腒 1:鎼 :':::lJ顨 荳 l腶 苜:Fl菌 讚|腶 ::b苛 ti1 8軱 |1lii[鞋 1lT:腡 1:膪 !隬 ::t:R:芫 ted hereini :i腶 ]l 1:腸 |腷 腶 !lT腡 :访 lli腸 lJ]ifI铫 fined)  菄 靸铬 菌限 閣 驢 鞃 詩腷 mmedi臧 腶諭 銵 腕 aV:趄 諭 閣 鞯 鎼 ::r n違 苖 :l靲 菉 l膒 |腶 :1鞢 %:]:i:li迈 rir菁 釫 ii:]靚 :軹 腔 Rli#jil:i腡 ]R鮠 r:腶 Acti :ililt腵 h臷 觪Falttett葛 i釷 轺 蝛 鞃 閣 趔   greement 苖 诞 関 顛 閩 V ell菌 臨 靷 R鏩 邐 轤陑 :腵諌 腡  鞃 Wl:]]11限   臨 agreed as fomows: SECTION I SCOPE Agreement is a Mineral Production Sharing Agreement entered into 11This il;J;i-i;6; proui"ion. of the Act and its implementins rules and i"grLtion". The primary purpose of this Agreement is to provide for the V ,ri""-"i- deveiopment and commercial utilization of cerlain 'iiiiiit ",,pr"ratrir, other associated mineral deposits existing ,- ,i"x"t and copper'and all necessary services, technology and *itn-in tf,. Contract Aiea, with the Contractor in accordance with tinancing to be furnished or arranged by not' by virtue of this tn" oior]"ion" of thrs Agreement. The aontractor shall preiudice egrJ;;;;i, ,tqr,r" ,ny-titt" over the contracuMining Area without to"tne acquisition by the Contractor of the land/surface rights through any mode of acquisition provided for by law. shall undertake and execute, 1or and on behalf of the 12 The Contractor mining operations in accordance with the Govemment, sustainable and appointed, for provisions of this Agreement, and is hereby constituted ih" prrpr"" of this Agreement, as the exclusive entity to conduct mrning operations in the Contract Area. 2 The Contractor shall assume all the exploration risk such.that. if no minerals 1.3. in quantity are developed and produced' it will not be entitled to "trrn"t"i"f reimbursement. 1.4. During the term of this Agreement, the total value of production and sale ot minerits o"riveo from the mtning operattons contemplated herein shall be ;;;;;;;J i;r. and divided betwden the Government and the contractor in accordance with Section Vlll hereof' sEcTloN ll DEFINITIONS As used in this Agreement, the following words and terms' whether singular or plural, shall have the following respective meaning: 2.'1. Act refers to Republic Act No' 7942' otherwise known as the "Philippine Mining Act of 1995." 2.2. ASI99I09d means this Mineral Production Sharing Agreement' Associated Minerals mean other ores/minerals, which occur together with the princiPal ore/mineral 2.4. Banqko Sentral means Bangko Sentral ng Pilipinas' 2.5. Eldgg! means an estimate of expenditures to be made by.Contractor in 6ffioperations contemplated hereunder to accorrplish the Work Prograrn for each particular Period. 2.6. Bureau means Mines and Geosciences Bureau' V 2.7 . Calendar Year or Year means a period of twelve (12) consecutive .months C,irnl;,th th" fit"t day of January and ending on December..31' while ;c;le;ar Ouartei' meani a period of lhree consecutive months with the first calendar quarter starting with the first day of January. 2.8. Commercial Production means the production of sufficient quantity of minerals to economic viability of mining operations reckoned from the "rstain operation as declared by the Contractor or as stated in date of commercial the feasibility study, whichever comes first 2.9. Constitution or Philipoine Constitution means the 1987 Constitution of the Republic of the Philippines adopted by the Constilutional Convention of 19U6 on October 15, 1986 and ratified by the People of the Republic of the Philippines on Fefiuary 2, 1987. 2.10. Contract Area means the area onshore or offshore delineated under tlle Mineral Production Sharing Agreement subject to the relinquishment 3 obligations of the Contractor and properly defined by latitude and longitude or bearing and distance. 2.11. Contract Year means a period of twelve (12) consecutive months counted from the Effective Date of this Agreement or from the anniversary of such Etfective Date. 2.12. Contractor means Macro Asia Corporation or its assignee or assignees of interest under this Agre€ment: Provided, That the as:iignment of any of such interest is accomplished pursuant to the pertinent provisions of the implementing rules and regulatjons of the Act. 2.13. Declaration oi Minino Feasibilitv means a document proclaiming the presence of minerals in a specific site, which are recoverable by socially acceptable, environmentally safe and economically sound methods specified in the Mine Development Plan. 2.14. Department or DENR means the Department of E lvironment and Natural Resources. 2.'15. Director means the Director of Mines and Geosciences Bureau. 2.16. E[9S!j.yg-9e!e means the date of execution of this Agreement by th€ Contractor and by the Secretary on behalf of the Government. 2.17. Environment means all facets of man's surroundin{ls: physical, ecological, aesthetic, cultural, economic, historic, institutional and social. 2.18. ExDloration means searching or prospecting for mineral resources b)' geological, geophysical and geochemical suTveys, remote sensing, tesl pitting, trenching, drilling, shaft sinking, tunneling or any other means for th(r purpose of determining the existence, extent, quality and quantity of mineral resources and the feasibility of mining them for profit. V 2.'19. Exoloration Period shall mean the period from the Effective Date of thi$ Agreement, which shall be for two (2) years, renewable for like periods but not to exceed a total term of six (6) years for nonmelallic minerals and eight (8) years for metallic minerals, subject to the perlinent provisions of the implementing rules and regulations of the Act. 2.20. Force Maieure means acts or circumstances beyond the reasonable control of the Contractor including, but not limited to war, rebellion, insurrection, riots, civil disturbances, blockade, sabotage, embargo, strike, lockout, any dispute with surface owners and other labor disputes, epidemics, earthquake, storm, flood or other adverse weather conditions, explosion, fire, adverse action by the Government or by any of its instrumentality or subdivision thereof, act of God or any public enemy and any cause as herein described over which the affected party has no reasonable control. 4 2.21. Foreion Exchanae means any currency other than the currency of the Republic of the Philippines acceptable to the Government and thr) Contractor. 2.22. Government means the Government of the Republic of the Philippines or any of its agencies and instrumentalities. 2.23. Gross Output means the actual market value of lhe minerals or mineral products from each mine or mineral land operated as a separate entity, without any deduction tor mining, processing, refining, transporting, handling, marketing or any other expenses: Provided, That if the minerals or mineral products are sold or consigned abroad by the Contractor under C.l.F. terms, the actual cost of ocean freight and insurance shall be deductecl: Provided further, That in the case of mineral concentrates which are not traded in commodity exchanges in the Philippines or abroad such as copper concentrate, the actual market value shall be the wo[ld price quotation of the refined mineral products contained thereof prevailing in the said commodity exchanges, after deducting the smelting, refining, treatment, insurance, transportation and other charges incurred in the process of converting mineral concentrates into refined metal traded in those commodity V exchanges. 2.24. MU.g-Q.Cye!9pOcI1 refers to work undertaken to prepare an ore body or a mineral deposit for mining, including the construction of necessary infrastructure and related facilities 2.25. Minerals mean all naturally occurring inorganic substances in solid, liquid, gas or any intermediate state excluding energy rnaterials such as coal, petroleum, natural gas, radioactive materials and geothermal energy. 2.26. Mineral Products mean materials derived from mineral ores/rocks and prepared into marketable state by metallurgical processes which include beneficiation, cyanidation, leaching, smelting, calcination and other similar processes_ V 2.27. Minino Atea means that portion of the Contract Area identified by the Contractor as defined and delineated ln a Survey PIan duly approved by the Director/Regional Director concerned for purposes of development and/or utilization and sites for support facilities. 2.28. Minino Operations means mining activities involving exploration, feasibilily study, environmental impact assessment, development, utilization, mineral processing and mine rehabilitation. 2.29. Notice means notice in writing, telex or telecopy (authenticated by answer back or confirmation received) addressed or sent as provided in Section .16.2 of this Agreement. 2.30. Ore means naturally occurrjng substance or material from which a mineral or element can be mined and/or processed for profit. 5 2 31. Porrut on means anv.arte,rat onooi j}; i}jJ:::""]'il'j"ffi l|lfl iJ:5::fiI 3i::;i[: ,i:,:fl:li,i, iff;, ;;"";;' or sorid wastes or anv.production or unnecessary noise or any t-"!Ln or objectionable odor' asr ill or is likelv to create or render such *ut"i' *' tno land resour':es harmful' detrimental ir. ","r,-rri"* t" p,oric rreattn' JaiJv'oi welfare or whrr)h wrll adverselv atfect their utilization lor do'"tr"'i*''"'"i"f industrial' agricultural' recreationerl or other legitimate PurPoses' 2'32,secretarvmeansthesecretaryoftheDepartmentofEnvironmentand Natural Resources' 2.33. State means the Republic of the Philippines' 2.34. Work Proqram means a document which presents the plan of maior minirrg operations tn" expenaitures of the Contractor in its "o""siiloiiq- or trme' including the plan arrd "no t g'i"; p""rroi contract Area ou'ing [osiano neignooring communities and of expendltures for developmeniof as submitted and approved in Iocal geoscience and rn'n'no l"J*rogv of the Act' al-c-oro-ance witn tne implemeiting rules and regulatlsns V sEcTloN lll TERM OF AGREEMENT 3,l.ThisAgreementShallhaveatermoftwenty.five(25)yearsfrom'Effective ;;,; il;"t be renewed tneieaner for another term not exceeding twentv ffii'2!;";;J in" ,"nt*ut oi thi' Ag'""'"nt' as well as the chanses in the i"r-",i:"i,i *noittns tnereot' sr'ait be"upon mutual consent.by the parties' ln il; ;;i G Gor"|.n*"nt oecioes to allpw mining operations thereafter bv i"ntr""t", tnis must oelnrough competitive public bidding. After due "ir.,"i of notrce' the Conlractor-shall have the right to equa! the highest oublication ati reasonaute expenses of the highest bidder' ffiffi;"ffiil;enioi SECTION IV , CONTMCT AREA 4.1. Size, Shape, and Location of Contract Area - This Agreement covers a Contract Area of approximately Four Hundred Ten (410) hectares' situated in Brooke's Point, Palawan ind bounded by the following geographical looiainates (piease refer to ANNEX "8" - 1:50,000 scale Location Map/Sketch Plan). The final boundary of the Contract Area is subject to all valid and exis;ting mining rights, if any, and the resolution of any pending case(s) involving the same. 腏 艏 V SECTION EXPLORATION PERIOD 5.1. Timetable for Exploration - The Contractor shall commence Exploration activities not later than three (3) months after the Eff€ctive Date for a period of two (2) years, renewable for like periods but not to exceed a total term of six (6) years for nonmetallic minerals and eight (8) years for metallic minerals, subject to annual review and approval by the Director in accordance with the implementing rules and regulatiors of the Act 5.2 Renewal of Exploration Period - ln case the Contractor opts for a renewal of its Exploration Period, it shall file prior to the expiral.ion thereof, a renewal application in the Mines and Geosciences Bureau Central Office. accompanied by the mandatory requirements stipulat-'d in the implementing rules and regulations of the Act. The Director may grant the renewal of the Exploration Period on condition that the Contraotor has substantially V complied with the terms and conditions of the Agreemont. ln cases where further exploration is warranted beyond the six (6)- or eight (8)-year period and on condition that the Contractor has substantially implemented the Exploration and Environmental Work Programs as verified by ihe Bureau, the Director may further grant renewal of the Exploration Period: Provided, That the Contractor shall be required to set up a performance surety equivalent to the expenditure requirement of the Exploration and Environmental Work Programs. - shall strictly comply with the 53Budgets The Contractor Work Programs and approved Exploration and Environmental Work Programs together with their corresponding Budgets (please refer to ANNEXES "C" and "D"). V The amount to be spent by the Contractor in conducting Exploration activiiies under the terms of this Agreement during the Exploration Period shall be in the aggregate of not less than that specified for each of the Contract Years, as follows: For the Exploration Work Program: 1st Contract Year : 良芈良 1,950,000.00 2nd Contract Year : 良芈良 13,000,000.00 Total PhP 14,950,000.00 PhP 1,500,000.00 ln the event of renewal of the Exploration Period, the amount to be spenl every year shallfirst be agreed upon by the parties. 膌荴 '  雊 i 鏜 i 襼 跫 !鱢 鑝 1  轑 | 腡 臨 t菌 1郌 豓 鱡 鑲  :鳡 軌 軝 l鏄鍳 鋱 54 t鲧 r腡 ] 臨 腷 豥 1迉 ] laration of M ning Feasibility I葛 gr閝 鿵 閈 ttFi腸 腵葛 鑆 閈诬 腡  邠 膊i[i雳 蝛韕 諭 鎣:鍛 韭 lM腁 起鱝 跫 i 诬軎閣 诎 a鹏 attnf 趌 铫 鑆 鉵 银覷  T铬 醡 驢镓  蹶 跻 to submit the Declaration of Mining F( sha腡 expenditures, raw and processed gedogical, geochemical, geophysical and radiometric data plotted or a map at a minimufil 1:50,000 scale, copies of originals of assay results, duplicated samples, field data, copies of originals from drilling reports, maps, environmental work program implementation and detailed expenditures showing discrepancies/ deviations with approved exploration and environmental plans and budllets as well as all other information ol any kind collected during ihe exploration activities. Ali information submitted to the Bureau sh€ll be subject to the confidentiality clause of this Agreement. b - The shall submit to the Director, through the Final Report Contractor Regaonal Director concerned, a final report under oath upon th€l expiration of the Exploration Period which shall be in the form anci substance comparable to publjshed prr)fessional reports of respectable international institutions and sfrall incorporate all th€! findings in the Contract Area including location of samples, assays chemical analysis, and assessment of mineral potentials logether wittl 腒腪 a geologic map of 1:50,000 scale at the minirnum showing the resultsi of the exploration. Such report shall also inclucie detailed expenditure$ incurred during the Exploration Period. ln case of diamond drilling, the Contractor shall, upon request of the Director/Regional Oirector concerned, submit to the Regional Office concerned a quarter of the core samples, which shall be deposited in the Regional Office Core Library for safekeeping and reference. CRelrnquishment Report - The Contractor sltall submit a sbparate relinquishment report with a detailed geologic report of the relinquished area accompanied by maps at a scale of 1:50,000 and results of analyses and detailed expenditures, among others. V SECTION VI DEVELOPMENT AND CONSTRUCTION PERIOD 6.1. Timetable - The Contractor shall complete the development of the mine including the construction of production facilities within thirty six (36) month$ from the submission of the Declaration of Minlng Feasibility, subject to such extension based on justifiable reasons as the Director may approve, upon recommendation of the Regional Director concerned. 6.2. Reporting a. Annual - The Contractor sha| submit, within sixty (60) days after December 31 of each year, to the Director, through the ieqionat Directof concerned, an annual report, which states thJ malor activities, achievements and detailed expenditures during the year covered, including maps, assays, rock and mineral anal),se-s and geological anrj 9 environmental progress reports during tfe Development and Construction Period. b. Final Report - Within six (6) months from the completion of the development and construction activities, the Contractor shall submit a final report to the Director, through the Regional Director concerned. Such report shall integrate all information in msps of appropriate scale and quality, as well as in monographs or reports in accordance with international standards. SECTION VII OPERATING?ERIOD 7.1. Timetable - The Contractor shall submit, within thirty (30) days before completion of mine development and construction ol production facilitjes, to the Director, through the Regional Director concerned, a Three-Year Commercial Operation Work Program. The Contractor shall commenco commercial utilization immediately upon approval of the aforesaid Work Program. Failure of the Contractor to commence Commercial production within the perjod shall be considered a substantial bre:rch of ihe Agreement. 7.2. Commercial Operalion Work Program and Budget - Durjng the Operating Period, the Contractor shall submit to the Director, through the Regional Director concerned, Work programs and Budgets covering a period of three (3) years each, which shall be submitted not later than thirty (30) days before the expiration of the period covered by the previous Work program. The Contractor shall conduct Mining Operations and other activities for the duration of the Operating Period in accordance with the duly approved Work Programs and corresponding Budgets. V 7.3. Expansion and Modification of Facilities - The Contractor may make expansions, modifications, improvements, and replacements of the mining facilities and may add new facilities as the Contractor may consider necessary for the operations: provided, That such plans shall be embodied in an appropriate Work Program approved by the Director. 7 .4. Reporting a. Quarterly Reports - Beginning with lhe first Calendar Ouarter following the commencement of the Operatjng period, the Contractor shall submit, within thirly (30) days after the end of each Calendar euarter, Lo the Director, through the Regional Director concerned, a euarterly Report statjng the tonnage of production in terms of ores concentrates, and their corresponding grades and other types ot products; value, destinatjon of sales or lxports and to whom solO, terms of sales and expendjtures 10 b. Annual Reports - During the Operating pericd, the Contractor shall submit within sixty (60) days from the end of each Calendar year, tc) the Director, through the Regional Director concerned, an Annual Report indicating in sufficient detail: b.1. The total tonnage of ofe reserves, whelher 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 philipprnes tonnages sold or committed for e):port (whether actually shipped from the Philappines or not), to.rnages actually shippecl from the Philippines (with fufl details as to purchaser, destination and terms of sale), and if known to the Contractor tonnages teflned, processed or manufactured in the philipptnesi with full specifications as to the int€,rmediate products, by- products or final products and of the terms at which they wer€, drsposed: b.2. Work accomplished and work in progress at the end of the year in question with respect to all the installations and facilitieli related to the utilization program, including the jnvestment 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, reEion). The Contractor shall also comply with other reporting requirements providecl for in the implementing rutes and regulations of the Aat. sEcTtoN v t \i FISCAL REGIME 8.'1. General Principle - The fiscal regime of this Agreement shall be governed by the principre according to which the Governme-nt expects a reasonabre returrr ln economic value for the utilization of nonr"n"*ubll ,inei"t ,u"orr""s under its .national sovereignty while the Contractor expects-a reasonablo return on its jnvestment with speciat account to be tak;;forih; high risk ol exploration, the terms and conditions prevailing elsewftere in tfre inOustry anO any special efficiencv to be gained Oy a particilady gooJ performance of tne, Contractor 8.2. Registration Fees - Within fifteen (1S) days upon recerpt of the notjce approval of the Agreement from the iegionar CrfL!- concerneo, oi, Contractor shall cause the regiskation of itis ag,-""rrniiv-rtn tre tfre Regional Office and pay the registration fee at tie iate prov,oeO said exrstrng rules and regulations. Failure of tn" C,rnt"r.tJ io in tne cause the registration of this Agreement within the prescribed period shall be sufficient ground for cancellation of the same. 8.3. Occupation Fees - Prior to registration of this Agreement and at the same date every year thereafter, the Contractor shall pa),to the Municipal/City Treasurer concerned an occupation fee over the Contract Area at the annual rate provided in the existing rules and regulations. lf the fee is not paid on the date specified, the Contractor shall pay a surcharge of twenty five percent (25%) of the amount due in addition to the occupation fees. 8.4. Share of the Government - The Goveroment Share sh;lll be the excise tax on mineral products ai the time of removal and at the rate provjded for an Republjc Act No. 7729 amending Section 151 (a) of the National lnternal Revenue Code, as amended, as well as other taxes, duties and fees levied by existing laws. The Excise Tax shall be paid to the nearest Bureau of lnternal Revenue Office in the province concerned. For purposes of determining the amount of the herein Government Share, the Contractor shall strictly comply with the audiiing and accounting requirements prescribed under existing laws and regu[]tions. V The Government Share shall be allocated in accordance with Sections 290 and 292 ot Republic Act No. 7160. otherwise known as "The Local Government Code of 1991." 8.5. Pricing of Sales - The Contractor shall dispose of the minerals and by_ products produced at the highest market prjce prevajling in the locality: The Contractor shall also pay the lowest achievable marketing commissions and related fees and shall negotjate for more advantageous teims and conditions subject to the right to enter jnto long-term sales or marketing contracts or foreign exchange and commodity hedging contracts, ,,lhich the Government acknowledges to be acceptable notwithstanding that the sale price of the minerals and by-products may from time to time be lower, or the terms and conditions of sales are less favorable, than that available elsewhere. The Contractor shall seek to strike a balance between longlerm sales or marketing contracts or foreign exchange and commodity hjdging contracts comparable to policies followed by independent produ-cers in the international mining industry. The Contractor shall Iikewise seek a balanced distribution among consumers. lnsofar as sales to Contractor,s affilrate(s) are concented. pricj-s snatt be at arm's length standard, and competing offers for large .1*t" tong_t"r, contracts shall be procured. Before any sale and/6r "nO shipment of mineral ?Tg*t i: . made, existing . and future marketin! 'coniiactlsllsates agreement(s) shall be submitted.to the Director, copy turiisneO ihe Regional Drrector concerned, for regrstration. et tne same-iiie, in!'ilntr""to, .nurr regularly rnform the Director rn writing of any r"ri"lon".'cn"ng'; or additions in said contrac(s)/agreement(s). The Contractor shall reflect in rts Monthly/euarterly Report on production, Sales and lnventory of Minerals, as well as in the lntegrated Annual Report, 苂 艓 the corresponding registration number(s) of the marketing contract(s)/agreement(s) governing the export or sale of minerals. 8.6. Associated Minerals - lf minerals other than copper, gold, mo,ybdenum ar€ discovered in commercial quantities in the Contract Area. the value thereoi' shall be added to the value of the principal mireral in computing the Government share. sEcTtoN rx WORK PROGRAMS 9.'1. Submission to Government - Within the periods stated herein, the Contractor shall prepare and submit to the Director, through the Regional Directol concerned, a Work Program and corresponding Budget for the Contract Area stating the Mining Operations and sxpenditures 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 supportinel documents. 9.2. Government's Examination and Revision of Work program - Should ther Government decide to propose a revision to a certain specific feature in the Work Program or Budget, it shall, within thirty (30) days after receipt thereof. provide a Notice to the Contractor specifying in reasonable detail its reasons therefore. Promp y thereafter, the Government and C:ontractor will meet ancl endeavor to agree on the revision proposed by the Government. ln any event, the revision of any portion of said Work program or Budget in which the Government shall fail to notify the Contractor of the proposed revisiorr shall, insofar as possible, be carried out as prescribed heretn. lf ther Government should fail within sixty (60) days from receipt thereof to notify Contractor of the proposed revisions, the Work program and Budgei V proposed by the Contractor shall be deemed to be approved. 9.3. Contractods Changes to Work program _ lt is recognized by the Governmenrl and the Contractor that the details of any Woik progiam may requrre, changes in the light of changing circumstanies. Ther Coitractor may mak€) srch cttanges: provided, That rtshall not change the,general oblective ofther Work Program: provided further, That changes whicf,lntl,t a-iarianc" ot at least twenty percent (20%) shall be subject io the afp,ourt ofln" oir""tor. 9.4. The Government,s approval of a proposed Work program and Budget will not be unreasonably withheld. 13 SECTION X ENVIRONMENTAL PROTECTION AND MINE SAFETY AND HEALTH 10.1. The Contractor shall manage its Mining Operations in a technically, financially, socially, culturally and environmentally responsible manner to achieve the sustainable development 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 L'nvironmental protection are mel in the course of the Mining Operations. To the extent possible, control of pollution and the transformation of the mined-out areas or materials into economically and socially productive forms musl be done simultaneously with mining. 10.3. The Contractor shall submit an Environmental Wilrk program during the Exploration Period as prescribed in the implementing rules and regulations of the Act. 10.4. An Environmental Compliance Certificate (ECC) shall be secured first by the V Contractor prior to the conduct of any development works, construction of production facilities and/or mine production activities in the Conlract Area. 10.5. The Contractor shall submit within thirty (30) calendar days after the issuance and receipt of the ECC, an Envjronmental protection and Enhancement Program (EpEp) using MGB Form No. 16_2 covering all areas to be affected by development, utilization and processing activities under this Agreement. The Contractor shall allocaie for its jnitiaaenvironment_related capital expenditures approximately ten percent (10%) of the total project cost or in such amount depending on the environmental/geologicai condition, nature and scale of operations and technology to be employed in the Contract Area. 10.6. The Contractor shalt submit, withjn thirty (30) days prior to the beginning of 膥 every c€lendar year, an Annual Environmental protection and Enhancement Program (AEPEP), using MGB Form 16-3, which sha be based on the approved EPEp. The AEpEp shalt be implemented during the year for whicl.r it was..submitted. To implement its AEpEp, the Contrlctor sna allocats annually three to five percent (3o/o_Syo) ol its direct mining and milling costs depending on the environmentat/geoiogic conOition, naiul and scale of operations and technology employed in the Contract Area. 10.7. The Contractor sha estabtish a Contingent Liabitity and Rehabititation Fund (CLRF) which sha be in rhe form of thjMine n"n"i,tit"tion iJno (MRF) and the Mine Waste and Tailings Fee (MWTF). 鏒 i郤 身  鞓 ]釶 :軹 覟 诞 顫 豄 Th0 11膜[_h_腡 _ 腜 ^_^_`_腝 The MRF shtt be depOmed as Tm菌 ^腶 ttn腶 譬苇 譣ri趂 I苠 苠趂 r莁 鋻 赖 14 and shall b€ used for physical and social rehabilitation of areas affected by mining activities and for research on the social, technical and preventive aspects of rehabilitation. The MWTF shall be collected based on the amounts of mine waste and mi tailings generated during the conduct of lvlining Operations. The MWTF collected shall accrue to a Mine Waste and Tajlings Fieserve Fund and shall be deposited in a government depository bank for pa)/ment of compensation for damages caused by the Mining Operations. '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 mjnimize land degradation, air and water pollut on, acid rock drainage and changes in hydrogeology. 10.9. The Contractor shall set up an Environmental and Safety Office at its minesite manned by qualified personnel to plan, implement and monitor its approved EPEP. '10.10.The Contractor shall be responsible in the monitoring of environmental, safety and health conditions in the Contract Area and shall stricfly comply with all the rules and regulations embodied under DAO No. 2OOO-98, otheMise known as the "Mine Safety and Health Standards.,, 10.11.The Contractor shall be responsible for the submission of a final mine rehabalitation and/or decommissioning plans, in,:luding its financial requirements and incorporating the details and particulars set forth in the implementing rules and regulations of the Act. SECT:oN X! V permits purpose eTo secure all necessary or desirable for the of Maning Operations; To keep accurate technical records about the Mining Operations, as well as financial and marketing accounts, and make them available to Government representatives authorized by the Director for the purpose of assessing the performance anl compliance of the Contractor with the terms of this Agreement. Authorized representatives of other Government Agencies may also have access to such accounts in accordance with existing laws, rules and regulations; To furnish the Bureau all the data and information gathered from the 9 Contract Area and that all the books of accoun:s 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 by Mining Operations of the Contractor and indemnify the Government for any expenses or costs ancurred by the Government by reason of any such claims, accounts, demands or actions, ln the development of the community: j.1. To recognize and respect the rights, customs and traditions of indigenous cultural communlties over their ancestral lands and to allocate royalty payment of not less than one percent (1%) of the value of the gross output of minerals sold; V ).2. To coordinate with proper authorities in the development of the mining community and for those living in the host and neighboring communities through social infrastructure, livelihood programs, education, water, electricity and medical services. Where traditional self-sustatning income and the community activities are identified to be present, the Contractor .shall assist in the preservation and/or enhancement of such activities, To allot i3annually mining a mjnimum of one percent (1%) of the direct and milltng costs necessary to trnplement the activitre; undertak€n in_the development of the host and netghboring communilies. Expenses for community devetopment -may O! charged.. agarnst the royatty payment of al least one peicent ('17") of the gross output intended for the concerned indrgenous cultural communttv W 腏 艏 i.4. To give preference to Filipino citizens who have established domicile in the neighboring communrties, in the hiring of personnel for its minlng operations. lf necessary skills and expertise are currently not available, the Contractor must immediately prepare and undertake a tlaining and recruitment program at its expense, and j.5. To incorporate in the Mining Feasibility Sludy the planned expenditures necessary to jmplement (j.1) to (J3) 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 reports that are appropriate in scale and in format and substance which are consistent with the internationally accepted standards and practices. Such maps shall be made a\,'ailable to the scientific community in the most convenient and cosl effective forms, subject to the condition that the Contractor may delay release of V said information for a reasonable period of time which shall not exceed three (3) years, k.2. To systematically keep the data generated from the Contracu Mining Area such as cores, assays and other related information, including economic and financial data and make them accessrble to students. researchers and olher persons responsible for developing mining, geoscience and processing technology subject to the condition that the Contractor may delay release of data to the science and technology community within a reasonable period of time which shall not exceed three (3) years; k.3. To transfer to the Government or local mining company the V appropriate technology it may adapt in the explor;tion, development and commercial utilization of the minerals in the Contract Area: k.4. To allocate research and development budget for the advancement of mining technology and geo-sciences in . coordination with the Bureau, reseaich institui;ons, academe, etc., and k.5. To replicate data, maps and reports cited in (k j ) and k.2t and furnish the Bureau for archiving and syslematic .rf"i"lrJr" which sha be made avartable to th" siienc. ["f.rr"i"gi community for conductrng research a1d "ra activrtres which ,nOertat ino otti,, geoscience contlbute to the de,/elopm;"i-"i "rnr.i""' and processrng technotogy ,no in" lorr"-,.oonj,i'. national pool of manpower talents. p;vtded, h";";. fi;;;;: 腃膌 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 Feasibilit), Study the planned expenditures necessary to implement 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. '1'1.2. Rjghts of the Contractor: a. To conduct Mining Operations within the confines of its ContracuMining Area in accordance with the terms and conditions hereof and without interfering with the rights of other Contractors/Lessees/Operators/ permittees/permit Holders, b. Possession of the Contract Area, with full right of ingress and egress and the right to occupy the same, subject to surface and easemenl flghts, c. To use and have access to all declassifled geological, geophysical, drilling, production and other data relevant to the mi;ing o,erations; d. To sell, asslgn, transfer, convey or otheMise dispose of all its rights, interests and obligations under the Agreement subject to the approval of the Government; e TO employ or b腵 ng into the P芡 腡ippines fOreign technical and h. To import when necessary all equipment, spare parts and raw materials required in the operations in accord3nce with existing laws and regulations 11.3. Obligations of the Government: To ensure that the Contractor has the Government's full cooperation in the exercise of the rights granted lo it under thili Agreement, b To use its best efforts to ensure the timely issuance of necessary permits and similar authorizing documents for use of the surface of the Contract Area; and CTo cooperate with the Contractor in its efforts to obtain financing contemplated herein from banks or other fjnancial institutions: Provided, That such financing arrangements \vill in no event reduce the Contractor's obligation on Government righls hereunder. SECTION XII ASSETS AND EOUIPMENT 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, plant and other installations of a movable nature erected or placod on the Contract Area by the Contractor shall remain the property of the Contractor. The Contractor shall have ihe right to remove and re-export such materials and equipment, plant and olher installations from V the Philippines, subject to existing rules and regulations. ln case ol cessation of Mining Operations on public lands occasioned by its voluntary abandonment or withdrawal, the Contractor shall have a period of one (il year from the time of cessation within which to rerrove its improvements; otheMise, all social infrastructures and facilities shall be turned over or donated tax free to the proper government authorities, national or local, to ensure that said infrastructures and facilities are continuously ma,nta,ned and utilized by the host and nerghboring communit,"". ----' SECTION XIII EMPLOYMENT AND TRAINING OF PHILIPPINE PERSONNEL 13.1. The Contractor agrees to employ. to the extent possjble, qualjfied Filipino personnel in all types of mining operation. fo, *f,rcn if,"y'ui" -qualified; after Commercial production commences shall, in consultation and and with 19 consent of the Government, prepare and undertake an extensive training programme suitable to Filipino nationals in all levels of employment. ThE objective of said programme is to reach within the iimetable set forth below the following targets of "Filipinjzation;" Unskilled Skilled Clerical Professional Management ("k') ekr, (%) f/,) ek) 100100400 Year l 100 100 100100100 Year 3 100 100 100100100 Year 5 100 100 100100100 Year 7 100 100 100 Yoar 10 100 100100400 100 Yea腵15 100 100100100 13.2. Cost and expenses of training such Filipino personnel and the Contractor'si own employees shall be included in the Operating Expenses. '13.3. The Contractor shall not discriminate on the ba$is of gender and shall respect the right of women workers to participate in policy and decision- making processes affecting their rights and benefits. SECTION XIV ARBITRATION 14.1. fhe Government and the Contractor shall consult with each other in good faith and shall exhaust all available remedies to settle any and all disputes or disagreements arising out of or relating to the validity, interpretations, enforceability, or performance of lhis Agreement before resorting to arbitration as provided for in Section 14.2. below. V 14.2. Any disagreement or dispute which can not be setfled amicably within a period of one (1) year from the time the issue is raised by a Party shall be settled by a tribunal of three (3) arbitrators. This tribunal shall be constituted as follows: one to be appointed by the Contractor and the other to b€l appointed by the Secretary. The first two appointed arbitrators shall consider names of qualified persons until agreement on a mutually acceptable Chairman of the tribunal is selected. Such arbitration shall be initiated ancl conducted pursuant to Republic Act No. 976, otheMise known as the "Arbitration Act." .- ln any event, the arbitration shall be conducted applying the substantive laws of the Republic of the phitippines. 14.3. .Each party shall pay iifty percent (50%) of the fees and expenses of the Arbitrators and the costs of arbitration Each party shall pay its own costs and attorney's fee. 20 SECTION XV SUSPENSION OR TERMINATION OF CON RACT, TAX INCENTIVES AND CREOITS 15.1. This Agreement may be suspended for failure of the Contractori (a) to comply with any provision or requirement of the Act and/or its implementing rules and regulations; (b) to pay on time the complete taxes, fees and/or other charges demandable and due the Government. 15.2. This Agreement terminates or may be terminated for the following causes: (a) expiration of its term, whether original or renewal, ,:b) withdrawal from the Agreement by the Contractor; (c) violation by lhe Contr€ctor of the Agreement's terms and conditions; (d) failure to pay taxes, fees/or charge$, or financial obligations for two (2) consecutive years; (e) false statement or omission of facts by the Contractor; and (f) any sther cause or reason provided under the Act and its implementing rules ilnd regulations, or any other relevant laws and regulations. '15.3. All statements made in this Agreement shall be considered as conditions and essential parts hereof, and any falsehood in said statements or omission of facts which may alter, change or affect substantially the fact set forth in said statements shall be a ground for its revocation and termination. 15.4. The Contractor may, by giving due notice at any time during the term of this, Agreement, apply for its cancellation due to causes,which, in the opinion of the Contractor, render continued mining operation no longer feasible or viable. ln this case, the Secretary shall decide on the application within thirty (30) days from notice: Provided, That the Contractor has met all the financiai, fiscal and legal obtigations. 15.5. No delay or omissions or course of dealing by the Giovernment shall impair any of its rights under this Agreement, except in the case of a written waiver v\/ The Government's right to seek recourse and relief by all other means shall not be construed as a waiver of any succeeding or oiher default unless the contrary intention is reduced in writing and signed by the party authorized tc) exercise the waiver. 15.6. ln case of termination, the Contractor shall pay all the fees and other liabilities due up to the end of the year jn which'the termination becomes effective. The Contractor shall immediately carry out the restoraton of the Contract Area in accordance with good mining inOlstrv practice.- 15.7. The withdrawal by the Contract;r trom tnJ Minerjl 'agi"";unt snurr nof release it from any and alt frnanciat, fugat and fiscal obligatjons under this Agreement. "nriron."nt"i 15'8' The forrowing acts or omission, inter atia shafi constiture breach of contract, upon which the Government may exercise its rilfrt -io-iermtnate Agreement: ttre 21 a. Failure of the Contractor without valid reason to commence Commercial Production within the period prescribed; and/or b. Failure of the Contractor to conduct mining operations and other activities in accordance with the approved Work Programs and/or any modification thereof as approved by the Oirector. 15.9. The Government may suspend and cancel tax incentives and credits if the Contractor fails to abide by the terms and conditions of said incentives and credits. SECT10N XVi OTHER PROViS:ONS '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. y 16.2. Notice All notices, demands and other communications required or permitted hereunder shall be made in writing, telex or telecopy itnd shall be deemed to have been duly given notice, in the case of telex or telecopy, if answered back or confirmation received, or if delivered by hand, upon receipt or ten days after being deposited in the mail, airmail postage prapaid and addressed as follows: lf to the Government: THE SECRETARY yDepartment of Environment and Natural Resources DENR Building, Visayas Avenue Diliman, Quezon City lf to the Contractor: THE PRESIDENT MacroAsia Corporation Macro Asia-2502-B Philippine Stock Exchange Centre West Tower Exchange Road Orlrgas Center, pasrg City Eilher parly may subsfltute or change such address on notice thereof to the other parry: provided, That the co;tractor in ;;;;;;;f ol address during the term of this "hal Agreement, notjfy lhe "iing" Failure to do such notification sha Oirectoi. in wrlting. be informed about b-e d""r"! ," *:ri"", o"v'ii"'Lriri rr. ," any communications as provided in Section ,16.2 above. tr 22 16.3. Governing Law This Agreement and the relation between the parties hereto shall be governed by and construed in accordance with the laws of the Republic of the Philippines. The Contractor hereby agrees and obliges itself to comply with the provisions of the Act, its implementing rul,ls and regulations ancl other relevant laws and regulations. 16.4. Suspension of Obligation Any failure or delay on the part of any party in the performance of it$ obligation or duties hereunder shall be €lxcused to the extent attributable to Force Majeure as delined in the Act: Provided, That th€l suspension of lvlining Operations due to Force Majeure causes shall be subject to approval by the Director. b. lf Mining Operations are delayed, curtailed or prevented by such Force Majeure causes, then the time for enjoying the rights and carrying out the obligations thereby affecied, the term of this Agreement and all rights and obligations hereunder shall be extendecl for a period equal to the period involved. CThe Party, whose ability to perform its obligations is affected by suclr Force Majeure causes, shall promptly give Notice to the other irl writing of any such delay or failure of perfrlrmance, the expectecl duration thereof and its anticipated effect ancl shall use its efforts tc) remedy such delay, except that neither parly shall be under any obligation to settle a labor dispute: provided, That the suspension of obligation by the Contractor shall be subject to prior approval by the Director. 16.5. Amendments This Agreement shall not be annulled, amended or modified in any respect except by mutual consent in writing of the herein parties. 苂腏艏 艓 lN WTNESS WHEREOF, the Parties hereto have executed this Agreement, as ot the day and year first above written THE REPUBLIC OF THE PHlLIPPiNES 8Y: 腎 MICHAEtt DEFENSOR Department of Environment and Natural Re:iources MACROAS:A CORPORAT10N 腅 TIN: 荎菍臝 菇 菆菇l腝 4'腅膍 ,7 BY: SIGNED IN THE PRESENCE OFi ~ '腒 24 ACKNOWLEDGMENT ippines) Republ c ofthe Ph腡 Quezon City )SS Before me, a Notary Public for and in the City of Quozon, personally appeared V