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EXHIBIT 10.01
THIS AGREEMENT ENTERED INTO AS OF JUNE 28, 1996, BY AND BETWEEN MINAS PENOLES,
S.A. DE C.V., A COMPANY INCORPORATED UNDER THE LAWS OF THE UNITED MEXICAN
STATES (HEREINAFTER "PENOLES"); AND THE FRESNILLO COMPANY, A COMPANY
INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK, U.S.A. (HEREINAFTER
"TFC").
W I T N E S S E T H:
WHEREAS, TFC is the owner of the fully issued, outstanding and non-assessable
shares of the capital stock set forth in Schedule "A" attached hereto
(hereinafter the "Shares") of Compania Fresnillo, S.A. de C.V., Compania Minera
Las Xxxxxx, X.X. de C.V., Minera La Encantada, S.A. de C.V., Xxxxxx Xxxxxx,
S.A. de C.V., Fresnillo Servicios, S.A. de C.V., and Fresnillo Exploraciones,
S.A. de C.V. (collectively the "Companies");
WHEREAS, TFC wishes to sell to PENOLES the Shares, including any interests in
exploration properties and projects owned and/or controlled by any of the
Companies; and
WHEREAS, PENOLES wishes to acquire and purchase the Shares.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
set forth, the parties hereto agree as follows:
1.- SALE OF SHARES
TFC hereby agrees to sell and transfer to PENOLES and PENOLES agrees to
purchase and acquire all of the Shares, including any exploration properties
and projects owned and/or controlled by any of the Companies, free and clear of
any lien or encumbrance, for an aggregate purchase price of One Hundred Thirty
Nine Million Nine Hundred Fifty One Thousand Two Hundred Forty U.S. Dollars
(US$139,951,240) less applicable Mexican withholding income tax of Twenty Two
Million Seven Hundred Seventy Thousand One Hundred Seventy Four and 80/100 U.S.
dollars (US$22,770,174.80), (the "Purchase Price"), payable at the closing to
be held at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx at 11:00 a.m. on July 1, 1996. The sales shall be effective as of 12:00
noon on June 30, 1996.
2.- CLOSING OF THE SALE OF SHARES
On the closing of the sale of the Shares:
(a) PENOLES shall wire transfer to TFC at such bank account in New York,
New York as TFC designates the Purchase Price in immediately available funds;
and
(b) TFC shall deliver to PENOLES (i) the Shares, duly endorsed or such
other documentation of transfer as the parties hereto may agree; (ii) a copy of
a certificate issued
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by the appropriate authorities of the State of New York confirming that TFC is
in "good standing" to the extent that concept is recognized; (iii) a
Certificate of the Secretary of TFC confirming that TFC is a resident of the
United States with Federal Employer Identification Number 00-0000000 (TFC shall
deliver a Certificate of Residency, Form 6166, upon receipt from the United
States Internal Revenue Service), and (iv) a Certificate of the Secretary of
TFC certifying that TFC is entitled to relief under the Convention between the
Government of the United Mexican States and the Government of the United States
of America for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income and Protocol (the "Convention") because
it falls under the provisions of paragraph 1(d) or 1(f) of Article 17 of the
Convention.
3.- UNDERTAKINGS BY TFC
TFC hereby undertakes to (i) designate a representative resident in Mexico for
tax purposes and to notify the tax authorities of said designation within 15
days as of the designation as provided in Article 160 of the Mexican Income Tax
Law and to file such returns as are required under said Mexican Income Tax Law,
and (ii) provide PENOLES a copy of said designation, notice and returns filed
for the sale of the shares of the capital stock of Fresnillo Servicios, S.A. de
C.V. and Fresnillo Exploraciones, S.A. de C.V. and to provide PENOLES the
documents listed in Section 2(b)(ii), (iii) and (iv) for the sale of the shares
of the capital stock of Compania Minera Las Xxxxxx, X.X. de C.V. and Minera La
Encantada, S.A. de C.V., in order for PENOLES not to withhold any Mexican
income tax pursuant to the Convention.
4.- UNDERTAKINGS BY PENOLES
PENOLES hereby undertakes to:
(a) Cause the Companies to cooperate fully with TFC, its officers,
representatives and advisors, providing such information, documents and access
to each of the Companies' accounting, tax, financial and corporate records as
may be required by TFC for the determination of TFC's tax cost of the Shares in
order for TFC to define any Mexican income tax applicable to the sale and
purchase of the Shares as provided in Section 3(i) above;
(b) Give notice to Mexico's Federal Competition Commission as required
under Mexico's Federal Economic Competition Law with respect to the purchase of
the shares of capital stock of Compania Fresnillo, S.A. de C.V.:
(c) Withhold the applicable 20% Mexican income tax from the portion of
the Purchase Price applicable to the sale of the shares of the capital stock of
Compania Fresnillo, S.A. de C.V. and Xxxxxx Xxxxxx, S.A. de C.V., pay it to
the appropriate Mexican tax authorities and to provide a copy of the
corresponding tax return to TFC;
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(d) Cause each of the Companies to hold shareholders meetings
within 30 calendar days following the closing, designating new Directors and
their respective Alternates in lieu of the Directors and Alternates designated
by TFC and releasing and indemnifying such TFC designees from any liability
they may have incurred during their tenure;
(e) Give notice within 30 calendar days following the closing, to
each of the Companies of the acquisition of the Shares so that PENOLES becomes
the shareholder of record of said Shares; and
(f) Cause each of the Companies to give notice within 30 calendar
days following the closing, to the Mexican Foreign Investment Registry and the
Public Registry of Mining of the acquisition of the Shares.
5.- RELEASE AND INDEMNIFICATION
PENOLES shall and shall cause each of the Companies to jointly and severally
indemnify and save harmless TFC and its stockholder Alumax Inc., and their
respective directors, officers, employees, agents, affiliates, successors, and
assigns as well as their representatives on the Boards of Directors of the
Companies from any and all actions, claims, demands or causes of action and any
and all costs, expenses, damages, losses, or liabilities, whether contingent or
otherwise, whatsoever relating in any way to the Companies, including, without
limitation, registration and recordal fees, exploration costs, development
costs, environmental claims, labor claims, taxes or royalty payments.
6.- SURVIVAL OF OBLIGATIONS
All obligations of each of the parties hereto in Sections 3, 4 and 5 above
shall survive the closing and continue indefinitely.
7.- NOTICES
Unless otherwise provided herein, any notice or communication to any party
hereto may be given by delivering the same by hand to a representative of such
party or by cable or telecopier or by registered, postage prepaid mail,
addressed as follows:
(a) If to PENOLES:
Minas Penoles, S.A. de C.V.
Rio de la Plata 00, 00xx Xxxxx
Xxx. Xxxxxxxxxx
00000 Xxxxxx, D.F.
Att'n: Xxxxx Xxxxxxx, President
Telecopier No. (000) 000-0000
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(b) If to TFC:
The Fresnillo Company
c/o Alumax Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Att'n: Vice President and General Counsel
Telecopier No. (000)000-0000
or to such other address as the parties may from time to time designate for
themselves in writing and any such notice, so cabled, telecopied or mailed
shall be deemed to have been made and received at the latest on the business
day following the cabling or telecopying, or on the fifth business day
following the mailing thereof.
8.- EXPENSES
Each party hereto shall be responsible for its own costs and expenses,
including legal, administrative and tax costs as well as travel expenses.
9.- INUREMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
10.- ARBITRATION
In the event of TFC and PENOLES being unable to resolve any dispute under this
Agreement, it shall be resolved through binding arbitration. Either party may
initiate resolution of such dispute through binding arbitration, by giving
written notice of such decision to the other party. Such notice shall identify
the arbitrator nominated by such party and the other party shall have twenty
days to nominate a second arbitrator. Within twenty days after the nomination
of the second arbitrator by the party receiving the election to arbitrate or by
the American Arbitration Association, as hereinafter provided, the two
arbitrators shall jointly nominate a third arbitrator to act as chairman. In
the event of being unable to agree on such an arbitrator, TFC and PENOLES shall
proceed to the American Arbitration Association for the nomination of this
arbitrator. If either of TFC or PENOLES fails to nominate its own arbitrator
the said American Arbitration Association shall do so at the request of the
other party. To the extent not otherwise provided in this Section, the
arbitration shall be conducted in accordance with the rules of International
Arbitration of the American Arbitration Association. The arbitration
proceedings will take place in New York, New York in the English language. All
costs and expenses of any such arbitration shall be borne by the parties as
determined by the arbitrators. Arbitrators need not be nationals of countries
other than the United States or Mexico. The arbitrators shall interpret and
enforce this Agreement to the fullest extent possible in accordance with its
terms but if a dispute cannot be resolved by application of that standard, they
may decide ex aequo et xxxx. A
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judgment upon the award rendered may be entered into any court of competent
jurisdiction or application may be made to such court for a judicial acceptance
of the award or an order of enforcement, as the case may be.
11.- SECTION HEADINGS
Section headings are inserted for the sake of convenience only and shall not be
used in construing or interpreting this Agreement.
12.- GOVERNING LAW AND INTERPRETATION
This Agreement shall be governed and interpreted in accordance with the
internal laws of the State of New York, United States of America, without
regard to choice of law rules as if this Agreement was executed and performance
hereunder was entirely within the State of New York. One or more specific
agreements may be executed by and between TFC and PENOLES in respect of the
sale of the shares of the capital stock of one or more of the Companies. In
the event that the terms and conditions of any such separate agreement is
inconsistent or conflicts with the terms and conditions of this Agreement, the
terms and conditions of this Agreement shall prevail and govern the transaction
or issue.
13.- ENTIRE AGREEMENT
This Agreement sets forth the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
cancels any and all prior agreements and understandings among the parties,
express or implied, oral or in writing.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
MINAS PENOLES, S.A. DE C.V.
Per: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President
THE FRESNILLO COMPANY
Per: /s/ X.X. Xxxx
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Name: X.X. Xxxx
Title: Vice-President
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SCHEDULE A
COMPANY NUMBER OF SHARES SERIES %
------- ---------------- ------ -
Compania Fresnillo, S.A. de C.V. 1,840,200 B 40.0
Compania Minera Las Xxxxxx, X.X. de C.V. 14,100 B 14.10
Minera La Encantada, S.A. de C.V. 14,100 B 14.10
Xxxxxx Xxxxxx, S.A. de C.V. 684 B 0.040592
Fresnillo Servicios, S.A. de C.V. 400,400 B 40.0
Fresnillo Exploraciones, S.A. de C.V. 1,041,600 B 40.0
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