Exhibit 10.4

 

Tax Agreement entered into by the Company and Americas Mining Corporation,
effective as of February 20, 2017.

 

This Tax Agreement (this “Agreement”) is made and entered into by and among
Americas Mining Corporation (“AMC”), on the one hand, and Southern Copper
Corporation (“SCC”), on the other.  Each of AMC and SCC shall be referred to
individually as a “Party” and shall be referred to collectively as the
“Parties.”

 

WHEREAS, as of December 31, 2016, AMC is the record and beneficial owner of
687,275,997 shares of common stock (“Common Stock”) of SCC, which shares
represent 88.9% of the total issued and outstanding Common Stock;

 

WHEREAS, on October 9, 2012, SCC received from AMC $2,108,221,000 (the “Judgment
Amount”) in satisfaction of the judgment (the “Judgment”) issued by the Court of
Chancery of Delaware in October 2011 in connection with the case captioned In re
Southern Peru Copper Corporation Shareholder Derivative Litigation;

 

WHEREAS, the Judgment Amount was comprised of $1,347,000,000 in damages plus
$684,617,363 in pre-judgment interest (the “Pre-Judgment Interest”) plus
$76,603,637 in post-judgment interest (the “Post-Judgment Interest” and together
with the Pre-Judgment Interest, the “Judgment Interest”);

 

WHEREAS, from the Judgment Amount, SCC paid $316,233,160 in legal fees and
expenses (the “Legal Fees and Expenses Amount”) to satisfy the court ordered
award of attorney’s fees and expenses in connection with the Judgment;

 

WHEREAS, the Legal Fees and Expenses Amount was comprised of $304,742,604 in
attorneys’ fees and expenses (the “Plaintiff’s Attorneys Fees”) plus $11,490,556
in post-judgment interest;

 

WHEREAS, AMC along with SCC and other AMC subsidiaries each filed a consolidated
U.S. Corporation Income Tax Return on Form 1120 for the tax year ended
December 31, 2012 with AMC as the parent of the consolidated group (the “Group”
and such return, the “Tax Return”) and for succeeding years;

 

WHEREAS, AMC is the taxpayer for U.S. federal income tax purposes and not SCC;

 

WHEREAS, AMC and SCC do not have a written tax sharing or similar agreement in
effect but AMC from time to time causes each member of the Group to pay its
share of the Group tax liability computed as if it were a separate company;

 

WHEREAS, on December 5, 2016, AMC received from the Internal Revenue Service
(“IRS”) a draft Notice of Proposed Adjustment (“NOPA”) regarding the Tax Return
asserting, among others, that (a) a portion of the deduction by SCC for
Plaintiff’s Attorneys Fees should be disallowed, (b) the Judgment Interest
excluded from gross income by SCC should be included in gross income by SCC,
(c) the Post-Judgment Interest treated as in increase to investment by AMC
should be deducted and (d) a portion of the Judgment Interest should be treated
as gross income from sources within the United States by SCC ((b), (c) and (d),
collectively, the “NOPA Interest Matters”); and

 

WHEREAS, AMC disagrees with the NOPA and intends to contest the IRS assertions
vigorously (the “Appeal”).

 

NOW, THEREFORE, in consideration of the mutual promises and undertakings herein
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.         Assumption of Incremental Tax Liability.  Should the Appeal be
resolved unfavorably to AMC, AMC shall, as the parent of the consolidated group,
be responsible and discharge, any and all liabilities and payments due to the
IRS on account of any incremental tax liabilities of AMC and/or SCC in
connection with the NOPA Interest Matters on behalf of itself and SCC, and shall
not seek reimbursement, contribution of collection of any amounts of money or
any other asset in connection therewith from SCC or any of its subsidiaries,
officers, directors or shareholders (each, an “SCC Party”).

 

2.         Release.  Effective as of the date hereof, AMC hereby waives,
releases, acquits and forever discharges each SCC Party from any and all
liability, reimbursement, contribution or collection obligations, claims,
actions, causes of action, suits, debts, dues, accounts, damages, judgments and
demands, in law or equity, including attorneys’ fees and disbursements, against
an SCC Party, that AMC ever had, now has or hereafter may have, for, upon, or by
reason of the NOPA Interest Matters.

 

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3.         Indemnity.  AMC shall indemnify, defend and hold harmless each SCC
Party from, all actions, claims, demands, interests, damages, liabilities,
losses, costs and/or expenses (including attorneys’ fees) any such SCC Party may
suffer or incur arising out of, or in connection with, the NOPA Interest Matters
or any breach of this Agreement.

 

4.         Choice of Law.  This Agreement shall be governed by, and construed,
interpreted and enforced in accordance with, the internal laws of the State of
New York. Any dispute, controversy or claim arising out of or related to this
Agreement shall be resolved by final and binding arbitration administered by the
International Chamber of Commerce in accordance with its Rules of Arbitration
then in effect (“Rules”), except as modified herein. The seat of arbitration
shall be New York, New York. There shall be three (3) arbitrators, of whom the
claimant shall nominate one, and the respondent another, in each case within
twenty (20) days of the date of the request for arbitration. The two
Party-nominated arbitrators shall nominate the third, who shall serve as the
chair of the tribunal, within twenty (20) days of the confirmation of the
appointment of the second arbitrator. Any arbitrator who is not timely nominated
as provided herein shall be appointed by the ICC Court of Arbitration. The award
of the arbitrators shall be final and binding of the Parties, and judgment
thereon may be entered or enforced in any court of competent jurisdiction and
any court where a Party or its assets is located (to whose jurisdiction the
Parties consent for the purposes of entering or enforcing the award). By
agreeing to arbitration, the Parties do not intend to deprive any court of its
jurisdiction to issue interim or preliminary relief in aid of arbitration
without prejudice to the ability of the tribunal or an Emergency Arbitrator
under the Rules to issue such relief. In any judicial action permitted under
this section, the Parties irrevocably and unconditionally agree that the service
may be effect in the manner provided for notices in of this Agreement, or as
otherwise permitted by law; AND EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM ARISING OUT OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. Any arbitration hereunder shall be confidential, and the Parties and
their agents agree not to disclose to any third party the existence or status of
the arbitration and all information made known and documents produced in the
arbitration not otherwise in the public domain, and all awards arising from the
arbitration, except and to the extent that disclosure is required (a) by law,
regulation, subpoena, request for information, civil, administrative or arbitral
investigative demand or similar order issued by a court or governmental body or
any other body with jurisdiction over a Party’s activities, (b) by the rules of
a stock exchange or any other listing entity, or any other requirement imposed
by an exchange or a listing entity, or (c) to protect or pursue a legal right.

 

5.         Severability.  If any provision of this Agreement shall be declared
invalid or unenforceable by any court of competent jurisdiction, such finding
shall have no effect upon any other provision of this Agreement, which shall be
given full force and effect.

 

6.         No Admission.  Nothing in this Agreement, including the fact of its
execution or the making of any payment hereunder, shall be construed as an
admission or acknowledgment of wrongdoing or liability by any Party to any other
person.

 

7.         Specific Performance.  The Parties agree that irreparable injury will
occur in the event that any of the provisions of this Agreement is not performed
in accordance with its specific terms or is otherwise breached.  Each Party
shall be entitled to an injunction or injunctions to prevent or remedy any
breaches or threatened breaches of this Agreement by any other Party, to a
decree or order of specific performance to specifically enforce the terms and
provisions of this Agreement and to any further equitable relief.  The Parties’
rights in this section are an integral part of this Agreement and each Party
hereby waives any objections to any remedy referred to in this section
(including any objection on the basis that there is an adequate remedy at law or
that an award of such remedy is not an appropriate remedy for any reason at law
or equity).

 

8.         Miscellaneous.

 

(a)    This Agreement embodies the entire understanding between the Parties with
respect to the matters described herein, and supersedes any prior agreements and
negotiations, written or oral, between the Parties or their respective
representatives in connection therewith.

 

(b)    No statements, promises or representations have been made by any Party to
any other, or relied upon, and no consideration has been offered, promised,
expected or held out other than as may be expressly provided herein.

 

(c)     This Agreement may not be altered, changed, amended or modified except
by way of a written instrument signed by authorized representatives of the
Parties.

 

(d)    Each of the Parties represents and warrants to the other Party that
(i) it has all of the requisite authority and capacity to enter into and execute
this Agreement, (ii) that this Agreement has been duly authorized, executed and
delivered on its behalf and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other debtor relief laws and that certain equitable remedies may not be
available regardless of whether enforcement is sought in equity or at law, and
(iii) that the execution, delivery and performance of this Agreement by it do
not and will not violate any applicable law.

 

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(e)     This Agreement has been drafted cooperatively by the Parties and their
counsel of choice, and, as such, any ambiguities are the responsibility of the
Parties and shall not be construed against any Party.

 

(f)      This Agreement is binding upon, and inures to the benefit of, any
successors.  This Agreement may not be assigned by AMC.

 

(g)     Nothing contained in this Agreement shall be deemed to give rise to any
right in a person not a party hereto to seek enforcement of, or damages arising
out of any alleged default with respect to, any provisions of this Agreement.

 

(h)    This Agreement shall be effective as of February 20, 2017.

 

9.         Notice.  Any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given: (i) upon personal
hand delivery; (ii) upon sending such notice by facsimile, provided receipt is
confirmed by a machine-generated transmission report; (iii) three (3) business
days after sending such notice by U.S. registered or certified mail, postage
prepaid and return receipt requested; (iv) one (1) business day after depositing
such notice with a nationally-recognized courier service guaranteeing next day
delivery; or (v) upon acknowledgment of receipt by the recipient after delivery
of a notice via email.  Notices shall be addressed to the Party to be notified
at the addresses or facsimile number set forth below or at such other address or
facsimile number as any such Party may designate by advance written notice to
the other Parties.

 

If to AMC:

Americas Mining Corporation

1440 E. Missouri

Suite 160

Phoenix, AZ 85014

Attention: Oscar Gonzalez Barron

E-mail: oscar.gonzalez@americasmining.com

 

If to SCC:

Southern Copper Corporation

1440 E. Missouri

Suite 160

Phoenix, AZ 85014

Attention: Stanley Keegan & Raul Jacob

E-mail: skeegan@southernperu.com.pe; rjacob@southernperu.com.pe

 

10.  Counterparts.  This Agreement may be executed and delivered in two or more
counterparts, each of which when so executed and delivered shall be the
original, but such counterparts together shall constitute one and the same
instrument. This Agreement shall be final and binding upon the execution and
delivery of this Agreement by all Parties.  It is specifically agreed by all
parties that a facsimile or scanned copy of this Agreement shall have the same
effect and may be accepted with the same authority as the original.

 

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IN WITNESS WHEREOF, the Parties have executed this instrument on February 28,
2017.

 

AMERICAS MINING CORPORATION

 

By:

/s/ Oscar Gonzalez Barron

 

 

Name: Oscar Gonzalez Barron

 

 

Title: Director of Administration

 

 

 

 

SOUTHERN COPPER CORPORATION

 

 

 

 

By:

/s/ Raul Jacob Ruisanchez

 

 

Name: Raul Jacob Ruisanchez

 

 

Title: Vice President, Finance, Treasurer and Chief Financial Officer

 

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