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Exhibit 10.11(a)
AMENDED AND RESTATED
GOLDEN EAGLE
EARN-IN AGREEMENT
between
SANTA FE PACIFIC GOLD CORPORATION
and
HECLA MINING COMPANY
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Hecla's Representations . . . . . . . . . . . . . . . . . . . . 4
2.3 Santa Fe's Representations and Warranties . . . . . . . . . . . 7
2.4 Materiality of Representations . . . . . . . . . . . . . . . . 8
ARTICLE III - TERM OF EARN-IN AGREEMENT . . . . . . . . . . . . . . . . . 8
ARTICLE IV - RELATIONSHIP OF THE PARTIES . . . . . . . . . . . . . . . . 8
4.1 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Federal Tax Elections and Allocations . . . . . . . . . . . . . 9
4.3 State Income Tax . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Other Business Opportunities . . . . . . . . . . . . . . . . . 9
4.6 Waiver of Right to Partition . . . . . . . . . . . . . . . . . 10
4.7 Transfer or Termination of Rights to Properties . . . . . . . . 10
4.8 Implied Covenants . . . . . . . . . . . . . . . . . . . . . . . 10
4.9 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V - INITIAL CONTRIBUTION . . . . . . . . . . . . . . . . . . . . 10
5.1 Initial Payment and Contributions; Earn-in Expenditures;
Feasibility Study . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Reasonable Earn-in Expenditures . . . . . . . . . . . . . . . . 11
5.3 Identification of Earn-in Expenditures Upon Presentation of
Feasibility Study . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Addition of Mineral Properties to Operating Agreement . . . . 12
ARTICLE VI - MANAGEMENT COMMITTEE . . . . . . . . . . . . . . . . . . . . 12
6.1 Organization and Composition . . . . . . . . . . . . . . . . . 12
6.2 Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII - PROGRAMS AND BUDGETS . . . . . . . . . . . . . . . . . . . 13
7.1 Preparation, Presentation and Content of Programs and Budgets . 13
(a) Content of Programs . . . . . . . . . . . . . . . . . . . 13
(b) Content of Budgets . . . . . . . . . . . . . . . . . . . . 13
7.2 Submittal and Approval of Proposed or Modified Programs and
Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII - MAINTENANCE AND ABANDONMENT OF MINERAL PROPERTIES . . . . 14
8.1 Maintenance of Mineral Properties and Underlying Agreements . . 14
8.2 Assessment Work or Fees . . . . . . . . . . . . . . . . . . . . 14
8.3 Abandonment of Mineral Properties . . . . . . . . . . . . . . . 15
ARTICLE IX - AREA OF INTEREST . . . . . . . . . . . . . . . . . . . . . . 15
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9.1 Proposed Acquisition of Mineral Properties . . . . . . . . . . 15
9.2 Election to Acquire Mineral Properties . . . . . . . . . . . . 16
9.3 Excluded Acquisition . . . . . . . . . . . . . . . . . . . . . 16
9.4 Area of Interest Properties Owned or Controlled by Hecla . . . 16
ARTICLE X - WITHDRAWAL AND TERMINATION . . . . . . . . . . . . . . . . . 19
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Santa Fe's Election to Withdraw and Terminate . . . . . . . . . 19
10.3 Termination Upon Contribution of Mineral Properties to the
Operating Agreement . . . . . . . . . . . . . . . . . . . . . . 19
10.4 Failure to Provide Feasibility Study . . . . . . . . . . . . . 20
10.5 Removal of Property . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XI - OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.1 Parameters for Santa Fe's Earn-in Activities . . . . . . . . . 20
11.2 Surface and Surface Facilities . . . . . . . . . . . . . . . . 21
11.3 Compliance With Laws and Agreements . . . . . . . . . . . . . . 22
11.4 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XII - RECLAMATION . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XIII - REPORTING, INSPECTION AND AUDIT . . . . . . . . . . . . . 26
ARTICLE XIV - MEMORANDUM . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE XV - DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE XVI - CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . 28
16.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16.2 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16.3 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . 29
16.4 Duration of Confidentiality . . . . . . . . . . . . . . . . . . 29
ARTICLE XVII - TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 29
17.1 Reimbursement for Taxes . . . . . . . . . . . . . . . . . . . . 29
17.2 Provisions Concerning Taxation . . . . . . . . . . . . . . . . 29
ARTICLE XVIII - COOPERATION . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XIX - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 30
19.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
19.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
19.3 Modification . . . . . . . . . . . . . . . . . . . . . . . . . 31
19.4 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . 31
19.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 32
19.6 Rule Against Perpetuities . . . . . . . . . . . . . . . . . . . 32
19.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 33
19.8 Entire Agreement; Amendments; Successors and Assigns . . . . . 33
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19.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 33
19.10Paragraph Headings . . . . . . . . . . . . . . . . . . . . . . 33
EXHIBITS
EXHIBIT A: PROPERTIES TO BE CONTRIBUTED BY HECLA
EXHIBIT B: TAX MATTERS
EXHIBIT C: AREA OF INTEREST
EXHIBIT D: EXPENDITURE SCHEDULE
EXHIBIT E: SPECIAL WARRANTY DEED
EXHIBIT F: OPERATING AGREEMENT
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AMENDED AND RESTATED GOLDEN EAGLE EARN-IN AGREEMENT
This Amended and Restated Earn-in Agreement is made as of September, 6,
1996 between SANTA FE PACIFIC GOLD CORPORATION, a Delaware corporation
("Santa Fe"), and HECLA MINING COMPANY, a Delaware corporation ("Hecla").
RECITALS
A. Hecla owns or controls certain lands in Ferry County, State of
Washington, as described in Exhibit A Part 1 and defined as "Hecla's
Properties" in Section 1.8. Hecla also owns and controls certain lands as
described in Exhibit A Part 2 and defined as the "Joint Properties" in
Section 1.9. Hecla desires to contribute Hecla's Properties to the purposes
of this Earn-in Agreement.
B. Santa Fe desires to immediately acquire an undivided 75% interest
in the Joint Properties described in Exhibit A Part 2, and to acquire the
right to receive conveyance of an undivided 75% interest in Hecla's
Properties, for which Santa Fe shall make payment of $2,500,000 to Hecla.
C. Santa Fe further desires to make certain expenditures on or for the
benefit of the Mineral Properties as may be reasonable or necessary to enable
Santa Fe to provide Hecla with a Feasibility Study.
D. Santa Fe and Hecla desire to enter into the Operating Agreement
attached hereto as Exhibit F, on the terms and conditions hereinafter set
forth.
In consideration of the promises set forth below, Hecla and Santa Fe
agree to the provisions of this Earn-in Agreement.
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ARTICLE I
DEFINITIONS
1.1 "Affiliate" means any person, partner, partnership, joint
venture, limited liability company, corporation or other form of enterprise
which directly or indirectly controls, is controlled by, or is under common
control with Santa Fe or Hecla. For purposes of the preceding sentence,
"control" means possession, directly or indirectly, of the power to direct or
cause direction of management and policies through ownership of voting
securities, contract, voting trust or otherwise.
1.2 "Area of Interest" means the area described in Exhibit C. The
Joint Properties shall not be deemed to be subject to this Earn-in Agreement
or part of the Area of Interest for purposes of this Earn-in Agreement.
1.3 "Earn-in Activities" means all activities on or for
the benefit of the Mineral Properties giving rise to Earn-in Expenditures.
1.4 "Earn-in Agreement" means this Amended and Restated Golden
Eagle Earn-in Agreement.
1.5 "Earn-in Expenditures" means those expenditures on or for the
benefit of the Mineral Properties as defined in Exhibit D or as specified in
the terms of this Earn-in Agreement.
1.6 "Effective Date" means the effective date of this Earn-in
Agreement, September 6, 1996.
1.7 "Feasibility Study" means a study of the feasibility of
developing and operating a mine on the Mineral Properties, or the Mineral
Properties and Joint Properties, as the case may be, including an analysis of
economic, engineering, environmental, regulatory and
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other considerations, and containing the level of detail customary in the
industry for a bankable feasibility study which may, if necessary, be
presented to financial institutions for the purpose of seeking and ultimately
obtaining financing for the development of a mine.
1.8 "Hecla's Properties" means those properties described in
Exhibit A Part 1.
1.9 "Joint Properties" means those properties described in Exhibit
A Part 2, in which Santa Fe shall immediately acquire an undivided 75%
interest from Hecla upon payment of $2,500,000 to Hecla hereunder.
1.10 "Mineral Properties" means Hecla's Properties and any other
interests in real property within the Area of Interest which are made subject
to the terms of this Earn-in Agreement after the Effective Date. The Joint
Properties are not Mineral Properties for purposes of this Earn-in Agreement.
1.11 "Operating Agreement" means that agreement, attached to
this Earn-in Agreement as Exhibit F, which is to be entered into immediately
between Santa Fe and Hecla for purposes of operating the Joint Properties,
and to which the Mineral Properties may be added upon Santa Fe's fulfillment
of the requirements set out in Article V of this Earn-in Agreement.
1.12 "Parties" means Hecla and Santa Fe.
1.13 "Term" means the term of this Earn-in Agreement as
defined in Article III.
ARTICLE II
REPRESENTATIONS
2.1 CAPACITY. Each of the Parties represents as follows:
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(a) that it is a corporation duly incorporated and in good
standing in its state or jurisdiction of incorporation and that it is
qualified to do business and is in good standing in those states or
jurisdictions where necessary in order to carry out the purposes of this
Earn-in Agreement;
(b) that it has the capacity to enter into and perform this
Earn-in Agreement and all transactions contemplated herein and that all
corporate and other actions required to authorize it to enter into and
perform this Earn-in Agreement have been properly taken;
(c) that it will not breach any other agreement or
arrangement by entering into or performing this Earn-in Agreement; and
(d) that this Earn-in Agreement has been duly executed and
delivered by it and is valid and binding upon it in accordance with its
terms.
2.2 HECLA'S REPRESENTATIONS AND WARRANTIES. Hecla represents and
warrants that to the best of its information, knowledge and belief, with
respect to Hecla's Properties and the Joint Properties:
(a) Hecla is in exclusive possession of such properties;
(b) Subject to the paramount title of the United States, (i)
the unpatented mining claims were properly laid out and monumented; (ii)
all required location work was properly performed; (iii) location
notices and certificates were properly recorded and filed with
appropriate governmental agencies; (iv) all assessment work has been
performed, or fee payments in lieu thereof made, as required to hold the
unpatented mining claims through the assessment year ending August 31,
1995; (v) all
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affidavits of assessment work and other filings required to maintain the
claims in good standing have been properly and timely recorded or filed
with appropriate governmental agencies; (vi) the claims are free and
clear of defects, liens or encumbrances arising by, through or under
Hecla except for those found of public record or identified on Exhibit A
hereto; (vii) there are no conflicting claims; and (viii) there are no
pending or threatened actions, suits or proceedings involving the mining
claims.
(c) Hecla's Properties and the Joint Properties are free and
clear of all defects, liens and encumbrances except for those found of
public record or identified on Exhibit A hereto and except for those
which would not have a material adverse effect on the usage contemplated
herein;
(d) there is no judgment outstanding or litigation,
proceeding or governmental investigation pending or threatened against
Hecla, its Affiliates, Hecla's Properties or the Joint Properties,
which would have a materially adverse effect on the title or interest of
Hecla in or to Hecla's Properties and the Joint Properties or Hecla's
power or right to sell, convey, transfer or assign the mineral estate
in such properties, nor has Hecla received any communication asserting
or threatening any adverse claim to any part of such properties other
than as specified herein;
(e) Hecla has made available to Santa Fe all information and
data regarding the existence of minerals within Hecla's Properties and
the Joint Properties, and all information concerning record, possessory,
legal or equitable title to such properties which is within Hecla's
knowledge, possession or control;
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(f) Hecla has fully informed and disclosed to Santa Fe (i)
the occurrence of, and circumstances surrounding, any release, spill,
discharge, leak, emission, escape, dumping or any material release of
any kind of any toxic or hazardous substances as defined under any
local, state or federal regulation, laws or statutes, from, on, in or
under Hecla's Properties and the Joint Properties or into any
environment surrounding such properties, except for those releases
permissible under such regulations, laws or statutes; (ii) any storage
or disposal of toxic or hazardous substances or toxic or hazardous
wastes on, at or related to such properties; and (iii) all pending or
threatened litigation or enforcement proceedings relating to such
properties or to Hecla's operations conducted at any time within the
Area of Interest.
(g) Hecla is in compliance in all material respects with all
federal, state and local laws, rules and regulations relating to or
affecting Hecla's Properties and the Joint Properties, and has obtained,
maintained in full force and effect, and operated in substantial
compliance with all authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or regulatory body
relating to or affecting such properties except as disclosed in this
Earn-in Agreement; and operations of Hecla and its agents or contractors
on, at, or related to such properties have not resulted in any
substantial violations of federal, state or local laws, rules,
regulations, ordinances or orders which would have a material adverse
effect on the usage contemplated herein;
(h) Other than as specified in Exhibit A, there are no
existing mineral production or other royalties of any kind which are
payable with respect to Hecla's Properties or the Joint Properties or
mineral substances mined therefrom;
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(i) neither Hecla nor any of its Affiliates is a party to or
has any knowledge of any existing oral or written agreement of any kind
which does or could have a material adverse impact on record or
possessory title to the mineral estate on Hecla's Properties, the Joint
Properties, and/or the exploration, development or mining of same;
(j) there are no existing restrictions which would have a
material adverse effect on the right to explore, develop and mine
mineral substances from Hecla's Properties or the Joint Properties,
excluding restrictions contained in applicable laws, statutes and
regulations; and
(k) Hecla is unaware of any material facts or circumstances
which have not been disclosed to Santa Fe, which should be disclosed to
Santa Fe in order to prevent the representations in this Section 2.2
from being misleading.
2.3 SANTA FE'S REPRESENTATIONS AND WARRANTIES. Santa Fe represents
and warrants that to the best of its information, knowledge and belief, with
respect to Santa Fe's activities on Hecla's Properties and the Joint
Properties prior to entry into this Earn-in Agreement, Santa Fe has been and
remains in compliance in all material respects with all federal, state and
local laws, rules and regulations relating to or affecting its activities,
and activities of Santa Fe and its agents or contractors on, at, or related
to such properties have not resulted in any substantial violations of
federal, state or local laws, rules, regulations, ordinances or orders which
would have a material adverse effect on the usage contemplated herein.
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2.4 MATERIALITY OF REPRESENTATIONS. All representations and
warranties made in this Article II are material to this Earn-in Agreement and
the Parties' intent in entering into it.
ARTICLE III
TERM OF EARN-IN AGREEMENT
The Term of this Earn-in Agreement shall commence as of the Effective
Date and shall terminate in accordance with Section 5.1(c) and 10.3, unless
the Earn-in Agreement is terminated earlier pursuant to Article X or extended
by amendment upon the Parties' mutual written agreement.
ARTICLE IV
RELATIONSHIP OF THE PARTIES
4.1 NO PARTNERSHIP. Nothing contained in this Earn-in Agreement
shall be deemed to constitute any Party the partner of another, nor, except
as otherwise herein expressly provided, to constitute any Party the agent or
legal representative of another, nor to create any fiduciary relationship
between or among them. It is not the intention of the Parties to create, nor
shall this Earn-in Agreement be construed to create, any mining, commercial
or other partnership other than the tax partnership referenced in Section
4.2. No Party shall have any authority to act for or to assume any
obligation or responsibility on behalf of any other Party, except as
otherwise expressly provided herein. The rights, duties, obligations and
liabilities of the Parties shall be several and not joint or collective.
Each Party shall be responsible only for its obligations as herein set out
and shall be liable only for its share of the costs and expenses as provided
herein, it being the express purpose and intention of the Parties that their
ownership of assets and the rights acquired hereunder shall be as tenants in
common. Each Party shall
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indemnify, defend and hold harmless each other Party, its directors,
officers, employees, agents and attorneys from and against any and all
losses, claims, damages and liabilities (including litigation costs and
attorneys' fees) arising out of any act or any assumption of liability by the
indemnifying Party, or any of its directors, officers, employees, agents and
attorneys done or undertaken, or apparently done or undertaken, on behalf of
any other Party, except pursuant to the authority expressly granted herein or
as otherwise agreed in writing among the Parties.
4.2 FEDERAL TAX ELECTIONS AND ALLOCATIONS. Without changing the
effect of Section 4.1, the Parties agree that their relationship pursuant to
this Earn-in Agreement shall constitute a tax partnership within the meaning
of Section 761(a) of the United States Internal Revenue Code of 1986, as
amended. Tax elections and allocations shall be made as set forth in Exhibit
B to this Earn-in Agreement, which is attached hereto and made a part
hereof. The tax partnership shall not survive the Term of this Earn-in
Agreement and shall continue only if unanimously agreed by the Parties to the
Operating Agreement.
4.3 STATE INCOME TAX. The Parties also agree that, to the extent
permissible under applicable law, their relationship shall be treated for
state income tax purposes in the same manner as it is for Federal income tax
purposes.
4.4 TAX RETURNS. The Tax Matters Partner, as defined in Exhibit B
to this Earn-In Agreement, shall prepare and file any tax returns or other
tax forms required.
4.5 OTHER BUSINESS OPPORTUNITIES. Except as expressly provided in
this Earn-in Agreement, each Party shall have the right independently to
engage in and receive full benefits from business activities, whether or not
competitive with the operations under this Earn-in Agreement, without
consulting any other Party. The doctrines of "corporate opportunity" or
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"business opportunity" shall not be applied to any other activity, venture,
or operation of any Party, and, except as otherwise provided in this Earn-in
Agreement, no Party shall have any obligation to any other with respect to
any opportunity to acquire any property at any time.
4.6 WAIVER OF RIGHT TO PARTITION. The Parties hereby waive and
release all rights of partition, or of sale in lieu thereof, or other
division of assets, including any such rights provided by statute.
4.7 TRANSFER OR TERMINATION OF RIGHTS TO PROPERTIES. Except as
otherwise provided in this Earn-in Agreement, no Party shall transfer all or
any part of its interest in the Mineral Properties or this Earn-in Agreement
or otherwise permit or cause such interests to terminate.
4.8 IMPLIED COVENANTS. There are no implied covenants contained
in this Earn-in Agreement other than those of good faith and fair dealing.
4.9 EMPLOYEES. Employees of the respective Parties are not and
shall not be employees of the other Parties or of any venture which may be
comprised of the Parties.
ARTICLE V
INITIAL CONTRIBUTION
5.1 INITIAL PAYMENT AND CONTRIBUTIONS; EARN-IN EXPENDITURES;
FEASIBILITY STUDY.
(a) Upon execution of this Earn-in Agreement, Santa Fe shall
make a nonrefundable payment of $2,500,000 to Hecla in exchange for immediate
conveyance of a 75% undivided interest in the Joint Properties by special
warranty deed (attached as Exhibit E) from Hecla, and the right to receive a
good and sufficient deed of an undivided 75% interest in Hecla's Properties
within 10 days of Santa Fe notifying Hecla (in writing) of its desire to
receive such conveyance; Hecla hereby grants Santa Fe the right to such
conveyance covering all or
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any part of Hecla's Properties at Santa Fe's sole election, without further
exchange of consideration, which election may be made, if at all, at any time
during the term of this Earn-in Agreement.
(b) Hecla has contributed Hecla's Properties for the purposes
of this Earn-in Agreement, and Hecla need not make further contribution
during the term of this Earn-in Agreement.
(c) Subject to Santa Fe's rights under Section 10.2 of this
Earn-in Agreement, Santa Fe shall contribute such Earn-in Expenditures as
may, in its sole discretion, be reasonable or necessary in order to provide
Hecla with a Feasibility Study. Santa Fe must provide the Feasibility Study
to Hecla, if at all, on or before the sixth anniversary of the Effective
Date, subject to Santa Fe's right to withdraw under Section 10.2. At Santa
Fe's sole election, the Feasibility Study may cover any part of the Mineral
Properties, or the Joint Properties in addition to any part of the Mineral
Properties.
5.2 REASONABLE EARN-IN EXPENDITURES. Subject to the terms of
Exhibit D, Santa Fe shall determine the manner, places and means by which it
conducts Earn-in Activities and makes Earn-in Expenditures on or for the
benefit of the Mineral Properties. Such Earn-in Activities shall be
conducted reasonably in accordance with mining industry standards in the
United States.
5.3 IDENTIFICATION OF EARN-IN EXPENDITURES UPON PRESENTATION OF
FEASIBILITY STUDY. Within thirty (30) days after presenting Hecla with a
Feasibility Study, Santa Fe shall identify the amount of Earn-in Expenditures
expended since the effective date and shall provide
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sufficient detail and supporting documentation to permit Hecla to review and
reasonably verify the Earn-in Expenditures.
5.4 ADDITION OF MINERAL PROPERTIES TO OPERATING AGREEMENT.
Within forty-five (45) days after Santa Fe provides Hecla with a Feasibility
Study, Hecla shall execute, acknowledge and deliver to Santa Fe a good and
sufficient deed of an undivided 75% interest in Hecla's Properties, and in
any additional Mineral Properties for which Santa Fe has made an election
pursuant to Section 9.4, to the extent not previously conveyed to Santa Fe;
such conveyance shall be made without any further exchange of consideration.
Thereupon, the Mineral Properties, including Hecla's Properties, shall be
jointly contributed by the parties to the purposes of the Operating
Agreement.
ARTICLE VI
MANAGEMENT COMMITTEE
6.1 ORGANIZATION AND COMPOSITION. Santa Fe and Hecla hereby
establish a Management Committee to determine overall policies, objectives,
procedures, methods, actions and budgets under this Earn-in Agreement. The
Management Committee shall consist of two members appointed by Santa Fe and
two members appointed by Hecla. Each Participant may appoint one or more
alternates to act in the absence of a regular member. Any alternate so
acting shall be deemed a member. Appointments shall be made or changed by
notice to the other Participant prior to the meeting at which the member is
to act.
6.2 DECISIONS. Each of the Parties, acting through their
appointed members, shall have one vote on the Management Committee. If a
matter for decision does not receive
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the approval of both Parties, and does not require unanimous approval
pursuant to this Earn-in Agreement, then the decision shall be made by Santa
Fe.
6.3 MEETINGS. Unless agreed otherwise by the Parties, the
Management Committee shall hold quarterly meetings at a place within the
continental United States to be designated by Santa Fe, or at other mutually
agreed locations. Santa Fe shall give thirty (30) days notice to Hecla of
such meetings.
ARTICLE VII
PROGRAMS AND BUDGETS
7.1 PREPARATION, PRESENTATION AND CONTENT OF PROGRAMS AND BUDGETS.
Santa Fe and Hecla agree as follows:
(a) CONTENT OF PROGRAMS. Proposed programs and budgets shall
be prepared for proposal to the Management Committee by Santa Fe. Each
program shall be accompanied by and include a corresponding budget of
Earn-in Expenditures and shall designate the location on or off the
Mineral Properties where the Earn-in Activities are to be performed,
shall describe work to be performed as Earn-in Activities, and shall
state the estimated period of time required to perform the work.
(b) CONTENT OF BUDGETS. Each budget shall be prepared in
reasonable detail, including, but not limited to, type of Earn-in
Activities to be conducted (such as drilling, blasting, assaying,
modeling, engineering, geophysics, geochemistry, hydrology, metallurgy,
metallurgical or environmental test work or other test work, permitting,
regulatory compliance, preparation of a Feasibility Study, etc.), time
frame within which the work shall be performed maps reflecting
location(s) of Earn-in Activities to be conducted on the Mineral
Properties (or identifications of where Earn-in Activities will
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be conducted off-site and, to the extent known at the time the budget is
prepared, an indication of who will be conducting such off-site
activities), and estimated cost(s) of each type of work included in the
Earn-in Activities.
7.2 SUBMITTAL AND APPROVAL OF PROPOSED OR MODIFIED PROGRAMS
AND BUDGETS. Within ten (10) working days after Santa Fe submits a
proposed or modified Program and Budget to Hecla, the Management
Committee shall meet to consider it. In the event Santa Fe and Hecla
are unable to reach agreement to approve a proposed or modified Program
and Budget, Santa Fe's Program and Budget shall prevail provided it
meets the terms and conditions specified in this Earn-in Agreement.
ARTICLE VIII
MAINTENANCE AND ABANDONMENT OF MINERAL PROPERTIES
8.1 MAINTENANCE OF MINERAL PROPERTIES AND UNDERLYING AGREEMENTS.
Santa Fe shall take all steps necessary to maintain the Mineral Properties
(and underlying agreements relating thereto) in good standing during the Term
of this Earn-in Agreement. All costs and expenses incurred by Santa Fe under
this Section 8.1 shall qualify as Earn-in Expenditures.
8.2 ASSESSMENT WORK OR FEES. Santa Fe shall conduct all required
annual assessment work and pay any and all fees on or for the unpatented
mining claims included in the Mineral Properties for the annual assessment
year beginning September 1, 1995. Thereafter, during the term of this
Earn-in Agreement, Santa Fe shall perform any annual assessment work required
to maintain such claims for any assessment year in which this Earn-in
Agreement has not expired or been terminated prior to ninety (90) days before
the end of such assessment year, and will make annual fee payments required
to maintain unpatented mining claims for any assessment year in which this
Earn-in Agreement has not expired or been terminated thirty (30)
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days prior to the fee payment due date. Santa Fe shall timely record, file
and furnish to Hecla affidavits of such performance and evidence of fee
payment. Santa Fe shall not be liable on account of holdings by any court or
governmental agency that the effects of any work elected and performed in
good faith by Santa Fe are insufficient to constitute annual assessment work
for purposes of preserving title to such claims, provided that the work so
done is of the kind generally accepted as assessment work in the mining
industry in the United States and provided that Santa Fe expended a total
amount sufficient to meet any minimum requirements during the required period
of time with respect to all such unpatented claims.
8.3 ABANDONMENT OF MINERAL PROPERTIES. Subject to Santa Fe's
right, at its sole election, to receive conveyance of Hecla's Properties
pursuant to the terms of Section 5.1, or to receive conveyance of excluded
lands pursuant to the terms of Section 9.4, if either party desires to
abandon, release or surrender its rights to a part of the Mineral Properties
at any time, it shall notify the other Party and offer to assign to the Other
Party the part of those Properties it intends to abandon, release or
surrender.
ARTICLE IX
AREA OF INTEREST
9.1 PROPOSED ACQUISITION OF MINERAL PROPERTIES. If during the
Term of this Earn-in Agreement Santa Fe or Hecla or an Affiliate of either
should acquire any interest in real property in the Area of Interest, it
shall notify the other Party (referred to in this Article IX as "Other
Party") within ten (10) days after the acquisition and shall include in the
notice a description of the interest in real property and a statement of the
total acquisition cost and any committed work expenditures. The Other Party
shall have a period of thirty (30) days from
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receipt of such notice within which to elect to subject the interest in real
property to this Earn-in Agreement.
9.2 ELECTION TO ACQUIRE MINERAL PROPERTIES. If Hecla is the Other
Party and elects to include the interest in real property acquired by Santa
Fe in this Earn-in Agreement, the total acquisition cost shall be deemed
Earn-in Expenditures expended by Santa Fe, and Santa Fe shall assign to Hecla
an undivided 25% interest in and to the acquired interest in real property by
executing, acknowledging, and delivering a good and sufficient deed or
assignment, whereupon the interest in real property shall become a part of
the Mineral Properties subject to this Earn-in Agreement. If Santa Fe is the
Other Party and elects to include the interest in real property acquired by
Hecla in this Earn-in Agreement, Santa Fe shall pay Hecla 100% of its total
acquisition cost, which shall be deemed Earn-in Expenditures expended by
Santa Fe, and Hecla shall assign an undivided 75% interest to Santa Fe in the
above-described manner, whereupon the interest in real property shall become
a part of the Mineral Properties subject to this Earn-in Agreement.
9.3 EXCLUDED ACQUISITION. If the Other Party elects not to
subject the real property or interest in real property to this Earn-in
Agreement during the thirty (30) day period referenced in Section 9.1, the
acquiring party shall hold it free and clear of this Earn-in Agreement, and
it will not be a part of the Mineral Properties or the Area of Interest.
9.4 AREA OF INTEREST PROPERTIES OWNED OR CONTROLLED BY HECLA.
(a) Certain lands that are currently owned and controlled by
Hecla within the Area of Interest are excluded from Hecla's Properties
for the purposes of this Earn-in Agreement. The excluded lands are
identified on Exhibits A and C. Santa Fe may, at
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its sole election and without further exchange of consideration, subject
the excluded lands, or any part or parts thereof, to this Earn-in
Agreement by providing written notice(s) of its election to Hecla. Such
notice(s) shall specify the excluded lands, or parts thereof, for which
the election is made. Effective upon receipt of Santa Fe's notice, the
properties specified in such notice shall become a part of the Mineral
Properties, but Santa Fe shall have no vested ownership interest in such
lands until such time as it may, at its sole option and without further
exchange of consideration, request delivery of a good and sufficient
deed or assignment of an undivided 75% interest in the formerly excluded
lands for which an election has previously been made. Within thirty
(30) days of exercising its option to receive a conveyance of any part
of the formerly excluded lands, Hecla shall execute, acknowledge and
deliver a good and sufficient deed or assignment of an undivided 75%
interest in such lands to Santa Fe.
(b) Santa Fe's election(s) to subject excluded lands to this
Earn-in Agreement under this Section 9.4 may be made at any time
commencing with the Effective Date and continuing through the earlier of
one year after Hecla hereafter notifies Santa Fe in writing that all of
the excluded lands (which remain excluded as of the time of the notice)
have become unencumbered by permitting or bonding requirements or
environmental or reclamation obligations owing to any local, state or
federal agency and are no longer the subject of any existing or
threatened governmental investigation or enforcement proceeding or
public or private litigation, or the date conveyance becomes required
pursuant to Section 5.4. Upon the expiration of such election period,
Hecla may, subject to the offer of assignment procedures described in
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Section 8.3, dispose of any portion of the excluded lands for which an
election or conveyance has not been made.
(c) Santa Fe's option to receive a conveyance of all or part
of the excluded lands which it has elected to subject to this Earn-in
Agreement under this Section 9.4 shall be exercised, if at all, within
six (6) years of the Effective Date.
(d) Santa Fe's election and option rights identified in this
Section 9.4 are not limited to a single election or option, but may be
exercised from time to time on various portions of the excluded lands.
(e) Notwithstanding any other provision of this Earn-in
Agreement, all fixtures and facilities located on the surface of either
Hecla's Properties or the excluded lands are and shall remain the sole
and separate property of Hecla, and no election by Santa Fe respecting
Hecla's Properties or the excluded lands shall create any current or
future property right in Santa Fe to such fixtures and facilities;
provided, however, Santa Fe may include in any election under this
Section such mineral-bearing materials located at or in Hecla's surface
facilities as Santa Fe may specify in making the election. Santa Fe
agrees to cooperate with Hecla to ensure Hecla has full access to such
fixtures and facilities for any purposes including, but not limited to,
the dismantling, salvaging, closure, restoration, remediation,
monitoring, maintenance or sale of all or part of such fixtures and
facilities.
(f) Notwithstanding any other provision of this Earn-in
Agreement, Hecla shall have the continuing right to access those excluded
lands which Santa Fe has elected to include in this Earn-in Agreement to
perform such sampling, testing and reclamation activities
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as Hecla in its sole discretion and judgment deems necessary or convenient in
order to perform its obligations pursuant to Section 11.4 of this Earn-in
Agreement, and Santa Fe shall not unreasonably interfere with any of Hecla's
activities associated therewith. In the event Santa Fe unreasonably
prohibits Hecla's access to and activities on any parcel of excluded lands
for which Santa Fe has made an election, Santa Fe shall thereby be deemed to
assume all of Hecla's obligations under Section 11.4 of this Earn-in
Agreement with respect to any such parcel of excluded lands.
ARTICLE X
WITHDRAWAL AND TERMINATION
10.1 TERMINATION. This Earn-in Agreement shall terminate as
expressly provided herein, unless earlier terminated by written agreement.
Withdrawal by Santa Fe in accordance with Section 10.2 shall be deemed to
terminate this Earn-in Agreement.
10.2 SANTA FE'S ELECTION TO WITHDRAW AND TERMINATE. Santa Fe may
withdraw from and terminate this Earn-in Agreement at any time and for any
reason. To withdraw, Santa Fe must provide Hecla with written notice of
withdrawal. The effective date of withdrawal shall be thirty (30) days after
the notice of withdrawal is sent to Hecla. Upon such withdrawal, this
Earn-in Agreement shall terminate, subject to any obligations arising under
Section 11.4 or Article XII.
10.3 TERMINATION UPON CONTRIBUTION OF MINERAL PROPERTIES TO THE
OPERATING AGREEMENT. If not terminated earlier, this Earn-in Agreement shall
terminate upon the parties' joint contribution of the Mineral Properties to
the purposes of the Operating Agreement pursuant to Section 5.4.
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10.4 FAILURE TO PROVIDE FEASIBILITY STUDY. Santa Fe shall have six
(6) years, up to and including the sixth anniversary of the Effective Date
hereof, within which to provide Hecla with a Feasibility Study, or this
Earn-in Agreement shall terminate, subject to any obligations arising under
Section 11.4 or Article XII.
10.5 REMOVAL OF PROPERTY. Santa Fe shall have a period of sixty
(60) days following the effective date of termination or expiration of this
Earn-in Agreement (unless the Mineral Properties are contributed to the
Operating Agreement pursuant to Section 5.4) to remove at its sole cost and
expense all or any part of equipment, machinery, fixtures, structures, or
improvements placed or erected on the Mineral Properties by Santa Fe.
ARTICLE XI
OPERATIONS
11.1 PARAMETERS FOR SANTA FE'S EARN-IN ACTIVITIES. During the Term
of this Earn-in Agreement, Santa Fe shall have reasonable control, discretion
and the right to conduct, in accordance with United States mining industry
standards, any and all Earn-in Activities for which Earn-in Expenditures may
be incurred under Exhibit D, including, without limitation, mineral
exploration, development, test mining and processing activities, drilling,
blasting, assaying, modeling, engineering, geophysics, geochemistry,
hydrology, metallurgy, metallurgical and environmental test work or other
test work, process testing, permitting, regulatory compliance, evaluation,
performance and preparation of a Feasibility Study, and all other activities
incidental to or arising therefrom, on or for the benefit of the Mineral
Properties, regardless of where such activities may be conducted. Santa Fe
may recover and process a reasonable amount of ore and other material from
the Mineral Properties for testing purposes and may conduct such testing on
or off the Mineral Properties.
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11.2 SURFACE AND SURFACE FACILITIES.
(a) Santa Fe shall have the right, at its sole election and
without further consideration, to use so much of the surface and any surface
facilities owned or controlled by Hecla on Hecla's Properties, or on lands
within the Area of Interest (other than lands excluded under Exhibit C) that
are both owned or controlled by Hecla and made subject to this Earn-in
Agreement. Santa Fe shall make any necessary utilities expenditures during
any period when Santa Fe is using Hecla's surface facilities. Santa Fe shall
have the right to make such other surface use arrangements as it deems
appropriate and may request permission to use any surface facilities owned or
controlled by Hecla on the excluded lands under Exhibit C; provided, however,
Hecla has the right to use or dispose of any of its surface facilities
(whether on Hecla's Properties or on the excluded lands) which Santa Fe has
not previously elected for use (with regard to facilities on Hecla's
Properties) or which Santa Fe has not previously been granted permission to
use (with regard to facilities on the excluded lands) by Hecla. All costs
and expenses incurred by Santa Fe relating to surface or surface facility use
on or for the benefit of the Mineral Properties shall be credited as Earn-in
Expenditures.
(b) Except on lands where Santa Fe has exercised its option
to receive a conveyance pursuant to Sections 5.1(a) or 9.4, Hecla shall
retain the right to manage, cut and remove the timber resources of
Hecla's Properties during the entire term of this Earn-in Agreement. In
the event Santa Fe desires to cut and remove any timber which may impede
Santa Fe's operations hereunder, Santa Fe shall first notify Hecla and
provide Hecla with a ninety (90) day period from the date of such notice
to remove the timber for its own account and at its own expense. If
Hecla fails to exercise its right to
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remove the timber within the ninety-day period from the date of notice,
Santa Fe may cut and remove the timber and Hecla shall have no right to
any payment for or on account of such timber removed by Santa Fe.
11.3 COMPLIANCE WITH LAWS AND AGREEMENTS. Santa Fe's Earn-in
Activities on the Mineral Properties shall be conducted in compliance with
all applicable laws, statutes, regulations, underlying agreements and this
Earn-in Agreement.
11.4 INDEMNITY. Santa Fe shall be solely responsible for and shall
indemnify, defend, and hold harmless Hecla and its directors, officers,
employees, agents, attorneys, and Affiliates from and against any and all
environmental and other liabilities, losses, claims, damages, costs, expenses
(including without limitation any remediation or reclamation expenses, fines,
penalties, judgments, litigation costs and attorney's fees), enforcement
activities and causes of action to the extent and only to the extent that
they arise from Santa Fe's Earn-in Activities on or for the benefit of the
Mineral Properties during the Term of this Earn-in Agreement; provided,
however, the amount of such indemnification, if any, shall be credited as an
Earn-in Expenditure or, if arising after entry into the Operating Agreement,
shall be credited to Santa Fe on the joint accounts. Hecla shall be solely
responsible for, and shall indemnify, defend, and hold harmless Santa Fe and
its directors, officers, employees, agents, attorneys, and Affiliates from
and against, any and all environmental and other liabilities, losses, claims,
demands, damages, costs, expenses (including without limitation any
remediation or reclamation expenses, fines, penalties, judgments, litigation
costs and attorneys' fees) enforcement activities and causes of action
(whether or not pending as of the Effective Date, and including but not
limited to those certain lawsuits known as Washington Wilderness, et al. v.
Hecla Mining Company, Cause No.
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94 CS233-FVS, Leo Orestad, et ux., et al. v. Hecla Mining Co., Cause No.
95201356-7, and William G. Harmon v. Hecla Mining Co., Cause No.
95-2-00004-9), to the extent and only to the extent that they arise from
activities conducted at any time prior to the Effective Date of this Earn-in
Agreement on the Mineral Properties or on lands owned or controlled as of the
Effective Date by Hecla within the Area of Interest (including the excluded
lands identified on Exhibit C), regardless of whether such liability, loss,
claim, demand, damage, cost, expense (including without limitation, any
remediation or reclamation expenses, fine, penalty, judgment, litigation cost
and attorneys' fees) enforcement actions and causes of action arises or
accrues before, during or after the Term of this Earn-in Agreement. The
provisions of this Section 11.4 shall survive any termination of this Earn-in
Agreement and shall be enforceable in accordance with its terms.
11.5 INSURANCE. Santa Fe shall carry and maintain at all times the
following insurance:
COVERAGE LIMITS
(i) Worker's Compensation WC - Statutory
("WC") and Employers' EL - $500,000
Liability ("EL)
Insurance, including
occupational disease.
(ii) Business automobile $1,000,000 combined
liability insurance, single limit per oc-
including all owned currence for bodily
and hired vehicles; injury and property
provided, if Santa Fe damage.
uses non-owned vehicles,
it shall first obtain
coverage for such non-
owned vehicles as part of
the automobile liability
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insurance policy or under
a rider thereto.
(iii) Commercial general $5,000,000 combined
liability insurance single limit per oc-
including blanket con- currence and in the
tractual liability, annual aggregate for
personal injury, inde- bodily injury, personal
pendent contractors. injury and property
damage.
Certificates of Insurance shall be kept in force by Santa Fe and shall name
Hecla as an additional insured. Such policies shall include Blanket
Contractual Liability Endorsements, including the provision of Section 11.4
of this Earn-in Agreement.
ARTICLE XII
RECLAMATION
Santa Fe shall comply with all applicable statutes, regulations, rules
and orders of all governmental bodies with jurisdiction over the Mineral
Properties or Santa Fe's activities on the Mineral Properties including,
without limitation, those relating to health, safety, noise, environmental
protection, reclamation, waste disposal and water and air quality. Should
Santa Fe's Earn-in Activities cause any discharge, leakage, spillage,
emission or pollution of any type upon or from the Mineral Properties or
require reclamation, Santa Fe shall remediate and reclaim the Mineral
Properties affected thereby to standards that meet the standards imposed by
the governmental body having jurisdiction over the portion of the Mineral
Properties being remediated or reclaimed. Costs and expenses of such
remediation or reclamation work (1) shall be credited as Earn-in Expenditures
if conducted during the term of this Earn-in Agreement, (2) shall be borne
solely by Santa Fe if the work is conducted after any termination of this
Earn-in Agreement to reclaim or remediate Santa Fe's Earn-in Activities, and
(3) shall be charged to the
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Parties' joint account if the costs and expenses accrue following
contribution of the Mineral Properties to the Operating Agreement pursuant to
Section 5.4. Santa Fe shall indemnify, hold harmless and defend Hecla
against all liability, loss, claim, damage, cost and expense (including
without limitation any fines, penalties, judgments, litigation costs and
attorneys' fees) incurred by Hecla as a result of Santa Fe's default or
resulting breach of this Article.
Upon the termination in accordance with Section 10.2 of this Earn-in
Agreement , and subject to Santa Fe's indemnification rights under Section
11.4, unless the Mineral Properties are jointly contributed to the Operating
Agreement pursuant to Section 5.4, Santa Fe shall surrender the Mineral
Properties pursuant to Section 10.2 of this Earn-in Agreement in compliance
with all permits, plans of operation, governmental laws, ordinances, rules,
regulations, requirements and orders relating to or arising out of the
activities of Santa Fe on the Mineral Properties including, but not limited
to, those relating to the reclamation, restoration, reconditioning or
conservation of lands and waters or to air and water quality which are in
effect or which become effective during the term of this Earn-in Agreement.
Santa Fe shall comply with all laws and regulations of the State of
Washington and the United States of America as they pertain to reclamation
obligations relating to or arising out of Santa Fe's activities on the
surface and subsurface of the Mineral Properties.
Prior to commencing any surface disturbing activities on Hecla's
Properties, Santa Fe shall panel Hecla's Properties sufficiently for
photographic orientation and shall provide Hecla with dated, pre-disturbance
aerial photography at a scale not to exceed 1" to 500'. Upon completion of
final reclamation on all or any part of Hecla's Properties, Santa Fe shall
repeat the panelling and aerial photography procedure and submit the dated
photography to Hecla with
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a request for Hecla's inspection. Hecla, at its election, may inspect the
reclamation using both the pre-disturbance and post-reclamation photography
and may provide Santa Fe with a specific request to perform any additional
work reasonably required to restore or reclaim Hecla's Properties to
standards equal to the standards identified in this Article XII. The costs
of panelling and aerial photography shall be paid by Santa Fe and credited as
Earn-in Expenditures. The cost of Hecla's inspection as provided herein
shall be borne solely by Hecla.
Nothing in this Article XII shall require or be interpreted as requiring
Santa Fe to perform any reclamation or pay any part of reclamation costs
associated with conditions resulting from any activities on the Mineral
Properties conducted by any person or entity other than Santa Fe, its
contractors, employees, Affiliates, agents and representatives, which
includes, but is not necessarily limited to, all conditions existing on the
Mineral Properties or within the Area of Interest prior to the Effective
Date. If the Mineral Properties are jointly contributed to the Operating
Agreement pursuant to Section 5.4, then the obligations of this Article XII
shall thereupon terminate, and the liability of the parties for any
subsequent reclamation or reclamation costs shall be determined in accordance
with the provisions of the Operating Agreement. If this Earn-in Agreement is
terminated pursuant to Section 10.2, then the obligations of this Article XII
shall survive such termination and shall be enforceable in accordance with
its terms.
ARTICLE XIII
REPORTING, INSPECTION AND AUDIT
Santa Fe shall keep Hecla advised of all Earn-in Activities during the
term of this Earn-in Agreement by submitting to Hecla the data and
information described in Exhibit F to the Operating Agreement within a
reasonable time but no more than sixty (60) days after such data
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and information is available to Santa Fe. In addition, subject to Santa Fe's
right to protect and withhold trade secrets relating to processing and
recovery technology, Hecla and Hecla's employees, agents and representatives
(at Hecla's sole risk and expense and subject to reasonable safety
regulations) shall have the right to inspect and to audit Santa Fe's
activities on and with respect to the Mineral Properties and all documents,
records, accounts and other data at all reasonable times, so long as Hecla,
Hecla's employees, agents and representatives do not unreasonably interfere
with Earn-in Activities. The cost of any such audit shall be borne solely by
Hecla.
ARTICLE XIV
MEMORANDUM
Hecla and Santa Fe shall execute and record a memorandum of this Earn-in
Agreement, which shall not disclose financial or other proprietary
information contained herein, in a form sufficient to constitute record
public notice of the rights granted by this Earn-in Agreement in the county
or counties in which the Mineral Properties are situated. This Earn-in
Agreement shall not be recorded.
ARTICLE XV
DEFAULT
In the event of any default by either Santa Fe or Hecla in the
performance of its obligations under this Earn-in Agreement ("Defaulting
Party"), the non-Defaulting Party shall give to the Defaulting Party written
notice specifying the default and allow thirty (30) days to cure or commence
to cure and thereafter diligently pursue the correction of any such noticed
defaults. If the default is not addressed as provided hereinabove, the
non-Defaulting Party may declare this Earn-in Agreement terminated.
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ARTICLE XVI
CONFIDENTIALITY
16.1 GENERAL. The financial terms of this Earn-in Agreement and
all geologic, metallurgical and other information obtained in connection with
the performance of it shall be the exclusive property of the Parties and,
except as provided in Section 16.2, shall not be disclosed by a Party to any
third party or the public without the prior written consent of the other
Party.
16.2 EXCEPTIONS. The consent required by Section 16.1 shall not
apply to a disclosure:
(a) To an Affiliate or a consultant, contractor or
subcontractor that has a bona fide need to be informed;
(b) To any third party to whom the disclosing Party
contemplates a transfer of all of its interest in or to this Earn-in
Agreement; or
(c) To a governmental agency or to the public which the
disclosing Party believes in good faith is required by pertinent law or
regulation or the rules of any stock exchange on which the disclosing
Party is listed.
In any case to which this Section 16.2 is applicable, the disclosing Party
shall give notice to the other Party concurrently with the making of such
disclosure. As to any disclosure pursuant to Section 16.2(a) or (b), only
such confidential information as such third party shall have a legitimate
business need to know shall be disclosed and such third party shall first
agree in writing to protect the confidential information from further
disclosure for a period of one (1) year after its receipt to the same extent
as the Parties are obligated under this Article XVI.
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16.3 PRESS RELEASES. Santa Fe and Hecla shall consult with each
other before issuing any press release or public statement on the results of
Earn-in Activities on or for the benefit of the Mineral Properties. Neither
Hecla nor Santa Fe or their Affiliates shall issue any press release or
public statement mentioning the Mineral Properties without the other Party's
prior written approval and consent, which approval and consent shall not be
unreasonably withheld.
16.4 DURATION OF CONFIDENTIALITY. The provisions of this Article
XVI shall apply during the Term of this Earn-in Agreement and shall continue
to apply to any Party who withdraws, who is deemed to have withdrawn, or who
transfers its interest in this Earn-in Agreement, for one year following the
date of such occurrence.
ARTICLE XVII
TAXES
17.1 REIMBURSEMENT FOR TAXES. All taxes levied on real estate
associated with Hecla's Properties or any improvements on it shall be paid or
reimbursed by Santa Fe to Hecla. Santa Fe shall promptly reimburse Hecla for
any such taxes upon receipt from Hecla of a paid tax statement, provided that
Santa Fe may contest the validity or lawfulness of any taxes by appropriate
legal procedures. Any payment of taxes or tax reimbursements paid by Santa
Fe shall constitute Earn-in Expenditures. Santa Fe's obligation to pay
taxes will terminate if Santa Fe withdraws from this Agreement.
17.2 PROVISIONS CONCERNING TAXATION. While this Earn-in Agreement
is in effect, all matters relating to taxation other than Section 17.1 shall
be governed by Article IV of this Earn-in Agreement and "Exhibit B" to this
Earn-in Agreement entitled "Tax Matters," which Exhibit is incorporated
herein by reference.
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ARTICLE XVIII
COOPERATION
Within ten (10) days after a request from a Party, each Party shall
provide the other Party with access to all data and information in its
possession or to which it has access relating to or affecting the Mineral
Properties including, but not limited to, title documents, legal opinions,
pertinent agreements, assays, samples of minerals, drill hole logs, test
results, historical materials relating to exploration, development, mining,
environmental matters and title, filings with governmental bodies, maps and
surveys. Both Parties shall have the right to make copies thereof, each at
its own expense.
ARTICLE XIX
GENERAL PROVISIONS
19.1 NOTICES. All notices and other required communications made
pursuant to this Earn-in Agreement (referred to in this Section 19.1 as
"Notices") to the Parties shall be in writing, and shall be addressed
respectively as follows:
To: Hecla Hecla Mining Company
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
Attn: General Counsel
To: Santa Fe Santa Fe Pacific Gold Corporation
6200 Uptown Blvd. NE, Suite 400
P. O. Box 27019
Albuquerque, New Mexico 87125
Attn: Land Department
and
Santa Fe Pacific Gold Corporation
250 South Rock Blvd., Suite 100
Reno, Nevada 89502
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All Notices shall be given (i) by personal delivery to the Party or (ii) by
electronic communication, with a confirmation sent by registered or certified
mail return receipt requested, or (iii) by registered or certified mail
return receipt requested. All Notices shall be effective and shall be deemed
delivered (i) if by personal delivery, on the date of delivery if delivered
during normal business hours, and if not delivered during normal business
hours, on the next business day following delivery, (ii) if by electronic
communication, on the next business day following receipt of the electronic
communication, and (iii) if solely by mail, on the next business day after
actual receipt. A Party may change its address by Notice to the other Party.
19.2 WAIVER. The failure of a Party to insist on the strict
performance of any provision of this Earn-in Agreement or to exercise any
right, power or remedy upon a breach hereof shall not constitute a waiver of
any provision of this Earn-in Agreement or limit the Party's right thereafter
to enforce any provision or exercise any right.
19.3 MODIFICATION. No modification of this Earn-in Agreement shall
be valid unless made in writing and duly executed by the Parties.
19.4 FORCE MAJEURE. Except for any obligation to make payments
when due hereunder, the obligations of a Party shall be suspended to the
extent and for the period that performance is prevented by any cause, beyond
its reasonable control, including, without limitation, labor disputes
(however arising and whether or not employee demands are reasonable or within
the power of the Party to grant); acts of God; laws, regulations, orders,
proclamations, instructions or requests of any government or governmental
entity; judgments or orders of any court; inability to obtain on reasonably
acceptable terms any public or private license, permit or other
authorization, including access and occupancy rights from surface owners;
curtailment
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or suspension of activities to the extent necessary to remedy or avoid an
actual or imminent violation of federal, state or local environmental
standards; acts of war or conditions arising out of or attributable to war,
whether declared or undeclared; riot, civil strife, insurrection or
rebellion; fire, explosion, earthquake, storm, flood, sink holes, drought or
other adverse weather conditions; delay or failure by suppliers or
transporters of materials, parts, supplies, services or equipment or by
contractors' or subcontractors' shortage of, or inability to obtain, labor,
transportation, materials, machinery, equipment, supplies, utilities or
services; accidents; breakdown of equipment, machinery or facilities; or any
other cause similar to the foregoing. The affected Party shall promptly give
notice to the other Party of the suspension of performance, stating therein
the nature of the suspension, the reasons therefor, and the expected duration
thereof. The affected Party shall resume performance as soon as reasonably
possible.
Commercial frustration, commercial impracticability or the
occurrence of unforeseen events rendering performance hereunder uneconomical
shall not constitute an excuse of performance of any obligation imposed
hereunder.
19.5 GOVERNING LAW. This Earn-in Agreement shall be governed by
and interpreted in accordance with the laws of the State of Washington,
except for its rules pertaining to conflicts of laws.
19.6 RULE AGAINST PERPETUITIES. Any right or option to acquire any
interest in real or personal property under this Earn-in Agreement must be
exercised, if at all, so as to vest such interest within twenty-one (21)
years after the Effective Date.
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19.7 FURTHER ASSURANCES. Each of the Parties agrees to take from
time to time such actions and execute such additional instruments as may be
reasonably necessary or convenient to implement and carry out the intent and
purpose of this Earn-in Agreement.
19.8 ENTIRE AGREEMENT; AMENDMENTS; SUCCESSORS AND ASSIGNS. This
Earn-in Agreement contains the entire understanding of the Parties and
supersedes all prior agreements and understandings between the Parties
relating to the subject matter hereof, and may be amended only by a written
agreement executed by the Parties hereto. This Earn-in Agreement shall be
binding upon and inure to the benefit of the respective successors and
permitted assigns of the Parties. Neither Hecla nor Santa Fe shall assign
any interest in this Earn-in Agreement to any Party which is not an Affiliate
without the written consent of the other Party, which consent shall not be
unreasonably withheld.
19.9 SEVERABILITY. In the event that a court of competent
jurisdiction determines that any term, part or provision of this Earn-in
Agreement is unenforceable, illegal, or in conflict with any federal, state,
or local laws, the Parties intend that the court reform that term, part or
provision within the limits permissible under law in a way as to approximate
most closely the intent of the Parties to this Earn-in Agreement; provided
that, if the court cannot make a reformation, then that term, part or
provision shall be considered severed from this Earn-in Agreement. The
remaining portions of this Earn-in Agreement shall not be affected and it
shall be construed and enforced as if it did not contain that term, part or
provision.
19.10 PARAGRAPH HEADINGS. The paragraph and other headings of
this Earn-in Agreement are inserted only for convenience and in no way
define, limit or describe the scope or intent of this Earn-in Agreement or
effect its terms and provisions.
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19.11 ATTORNEYS' FEES. The prevailing party in any dispute
arising under this Earn-in Agreement shall be entitled to an award of its
reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, the parties hereto have executed this Earn-in
Agreement as of the date first above written.
Attest: SANTA FE PACIFIC GOLD CORPORATION
/s/ B. E. Martin By /s/ D. K. Hogan
--------------------------- ---------------------------------
Secretary Its Vice President
---------------------------------
Attest: HECLA MINING COMPANY
/s/ Michael B. White By /s/ Arthur Brown
---------------------------- ----------------------------------
Secretary Its Chairman
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STATE OF NEW MEXICO )
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) ss.
COUNTY OF BERNALILLO )
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The foregoing instrument was acknowledged before me this 25th day of
September, 1996, by D. K. Hogan the Vice President of Santa Fe Pacific Gold
Corporation, a Delaware corporation, on behalf of said corporation.
/s/ Bonnie L. Simmons
-----------------------------------------
Notary Public
My commission expires: September 28, 2000
-------------------
STATE OF IDAHO )
------------------
) ss.
COUNTY OF Kootenai )
------------------
The foregoing instrument was acknowledged before me this 6th day of
September, 1996, by Arthur Brown the Chairman of Hecla Mining Company, a
Delaware corporation, on behalf of said corporation.
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/s/ Narda Lee Anthony
----------------------------------------
Notary Public
My commission expires: 8-5-2000
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