Assignment of Rights Agreement between Mario Ivan Hernández Alvarez as Assignor Royal Gold Chile Limitada as Assignee and Royal Gold Inc. as Guarantor
Exhibit 10.9
between
Mario Xxxx Xxxxxxxxx Xxxxxxx
as Assignor
Royal Gold Chile Limitada
as Assignee
and
as Guarantor
THIS ASSIGNMENT OF RIGHTS AGREEMENT (“Agreement”) effective January 16, 2007 (“Effective
Date”) is by and between Mario Xxxx Xxxxxxxxx Xxxxxxx , Chilean, mining engineer, married with
identification certificate number 4773296-K, domiciled at Xx Xxxxxxxxxx 000, Xxxxx 000,
Xxxxxxxxxxx, Xxxxx, (“Assignor”) and Royal Gold, Inc. a corporation organized and existing under
the laws of the State of Delaware, United States of America, (“Royal Gold Inc.”) acting on behalf
of Royal Gold Chile Limitada, a Chilean limited liability company under formation (“Royal Gold
Chile”) and as guarantor of the obligations of Royal Gold Chile hereunder, domiciled at Torre de la
Costanera, Xxxxxxx Xxxxxx Xxxxx 0000, 00xx Xxxxx, Xxxxxxxx, Xxxxx.
Recitals
Compañia Xxxxxx Xxxxxxx Chile Limitada (“Barrick”) and Assignor are the parties to that
certain Stock Purchase Agreement, dated June 30, 1998 (“Xxxxxx-Xxxx Contract”) a true and complete
copy of which is attached hereto as Exhibit A.
Pursuant to the Xxxxxx-Xxxx Contract, Assignor is entitled to receive as the balance of the
price due from Barrick: (i) as provided in Clauses 4d) and 4e), an amount equivalent to a variable
percentage of the value of gold produced by Barrick or it successors from mineral concessions
located in whole or in part within an area identified in Annex A to the Xxxxxx-Xxxx Contract, and
(ii) as provided in Clause 4f), an amount equivalent to 0.4314% of proceeds from copper sold on and
after January 1, 2017 that is produced by Barrick or it successors from mineral concessions located
in whole or in part within an area identified in Annex A to the Xxxxxx-Xxxx Contract, less certain
specified deductions, all on the terms and conditions specified in the Xxxxxx-Xxxx Contract
(collectively, together will all rights granted to Assignor by the Xxxxxx-Xxxx Contract in respect
of such payments, “Assignor’s Royalty Interest”).
Assignor desires to assign to Royal Gold Chile and Royal Gold Chile desires to acquire by
assignment from Assignor one half of Assignor’s Royalty Interest (“Purchased Royalty Interest”), on
the terms and subject to the conditions set forth in this Agreement.
Royal Gold Chile also desires to acquire a right of first refusal to purchase all or any
portion of the other one half of Assignor’s Royalty Interest and Assignor is willing to grant such
a right to Royal Gold Chile, on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants,
conditions and agreements contained herein, Assignor and Royal Gold Chile (the “Parties”),
intending to be legally bound, covenant and agree as follows.
Agreement
ARTICLE I
DEFINITIONS AND CONSTRUCTION
DEFINITIONS AND CONSTRUCTION
1.1 Definitions. As used in this Agreement, the following terms, whether in singular or
plural form, shall have the following meanings:
(a) “Acquisition” means the consummation of the assignment of the Purchased Royalty
Interest to Royal Gold Chile and of the other transactions contemplated by this Agreement.
(b) “Affiliate” means with respect to any Person, any other Person controlling,
controlled by or under common control with such Person, with “control” for such purposes meaning
(i) the ownership of 50% or more of the equity interests or social rights in a Person, or (ii) the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or voting interests,
by contract or otherwise.
(c) “Agreement” has the meaning set forth in the Preamble.
(d) “Assignor” has the meaning set forth in the Preamble.
(e) “Assignor’s Royalty Interest” has the meaning set forth in the Recitals.
(f) “Barrick” has the meaning set forth in the Recitals.
(g) “Business Day” means any day other than a Saturday, a Sunday or a day on which
banks are generally not open for the conduct of regular business in either Santiago, Chile, or
Denver, Colorado, United States of America.
(h) “Chamber” has the meaning set forth in Section 10.7(a).
(i) “Closing” means the consummation of the Acquisition.
(j) “Closing Date” has the meaning set forth in Section 2.4.
(k) “Contract Administration Rights” has the meaning set forth in Section 5.3(b).
(l) “Dispute” has the meaning set forth in Section 10.7(a).
(m) “Effective Date” has the meaning set forth in the Preamble.
(n) “Encumbrance” means any security agreement, financing statement filed with any
Governmental Authority, conditional sale or contract right, lien, mortgage, indenture, pledge,
option, encumbrance of any kind, constructive trust or other trust, claim, attachment, exception to
or defect in title or other ownership interest of any kind which constitutes an interest in or
claim against property, however arising.
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(o) “Governmental Authority” means the Republic of Chile, the United States of
America, any region or state thereof, and any political subdivision or quasi-governmental authority
of any of the same.
(p) “Indemnitee” has the meaning set forth in Section 8.3(a).
(q) “Indemnitor” has the meaning set forth in Section 8.3(a).
(r) “Losses” means any claims, losses, liabilities, damages, penalties, costs, and
expenses, including interest imposed in connection therewith, expenses of investigation, reasonable
fees and disbursements of counsel and other experts, and the cost to any Indemnitee making a claim
or seeking indemnification under this Agreement with respect to funds expended by such Indemnitee
by reason of the occurrence of any event with respect to which indemnification is sought.
(s) “Notice” has the meaning set forth in Section 10.1.
(t) “Notice of Proposed Transfer” has the meaning set forth in Section 9.1.
(u) “Parties” has the meaning set forth in the Recitals.
(v) “Xxxxxx-Xxxx Contract” has the meaning set forth in the Recitals.
(w) “Xxxxxx-Xxxx Project” means the cross-border precious metals project located in
Region III, Chile, approximately 000 xxxxxxxxxx xxxxxxxxx xx Xxxxxxxx, xxx xx Xxx Xxxx Xxxxxxxx,
Xxxxxxxxx.
(x) “Person” means any natural person, Governmental Authority, corporation, general or
limited partnership, limited liability company, joint venture, trust, association or unincorporated
entity of any kind.
(y) “Purchase Price” has the meaning set forth in Section 2.2.
(z) ‘Purchased Royalty Interest” has the meaning set forth in the Recitals, and
together with the Retained Royalty Interest constitutes Assignor’s Royalty Interest.
(aa) “Retained Royalty Interest” means the one half interest in Assignor’s Royalty
Interest that is not to be assigned to Royal Gold Chile at the Closing, but that will be retained
by Assignor.
(bb) “Royal Gold Chile” means Royal Gold Chile Limitada, a Chilean limited liability
company under formation.
(cc) “Royal Gold Inc”. has the meaning set forth in the Preamble.
(dd) “Transfer” means sell, assign, transfer, subrogate, novate, pledge, hypothecate
or encumber, in any form, directly or indirectly.
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1.2 Rules of Construction. Unless otherwise expressly provided in this Agreement: (i) words
used in this Agreement, regardless of the gender used, shall be deemed and construed to include any
other gender, masculine, feminine, or neuter, as the context requires; (ii) the word “including” is
not limiting, and the word “or” is not exclusive; (iii) the capitalized term “Section” refers to
sections of this Agreement; (iv) references to a particular Section include all subsections
thereof; and (viii) references to a “day” or number of “days” (without the explicit qualification
“Business”) refer to a calendar day or number of calendar days.
1.3 Exhibits. The following Exhibits attached hereto are incorporated in, and form a part of,
this Agreement:
Exhibit A Xxxxxx-Xxxx Contract
Exhibit B Form of Public Deed
ARTICLE II
PURCHASE AND SALE, CLOSING
PURCHASE AND SALE, CLOSING
2.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, at the Closing,
Assignor shall assign and transfer to Royal Gold Chile and Royal Gold Chile shall purchase and pay
the Purchase Price for the Purchased Royalty Interest, free and clear of all Encumbrances.
2.2 Purchase Price. The purchase price for the Purchased Royalty Interest shall be US $20.5
million (“Purchase Price”), payable as herein provided.
2.3 Payment of Purchase Price. At the Closing, Royal Gold Chile shall pay the Purchase Price
to Assignor by bank wire transfer of immediately available funds to an account designated by
Assignor at least three Business Days prior to the Closing.
2.4 Closing. The Closing shall occur as promptly as possible, and in any event not later than
the earlier of (i) March 10, 2007 or (ii) five Business Days following the satisfaction or waiver
of the conditions set forth in Article VI, or on such other date as the Parties may agree (the
“Closing Date”). The Closing shall take place at Avenida Xxxxxx Xxxxx N°2711, piso 00, xxxxxx xx
xxx Xxxxxx, Xxxxxxxx, Xxxxx, or at such other place as the Parties may agree not later than three
(3) Business Days prior to the Closing Date.
2.5 Deliveries by Assignor. At the Closing, Assignor shall deliver, or cause to be delivered
to Royal Gold Chile (unless previously delivered or waived in writing by Royal Gold Chile) the
following:
(a) a Public Deed in the form and substance of Exhibit B, assigning and transferring
the Purchased Royalty Interest to Royal Gold Chile;
(b) a certificate executed by Assignor, stating that the conditions set forth in Section 6.1
have been satisfied;
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(c) an opinion of Assignor’s legal counsel in form and substance satisfactory to Royal Gold
Chile and its legal counsel, acting reasonably, to the effect that Assignor has all the requisite
power and authority to execute this Agreement, that Assignor has performed all the necessary acts
to execute and deliver this Agreement, and that upon execution and delivery by Assignor, this
Agreement will constitute Assignor’s valid and binding obligation and be enforceable against him in
accordance with its terms; and
(d) all such other assurances, consents, agreements, documents and instruments as may be
reasonably required by Royal Gold Chile to consummate the Acquisition.
2.6 Deliveries by Royal Gold Chile. At the Closing, Royal Gold Chile shall deliver, or cause
to be delivered to Assignor (unless previously delivered or waived in writing by Assignor) the
following:
(a) the Purchase Price, as provided in Section 2.3;
(b) a certificate executed by an authorized officer of Royal Gold Chile, stating that the
conditions set forth in Section 6.2 have been satisfied;
(c) an opinion of Royal Gold Chile’s legal counsel in form and substance satisfactory to
Assignor and its legal counsel, acting reasonably, to the effect that Royal Gold Chile has all the
requisite corporate power and authority to execute this Agreement, that Royal Gold Chile has
performed all the necessary acts to execute and deliver this Agreement, and that upon execution and
delivery by Royal Gold Chile, this Agreement will constitute Royal Gold Chile’s valid and binding
obligation and be enforceable against it in accordance with its terms; and
(d) all such other assurances, consents, agreements, documents and instruments as may be
reasonably required by Assignor to consummate the Acquisition.
2.7 Further Assurances. On and after the Closing Date, each of the Parties will take all
appropriate action and execute any documents, instruments or conveyances of any kind that may be
reasonably requested by the other Party to carry out any of the provisions of this Agreement.
ARTICLE III
ASSIGNOR’S REPRESENTATIONS AND WARRANTIES
ASSIGNOR’S REPRESENTATIONS AND WARRANTIES
Assignor represents and warrants to Royal Gold Chile, as of the date of this Agreement and as
of the Closing, as follows:
3.1 Title to Assignor’s Royalty Interest. Assignor owns the entire right, title, and interest
in Assignor’s Royalty Interest free and clear of all Encumbrances or claims by third Persons. At
the Closing Royal Gold Chile will acquire the Purchased Royalty Interest free and clear of all
Encumbrances or claims by third Persons.
3.2 Xxxxxx-Xxxx Contract. A true and complete copy of the Xxxxxx-Xxxx Contract is attached
hereto as Exhibit A. The Xxxxxx-Xxxx Contract is enforceable in accordance with its
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terms and has not been modified, supplemented, or amended. Assignor has not assigned, in
whole or in part, Assignor’s Royalty Interest or any of his rights with respect thereto; granted or
created any Encumbrances on or in respect of Assignor’s Royalty Interest; granted any options to
purchase or rights of first refusal with respect to Assignor’s Royalty Interest; or agreed to any
amendment to the Xxxxxx-Xxxx Contract or waived any of his rights thereunder. Assignor has fully
and timely performed all of his obligations under the Xxxxxx-Xxxx Contract and there are no further
actions required by him or on his behalf in order for him to be fully vested in and entitled to
Assignor’s Royalty Interest. There does not exist under the Xxxxxx-Xxxx Contract any event of
default or event or condition that, after notice or lapse of time or both, would constitute a
violation, breach or event of default on the part of Assignor or any other party thereto.
3.3 Authority. Assignor has all requisite power and authority to execute, deliver, and
perform this Agreement and to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement and the consummation of the transactions contemplated
hereby by Assignor have been duly and validly authorized by all necessary action on the part of
Assignor, and this Agreement has been duly and validly executed and delivered by Assignor, and is
the valid and binding obligation of Assignor, enforceable against him in accordance with its terms.
3.4 No Conflict; No Required Consents The execution, delivery, and performance by Assignor
of this Agreement do not and will not (i) violate any provision of any law applicable to Assignor;
(ii) conflict with, violate, result in a breach of, constitute a default under (without regard to
requirements of notice, lapse of time, or elections of other Persons, or any combination thereof)
or accelerate or permit the acceleration of the performance required by, any agreements to which
Assignor is a party or by which he is bound or affected; or (iii) require any consent, approval, or
authorization of, or filing of any certificate, notice, application, report, or other document
with, any Governmental Authority or other Person, other than any filing required to be made by
United States securities laws and the notification to Barrick of the Public Deed attached hereto as
Exhibit A.
3.5 No Litigation. No litigation, arbitration or other proceeding is pending, or to
Assignor’s knowledge, threatened, against Assignor or involving Assignor’s Royalty Interest.
3.6 Information and Data. Assignor has provided Royal Gold Chile with copies of all
correspondence, notes, written information, data, and other documents in his possession or control
relating to Assignor’s Royalty Interest, including all copies of all written communications with
Barrick.
3.7 Broker’s Fees. Assignor does not have any liability to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this Agreement for which
Royal Gold Chile could become liable or obligated.
ARTICLE IV
ROYAL GOLD CHILE’S REPRESENTATIONS AND WARRANTIES
ROYAL GOLD CHILE’S REPRESENTATIONS AND WARRANTIES
Royal Gold Chile represents and warrants to Assignor, as of the date of this Agreement and as
of the Closing, as follows:
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4.1 Organization of Royal Gold Chile. Royal Gold Chile is a Chilean limited liability company
under formation that at the Closing Date will be duly organized, validly existing and owned by
Royal Gold Inc. and an Affiliate of Royal Gold Inc. Royal Gold Inc, is duly organized, validly
existing, and in good standing under the laws of the State of Delaware, and has all requisite power
and authority to conduct its activities as such activities are currently conducted.
4.2 Authority. Royal Gold Inc. has all requisite corporate power and authority to execute,
deliver, and perform this Agreement on behalf of Royal Gold Chile and to consummate the
transactions contemplated hereby. At the Closing the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby by Royal Gold Chile will
have been duly and validly authorized by all necessary action on the part of Royal Gold Chile.
This Agreement has been duly and validly executed and delivered on behalf of Royal Gold Chile, and
is the valid and binding obligation of Royal Gold Chile, enforceable against it in accordance with
its terms.
4.3 No Conflict; Required Consents The execution, delivery, and performance by Royal Gold
Chile of this Agreement do not and will not (i) conflict with or violate any provision of the
articles of incorporation or bylaws of Royal Gold Chile; (ii) violate any provision of any law
applicable to Royal Gold Chile; (iii) conflict with, violate, result in a breach of, constitute a
default under (without regard to requirements of notice, lapse of time, or elections of other
Persons, or any combination thereof) or accelerate or permit the acceleration of the performance
required by, any agreements to which Royal Gold Chile is a party or by which it is bound or
affected; or (iv) require any consent, approval, or authorization of, or filing of any certificate,
notice, application, report, or other document with, any Governmental Authority or other Person,
other than any filing required to be made by United States securities laws and the notification to
Barrick of the Public Deed attached hereto as Exhibit A.
4.4 Broker’s Fees. Royal Gold Chile does not have any liability to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions contemplated by this
Agreement for which Assignor could become liable or obligated.
ARTICLE V
COVENANTS
COVENANTS
5.1 Cooperation. Assignor and Royal Gold Chile shall each use commercially reasonable efforts
to take all steps within his or its power, and will cooperate with the other Party, to cause to be
fulfilled those of the conditions to the other Party’s obligations to consummate the transactions
contemplated by this Agreement that are dependent upon his or its actions, and to execute and
deliver such instruments and take such other commercially reasonable actions as may be necessary to
carry out the intent of this Agreement and to consummate the transactions contemplated hereby.
5.2 Due Diligence. Following the execution of this Agreement, until the Closing Date or
earlier termination of this Agreement, Royal Gold Chile shall have the exclusive right to conduct
reasonable due diligence in respect of (i) the ownership, terms and conditions, validity, and good
standing of the Assignor’s Royalty Interest, (ii) the ownership, terms and conditions, validity,
and good standing of the concessions and minerals rights granted by the Chilean courts
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in respect of the Xxxxxx-Xxxx Project; and (iii) the sufficiency of the surface rights and
authorizations held by the operator to permit development of the Xxxxxx-Xxxx Project. Assignor
shall co-operate with Royal Gold Chile in respect to such due diligence, and, if requested by Royal
Gold Chile, each shall use its reasonable efforts to facilitate direct communications between Royal
Gold Chile and Barrick.
5.3 Administration of Xxxxxx-Xxxx Contract.
(a) Immediately following the Closing the Parties shall jointly request that Barrick make one
half of all payments due in respect of Assignor’s Royalty Interest to Assignor (to reflect
Assignor’s ownership of the Retained Royalty Interest) and the other half of all such payments to
Royal Gold Chile (to reflect Royal Gold Chile’s ownership of the Purchased Royalty Interest). If
Barrick fails or refuses to make such separate payments to Assignor and to Royal Gold Chile, the
Parties agree that all payments made by Barrick in respect of both the Retained Royalty Interest
and the Purchased Royalty Interest shall be made to Royal Gold Chile and that Royal Gold Chile
shall upon receipt of such payments disburse the amount thereof corresponding to the Retained
Royalty Interest to Assignor.
(b) The Parties acknowledge that if the Closing occurs, they will each own one half of all of
the rights and interests that are now held by Assignor related to Assignor’s Royalty Interest,
including the rights to (i) take payment in-kind, (ii) protest payments received and conduct an
audit, (iii) inspect operations and designate a company for the resolution of any dispute with
Barrick concerning commingling of mineral products, (iv) to resolve other disputes with Barrick,
(v) acquire concessions that Barrick determines to abandon, and (vi) consent to a transfer of the
mining concessions (“Contract Administration Rights”). The Parties agree that a further agreement
between them concerning the exercise of the Contract Administration Rights will be necessary in
order to secure to Royal Gold Chile the full benefit of its ownership of the Purchased Royalty
Interest and to Assignor the full benefit of the Retained Royalty Interest. Promptly following
execution of this Agreement, the Parties shall negotiate in good faith a supplemental agreement
that address the manner in which they will exercise the Contract Administration Rights following
the Closing.
ARTICLE VI
CONDITIONS
CONDITIONS
6.1 Conditions to Royal Gold Chile’s Obligations. The obligation of Royal Gold Chile to
consummate the transactions contemplated by this Agreement shall be subject to the following
conditions, any of which may be waived by Royal Gold Chile in its sole discretion:
(a) The representations and warranties of Assignor in this Agreement shall be true and
accurate in all material respects at and as of the Closing with the same effect as if made at and
as of the Closing.
(b) Assignor shall have performed in all material respects all obligations and agreements and
complied with all covenants in this Agreement to be performed and complied with by it at or before
the Closing.
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(c) No injunction or restraining order of any Governmental Authority of competent jurisdiction
shall be in effect which prohibits the transactions contemplated by this Agreement and no action or
proceeding shall have been instituted and remain pending before any Governmental Authority to
restrain or prohibit any of the transactions contemplated by this Agreement.
(d) The completion of due diligence to Royal Gold Chile’s reasonable satisfaction with respect
to: (i) the ownership, terms, and conditions, validity, and good standing of the Assignor’s Royalty
Interest, (ii) the ownership, terms and conditions, validity, and good standing of the concessions
and minerals rights granted by the Republic of Chile in respect of the Xxxxxx-Xxxx Project; and
(iii) the sufficiency of the surface rights and surface use authorizations held by Barrick to
permit development of the Xxxxxx-Xxxx Project.
(e) Receipt by Royal Gold Chile of justifiable opinions concerning the Acquisition from its
legal and tax advisors that are satisfactory to Royal Gold Chile, acting reasonably and in good
faith.
(f) There shall have not been since the Effective Date any material adverse change in the
value of, or prospects for, the Xxxxxx-Xxxx Project .
6.2 Conditions to Assignor’s Obligations. The obligation of Assignor to consummate the
transactions contemplated by this Agreement shall be subject to the following conditions, any of
which may be waived by Assignor in his sole discretion:
(a) The representations and warranties of Royal Gold Chile in this Agreement shall be true and
accurate in all material respects at and as of the Closing with the same effect as if made at and
as of the Closing.
(b) Royal Gold Chile shall have performed in all material respects all obligations and
agreements and complied with all covenants in this Agreement to be performed and complied with by
it at or before the Closing.
(c) No injunction or restraining order of any Governmental Authority of competent jurisdiction
shall be in effect which prohibits the transactions contemplated by this Agreement and no action or
proceeding shall have been instituted and remain pending before any Governmental Authority to
restrain or prohibit any of the transactions contemplated by this Agreement.
ARTICLE VII
TERMINATION
TERMINATION
7.1 Termination Events. This Agreement may be terminated and the transactions contemplated
hereby may be abandoned:
(a) at any time, by the mutual written agreement of Royal Gold Chile and Assignor;
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(b) by either Royal Gold Chile or Assignor, upon Notice to the other Party, at any time, if
the other Party is in breach or default of its respective covenants, agreements, or other
obligations herein, or if any of its representations herein are not true and accurate in all
material respects when made or when otherwise required by this Agreement to be true and accurate in
all material respects, and such breach, default or failure is not cured within 30 days of receipt
by the other Party of such Notice;
(c) by either Royal Gold Chile or Assignor upon written notice to the other, if the Closing
shall not have occurred on or before the March 10, 2007 for any reason other than a breach or
default by such Party of its respective covenants, agreements, or other obligations hereunder, or
any of its representations herein not being true and accurate in all material respects when made or
when otherwise required by this Agreement to be true and accurate in all material respects; or
(d) as otherwise provided herein.
7.2 Effect of Termination.
(a) If (i) this Agreement is terminated by Royal Gold Chile pursuant to Section 7.1(b) and
(ii) Assignor is in breach in any material respect of any of its representations and warranties
made herein or its covenants or agreements made herein (and Royal Gold Chile is not in breach in
any material respect of any of its representations and warranties or covenants made herein), then:
(i) Royal Gold Chile shall have all remedies available at law or in equity, including the
right of specific performance and the right to seek money damages from Assignor for any Losses
incurred by Royal Gold Chile; and
(ii) Assignor shall promptly pay to Royal Gold Chile the sum of US $2 million as a penalty for
such breach.
(b) If (i) this Agreement is terminated by Assignor pursuant to Section 7.1(b) and (ii) Royal
Gold Chile is in breach in any material respect of any of its representations and warranties made
herein or its covenants or agreements made herein (and Assignor is not in breach in any material
respect of any of its representations and warranties or covenants made herein), then:
(i) Assignor shall have all remedies available at law or in equity, including the right of
specific performance and the right to seek money damages from Royal Gold Chile for any Losses
incurred by Assignor; and
(ii) Royal Gold Chile shall promptly pay to Assignor the sum of US $2 million as a penalty for
such breach.
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ARTICLE VIII
INDEMNIFICATION AND GUARANTY
INDEMNIFICATION AND GUARANTY
8.1 Indemnification by Assignor From and after Closing, and regardless of any investigation
made at any time by or on behalf of Royal Gold Chile or any information Royal Gold Chile may have,
Assignor shall defend, indemnify and hold harmless Royal Gold Chile, its Affiliates, officers,
directors, employees, agents, and representatives, and any third party claiming by or through any
of them, as the case may be, from and against any and all Losses arising out of or resulting from:
(a) any representations and warranties made by Assignor in this Agreement not being true and
accurate when made or when required by this Agreement to be true and accurate; or
(b) any failure by Assignor to perform any of its covenants, agreements, or obligations in
this Agreement.
8.2 Indemnification by Royal Gold Chile . From and after Closing, Royal Gold Chile shall
defend, indemnify and hold harmless Assignor and any third party claiming by or through him, as the
case may be, from and against any and all Losses arising out of or resulting from:
(a) any representations and warranties made by Royal Gold Chile in this Agreement not being
true and accurate when made or when required by this Agreement to be true and accurate; or
(b) any failure by Royal Gold Chile to perform any of its covenants, agreements, or
obligations in this Agreement.
8.3 Claims for Indemnity; Third Party Claims.
(a) Whenever a claim for Losses shall arise for which one Party (“Indemnitee”) shall be
entitled to indemnification under this Article VIII, Indemnitee shall give the indemnifying party
(“Indemnitor”) Notice promptly after the first receipt of knowledge of such claim, and in any event
within such period as may be necessary for Indemnitor to take appropriate action to resist such
claim. Such Notice shall specify all facts known to Indemnitee giving rise to such indemnification
rights. The right of Indemnitee for indemnification, as set forth in the Notice, shall be deemed
agreed to by Indemnitor unless, within 30 days after receipt of such Notice, Indemnitor shall
notify Indemnitee in writing that it disputes the right of Indemnitee to indemnification.
(b) Upon receipt by Indemnitor of a Notice from Indemnitee with respect to any claim of a
third party against Indemnitee, and acknowledgment by Indemnitor (whether after resolution of a
dispute or otherwise) of Indemnitee’s right to indemnification hereunder with respect to such
claim, Indemnitor shall assume the defense of such claim with counsel reasonably satisfactory to
Indemnitee and Indemnitee shall cooperate to the extent reasonably requested by Indemnitor in
defense or prosecution thereof and shall furnish such records,
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information and testimony and attend all such conferences, proceedings, hearings, trials and
appeals as may be reasonably requested by Indemnitor in connection therewith. If Indemnitor
acknowledges Indemnitee’s right to indemnification and elects to assume the defense of such claim,
Indemnitee shall have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of Indemnitee. If Indemnitor has assumed the
defense of any claim against Indemnitee, Indemnitor shall have the right to settle any claim for
which indemnification has been sought and is available hereunder; provided that, to the extent that
such settlement requires Indemnitee to take, or prohibits Indemnitee from taking, any action or
purports to obligate Indemnitee, then Indemnitor shall not settle such claim without the prior
written consent of Indemnitee, such consent not to be unreasonably withheld. If Indemnitor does
not assume the defense of a third party claim or disputes Indemnitee’s right to indemnification,
Indemnitee shall have the right to defend against such claim until Indemnitor’s obligation to
indemnify is established pursuant to this Section 8.3, and Indemnitor shall have the right to
participate in the defense of such claim through counsel of its choice, at Indemnitor’s expense,
but Indemnitee shall have control over the defense and authority to resolve such claim, subject to
this Section 8.3.
8.4 Survival of Representations and Warranties; Limitations Unless specified otherwise in
this Agreement, the representations and warranties of Assignor and Royal Gold Chile in this
Agreement shall survive the Closing for a period of 24 months, except for (i) those contained in
Sections 3.1 and 3.2, which shall survive indefinitely. Assignor and Royal Gold Chile shall have
no liability under Sections 8.1 and 8.2, respectively, unless a claim for Losses for which
indemnification is sought thereunder is asserted by Royal Gold Chile or Assignor, as the case may
be, within the applicable survival period.
8.5 Sole Remedy. Each Party acknowledges and agrees that, should the Closing occur, its sole
and exclusive remedy against the other Party with respect to any breach of representation,
warranty, covenant, agreement or obligation will be pursuant to the indemnification provisions set
forth in this Article VIII.
8.6 Guaranty. Royal Gold Inc. hereby unconditionally guarantees the obligations of Royal Gold
Chile pursuant to the terms of this Agreement, including without limitation the indemnification
obligations set forth in Section 8.2. If any indemnification obligation of the Royal Gold Chile is
not paid in accordance with the provisions of this Article VIII, Assignor shall be entitled to
collect the amount of any Loss from Royal Gold Inc.
ARTICLE IX
RIGHT OF FIRST REFUSAL
RIGHT OF FIRST REFUSAL
9.1 Preemptive Rights. If Assignor intends to Transfer all or any part of the Retained
Royalty Interest, Assignor shall promptly give Royal Gold Chile Notice of his intentions (“Notice
of Proposed Transfer”). The Notice of Proposed Transfer shall state the price and all other
pertinent terms and conditions of the intended Transfer, and shall be accompanied by a copy of the
offer or the contract for Transfer. If the consideration for the intended Transfer is, in whole or
in part, other than monetary, the Notice of Proposed Transfer shall describe such consideration and
its monetary equivalent (based upon the fair market value of the nonmonetary consideration and
stated in terms of cash or currency). Royal Gold Chile
13
shall have 20 Business Days following delivery of a Notice of Proposed Transfer to give
Assignor Notice whether Royal Gold Chile elects to acquire the offered interest at the same price
(or its monetary equivalent in cash or currency) and on the same terms and conditions as set forth
in the Notice of Proposed Transfer.
(a) If Royal Gold Chile elects to acquire the interest subject to the Notice of Proposed
Transfer, the Transfer described in the Notice of Proposed Transfer shall be consummated promptly
after Notice of such election is delivered to Assignor, except the Transfer shall be made to Royal
Gold Chile.
(b) If Royal Gold Chile declines or fails to elect within the period specified in this Section
9.1 to acquire the interest subject to Assignor’s Notice of Proposed Transfer, Assignor shall have
90 Business Days following the expiration of such period to consummate the Transfer to a third
party at a price and on terms no less favorable to Assignor than those specified in the Notice of
Proposed Transfer.
(c) If Assignor fails to consummate the Transfer to a third party within the period set forth
in Section 9.1(b), the preemptive right of Royal Gold Chile in such offered interest shall be
deemed to be revived. Any subsequent proposal to Transfer such interest shall be subject to and
conducted in accordance with all of the procedures set forth in this Section 9.1.
ARTICLE X
MISCELLANEOUS
MISCELLANEOUS
10.1 Notices. All notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement (each a “Notice”) shall be in writing and shall be given
by any of the following methods: (i) personal delivery; (ii) registered or certified mail, postage
prepaid, return receipt requested; (iii) facsimile, receipt confirmed; or (iv) by a nationally
recognized overnight courier service. Notices shall be sent to the appropriate Party at its
address given below (or at such other address for such Party as such Party shall specify by
Notice):
| (a) | if Assignor, to: Mario Xxxx Xxxxxxxxx Xxxxxxx Xx Xxxxxxxxxx 266, Suite 701 Providencia, Santiago Facsimile: 00-0-0000000 e-mail xxxxx@xxxxxxxxxxx.xx with an informational copy to: Xxxxx Deutsch Spiegel Avda. Xxxxxx Xxxxx 2711- 19th floor Las Condes – Xxxxxxxx Facsimile- 00-0-0000000 e-mail: xxxxxxxx@xxxxxxx.xx |
14
| (b) if to Royal Gold Chile, to: c/o Royal Gold Inc. 0000 Xxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxx, Xxxxxxxx 00000 Attention: President Facsimile: (000) 000-0000 with an informational copy to: Royal Gold Chile Limitada c/o Xxxxxx Xxxxxx Torre de la Costanera Xxxxxxx Xxxxxx Xxxxx 0000, 00xx Xxxxx Xxxxxxxx Xxxxx Facsimile: 000-000-0000 (c) if to Royal Gold Inc., to: 0000 Xxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxx, Xxxxxxxx 00000 Attention: President Facsimile: (000) 000-0000 |
A Party may change its address for Notice by Notice to the Other Party. Each Notice shall be
effective (a) if delivered personally or by registered or certified mail, return receipt requested,
or by nationally recognized overnight courier service, when delivered at the address specified in
this Section 10.1, and (b) if given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section 10.1, and confirmation is received; in both such cases
if given on a Business Day during the normal business hours of the recipient and if not given
during such hours, on the Business Day during which such normal business hours next occur.
10.2 Confidentiality and Public Announcements.
(a) Subject to the provisions of Sections 10.2(b) through (f), each of the Parties shall treat
all information received from the other Party or in connection with the Acquisition, and Royal Gold
Inc. shall treat information received from Assignor or in connection with the Acquisition, as
confidential and shall not disclose such information except as provided in this Agreement.
(b) A Party or Royal Gold Inc. may disclose information received subject to Section 10.2(a) to
(i) such of such entity’s officers, directors, employees, attorneys, accountants or financial
advisors who have a need to have access to such information, and (ii) such other persons as the
other Party and Royal Gold Inc. consents in writing may receive such information.
15
A Party or Royal Gold Inc. that discloses information subject to Section 10.2(a) to its
representatives as provided in this Section 10.2(b) shall be responsible and liable for any
improper disclosure of the information by its representatives in violation of this Agreement.
(c) The provisions of Section 10.2(a) shall not apply to any information, data and knowledge,
as shown by written records, that (i) is in a Party’s or Royal Gold Inc.’s possession prior to
disclosure by the other Party or Royal Gold Inc., as the case may be, (ii) is in the public domain
prior to disclosure by the other Party or Royal Gold Inc., as the case may be, (iii) lawfully comes
into a Party’s or Royal Gold Inc.’s, as the case may be, possession from a source in accordance
with the terms and conditions, if any, imposed on that party by such source with respect to the use
and disclosure thereof, or (iv) lawfully enters the public domain through no violation of this
Agreement by the Party or Royal Gold Inc. receiving the information.
(d) Nothing contained in this Agreement shall be deemed to prevent a Party or Royal Gold Inc.
from disclosing any information that is subject to Section 10.2(a) if, in the opinion of such
party’s legal counsel, such disclosure is required to be pursuant to an order or direction of a
Governmental Authority having jurisdiction over the disclosing party ;
(e) Assignor acknowledges that Royal Gold Inc. will disclose the existence and terms and
conditions of this Agreement and file this Agreement as required by applicable United States
securities laws, and that Royal Gold Inc. will thereafter continue to disclose information
concerning this Agreement, Assignor’s Royalty Interest, and the Purchased Royalty Interest to
industry analysts and members of the public.
(f) Following the Closing, Royal Gold Chile and its Affiliates shall have the right to use and
disclose information concerning the Purchased Royalty Interest, subject only to the terms and
conditions of the Xxxxxx-Xxxx Contract or other agreement with Barrick.
10.3 Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other terms, conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the Acquisition is not affected in any manner materially adverse to
either Party. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement, so
as to effect the original intent of the Parties as closely as possible in a mutually acceptable
manner in order that the Acquisition be consummated as originally contemplated to the fullest
extent possible.
10.4 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be
binding upon and shall inure to the benefit of the Parties and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, directly or indirectly, including by operation of law, by either Party
without the prior written consent of the other Party; provided, however, that Royal Gold Chile may
assign this Agreement and its rights hereunder to an Affiliate without the prior consent of
Assignor.
16
10.5 No Third Party Beneficiaries . This Agreement is exclusively for the benefit of Assignor
with respect to the obligations of Royal Gold Chile under this Agreement, and for the benefit of
Royal Gold Chile and its permitted assigns with respect to the obligations of Assignor under this
Agreement. This Agreement shall not be deemed to confer upon or give to any other Person any
remedy, claim, liability, reimbursement or other right.
10.6 Entire Agreement. This Agreement (including its Exhibits), constitutes the entire
agreement between the Parties with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, between the Parties with respect to the
subject matter thereof, including (i) the letter agreement between the Assignor and Royal Gold
Inc., dated December 26, 2006 and (ii) the letter to Assignor from Xx. Xxxx X. Xxxxxx, President
and Chief Executive Officer of Royal Gold Inc., dated November 16, 2006, which are hereby
terminated as of the Effective Date, and shall be of no further force or effect as between the
Parties.
10.7 Dispute Resolution.
(a) All disputes arising out of or in connection with this Agreement, including any issue
directly or indirectly related to this Agreement or with any of its clauses and effects, including,
without limitation, the existence, validity, applicability, execution, interpretation, application,
performance or termination of this Agreement as well as any difference, difficulty or conflict
regarding this arbitration clause including the jurisdiction and authority of the arbitrator and
its appointment (“Dispute”) shall be finally settled under the Rules of Arbitration of the
Arbitration Center of the Cámara de Comercio de Xxxxxxxx X.X. (“Chamber”). Prior to the
commencement of the arbitration procedure, the Parties and Royal Gold Inc. shall have access to the
ordinary courts of Santiago for any injunctive relief or other type of preventive action intended
to protect their rights hereunder, without the need to apply for the arbitration procedure set
forth herein.
(b) The arbitral tribunal will be an “árbitro mixto” and, therefore, the arbitration tribunal
shall decide the Dispute and weight the evidence according to Chilean law. The arbitration
proceedings shall be conducted under the rules of procedure agreed by the Parties, and if the
Dispute involves Royal Gold Inc., by the Parties and Royal Gold Inc., and in all matters not
agreed, according to the rules provided in the Rules of Arbitration of the Chamber.
(c) The Parties and Royal Gold Inc. hereby appoint Xx. Xxxxxx Xxxxxxxx Monckeberg as the
arbitrator mixto. If Xx. Xxxxxx Xxxxxxxx Monckeberg is unable or unwilling to serve as the
arbitrator, the Parties and Royal Gold Inc. hereby appoint Xx. Xxxxxxx Xxxxxx Xxxx, and if both of
them are unable or unwilling to serve as the arbitrator, the Parties and Royal Gold Inc. hereby
grant an irrevocable power of attorney to the Chamber, upon written request of either of them to
appoint an “árbitro mixto” from the list of arbitrators of the Arbitration Center of the Chamber,
who shall be proficient in English.
(d) The arbitration shall be conducted in the city of Xxxxxxxx, Chile.
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(e) The arbitration proceedings shall be conducted in Spanish. If any party involved in the
arbitration proceedings so requests, the arbitrator shall accept that any documents presented to it
by such a party, may be written in the English language.
(f) Each party to the arbitration proceedings shall cooperate with the other in making full
disclosure of and providing complete access to all information and documents requested by the other
party in connection with such arbitration proceedings, subject only to any confidentiality
obligations binding on such party other than obligations under this Agreement or information
subject to client-attorney privilege.
(g) The award of the arbitration tribunal shall be final and binding upon the parties to the
proceeding, and either party to such proceedings may apply to a court of competent jurisdiction for
enforcement of such award. The Parties and Royal Gold Inc.waive any remedy against the award.
(h) During any period of arbitration involving a dispute, the Parties shall in all other
respects continue their implementation of this Agreement in the same form that they have been doing
so.
(i) The Parties and Royal Gold Inc. agree that the arbitration tribunal may impose interim
measures of protection in the cases contemplated by the Rules of Arbitration of the Chamber,
agreeing further that, before the constitution of the arbitration tribunal such measures may be
requested to and imposed by the ordinary courts of justice established by law.
(j) The provisions of this Section 10.7 shall continue to apply notwithstanding any
termination of this Agreement.
(k) For purposes of this Xxxxxxx 00.0, Xxxxxxxx, Xxxxx Xxxx Xxxxx, and Royal Gold Inc. hereby
sets each of their special xxxxxxxx xx xxx xxxxxx xx Xxxxxxxx, Xxxxxxxx, Xxxxx.
10.8 Governing Law. This Agreement and the rights and liabilities of the Parties and Royal
Gold Inc. hereunder shall be governed by and construed in accordance with the laws of the Republic
of Chile.
10.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which, together, shall constitute one and the same
agreement and shall become effective when one or more counterparts have been signed by each of the
Parties and Royal Gold Inc. and delivered (including by facsimile) to the others.
10.10 Amendment; Modification. This Agreement may not be amended, modified or supplemented at
any time except by written agreement of both Parties and Royal Gold Inc. .
[REMAINDER OF PAGE INTENTIONALLY BLANK
SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first
above written.
| /s/ Xxxxx Xxxxxxxxx | ||||
| Mario Xxxx Xxxxxxxxx A. | ||||
Royal Gold, Inc., on behalf of Royal Gold Chile Limitada
and as Guarantor pursuant to Section 8.6 of this Agreement
and as Guarantor pursuant to Section 8.6 of this Agreement
| By | /s/ Xxxx Xxxxxx | |||
| Title | President & CEO | |||
19
PURCHASE OF SHARES
XXXXXXXXX XXXXXXX, XXXXX XXXX
TO
COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA
IN SANTIAGO, CHILE, on the thirtieth day of June of nineteen ninety eight, before the
undersigned XXXXXX XXXXXXXX XXXXXXX, attorney at law, Notary Public, holder of the title Seventh
Notary of this Department, domiciled in Catedral Street number one thousand two hundred and thirty
three, the following parties appeared: The first party, being the “Seller”, Mr. MARIO XXXX
XXXXXXXXX XXXXXXX, who is Chilean, a mining engineer, is married, holder of identity document
number four million seven hundred and sixty three thousand two hundred and ninety six dash K,
domiciled in this city at Guardia Vieja street number two hundred and ninety three, office four
hundred and two,
and the other party as “buyer” or “the buyer” being COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA, unique
tax identification number fifty nine million seven hundred and ten dash two, a limited liability
company, whose line of business is as indicated by the name, domiciled in Xxxxx xx Xxxxxxxx
[street] number one hundred, eleventh floor, Providencia, Santiago, represented by Ms. XXXXX
XXXXXXX XXXXX XXXXX, who is Canadian, single, attorney at law, holder of identity document for
foreigners number fourteen million five hundred and ninety eight thousand four hundred and eleven
dash four, and Mr. XXXXXX XXXXX XXXXX, who is Chilean, married, attorney at law, holder of
national identity card number five million four hundred and nineteen thousand two hundred and
ninety two dash four, both of whom are also domiciled at Xxxxx xx Xxxxxxxx [street] number one
hundred, eleventh floor, Providencia, Santiago, all of whom are of legal age and who showed proof
of their identities with the documents mentioned above, and declared: ONE: Mr. MARIO XXXX
XXXXXXXXX XXXXXXX is the owner of one thousand three hundred and twenty B-series shares in COMPAÑÍA
MINERA NEVADA S.A., hereinafter also referred to as “The Company”, a corporation constituted by
means of the document of public record dated February seven nineteen hundred and eighty three,
granted before Santiago Notary Xx. Xxxxxxxx Xxxx Xxxxxxx, substitute notary for Xx. Xxxxx Xxxxxx
Xxxxxxx, the extract of which was registered in the Business Registry of the Santiago Real Estate
Registrar, on page three thousand two hundred and sixty one, number one thousand eight hundred and
twelve, of the year one thousand nine hundred and eighty three. COMPAÑÍA MINERA NEVADA S.A. was
formed as a result of the transformation of the contract mining company known as COMPAÑÍA MINERA
NEVADA which was originally constituted by means of the document of public record dated December
six nineteen hundred and seventy seven, granted before Santiago Notary Xx. Xxxx Xxxxxxxxx Xxxx
substitute notary for Xx. Xxxx Xxxxxx Xxxxxxx,
which was registered on page four hundred fifteen, under number
twenty five of the Registry of Property of the Huasco Custodian of Mines, for the year nineteen
hundred and seventy seven. TWO: Mr. MARIO XXXX XXXXXXXXX XXXXXXX does hereby sell,
assign and transfer the one thousand three hundred and twenty B-Series shares which he owns in
COMPAÑÍA MINERA NEVADA S.A. to COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA, which hereby purchases,
accepts and acquires them through its representatives. THREE: The shares are sold free
of all debt, prohibition, lien or encumbrance. Seller does hereby deliver to Buyer, on behalf of
whom the representatives thereof receive, the share certificates that represent the shares being
transferred. FOUR: The purchase price of the shares being sold by Mr. MARIO XXXX
XXXXXXXXX XXXXXXX is the amount of six million thirty nine thousand two hundred and sixteen
dollars of the United States of America, plus a variable price that will be determined in the
manner established in point d) and following of this clause. The price will be paid in the
following manner: a) The sum of three million nineteen thousand six hundred and eight dollars in
currency of the United States of America, which the seller declares to have received to his full
satisfaction, b) The sum of one million five hundred and nine thousand eight hundred and four
dollars in currency of the United States of America, that will be paid within a maximum of ten
days after the date on which COMPAÑÍA MINERA NEVADA S.A. or its successor in ownership of the
possessions, has produced at least thirty thousand xxxx ounces of gold within a period of thirty
calendar days, c) The sum of one million five hundred and nine thousand eight hundred and four
dollars in currency of the United States of America, that will be paid within the thirty days
following the date on which COMPAÑÍA MINERA NEVADA S.A. or its successor in ownership of the
possessions, has completed thirty six months
of production of at least thirty thousand xxxx ounces of gold within periods of one calendar
month, whether or not they are consecutive. d) A sum equivalent to a variable percentage of the
product resulting from the sale of refined gold of COMPAÑÍA MINERA NEVADA S.A. or of its
successor in ownership of the possessions, coming from the mining exploitation concessions owned
by the COMPANY, either totally or partially, directly or indirectly, and that are located within
the area demarcated in detail on a plan that the parties hereby sign as Appendix A, and that is
legalized, on this date before the undersigned Notary, with the number one hundred and sixteen,
with it being considered that said appendix forms an integral part of this contract. This
demarcated area is located within the territory of the Republic of Chile, between the UTM
coordinates that are indicated on said plan. The payment will be made each calendar quarter of
operation, for the period of one hundred and twenty years, as of this date. In the event that
COMPAÑÍA MINERA NEVADA S.A. or a company related to it, acquires new mining concessions within
the demarcated area, it will also be obligated to pay the variable price indicated above. The
above notwithstanding, in the event that COMPAÑÍA MINERA NEVADA S.A. or a company related to
it, acquires part of the mining concessions that are located within the demarcated area, it
shall pay the variable price in proportion to the participation that it holds in these mining
concessions. The value of the sales will be calculated by assigning to refined gold the average
daily price known as “Cash Settlement” on the “London Bullion Brokers”, “P.M.” Fix” or “London
Final”, during the relevant quarter. If the “London Bullion Brokers” ceases to exist or ceases
to issue daily quotations for gold, all references to said entity shall be understood to refer
to the entity that replaces it and that establishes daily
reference prices for gold for immediate delivery on a market that is open and worldwide in
nature. The percentage to be paid shall be determined in accordance with the following scale of
the average quarterly price of gold, determined in the manner indicated: One.- If the average
price of gold is less than or equal to three hundred and twenty five dollars per xxxx ounce, the
percentage will be zero point three two three five percent. Two.- If the average price of gold
is three hundred and fifty dollars per xxxx ounce, the percentage will be zero point four three
one four percent. Three.- If the average price of gold is three hundred and seventy five
dollars per xxxx ounce, the percentage will be zero point five three nine two percent. Four.-
If the average price of gold is four hundred dollars per xxxx ounce, the percentage will be zero
point six four seven one percent. Five.- If the average price of gold is five hundred dollars
per xxxx ounce, the percentage will be one point one two one six percent. Six.- If the average
price of gold is six hundred dollars per xxxx ounce, the percentage will be one point four six
seven seven percent. Seven.- If the average price of gold is seven hundred dollars per xxxx
ounce, the percentage will be one point eight one one eight percent. Eight.- If the average
price of gold is eight hundred dollars per xxxx ounce or more, the percentage will be two point
one five six nine percent. In the event that the average selling price of gold per xxxx ounce is
not one of the prices established above, but rather that it falls in between any two of the
segments indicated previously, in this case the percentage to be paid will be determined by the
following calculation: A) from the average selling price of copper determined, the lower price
of the corresponding segment must be subtracted; B) the result obtained from the previous
operation is divided by the difference between the
upper price of gold and the lower price of gold of the corresponding segment; C) The result of the
previous operation is multiplied by the difference between the upper and lower percentage of the
corresponding segment; and D) the percentage of the definitive variable price to be paid in said
period is determined upon adding the result from the previous operation to the lower percentage of
the segment corresponding to the lower segment. The method for calculating this percentage is
detailed in Appendix B which the parties sign and which is understood to form an integral part of
this document. For example, if the average price in a calendar quarter were to be three hundred
and ninety dollars, the percentage to pay would be zero point six zero three nine percent; if the
average price were to be four hundred and fifteen dollars, the percentage to pay would be zero
point seven one eight three percent; and if the average price were to be five hundred and thirty
five dollars, then the percentage to pay would be one point two four two four percent. For these
purposes, the amount of gold will be determined on the basis of the number of xxxx ounces of
refined gold produced by COMPAÑÍA MINERA NEVADA S.A., its successor, the Buyer or its related
companies, in ownership of the possessions that are located within the demarcated area or
delivered to the COMPANY or for the account thereof, by the refinery, smelter, or other processor
to which the COMPANY had delivered ore coming from the mining concessions that are located within
the demarcated area, during one calendar quarter. Refined gold is that which meets or exceeds the
normally commercially accepted requirements on the commodities market of London or of the United
States of America, as good delivery gold or “Bullion Gold”. e) An amount equivalent to a
percentage calculated on the value of the sales of unrefined gold contained in
the ore or concentrates, precipitates, cathodes, leaching products, or any other product,
either final or intermediate, expressly excluding refined gold, that has been sold by
COMPAÑÍA MINERA NEVADA S.A. or its successor, coming from the exploitation of the relevant
mining concessions that are located within the demarcated area. Seller shall have the right
to a percentage of the results of the sale of payable gold by COMPAÑÍA MINERA NEVADA S.A. or
its successor in ownership of the possessions, to the Buyer or its related companies,
according to the payments between these and the refinery, smelter, processor or other buyer,
in market conditions, based on the interchange of analysis and/or in the corresponding
arbitration or other mechanism for resolving differences that is stipulated in the relevant
contract, during the calendar quarter, without considering any hedging that might occur. In
order to determine the variable percentage applicable to a quarter, according to the table
established in letter d) above, it shall be presumed that the average price of the gold will
be equivalent to the total price actually paid during the quarter, divided by the number of
xxxx ounces of payable gold determined at the final settlements for each quarter. For
example, if the value of the payable gold received by COMPAÑÍA MINERA NEVADA S.A., its
successor, the Buyer, or its related companies, in the sales of a quarter, amounted to one
million dollars for a total of two thousand nine hundred and eighty five xxxx ounces of
payable gold, the average price for the gold would be three hundred and thirty five dollars,
and the applicable percentage would be zero point three six six seven percent; if the value
of the payable gold received by COMPAÑÍA MINERA NEVADA S.A., its successor, the Buyer, or its
related companies, in a quarter, amounted to two million dollars for a total of four thousand
six hundred and fifty one xxxx ounces of payable gold
the average price of the gold would be four hundred and thirty dollars, and the applicable
percentage would be zero point seven eight nine five percent, if the value of the payable gold
received by COMPAÑÍA MINERA NEVADA S.A., its successor, the Buyer, or its related companies, in a
quarter, amounted to two million five hundred thousand dollars for a total of four thousand four
hundred and sixty four xxxx ounces of payable gold, the average price of the gold would be five
hundred and sixty dollars, and the applicable percentage would be one point three two eight seven
percent; f) An amount equivalent to the percentage of zero point four three one four percent of the
value of the sales that actually take place as of the first day of January of the year two thousand
seventeen, but not beyond the period of one hundred and twenty years following said date, of copper
mineral, by COMPAÑÍA MINERA NEVADA S.A., its successor, the Buyer, or its related companies, from
said mining exploitation concessions that are located within the demarcated area, during the first
calendar quarter of operation starting from the date indicated, without considering possible
hedging, and net of the deductions indicated below. The value of these sales for the relevant
quarter will be equivalent to the value payable, for the concept of copper, to COMPAÑÍA MINERA
NEVADA S.A., its successor, the Buyer, or its related companies, for the refinery, smelter or other
processor to which COMPAÑÍA MINERA NEVADA S.A., or a third party, has delivered, on its behalf, or
on behalf of the successor in ownership of the possessions, the Buyer or its related companies,
under market conditions, with the following deductions: I) All of the costs and expenses related to
the transportation of the concentrate and/or processing that is external to COMPAÑÍA MINERA NEVADA
S.A., its successor, the Buyer, or its related companies, up to the smelter, refinery or
destination port, in other words, ground freight, storage costs, third party loading
costs, ocean freight, insurance during transportation, and others that are linked to said
transportation II) All of the costs of outsourced processing or external processing to
COMPAÑÍA MINERA NEVADA S.A., its successor, the Buyer, or its related companies, conducted by
third parties, in other words, all the charges for roasting, metallurgical deductions for
copper, charges for fusion, treatment, fines or penalties for impurities, shortages, charges
for copper refining, and price participation, as is normally stipulated on the sales and/or
processing contracts. III) All of the external costs and expenses that are directly related
to the sale of copper concentrate or metallic copper coming from the processes, in other
words, external fees, broker and agency fees, insurances, storage, third-party supervision,
chemical analysis and costs of arbitration procedures for differences ruled from the metal
content, if any. IV) Any tax or lien applicable to the sales or to the ocean freight of the
products, including that which is relevant to invoices, constituting an actual cost, in other
words, one that is not recoverable by COMPAÑÍA MINERA NEVADA S.A., its successor, the Buyer,
or its related companies. The copper will be understood to have been sold in the quarter
corresponding to the date of payment. In the event that COMPAÑÍA MINERA NEVADA S.A., or a
company related thereto acquires new mining concessions within the demarcated area, it shall
also be obligated to pay the previously mentioned variable price. The above notwithstanding,
in the event that COMPAÑÍA MINERA NEVADA S.A., or a company related thereto acquires a part
of mining concessions located within the demarcated area, it shall pay the
previously mentioned variable price variable in proportion to the participation that it holds in
these mining concessions. FIVE: In the event that COMPAÑÍA MINERA NEVADA S.A., or its
successor in ownership of the possessions, produces, acquires, processes or causes to be
processed, ore or mineral substances taken from exploitation concessions other than those located
within the demarcated area, whether this occurs with third parties or through companies that are
related to COMPAÑÍA MINERA NEVADA S.A., or with which said company is affiliated, or in which
COMPAÑÍA MINERA NEVADA S.A., has interests, either direct or indirect, the parties hereto agree
that such ores, metals and metal concentrates coming from different origins, can be mixed or
joined in the various mining processes, or in any other later stage of processing, in which case
the payments described in the previous clause will only be made in respect of the refined and
unrefined gold, and after the year two thousand seventeen for copper, obtained or recovered from
the ore, metals, and other mineral products, extracted from the relevant exploitation concessions
located within the demarcated area described in Appendix A. For this purpose, COMPAÑÍA MINERA
NEVADA S.A., its successor in ownership of the possessions, the Buyer, or its related companies,
will determine the weight or volume, take samples and analysis of the ore and materials taken from
said concessions, before they are mixed or processed jointly. The determination of weight,
volume, sample-taking or analysis will be conducted in accordance with generally accepted
principles and practices in the mining industry. The weight, volume, sampling and analysis, will
serve as the basis for the calculation of the payments that must be made in accordance with this
contract, in the event that a joint sale of ore thus mixed, the seller is expressly
authorized, throughout the entire period in which payment of the balance of the variable
price remains in force, to inspect the area where the products and ore are extracted, and to
review the manner and procedure with which the weight, volume and origin of said ore and
products is determined, that serves as the basis for determining the variable price. In the
event that there is any difference in the calculations, procedures or other aspects that
affect the determination of the variable price, the parties shall designate, by common
agreement, a company of renown international prestige in order to resolve the differences
that exist, at the expense of the party that makes the request, unless a difference in its
favor is found, in which case the expense will be born by the other party. The Seller shall
exercise this right in such a manner as to not hinder or interfere with the production
processes in any way, and shall advise the general manager of COMPAÑÍA MINERA NEVADA S.A. or
its successor at least fifteen days in advance, for the purpose of coordinating the visit.
SIX: All of the payments established in United States dollars will be paid in Chilean
currency converted according to the Observed Dollar Exchange Rate (“tipo de cambio del dólar
observado”) that was valid for the day prior to that on which payment takes place. IF the
Observed Dollar Exchange Rate ceases to exist, then the exchange rate to be used shall be the
average exchange rate that is certified by any three of the following banks, on request by
the selling company, for the date on which payment is effected: Citibank NA, Banco de Chile,
Banco Santiago, Banco de Crédito e Inversiones, and Banco Santander in their relevant
Santiago branches. Sums owed shall not accrue interest, except in the case of default or
simple late payment, in which case common interest will be charged. SEVEN: The
amounts that are determined for payment in each
quarter shall be paid, in Chilean currency, within the period of thirty days following the end of
said quarter. Each payment shall be accompanied by documentation in support of the calculation of
the amount of refined and unrefined gold, and also copper after the year two thousand seventeen
produced by the pertinent mining concessions that are located within the demarcated area, the
average price of gold, and the percentage determined. For all legal purposes, the settlements
presented by the buying company, signed by its duly appointed representatives, shall be presumed to
have been calculated correctly unless they were objected to or refuted, in writing, within the
period of no more than 90 days following presentation thereof. No claims shall be admissible
thereafter, such that the payments that are made in accordance with the settlements that are not
objected to, shall be considered as being final. COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA hereby
commits and is obligated to obtain from COMPAÑÍA MINERA NEVADA S.A. permission to access and place
at the disposal of the seller and/or independent auditors contracted by the seller, at its own
expense, all of the documentation related to the statements and calculations of production and
sales. Such auditors must be those of a company that is registered with the Superintendent of
Banks and Financial Institutions in the Republic of Chile, to conduct auditing on financial
institutions. In order to exercise this right, the Seller or its successors shall always act by
common consent through a common legal representative appointed by a Document of Public Record.
This provision shall be applicable to all successors and assignees of the Seller, under any title
whatsoever. In turn, COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA, hereby commits and is obligated to
impose on a third purchaser of shares in COMPAÑÍA MINERA NEVADA S.A. to which this contract
refers, the
obligation to respect and adopt the provisions and stipulations established herein in
favor of the Seller, its successors and assigns, under any title whatsoever. In like
manner, it is an obligation that, in the event of transfer of the possessions that are
located within the demarcated area, referred to in Appendix A, the purchaser thereof
shall assume the above obligations. These obligations shall be established in the
purchase contract. EIGHT: The Seller may choose to have the payments
corresponding to the percentage of production of refined gold, described in sub-paragraph
“d” of Clause Four above, conducted be means of the physical delivery of actual gold, in
which case it shall notify the Buyer at least sixty days in advance of the relevant
payment date. This option will only be possible to the extent that legal regulations and
the banking rules of the Central Bank of Chile permit the execution thereof, for both the
Buyer and the producer, provided that it does not imply any additional tax, contribution
or levy. The Seller shall not have the right to this option with regard to un-refined
gold that could be contained in ore concentrates. In like manner, the Seller may choose
to have payment of the purchase price of the shares referred to in this contract, made in
United States Dollars, but only to the extent that legal regulations and the banking
rules of the Central Bank of Chile permit it. NINE: The parties hereby declare
that nothing in this agreement may be interpreted as being an obligation for the buyer
acting for himself or in representation of COMPAÑÍA MINERA NEVADA S.A. or its successor
in ownership of the possessions, to conduct exploitation of the mining concessions
identified in the demarcated area, or of assuring that such exploitation shall have any
specific duration, characteristics, or
production. TEN: For all of the purposes of this contract, references to refined gold or
“bullion gold”, shall be construed as being made from gold ore with a content of ninety nine point
five percent pure gold. In the same manner, references to the concept of “hedging” shall be
understood as all operations whose objective is to ensure or determine the future selling price of
products. ELEVEN: The parties hereby agree that, in the demarcated area detailed in
Appendix A, there are both mining exploitation concessions and mining exploration concessions,
either already constituted or in the process thereof, of the COMPAÑÍA MINERA NEVADA S.A., or under
its control. The new exploitation concessions acquired or obtained by COMPAÑÍA MINERA NEVADA S.A.
or any company related thereto, within the demarcated area, will be incorporated into the
provisions of this contract. If for any reason COMPAÑÍA MINERA NEVADA S.A., its successor, or a
company related thereto, decides to not continue or renew any of the mining concessions contained
within the demarcated area, in respect of whose terrain there is no mining concession constituted
or in the process thereof, it shall offer to transfer, in proportion to its previous share
participation, as applicable, for the price of one third of the value of the most recent permit, to
the shareholders Xxxxxxx Xxxxxx Steppes or his estate, Xxxxx Xxxxxx Xxxxxx or his estate, Xxxxx
Xxxxxx Xxx or his estate, and/or Mr. Mario Xxxx Xxxxxxxxx Xxxxxxx or his estate, all of whom shall
state, in writing, within the following thirty days, their acceptance thereof. After the expiry of
said period without them having stated their intention to accept the offer, COMPAÑÍA MINERA NEVADA
S.A. shall be empowered to dispose of said concessions in whatever manner is most suitable for
its
interests. TWELVE: In order to guarantee payment of the variable portion of the
price mentioned in Clause Four of this document, COMPAÑÍA MINERA NEVADA S.A. is obligated
to not dispose of nor transfer the mining concessions identified in Appendix “A”, that are
located within the demarcated area, without the prior written consent of the selling party,
and this prohibition shall remain in force until such time as the obligation to pay the
variable part of the price that the buyer assumes, has been extinguished. This prohibition
shall be recorded in the relevant Registry of the Custodian of Mines of Huasco, Vallenar.
The above notwithstanding, the parties agree to release the prohibition agreed on
previously, in order to allow COMPAÑÍA MINERA NEVADA S.A. to dispose of said mining
concessions for the sole purpose of registering contracts by virtue of which COMPAÑÍA
MINERA NEVADA S.A. transfers ownership of said concessions, if, in the relevant contracts,
the new purchaser recognizes that he accepts the obligation for himself and formally and
explicitly commits to paying the variable part of the price indicated in points d), e) and
f) of Clause Four of this document, and that he likewise is obligated to constitute, in the
same document of public record by which he purchases ownership of the concessions that are
located within the demarcated area, the same prohibition that COMPAÑÍA MINERA NEVADA S.A.
constitutes hereby. In any event, COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA [and] its
successor shall be responsible to the sellers for payment of the variable part of the
price, in the portion that is not paid by the new purchaser. The Custodian of Mines of
Huasco, Vallenar, after having complied with the above requirement, shall carry out
whatever registrations are applicable for the indicated purpose, without requiring that new
documents
be provided by the parties. The same procedure indicated above shall be applied if the new
purchaser, in turn, desires to dispose of the identified mining concessions that he had acquired,
in which case only the prohibition on disposal shall be lifted, and only for the purpose of
registering the relevant contract, if, in turn, the new purchaser accepts and commits to paying the
variable part of the price referred to in Clause Four and constitutes the same prohibitions that
are agreed on here. Thus, whomever acquires the mining concessions that are subject to the
prohibition against disposal and transfer, must, in the contract by which he purchases the
possessions identified previously, accept and commit to paying the seller, the variable part of the
price indicated in points d), e) and f) of Clause Four of this document, and to constitute the same
prohibition that is hereby constituted by COMPAÑÍA MINERA NEVADA S.A. The parties hereby expressly
declare that the prohibition to dispose of or transfer, in favor of the Seller, referred to in this
clause, shall not be applicable and neither shall it affect the liens, guarantees, mortgages or
prohibition to dispose of or transfer, in one or more acts, that COMPAÑÍA MINERA NEVADA S.A. or
its successor in ownership of the possessions, provides as surety for the financing of the project
for the exploitation of the concessions that are located within the demarcated area, in favor of
one ore more banks, credit institutions or financial entities, either local or foreign, and neither
shall it affect the exercising of the rights derived from said liens, guarantees, mortgages or
prohibitions. Without prejudice to the foregoing, in the event that the banks, credit institutions
or financial entities referred to above, require so for the purposes described above, the seller
shall be obligated to provide the documents that are necessary to postpone the guarantee in favor
of the banks, credit institutions or financial entities, in order to permit the constitution of the
liens, guarantees,
mortgages or prohibitions alluded to, including the relevant releases therefrom, at the mere
request of the Buyer. THIRTEEN: The seller expressly waives all legal action to which
he could be entitled by reason of or because of this contract for the purchase of shares. In
like manner, the parties hereby declare that the provisions of the contract titled “Contrato de
Opción Minera de COMPAÑÍA MINERA NEVADA S.A.” which was signed on February twenty seven of
nineteen hundred and seventy eight before Santiago Notary Xx. Xxxxxx Xxxxxxx, substitute for
Xx. Xxxxxx Xxxxx Xxxxxx, as amended, including the amendment dated February seven of nineteen
eighty three, made before the Notary Xx. Xxxxxxxx Xxxx, substitute for Xx. Xxxxx Xxxxxx
Xxxxxxx. FOURTEEN. Any doubt or difficulty that arise between the parties regarding
this contract, the documents that compliment it or modify it, either in relation to the
interpretation thereof, compliance, validity, termination or any other issue related to this
contract, shall be resolved through arbitration in accordance with the bylaws of the
Arbitration Center of the Xxxxxxxx Chamber of Commerce A.G., whose provisions are witnessed by
the document of public record dated December 10 nineteen ninety two granted before the Santiago
Notary Mr. Xxxxxx Xxxxxxxxx Xxxxxx, which forms an integral part of this clause, the parties
declaring that they acknowledge and accept it. The parties confer an irrevocable special power
of attorney on the Xxxxxxxx Chamber of Commerce A.G. such that on the written request of
either party, it shall designate an arbitrator from among the members of the Arbitration Body
of the Arbitration Center of said Chamber, who shall arbitrate in relation to the procedure but
legally in relation to the decision of the matter. There shall be no recourse to appeal
against the resolution of said mixed arbitrator, and the
parties do hereby waive such. The designated arbitrator is specially empowered to resolve all
matters related to his competence and jurisdiction. For all legal purposes, the parties set their
domicile as the city of Xxxxxxxx. The applicable legislation shall be Chilean law.
SIXTEEN: Present at the signing hereof are Mr. XXXXX XXXXXXXX TEAR, who is British,
married, a chartered accountant, domiciled at Xxxxx xx Xxxxxxxx one hundred, floor 11, Providencia,
Santiago, identity card for foreigners number eight million eight hundred and twenty four thousand,
five hundred and ninety eight dash nine, and Xx. XXXXXXXX XXXXXXX XXXXXXX, who is Chilean,
married, a civil engineer, domiciled at Xxxxx xx Xxxxxxxx one xxxxxxx, xxxxx 00, Xxxxxxxxxxx,
Xxxxxxxx, national identity card number four million seven hundred and seventy three thousand eight
hundred and sixty six dash zero, in representation of COMPAÑÍA MINERA NEVADA S.A., whose line of
business is as the name suggests, with the same domicile as that of its representatives, who state
that they understand and accept all of the stipulations contained in this document, and which
obligate the company that they represent to obtain the authorization that is given to the sellers
to obtain from COMPAÑÍA MINERA NEVADA S.A. all of the documentation related to the statements,
calculations of production and sales, as well as the obligation of COMPAÑÍA MINERA NEVADA S.A. to
not dispose of or transfer the mining concessions identified in Appendix A and that are contained
within the demarcated area. The legal status of Ms. XXXXX XXXXXXX XXXXX XXXXX and XXXXXX XXXXX
XXXXX, for COMPAÑÍA XXXXXX XXXXXXX CHILE LIMITADA is witnessed by the document of public record
dated June 10, nineteen ninety eight, granted before Santiago Notary Xx. Xxxxxxx Xxxxxx Concha,
which is not inserted at the request of the parties since it is known to them. The legal status of
Mr. XXXXX XXXXXXXX TEAR and of Xx. XXXXXXXX XXXXXXX XXXXXXX, for COMPAÑÍA MINERA NEVADA
S.A., is witnessed by the Document of Public Record dated June twelve nineteen ninety eight,
granted before Santiago Notary Xx. Xxxxxxx Xxxxxx Concha, which is not inserted at the
request of the parties since it is known to them. IN WITNESS WHEREOF and after having
read, those present signed. A COPY IS GIVEN I ATTEST.-
| /s/ Mario Xxxx Xxxxxxxxx Xxxxxxx | ||||
| C.I.N° 4.773.296-K |
/s/ Xxxxx Xxxxxxx Xxxxx Xxxxx
|
/s/ Xxxxxx Xxxxx Xxxxx | |||||
X.X. de Ext. 14.598.411-4
|
C. I. N° 5.419.292-4 |
COMPANIA XXXXXX XXXXXXX CHILE LIMITADA
/s/ Xxxxx Xxxxxxxx Tear
|
/s/ Xxxxxxxx Xxxxxxx Xxxxxxx | |||||
X. X. Ext. 8.824.598-9
|
C.I.N° 4.773.876-0 |
COMPAÑIA MINERA NEVADA S.A
/s/ [ILLEGIBLE]
/s/ [ILLEGIBLE]
THIS COPY IS A TRUE AND FAITHFUL REPRESENTATION OF THE ORIGINAL.- SIGNED AND SEALED ON THIS
DATE. IDENTIFICATION N° 2:917-98.- XXXXXXXX XXXX 30, 1998.
