1 to the Notary You Are Hereby Requested to Record a Real And
Total Page:16
File Type:pdf, Size:1020Kb
To the Notary You are hereby requested to record a Real and Personal Property Security Contract in your Registry of Public Deeds, entered into as party of the first part, in its capacity as the party furnishing said security, by the DOE RUN PERU S.R.L. company, with R.U.C. (Single Taxpayer Registry) No. 20376303811, domiciled at Avenida Víctor Andrés Belaúnde No. 147, Torre Real Tres, Piso 9, Centro Empresarial, San Isidro District, Province and Department of Lima, duly represented by its General Manager, Mr. Juan Carlos Huyhua Mamani, an engineer, identified with D.N.I. (National Identity Card) No. 10495170, and Mr. ________________, identified with D.N.I. No. ________, pursuant to powers of attorney recorded in Entries ________ and ________ of Certificate No. 11015369 of the Public Registries of Lima, which shall hereinafter be referred to as DOE RUN PERU, and as party of the second part, as the beneficiary of the security, the MINISTRY OF ENERGY AND MINES, with R.U.C. No. 20131368829, domiciled at Avenida Las Artes Sur No. 260, San Borja District, Province and Department of Lima, duly represented by the Director General of Mining, Mr. Víctor Manuel Vargas Vargas, an engineer, identified with D.N.I. No. 08212064, who acts in conformity with the powers conferred in Ministerial Resolution No. ________, of ________ __, ____, which shall hereinafter be referred to as THE MINISTRY; with the participation in the capacity of depositary of Mr. Juan Carlos Huyhua Mamani, an engineer, identified with D.N.I. No. 10495170, domiciled for the intents and purposes of this contract at ________________, pursuant to the following terms and conditions: FIRST: RECITALS 1.1 By Directorial Resolution No. 334-97-EM/DGM of October 16, 1997, THE MINISTRY’s Directorate General of Mining (hereinafter THE DGM) approved the Environmental Remediation and Management Plan for the La Oroya Metallurgical Complex (hereinafter the LA OROYA PAMA). 1.2 By Supreme Decree No. 046-2004-EM of December 23, 2004, mining entities were authorized to apply to THE MINISTRY’s Directorate General of Environmental Affairs (hereinafter THE DGAAM) for an exceptional extension of the term for execution of one or more projects of approved PAMAs. 1.3 On December 20, 2005 DOE RUN PERU applied to THE DGAAM, through Petition No. 1579697, for an extension of the La Oroya Metallurgical Complex’s “Sulfuric Acid Plants” Project in conformity with Art. 2 of Supreme Decree No. 046-2004-EM 1.4 DOE RUN PERU’s application for an extension was approved by Ministerial Resolution No. 257- 2006-MEM/DM of May 29, 2006, and the final date for completion of the “Sulfuric Acid Plants” Project of the 1 Environmental Remediation and Management Plan for the La Oroya Metallurgical Complex was stipulated as October 31, 2009. 1.5 By Law No. 29410 of September 25, 2009 the Congress of the Republic declared the decontamination of the environment in the city of La Oroya, Junín Department, to be a matter of public need and utility, and of high-priority social interest, and extended the term for financing and concluding the “Sulfuric Acid Plant and Modification of the Copper Circuit” Project for the La Oroya Metallurgical Complex, hereinafter THE PROJECT, as prescribed in Art. 2 of Law No. 29410. Article 3 of said Act likewise requires DOE RUN PERU to secure its full compliance with the terms, undertakings, and investments provided for in Art. 2, in accordance with the terms and conditions adopted by THE MINISTRY. 1.6 By Supreme Decree No. 075-2009-EM of October 28, 2009, Law No. 29410 was regulated and it was stipulated in Section 5.1 (ii) of Art. 5 – Security, that DOE RUN PERU was required to furnish security covering not less than one hundred per cent (100%) of THE PROJECT’s cost in favor of THE MINISTRY. 1.7 DOE RUN PERU has temporarily suspended its operations and the due execution of THE PROJECT, declaring that it has been adversely affected by the international financial crisis of 2008 with worldwide effects and the decline of mineral prices which said worldwide crisis provoked. SECOND: THIS CONTRACT’S PURPOSE AND OBJECT The parties hereby stipulate that this agreement’s purpose is to comply with Section 5.1 (ii) of Art. 5 of Supreme Decree No. 075-2009-EM. To that end, this contract’s object is for DOE RUN PERU to furnish security in favor of THE MINISTRY (real and personal security as is appropriate and as is prescribed below) covering not less than one hundred per cent (100%) of THE PROJECT’s cost. Finally, it is specified that the real and personal security, hereinafter THE SECURITY, furnished hereby is intended to secure compliance with the terms prescribed in Law No. 29410, as well as all the obligations, undertakings, and investments pertaining to THE PROJECT, whose execution has been valued at the sum of US$ 163,046,495.08 (One hundred sixty-three million forty-six thousand four hundred ninety-five United States Dollars and 08/100). 2 The terms, undertakings, and investments provided for in the preceding paragraph and generally in this document comprise DOE RUN PERU’s obligation to obtain financing, put the La Oroya Metallurgical Complex into operation, and complete the construction and start-up of THE PROJECT, which obligations shall hereinafter be referred to as THE SECURED OBLIGATION. Accordingly, the security furnished may be foreclosed in the event of a default on THE SECURED OBLIGATION, in the following circumstances: a) If the financing for THE PROJECT or the La Oroya Metallurgical Complex’s commencement of operations have not occurred by the expiration of the term of ten (10) months granted by Law No. 29410. b) If the construction and start-up of THE PROJECT have not occurred by the expiration of the term of twenty (20) months granted by Law No. 29410. THIRD: SCOPES OF THE SECURITY FURNISHED PURSUANT TO THIS CONTRACT The parties agree to specify that THE SECURITY (real and personal) furnished in this act, as prescribed in the fourth clause, shall reach and/or encompass compliance with Law No. 29410, its regulations (Supreme Decree No. 075-2009-EM), and/or their amendments. THE SECURITY which is furnished in this act shall remain in force until the fulfillment of all the obligations, undertakings, and investments provided for in THE PROJECT has been verified, and it is specified that said security shall cover the possibility of a total default or a partial default and/or a tardy and/or defective fulfillment of the obligations prescribed in the second clause of this contract. THE SECURITY which is furnished pursuant to this contract may be replaced as is provided for in Section 5.3 of Article 5 of Supreme Decree No. 075-2009-EM. The amount of the encumbrance includes any judicial and/or extrajudicial expense, court cost, and other cost arising from a potential foreclosure of the security furnished pursuant to this instrument. FOURTH: THE AMOUNT OF THE ENCUMBRANCE DOE RUN PERU declares that it furnishes real and personal security in favor of THE MINISTRY for the fulfillment of the obligations mentioned in the second and third clauses of this contract, in an amount totaling up to 3 US$ 250,000,000.00 (Two hundred fifty million United States Dollars and 00/100). An express record is made of the fact that said sum is the total amount of the encumbrance for which THE SECURITY (real and personal security) is furnished. Accordingly, the sum of US$ 250,000,000.00 (Two hundred fifty million United States Dollars and 00/100) shall be reflected as the encumbrance in both the personal security and each of the mortgaged real properties. FIFTH: PERSONAL SECURITY 5.1 In conformity with the second and third clauses of this contract, DOE RUN PERU hereby furnishes a FIRST-TIER PERSONAL SECURITY in favor of THE MINISTRY in the amount stipulated in the fourth clause, above. Said security has the status of open personal security regulated by the Personal Security Act, Law No. 28677. The parties stipulate that the reference value of the personal properties furnished as security shall be the figure appearing as CURRENT VALUE for each of the personal properties in ANNEX A – PERSONAL PROPERTIES and ANNEX A-1 – VEHICLES, of COMMERCIAL APPRAISAL 2010-070/TIP, submitted by DOE RUN PERU together with Petition No. 1990891 of May 14, 2010, totaling US$ 550,916,643.81 (Five hundred fifty million nine hundred sixteen thousand six hundred forty three United States Dollars and 81/100). Without prejudice thereto, THE MINISTRY reserves the right, if it is reasonable to do so, to perform commercial appraisals updated every six months of each of the personal properties furnished as security, being authorized to charge DOE RUN PERU for all such expenses. 5.2 All the personal properties furnished as personal security are included and itemized in ANNEX A – PERSONAL PROPERTIES and ANNEX A-1 – VEHICLES of COMMERCIAL APPRAISAL 2010-070-TIP, which is an integral part of this contract. All of them are fixed assets of the La Oroya Metallurgical Complex, owned by DOE RUN PERU and located in La Oroya District, Yauli Province, Junín Department; they encompass the Copper Circuit, the Lead Circuit, the Zinc Circuit, and the Precious Metal Recovery Plant, including all the components of each such circuit. 5.3 DOE RUN PERU declares that there are no encumbrances, charges, and/or any kind of judicial and/or extrajudicial measures over the personal properties furnished as personal security in this act which might impair its ability 4 to furnish personal security and/or impair the first tier of registry priority which said security must have, with the exception of the vehicles over which there are liens.