEp shall be implemented during the year for whic.h it was submitt€d. To implement its AEpEp, tha Contraclor shall allocate 腏艒 percent annually threa to five (3%-5o ) ot ils direct mining and millino costs dopending on tha envlronmBntaugoologic condilion, naiure and scale of operations and t€chnology employed in the Conlract Area. 10.7 The Conlractor shall establish a Mine Rohsbilitation Fund (MRF) bassd on the financial roquirernents of th€ approved EpEp as I reasoneble environmental deposit to ensure satisfactory complianca with the commitments,/strategies of ihe EPEP/AEPEP and avaitability of tunds for tho pgrformancs of the EPEP/AEpEP during the specific projBc{ phas6. The MRF . shall b6 deposited as Trust Fund in a govemment deposilory bank and sh€ll be used for physicsl and social r€habilitation of arBas affected by mining aclivitigs and for research on lhe social, lechnical and prevsntive aspects of rahabilitation. 10.8. The Contractor shall set up mitigating measures such as min6 waste and mill tailing$ disposal systsm, mine rehabilitation or plan. water quality monitoring, Btc. to minimizo land degradation, ail and water pollulion, acid rock drainage and changes in hydrogeologry. 10.9. The Contractor shall set up an Environmental and Sstuty Ofice at its minesite mannsd by qualifisd p€rsonnel to plan, imploment and monitor its approvsd EPEP. ' 10.10. The Contractor shsll be responsible in the monitoring ol onvironmental, saf6ly and health condilions in the Contract Area and shall strictly comply with all ihe rules and rogulalions embodied under DAO No. 2O0G98, othenflise knorn as the "Mina Safety and Health Standsrds." 10.11.The Contractor shall be rosponsible for the submis.eion of a final mino ' rehabilitation and,/or decommissioning plans, including its financial requiremsnts and incorporating the details and parliculars s€t forth in the implementing rules and regulalions oI th6 Act. sEcTloN xt RIGHTS AND OBLIGATIONS OF THE PARTIES 1 1.1. Obligations of the Contracior: a. To sxclusrvely conduct sustainable Mining Operations within th6 Contraet Area in accordan@ with tho provisions of the Ac1 and its implementing rulas and regulations; b. To construcl and operats any faciliti€s spscitiod under tha Min6ral Agreement or approved Worl( Program; c. To determine the e)ploralion, mining and hoatmsnt proce$ to bs utilized in lha Mining Op€rations; d. To extrac{, r6move, use and dispose of any lailings as aulhorizad by an aPpft,vod work Program; 14 e To secure all permits necossary or dosirable for the purpose of Mining Operations. , To keep accurale toctnical rEcords about the Mining Oporatiofls, as well as financial and mark€ting accounls, and make t-fl"m ,rJifaOfl io Uovammenl represontativos authorized by th€ Director for the purpose of assessing th6 perfomance and compiiance ot ttre Contradior'wittr lh6 terms of this Agre€ment. Authorized reprosentativJs of oiher Govemment Agencios may also have aecasi to such accju s in occprdanca with existing laws, rules and regulations; To fumish th6 Bureau all the data and information g€thered from the Contrac{ Area and lhat all tha books of accounts ani records shall b€ open for inspection; h To allow access to Govemm€nt durihg reasonable hours in insp€cting the Contrac{ Area and exsmining pertinont r€cords for purposas oi monitorrng q66p;126ce with the tarms of this Agresmenti To hold the Government frae 6nd harmless from all claims end accounts of all kinds, as well as demands and actions erising out of lhe accid6nls or, injuries to p€Bons or properties caused -by Mining Oporations of the Contrac{or and indemnify the Govemmeni for ani exponses or costs incunBd by tho Govemmsnt by reason of any such claims, accounts, dernands o[ actions: ln the development of the mmmunity: j.1. To rscognize and rospect the rights, ctBloms and traditions of indigenous cultural communities over their ancestral lands and to allocata royalty payment of not l6ss than one psrcent (1%) of the value of the gross ouFrrt of minerals sold; j.2. To coordinate wilh propor authorilies in the dovelopment ofthe rnining community and for those living in the host and n€ighboring communities through social infrastruclure, livelihood programs, educaiion, walor, aleclricity and madicsl servicas. Wherc traditional self€ustaining income and lhe community activitie8 ara identifiod to be prosent, the Contractor shall assisl in the preservation and/or enhancsment of such activities: j.3. To allot annually a minimum of ono percent (1%) of the direct mining and milling costs necsssgry to implemeni the adivitias undanak€n in_ths d€velopment oi the host ana neighbori;t communitios. Expsnses fdr community development -may bI *:rged..against th€ royatty paymont of at teait one peicent (1%) of lhe gross output inlendod for the concernod indigenous cultural community; j.4. To givo preferenc€ to Filipino citizans who have eslablished domicils in the neighboring communities, ,n th€ hinno of p€rsonnel for ils mining operations. lf necossary skilts'and 邃 15 Bxpertise are currenfly not Evailable, th6 Contracior must immediately prBpare and underlake a training and rocruitmBnt program at its expense; and j.5. To incorporala in the Mining Fea$ibility Study the planned expenditures necassary to implement (J.1) t6 0.3) of this Sedion; k ln the development of Mining Technology and Geosciances: k.1 ln lhe course of its operations, lo produc€ geological, geophysical, geochemical and other typas of maps and reports that are appropriate in scale and in formal and substanc€ whic*r are consistent with the inlernationally acc€ptgd standards and praclicos. Such meps shall bo mad€ available to the scienlific community in the most conveflionl and cosl €fiective forms, subject lo the condition that the Contracior may delay relsese of 6aid information for a reasonable period of tim€ which shall not exeod three (3) years; k.2. To systematic€lly keep the data gsnerated from the Contracu Mining Area such as cores, essays and other relaled information, including eclnomic and financial data and make them acc€ssible to gtudents, researchars and olher persons responsible for developing mining, geoscience and processing technology subject to the condition th€t the Contraclor ma, delay release of data lo the scienc€ and technology community within a reasonable period of time whidt shall nol excoed thre; (3) years: k.3. To transfer to th6 Govemment or local mining company the appropriate technology it may adapt in the e)gloration, development and commeroial utilization of tho minerals in the Coriract Area; k.4 To allocate res€ardl and davelopment budget for the advancoment of mining t8chnology and geosciences in coordination with the Buraau, r€search inslitutions, acad€mo, otc.; and k.5. To replicate data, maps and reports cited in (k.i) and (k.2) and furnish the Bureau for archivirE and systematic saf;ke6ping which shall be made avaitable to the science and teehnoiogt community for conducling rasearch and undedaking oths; aclivities which contribute to th€ devslopmont of hining, geoscienc€ and processing technology and ths conesponding national pool of manpower talonts: provided, however, that the release ot data, maps and the liko shall be similarlv constreined in accordancE with (k.1) and (k.2) abovei 16 ^靛 菄 l. To incorporato in the Mining F€asibility Study the planned exp€nditures necessary to implement all th6 plans and pmgrams sst fiorth in this Agreement; and m. To pay all other taxes and f6€s mandatod by existing laws, rules and regulations. 1 1.2. Rights of the Contracton a. To conduGl Mining Oporations vrithin the confines of its ContracUMining Area in accordanco with tho terms and condilions hereof and without interfering with the rights of other ConlractorvL6ssees/Operatoru/ permili€es/permit Hol-dsrs. . b. Possession of the Contract Ar€a, with full right of ingrB$ and ogress and the right to occupy the s€me, subjact to surfa; and oas€hent rights; c. To u$e and have acc€ss to all declas8ified g€ological, geophysical, drilling, production and other data rolevant to the mining operitidns; d. To sell, assign, transfer, convey or othsMise disposo of all its rights, inlerests and obligations under the Agroernont subject to th8 app;oval of tho Government; e. To employ or bring into the philippinBs foreign tochnical and specialized porsonnel, including ths immsdiate mgmb€rs of their families as may be required in tho operetion$ ofthe Conhaclor, subject to apptioabto laws and rogulations: providod, Th€t if the employment connestion of such foreign parsons with the Contrac{or coase;, lho applicable lawB and regulations on immigralion shall apply to them Every time foteign technologios sr6 utilized and where alibn exesjtives are employad, an effective program of training undersludiss shall be ' undertaken. The atien employment shsll bs limited to tochnologies requiring highly specialized training and exporience subject toihe required approval under oxrsting laws, rules and reguletions; t To €nioy sssement rights and us€ o, timber, water and othor nsfural rBsources in lhe Contrad Area subject to portinenl laws, rules and regulations and the rights of lhird partios; g. Repalriation of capital and rsmittance of profits, dividends and int6r6st on loans, BubjBct to existing laws and Bangko $entral ng pilipinas rules and regulations; and h. To import whsn necessary all equipment, spare parts and raw materials reguirad in the operalions in accordance wiih existing laws and regulations. 腒膌 /T' ^.,,-7 L 0 11.3. Obtigations of the Govomment; a. To ensure lhat the Conlractor.has th€ Governmont,s full cooperaton in lhe exercise of the rights granted to it unOer tfris agdmJit; b. To use its best efforls lo ensurs thg tim€ly issuancg of necessary pemits and similar authorizing documents foi use of ttre surtace ot tni Contrcct Area; and c. To cooperate with the_ Cortrador in its 6fMs to oblain financing coniemplatod herein from banks or other financial institutions: Provided, That such financing anangemants will in no event reduc€ the Contradois obligation on Govemment rights heroundar. sEcTtoN x[ ASSETS AND EOUIP[ItENT 12.1. fhe Contracror shall acquira for ths Mining Op€rations mly such asseB thaf are reasonably estimatad to b€ requir€d in carrying out such Mining Operations. 12.2. All malerials, oquipmant, plant ard othe.r in8lallations ot a movablo nalure er6c{ed or placed on lh€ Contract Aroa by the Conlrador shall remain tho property of the Contractor. The Contractor shall have the right to remove and re-€xporl such materials and equipment, plant and other installationg trom the Philippinos, subject to axisting nres and regulations. ln cass of cesgation of Mining Operations on public lands occasioned by its voluntary abandonmgnt or withdrawal, the Contractor shall have a period of one (1) ysar from the time o, csssalion within which lo removo its improvaments; otherwise, all social infrastruclures and facilities shall be tumed ov6r or donated tax hee to th€ proper government authoritics, nEtion€l or local, to ensure thal said infrastruatures and f8cilities ar6 continuously mainlained and utilized by th6 hosl and noighboring communities. . sEcTtotrt xfll ETIIPLOYTiENT AND TRAINING OF PHILIPPINE PERSONNEL '13.'1. The Contractor agrees lo emptoy, to tha sxtent possible, qualified Filipino personnel in all types of mining operations for which they ar6 qualified; and after Commercial Production commences shall, in consullation and with consent of the Government, propare and undartake an axlensive training programme suitable to Filipino nationals in all levels of employment. The objectivs of s€id pmgramme shall be to reach within the timai;bb set forth below ths following targets of ',Filipinizaiion:, W, 48 ak Unskillec skl腡 ed clerical (%) (%) (%) (%) (%)P ofossional Management Year 1 100 100 100 70 70 Year 3 100 100 100 80 80 Year 5 100 100 100 9o 90 Year 7 100 100 Year 10 100 100 1諭 |:: Year 15 100 100 100 1oo 95 13.2. Cost and expenses of training such Filipino personnol and the Contuacto/s own employees shall bo included in the Operating Exponses. 腧 13.3. Ths Contrac{or shall not discriminate on the basis of gendar and shal respecl the right of women workers to participate in poliiy and decision-ma'king procasses affecting their rights and benefits. ' sEcTtoN xlv ARBITRATION 14.1. The Govemment and the Contractor shall consult with each oth€r in good faith and shall exhaust alt available remedies to sente any -nO att Oisput6s or dis?greements arising out of -or. relating to ths vali6[y, iniarpretations, enforcsability, or p€rtormance ot this Agreehent before res;rling to aruifation as provided for in Section 14.2. fr6low- 14.2. Any. disagreement or dispute which can not b€ seftlod amic€bly within a period. of one (1) year from the time the issue is raised by s pariy shall b€ settlod by a tribunat of thre€ (3) arbitrators. This tribunal shall be constituted as follows: one to be appointed by the Contractor and th6 other to b6 appointed- by the Secretary. Tho first two appoint€d arbitrators sh€ll consider namos of qualified parsons unlil agroement on a mutually gcceptablo Chairman of the tribunat is setected. buch arbitration sha be'initiated and 99l'guctod pursuant to Republic Act No. 876, otheMiss kno\,vn as the "tubitralion AcL', ln any event, the arbitration shalt b6 conduc,ted applying the substantive laws of the Republic of the phitippines. 14.3. Eadl party shall pay fifty percent (50%) of the feB$ and exp€nses of the Arbitrators and lhe msls ofarbrtratron. Each pady shsllpay its-ovn cosfs and attorney's feL'. 49 该 `苑 SECTION XV SUSPENSION OR TERMINATTON OF CONTRACT. TAX INCENTIVES AND CREDITS ',5.1. This Agroement may be suspended_for failura of the Conlrac_tor: (a) lo with any provision or requiremenl of lh6 aa it. irffliiinting comply regulationsi (b) to pay taxes, fees and/or "nonr. rules and the Govornment. olhar charges iema-nOaOte anO aua 15.2. This Agreement teminates or may be terminaled for the following caus€8: (a) expiration ot its term, whether originat or ren€wal; iOl wiinJiawar from tne Agreament by tho Contracior; ac) viotation Uy' iirb doniiaaor ot tlre Agreemont's terms and conditions; (d) failuro to pai taxes, tJVor charges or financial obligations for t$,o (2) consecutiv€ viais; (el tsis6 statament or omission of f8c{s by the Contractor; and (f) any oiher carse or reason provided under the Acl and its implementind rules and regulations, or any other relevant laws and regulalions. 153. AII siatements made in this Agreement shall b6 considered as conditions and essential parts hereof, and any falsehood in said stsiemonts or omission of f?qs, which may atter, change or affect substantiafly the fact sei torth in saiO statements shali be a ground for its royocation and ierminstion. 15.4. The Contractor may, by giving duo notice at any time during tho tsrm of this Agreement, apply for its cancellation due to causes which,ln the opinion of the Conlractor, render continued mining operation no longer feasiblo or viabl€. ln this cas€, the Secretary.shalt decide on the appticaion within thirfy (30) days from notics: proyided, That th6 Contraclor hai mat att the rinanciai tiscal and lsgal obligaiions. 15.5. No delay or omissions or @urse of dealing by the Govemmont shall impair any of its rights und6r this Agreemsnt, oxcopt in the casa of a written waiver. Th€. Govornment's right to seek recourse ancl rglief by all other m€ans sha not be conslrued as a waiver of any succeeding or other default unlgss tho contrary intar(ion is rsduced in writing and signod by tha party aulhorized to gxercisg tha waiver. 15.6. ln case of tsrmination, ths Contractor shall pay all tho fe€s and othar tiabitities due up to lhe end of th€ year in which th€ termination becomes effoctive. The Contractor shall immediately cany out the resioration of lh6 Contraci Area in acmrdance with good mining industry praclics. 15.7. The withdrawel by the Contuactor from th6 Mineral Agresnr€nt shall not release it from any and all financial, snvironmental, legal a;d fiscal obligations under lhis Agreoment. 15.8. 'l'he fol{owing acls or omission, inter alta shall constitute treech of contrecl, upon which the Govemmcnt may exercise its right to tsrminate the Agreemeni: 20 r~7 腘 - a. Failure of the Contrac{or withoul valid reason to commence Commercial Production wilhin tha period pr€scribed: and/or b. Failuro of the Contrac{or to conduct mining op€rations and other activitios in accordanc€ with ths approvsd Work Programs and/or any modification th€reof as approvod by lhe Oiroctor. 15.9. The Govemment may suspend aod c€ncel tax incentives and credits it the Contractor fails to abida by the terms and condilions of said incentivos and credils. sEgTloN xvl oTlrER PROVTSTONS 16.1. Any tems and conditions resulting trom repeal or amendmer{ qf any gxi$ing laws or regulation or frcm the enaclmer of a law, regulatlon or administrativa order shall bo considered a part of this Agreement. 16 2. Notice All noticas, dsmands and othsr communications requircd or permitted heraunder shall be made in writing, tolex or tel€copy and shall bo doomad lo have been duly given notice, in tho case of telox or tolecopy, if answerEd bac'k or contirmation recaived, or if delivered by hand, upon roceipl or ten days after being d€posited in ths mail, airmail postage prepaid and addressad as follows: lf lo the Govemment: The Socrctary Department of Environmont and Natural Rasour@s DENR Building, Visayas Avenue Diliman, Quezon CitY lf to ttle Conlractor: Tho Hoirs of Femando P. Dancel . clo Erlinda L. vda De Dancol No. 17 Adiarto 3lr€61, Poblacion 4, Pasuquin, llocos Norte Either party may substitute or change sucrtl s*lross on notice thereof to the olher party 16.3. Governing Law This Agreement and tho relation bstween tha Partias horoio shall be govemed by and construed in accordance with th€ la\'vs of ths Republic of the Philippinss. The Contractor hereby agrees and obliges itsolf to comply with 21 n*7 . the provisions of ths Act, its impl€m6ntin9 rules and ragulations and other relavanl laws and regulations. '16.4. Susponsion of Obligation a. Any failuro or delay on the part of any party in lhe performance of its obligation or duties horeund€r shall be exr:used to the exent attributebls to Forc€ Ms./b,r//.e as dafinBd in the Ast: provided, That the suspension of Mining Oper€tions due tD Force Majeure causes shall bo subject to approval by the Di.ector. b. I Mining Operations are delayed, curtailsd or preventod by such Force Malbule causes, then the time tbr enjoyrng the rights and camTing out the obligations thereby affBcted, the lerm of thia Agreement and all rights and obligations hereunder shall be exlended for a period equal to ths period involved. c. The Party, whose ability to psrform its obligalions is atfecled by such Forcg Majeure causes, shall promp y give Notica to th6 other in writing ' of any suc,h dslay or failure of pertormance, thg opecied duratio; thereof and its anticipated effecl and shall use its efforts lo remedy such delay, axc€pt that neither party shall be und6r any obligation to settle a labor disput€: provided, Thal the suspension of oblig;lion by the Contrador shalt bs sub.iect to prior approval by the Direclor. 16.5. Amendments This Agreement shall not be annulled, amanded or modifi€d in any resp€ct excepl by mutual consent in \{riting of the hsrein partias. THE REPUBLiC OF THE PH:LIPP,NES 蝛 | BY: l辇 SIGNEDiN THE R ESENCE O腵 | (Signature over Prinled ACKNOWLEDGMENT Republic of the Phitippines) Quezon City BefOre me, a Notary Pub腡 c for and in l MiCHAEL T DEFENSOR,with Commun 鞵苜 躯 鑆觃鎼 鑆 諭