**Exhibit 10.24.9**

 

 

Please extend in your Registryof Public Deeds one by means of which the Modification and Extension of theTerm of the Line of Credit Contract in Foreign Currency originally granted byPublic Deed dated September 25 2002, and was executed by of each one of theinstitutions below listed is made evident:

 

**BANCO DE CREDITO DEL PERU**, RUC No. 20100047218,with address at Calle Centenario N° 156, Las Laderas de Melgarejo, La Molina,Lima. Represented by Monsieur Andrés Javier Arredondo Bellido, identified with,  DNI N° 10543236   , and, Monsieur JuanManuel Inchaustegui Zevallos identified with, DNI N° 07794239, with faculties tothat effect according to power registered on Electronic Entry N° 11009127 fromthe Legal Entities Registry in Lima;

 

(each one denominatedindividually a Bank and jointly the Banks), and as **AGENT**for the Banks, Banco de Credito del Peru, henceforth will be denominated the **AGENT**; and on the other part

 

**DOE RUNPERU S.R.L**. RUC N° 20376303811, with address at Av. VíctorAndrés Belaunde 147, Via Principal 155, Centro Empresarial Real - Torre Real 3,Piso 9, San Isidro, properly represented by Mr. Henry EricPeitz, identified with Foreign Carnet N° 000190392, with faculty for thispurpose according to power granted on entry C00028 of Electronic Registry  N° 11015369 from the Legal Entities Registryin Lima, who henceforth denominated DRP,under the following terms and conditions:

 

**FIRST: DEFINITIONS**

 

1.1                                 Except for express indication or if the contextrequires it, the terms used in this Line of Credit Contract which the firstletter is capitalized will have the meaning indicated in this clause:

 

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Affiliates: Will be Doe Run Cayman Ltd (DRCayman), The DoeRun Resources Corporation (DRR) any of their Restricted Subsidiaries (otherthan DRP), as well as any of the Restricted Subsidiaries of **DRP**.  RestrictedSubsidiaries of DRR and **DRP**for this Line of Credit Contract as of the date of execution of this contractare detailed in Attachment II  SaidAttachment shall be updated as new Restricted Subsidiaries are included for DRRand/or **DRP**, **DRP** shall send a new listing to the  AGENT to that purpose.

 

Agent:  Will have the meaning that is indicated inthe introduction to this Line of Credit Contract.

 

Banks: Will have the meaning that is indicatedin the introduction to this Line of Credit Contract.

 

Working Banks: Will be those Banks that have not incurred inany non-fulfillment under this Line of Credit Contract.

 

Bonds:  Are bondsissued by DRR for up to an amount of US $175,832,200.00, in conformity with theterms and conditions contained in the “indenture” celebrated on the 29th ofOctober of 2002, between DRR, a company constituted under the laws of the Stateof New York, as Issuer, the Guarantees and State Street Bank and Trust Companyas Fiduciary ( Trustee”), and their modifications. According to Section 6.12 ofthe indenture, DRP’s and its Subsidiaries debt, as it is reflected, shown inthe guarantees under the indenture, are contractually subordinate to payment ofeach and every one of the **DRP**obligations under this Line of Credit Contract.

 

Adverse Material Change:  Is anymaterial adverse change in (i) the business, condition (financial or other),operations or property of **DRP**,

 

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DRR and/or its Affiliates, considered the last ones(the Affiliates) as a group with **DRP**and/or DRR (iI) the capacity of the **AGENT**and/or the Banks to execute the rights and remedies granted in their favor invirtue of the Financial documents or (III) capacity of **DRP**, DRR and/or its Affiliates, considering theselast ones (the Affiliates) as a group with **DRP** and/or DRR,to fulfill the obligations under the present Line of Credit Contract or any ofthe Financing Documents.

 

Commitment:  Is the amountup to which each Bank, in an irrevocable manner, is obligated to participate aslender for the Credit Line, which is detailed in Attachment I of this Line ofCredit Contract, with the sub-limits therein set.

 

Preceding Conditions for the Closing Date:  Are theconditions that are described in the Eighth Clause.

 

Conditions Previous to the Disbursements:  Are theconditions that are described in clause number Nine.

 

Administration and Guarantee Trust Contract:  Shall be thetrust contract to be executed by **DRP**, as grantor,in favor of the **AGENT** as trustee for the benefitof the Banks.

 

DRP in advance accepts that the AGENT will enjoy and will continue tomaintain in force the Cession of Rights for Accounts Receivable together withthe Administration and Guarantee Trust Contract if it is legally possible.

 

The AGENT shall diligently collaborate with DRP in the structuring ofthe constitution of the Administration and Guarantee Trust to which thepreceding paragraph refer, within a reasonable time considering that the

 

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maximum tem that DRP has to fulfill this obligation is 60 days,according to what is disposed on clause 11.21

 

Line of Credit Contract:  Shall be thisdocument

 

Guarantee Contracts:  Are theGlobal and Floating Pledge Contract and the Cession of Rights of AccountsPayables that **DRP** executes in favor of the **AGENT** for the benefit of the Banks on the date ofexecution of this Line of Credit Contract and the Administration and Guarantee TrustContract, once it is executed.

 

Inventory Concentrate Eligible Accounts:  Theinventory of concentrates acquired by **DRP**,that, according to the criteria and reasonable discretion of the Banks, except,for those that were objected by the Majority of the Banks and said objection wasnotified to **DRP**, fulfills the following requirements: (i) willconsist of concentrates physically located at the plants or **DRP** premises (including the concentrates that werefound at the Cobriza mine and those that were being shipped from the Cobrizamine to La Oroya). or in transit to La Oroya from general deposit warehouses,the same which DRP shall specify in writing to the **AGENT** within thirty (30) calendar days following to thedate of execution of this Line of Credit Contract, or which are beingdeposited, found or are physically located in places different from thosementioned, but within the territory of the Republic of Peru, can be freelyinspected by the **AGENT**,or by whom he designates, this designation will be previously notified inwriting to **DRP**,and over which there are no rights or burdens for the depositor, other thanthose charges that may derive from the payment of storage and transportation costs,or the costs for storage or transportation that may be questioned in good faith,and other Allowable Charges.; (ii) are in good condition, not damaged orobsolete, fulfilling all the standards established by any governmental authoritythat may have authority with regard to said

 

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goods, their use and/or sale and which are normallyuseable or sellable in the normal course of business of **DRP**; (iii) is not inventory assigned in favor of **DRP**; and (iv) aremarketable.

 

Are specifically excluded from this definition: (a) the **DRP**materials necessary for the processing of Ferrites and (b) the **DRP** concentrates that result from the processing ofthe Ferrites in relation to the Ferrites Project.

 

Eligible Product in Process Inventory Accounts:  The **DRP** inventory of products in process that in thecriteria and to the reasonable discretion of the Banks, except where this wereobjected by the Majority of the Banks and said objection was notified to **DRP**, will comply with the following requirements: (i)be products in process that are in good condition; (ii) are sellable productsin process, not obsolete; (iii) the products in process are found or are physicallylocated in the plant or **DRP** premises orat any other place authorized by the **AGENT**within the territory of the Republic of Peru; (iv) are the sole property of **DRP**, the same who has legitimate title for theirtransfer; and (v) are free from charges or any measure that may affect **DRP**’s title, except for AllowableCharges.

 

Excluded from this definition of inventory product in process are thoserelated to the Ferrites Project, amongst which are found: (a) the un-processed Ferrites;(b) the products in the process of production or processing at the Ferritesplant; (c) the materials needed for the procession of the Ferrites, (d) the Ferritesthat result from the DRP zinc circuit and that are mixed with the remainder ofthe Ferrites to be processed by the Ferrites s processing plant, and (e) theresidues derived form the processing of Ferrites at the Ferrites processingplant.

 

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Eligible Finished Product Inventory Accounts:  The inventory of finished products exclusiveproperty of **DRP**, that to the criteria andreasonable discretion of the Banks, except where the same were objected to bythe Majority of Banks and said objection was notified to **DRP**,and complies with the following requirements: (1) consists of finished productsat or physically located in the **DRP** plants orestablishments or at general deposit warehouses or in transit toward them; thesesame ones shall be specified in writing to the **AGENT**by **DRP** within thirty (30) calendar daysfollowing the date of execution of this Line of Credit Contract, or that beingdeposited, at or physically located in different places than those mentioned,but within the territory of the Republic of Peru may be freely inspected by the**AGENT**, or by whom he designates,designation which will be notified in advance and in writing to **DRP**, and over which there is no right or burden in favor ofthe depositor, other than the charges that may be derived from payment forstorage and transportation of the final products, or the storage ortransportation charges that are being questioned in good faith and otherAllowed Charges; (ii) which are in good condition, not damaged nor obsolete,fulfill all the standards established by any government authority, if there isone that has authority with regard to those goods, their use and/or their saleand are normally useable or sellable in the normal course of business of **DRP**; (iii) not be consigned inventory; and (iv) aremarketable.

 

Specificallyexcluded form this definition are the final products related to the FerritesProject, amongst which are: (a) the Ferrites without being processed, (b) thematerials necessary for the processing of the Ferrites; (c) the Ferrites thatresult from the DRP zinc circuit and that are mixed with the other Ferrites tobe processed by the Ferrites processing plant as part of the Ferrites Project;(d) the residues derived from the processing of Ferrites in the Ferritesprocessing plant; and (e) the concentrates that result from the processing ofthe Ferrites in relation to the Ferrites Project.

 

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Accounts Receivable from Eligible Buyers:Those accounts receivable for the sale of the **DRP**products elected to the criteria and reasonable discretion of the Banks, exceptthat said election would be objected by the Majority of the Banks and theobjection was notified to **DRP**, to beincluded in the computation of the Base Amount of the Loan, excluding: (i) thereceivable accounts for the sales contracts for an amount no greater than US$27,500,000 per year that are ceded in Trust as Guarantee in favor of thePeruvian Government to fulfill the Modified PAMA obligations, and (i) theaccounts receivable that are generated as a result of the sale of **DRP** concentrates to CORMIN as a result of the FerritesProjects, until the total of the debt generated from the Ferrites Loan has beenfully cancelled.  Once cancelled, theaccounts receivable that are generated between DRP and CORMIN in the FerritesProject, shall be considered Accounts Receivable of Eligible Buyers as they areceded under the Cession Contract for Rights to Accounts Receivable or to theAdministration and Guaranty Trust that is constituted or any one that may beconstituted in substitution of it, if that were the case.  For the purpose of determining the amount ofthe accounts to be computed, the nominal value of said accounts will  be deductedfrom the amount of discounts, reimbursements, deductions, claims, credits,charges, reimbursements or reductions. For effects of the computation of the value of those accounts that arenot in US dollars the corresponding conversion will be made at the exchange rateon the date of the calculation.

 

DRP and the **AGENT** agree that once all the debt from the Ferrites Loan ispaid, the accounts receivable that are generated as a results from the salesthat **DRP** makes to CORMIN as part of the FerritesProject shall be considered as Accounts Receivable of Eligible Buyers aslong  they fulfill the requirementsestablished in the preceding paragraph as they are

 

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ceded underthe Cession of rights of Accounts Receivable Contract or to the Administrationand Guaranty Trust that is constituted or the one that may be constituted insubstitution of it if that were the case.

 

Except wherethe Majority of the banks determines different, in no case will AccountsReceivable from Eligible Buyers be: (i) those derived from the sales made by **DRP** to its Affiliates; (ii) those where the payment term islonger than the one normally used by **DRP** in itscommercial transactions; (iii) those that remain unpaid for over sixty (60)days from their due date or for more than ninety (90) days from their invoice date;(iv) those where the debtor has more than fifty percent (50%) of their debt asineligible in conformance with the criteria established in number (iii)preceding, (v) those that, added to the other accounts from the same debtor,exceed the nominal value at 15%  from theall of the accounts pending from collection from **DRP**,but only with regard to the excess; (iv) those where the debtor is, a creditorof **DRP** with right to compensation or saiddebtor has claimed or argued his responsibility regarding the account, but onlywith regard to the amount for which the debtor has right to compensation or hasmade a claim or reclamation to **DRP**; (iv) thosewhere the debtor has voluntarily initiated or has been initiated a biddingprocess and/or bankruptcy,  it has beenliquidated or dissolved, has suspended the carrying out of its business or hasbeen declared insolvent; (viii) those derived from a sale in which, for anyreason, the debtor has the right to return the goods or **DRP**has the obligation to re purchase the same; (ix) those that do not represent afinal sale or those derived from a sale with regard to which the merchandisehas not yet been shipped or sent to the locality designated by the debtor ofthe account, except where the document for title transfer has been emitted infavor of the buyer; (x) those where the debtor has delivered in advance an  amount, value or good as guarantee, but onlyin regard to that amount, value or good, except where in any of the previouscases a letter of credit was, confirmed

 

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or endorsed infavor of any of the Banks; (xi) those that for any other reason are illegal orhave been illegally constituted; and (xii) those where the debtor, inaccordance to what is proven by the **AGENT** by meansof a comparison between the detail that **DRP** shallprovide according to literal (iv) of number 11.2 of the Eleventh Clause and itsown information regarding the amounts deposited in the collection accounts whenmaking the previous payments during the validity of this contract and theGuarantee Contracts had not done them by means of a deposit to the collectionaccounts set in the Cession Contract for Rights or the Trust Contract whichevermay be applicable.

 

Allowed Debt: Will Be (i) the guarantee given by **DRP** and itsAffiliates regarding (a) the granting of one or more Preferential Loans for thetotal amount of US $15,000,000.00 (henceforth the Renco Loan), and (b) theBonds, in said cases including interest, commissions and payment that from timeto time are generated, but that always are contractually subordinate to theobligations undertaken by **DRP** in virtueof this Line of Credit; (ii) any of **DRP** or itsAffiliates indebtedness open at the Time of Closing that appears in thequarterly Financial Statements (in accordance to the Peruvian GAAP) for **DRP** to June of 2005; (iii) debts and financial obligationsderived from the present Line of Credit Contract, for up to a maximum amount ofcapital of US $40,000,000.00 plus interest, commissions and other expenses;(iv) debts and financial obligations derived from Coverture Contractscelebrated by **DRP** with the purpose of protectingitself against the eventual variation of the interest rate and exchange rate aswell as the variation of the price for fuel, concentrates and finishedproducts, as long as the amount owed for concept of principal in said contractsdoes not exceed the amount owed for concept of principal in the contracts towhich it protects and the obligations derived from Hedge Agreements celebratedin the ordinary course of business and those exclusively related to the local saleof **DRP** production; (v) debts

 

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and financialobligations derived from the Subordinated Loan; (iv) additional indebtednessincurred by **DRP** for up to US $20,000,000.00plus interests, commissions and other expenses including the Ferrites Loan;(vii) debts and financial obligations undertaken by **DRP**in favor of DRR or any of their Affiliates (including debts derived of the inter-company contracts);  AS LONG AS, what is indicated in this numeral(vii): (a) is computed within the additional indebtedness allowed in numeral(vi), except for the debt derived from the inter-company contracts described inAttachment VI and the Commercial Accounts with DRR, and (b) includes the directand indirect indebtedness between **DRP** and one ormore of the Affiliates of DRR through one or more financial intermediaries, butbeing the annual increment of said indebtedness equivalent to the balance ofcommissions not distributed and only for up to a maximum of US $4,000,000.00annually; (viii)  debts and financialobligations that**DRP** may  incur in the ordinary course of its business,such as: commercial accounts, remunerations to be paid and social benefits,accumulated expenses, payment of taxes, bond letters to guarantee the paymentof customs obligations, lease of equipment; (x) supportive, unconditional,irrevocable and automatic bank bond letter in favor of the Ministry of Energyand Mines derived from the extension of the PAMA for a value equivalent to 20% fora maximum of US $23,000,000.000 of the balance of the deferred projects of theModified PAMA to be executed in accordance to article 8 of Supreme Decree No.046-2004-EM, as well as any other guarantee that may substitute the one previouslymentioned; and (x) debts and financial obligations incurred in the renovation,extension, substitution and/or refinancing of any debt mentioned in thepreceding literals, as long as when said renewal, extension, substitution and/orrefinancing is under equal or more favorable conditions, and does not result inan increase in the amount for concept of capital in an aggregate of the debtrepresented by said agreements, with excepted in what is indicated in (viii).

 

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Thisdefinition of Allowed Debt includes, with regard to previous numeral (iv) afinance line for up to US $10,000,000 corresponding to Section 3 of the FerritesLoan as it is defined in Attachment VIII of this Contract;

 

Financing Documents: Are (i) this Line ofCredit Contract, (ii) the Promissory Notes, (iii) the Guarantee Contracts, and(iv) any public deed that is derived from these previous documents as well, asin each case, the modifications or deferments that occur form time to time.

 

Adverse Material Effect:  Is any event or condition that creates asubstantial adverse effect in (i) the business, condition (financial or other),operations or properties of **DRP**, DRR and/orits Affiliates, considered those last ones (the Affiliates) as a group with **DRP** and/or DRR, (ii) the capacity of the **AGENT** and/or the Banks to execute the rights and remediesgranted in their favor in virtue of the Financing Documents, or (iii) thecapacity of **DRP**, DRR and/or its Affiliates,considered those last ones (the Affiliates) as a group with **DRP** and/or DRR, to fulfill its obligations under the presentLine of Credit Contract or any of the Financing Documents.

 

Events of Non-fulfillment : Are thosecircumstances detailed in the Twelfth Clause of this Line of Credit Contract, whichoriginate the consequences mentioned in clause number Thirteen of this Line ofCredit Contract.

 

Closing Date: Is the date when the Conditions preceding to the Closing Date and theexecution of the Financing Documents are met.

 

Disbursement Date:  Is the date for which a disbursement isrequested in the Request for Disbursement

 

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Date of Expiration:  This is the date of expiration for each oneof the loans and/or credits granted by the Banks in favor of **DRP** in the frame of the Line of Credit to which Line ofCredit Contract Refers to.

 

Final Expiration Date:  Is the final expiration date for the use ofthe Line of Credit, according to what is indicated in number 3.5 of the ThirdClause of this Line of Credit Contract.

 

Allowed Charges:  Will be those taxes and burdens that fall ormay fall on those assets of **DRP** that: (i)are derived from obligations from labor legislation and social securityobligations; (ii) are  charges and taxesimposed by law, or which are derived from the ordinary course of business of **DRP**, such as burdens or taxes derived from the storage ortransportation of their products,  orwere being questioned in good faith by **DRP**; (iii) arecharges or taxes necessary for the fulfillment of the law; (iv) are charges ortaxes that are originated as a consequence of incurring in Allowed Debt, AS LONGAS, said charges or taxes are for up to the maximum amount of the total amountof capital for the Allowed Debt; (v) are charges or taxes that are originatedas a consequence of a judicial mandate, judicial sentence or arbitrationdecision, as long as said judicial or arbitration processes does not constitutean Event of Non-fulfillment; (vi) assets in trust, constituted by **DRP**, with the intervention of the General Mining Bureau (“DGM”),to which one or more sale contracts will be attached in function of the budgetfor investments for the modified PAMA. The value of the affected contracts shall be for a sum no greater than $27,500,000.00  (Twenty Seven Million and 00/100 US Dollars), in function to the amount of the investment budget previously mentioned; and(vii) the guarantees, charges and taxes and transfer in trust that form part ofthe Ferrites Project and which are detailed in Attachment VIII to this  Line of Credit Contract.

 

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Line of Credit:  Is the financing that is granted to **DRP** in virtue of this document.  Said financing consists of: (i) a RevolvingLine of Credit, in conformity with the terms contemplated in numeral 3.2.1 ofthe Third Clause, and (ii) an Indirect Line of Credit, in agreement with theterms contemplated in numeral 3.2.2 from the Third Clause.

 

Majority of the Banks:  For effects of the calculation, the Majorityof the Banks, will be the working Banks whose amounts of Commitments representat least 67% of the total amount that the Working Banks had committed.  This total shall be calculated in USdollars.  For these purpose, thepercentages of participation for each Bank assigned in Attachment I of thisLine of Credit Contract will rule.

 

At all timesduring the  term of this Line of CreditContract Banco de Credito del Peru or another first rate bank, that wereapproved by DRP, shall retain 34% of  thetotal amount committed by the Working Banks.

 

For the casesin which unanimity of the Banks is required, the working banks shall be theones considered.

 

Loan Base Amount:  The amount resulting from the sum of thefollowing **DRP** asset accounts, as established inthe certificate to which numeral 11.27 from the Eleventh Clause refers to, inthe established percentages; (i) 90% of the Accounts Receivable from EligibleBuyers that would have granted their consent to the cession in favor of the **AGENT** for the total of the collection rights or payment or85% of the Collection Accounts for Eligible Buyers that had confirmed the receiptof the communication of said cession of collection and payment rights; (ii) 70%of the Inventory Accounts for Eligible Concentrates; (iii) 50% of the EligibleInventory Accounts for Products in Process, as long as at least 66% of thevalue in the books for said products corresponds to products at the process inthe

 

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stage process ofrefining and (iv) 80% of the Eligible Inventory Accounts for Final Products.

 

Obligations: Are, in general all thecommitments, duties and obligations undertaken by DRP before the Banks invirtue of this contract and, in particular, those commitments and obligationsdetailed in the Eleventh Clause.

 

Financial Obligations: Are the commitments andobligations undertaken by **DRP**before theBanks in virtue of what is disposed in numeral 11.1 from the Eleventh Clause inthis Line of Credit Contract.

 

Modified PAMA: Comprehends both the project for the construction of the Sulfuric AcidPlant, regarding to which **DRP** willrequest DGAAM an extension under the protection of Supreme Decree No046-2004-EM, as well as the other PAMA projects pending from execution to thedate of approval of the requested extension.

 

Minimum Net Consolidated Assets:  The Minimum Net Consolidated Assets of **DRP** are US $225,000,000.00; where the Net consolidatedAssets are the sum of (i) all the entries that, in accordance to the GenerallyAccepted Accounting Principles (GAAP) in Peru, appear in their Ledger as Assetsand (ii) the amount corresponding to the participations  representative of the social capital.  For the purpose of determining the Net MinimumConsolidated Assets of **DRP** (i) theamount that results from the previous formula will be added to the balance ofthe Subordinate Loan; and (ii) the difference between the receivable accountsfrom Affiliates and the accounts payable from Affiliates will be deducted.  The accounts to be paid to Affiliates shallhave solely originated from activities proper to the type of business and shallhave taken place under market conditions. Without prejudice of what is mentioned, for the purpose of thecalculation

 

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of the MinimumConsolidated Net Assets only accounts to be paid to Affiliates deriving frominvestments in securities or the purchase of fixed assets, as long as (i) saidpurchases are for amounts under US$ 100,000.00 considered individually and forUS $300,000.00 accumulated during the term of the Line of Credit Contract and(ii) purchases greater than the amounts in the preceding numeral (i) as long assaid purchases are carried out in terms no less favorable for DRP than thosethat DRP could obtain from buyers other than their Affiliates, in which caseverification from an independent consultant will be required.

 

In addition,the expenses rising from the closure of the Cobriza mine that do not affect thecash flow from DRP and the adjustments derived from guarantee operations thatdo not affect the cash flow of DRP are excluded from the calculation for theMinimum Consolidated Net Assets.

 

Subordinate Loan:  Is the subordinate loan (denominated as “SubordinatePromissory Note” granted by DRR to **DRP** for up toan amount of US $ 139,062,500.00 executed on September 12, 2002.  Said loan, during the term of the Line ofCredit will not generate interest and its payment in the measure  in which this Line of Credit is in effectwill be contemplated within the US $4’000,000, maximum amount that **DRP** can distribute to its Affiliates.  The Subordinate Loan shall be found subjectto the legislation of the State of New York in the US of America and the termsand conditions of the same shall be presented to the **AGENT**.

 

Ferrites Loan: Is the financing granted by Servicios Mineros Integrados S.A.C., asubsidiary of Trafigura Beheer B.V., for an amount of up to a maximum of US $30’000,000.00(Thirty Million US Dollars), in favor of **DRP** accordingto the terms and  conditions set in **Attachment VIII**.

 

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Ferrites Project:  Is the Project by means of which the Ferriteswith high zinc and silver content, amongst other metals, are processed by DRPat the Ferrites processing plant built for that purpose by DRP and which processedconcentrates are transferred to Consorcio Minero S.A. CORMIN, subsidiary ofTrafigura.  The account payable that isgenerated from the sale price from the transfer of the concentrates transferredby DRP in favor of CORMIN shall serve to pay the Ferrites Loan, for up to theamount that were necessary to fulfill the payment of principal plus interest.

 

Request for Disbursement:  Is the letter addressed to the AGENTto request a disbursement, which text is enclosed to this Line of CreditContract as Attachment II.

 

1.2                               Exceptwhere the contrary is specifically indicated or the context requires it, theinterpretation of this Line of Credit Contract shall observe the followingrules: (a) the singular includes the plural and vice versa; (b) the referenceto any gender includes the other gender; (c) the reference to any contract(including this Line of Credit Contract and its Attachments), documents orinstrument is understood as carried out on that contract, document orinstrument, as it may be modified or regulated from time to time in accordanceto the terms contained in each one of them and, if applicable, the termscontained in this Line of Credit Contract; (d) except where  the context demands an interpretation oropposite sense, the reference to any Clause, Section or Attachmentmeans that Clause, Section or Attachment of this Line of Credit Contract; (e) “including”(and, consequently “include”) means that it encompasses without limitation thegeneral description that precedes the use of said term; (f) any reference to “Party”or “Parties”  in this Line of CreditContract shall be understood carried out to one party or the parties of this Lineof Credit Contract as the case may be and (g) all reference to the “non-fulfillment”in this Line of Credit Contract and the Financing Documents refers to thenon-fulfillment

 

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of anyobligation by any of the Parties, without the duty on the part of the otherexisting parties to demand the fulfillment of said obligation – except for whatis foreseen in this Contract - or constitute delinquency on said Party.  As long as the current legislation allows it,all non-fulfillment will be incurred in an automatic manner, except for what isforeseen in this Contract.

 

**SECOND:   BACKGROUND**

 

2.1                               **DRP** is a privately held Company which purpose is that ofdedicating itself to mining activities of smelting, refining, sale of metalsand related activities including, but not limited, to the processing ofminerals.  In October of 1997, **DRP** acquired Empresa Metalurgica La Oroya S.A. from itsprevious owner, the government company Empresa Minera del Centro del Peru S.A.under the frame of the privatization process carried out by the government ofthe Republic of Peru.  In December of1997, by means of fusion by absorption **DRP** absorbedEmpresa Metalurgica La Oroya S.A.

 

2.2                                 Invirtue of Public Deed dated June 18, 1998, granted in Lima before Public NotaryDr. Anibal Corvetto Romero, Banco de Credito del Peru granted **DRP** a Line of Credit in Foreign Currency, with the purposeof financing its operations of export and/or local sales, for up to the amountof US $40’000,000.00

 

2.3                                 Withdate September 2002, Banco de Credito del Peru and **DRP**executed the Line of Credit contract in Foreign Currency in virtue of whichBanco de Credito Del Peru renewed the line of credit previously indicated forup to the same amount, but subject to terms and conditions agreed in thereferenced contract granted under public deed dated September 25, 2002.

 

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The term ofexpiration of said contract was successively renewed through the 15thof December 2005.

 

2.4                                 Bymeans of this Contract **DRP** hasrequested a new renewal and extension of the term of final expiration of theLine of Credit and Banco de Credito del Peru attending to said request hasaccepted to extend and modify the Line of Credit Contract in the terms andcondition that are detailed in this Contract. For this reason, the parties specifically declare that this Contract (i)does not constitute a renewal of obligations and (ii) the terms and conditionsof the Line of Credit Contract are those that are agreed in this Contractsubstituting and modifying all the terms and conditions of the Line of CreditContract of September 25, 2002.

 

**THIRD:OBJECT OF THE CONTRACT.**

 

3.1                                 **DRP** requires financing for working capital for its foreigncommerce operations and/or local sales, purchase of concentrates, rawmaterials, supplies, inventory, spare parts, other operative costs and otherreasons for working capital, for this reason it has requested the Banks tothrough the **AGENT** grant  a Line of Credit for an amount of up to $40’000,000.00US (FORTY MILLION AND 00/100 US DOLLARS) and the Banks agreeing to the requestmade, agree to grant it, subject to the maximum amounts that each Bank has committedin virtue of their corresponding Commitments, and in agreement with the termsand conditions that are pointed in the Line of Credit Contract.

 

Thecommitments undertaken by each one of the Banks and their correspondingsub-limits are those listed in Attachment I of this contract.  Attachment I shall be updated accordingly if BCPwere to partially cede

 

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theirparticipation according to what is stipulated in Clause 16 of this Line ofCredit Contract.

 

3.2         TheLine of Credit that is granted under the protection of this Line of CreditContract will be formed by the two sub-headings, indicated next, which jointuse cannot exceed US $ 40,000,000.00 (FORTY MILLION AND 00/100 US DOLLARS):

 

3.2.1            RevolvingLine of Credit:  Is granted up to foran amount that is the lesser between (i) US $40,000,000.00 (FORTY MILLION AND00/100 US DOLLARS) and (II) the Loan Base Amount, as long as the legal limits for the banking operations thatthe General Financing System and the Insurance System and/organicSuperintendence Banking and Insurance Law (Law 26702) or any other law that mayreplace them in the future allow it.

 

**DRP** will be able to use the Revolving Line ofCredit that is granted in virtue of this Contract of the Line of Credit, bymeans of the request of loans necessary to cover its needs for workingcapital.  Within the Revolving Line ofCredit to which this numeral refers to, up to US $5,000,000.00 (FIVE MILLIONand 00/100 USD) may be dedicated for letters of credit.  The use of the letters of credit will befound subject to the limitations of the Base Amount of the Loan and the otherconditions of the Revolving Line of Credit from the moment in which theshipping documents that transfer the title are received by **DRP**.

 

The Revolving Line of Credit shall be ruled, in the specific, by the terms and conditions of Clause Fourand in the general by Clause Sixth and following.

 

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The Revolving Line of Credit includes the issuance of Credit Cards forDRP executives for up to US $120,000.00 (ONE HUNDRED AND TWENTY THOUSAND AND00/100 US DOLLARS), according to DRP’s  request.

 

Finally **DRP** may use this Revolving Line ofCredit for up to an amount of US $5,000,000.00 for (a) the issuance of bondletters destined to guarantee the local acquisition of concentrates or rawmaterials; and, (b) as long as the **AGENT**authorizes it, the issuance of letters of credit for the acquisition ofequipments or goods, other than those indicated in numeral 5.2 of the FifthClause.  The line for bond letters shallbe subject in what is specific to what is disposed on the Fifth Clause and inthe general to what is disposed in the Sixth Clause and following of this Lineof Credit Contract.

 

3.2.2            Indirect Line of Credit: Is granted for up to the maximum amount of US$13,000,000.00 (THIRTEEN MILLION AND 00/100 US DOLLARS), to be used in thefollowing manner: (i) up to US $5,000,000.00 (FIVE MILLION AND 00/100 USDOLLARS) will be earmarked for the issuance of bond letters payment guaranty forthe benefit of the Peruvian National Superintendence of Customs – CUSTOMS toguarantee operations for temporary admission of mineral (ii) up to US$8,000,000.00 (EIGHT MILLION AND 00/100 US DOLLARS) will be earmarked for theissuance of bond letters in strict compliance in benefit of the NationalSuperintendence of Tax Administration –SUNAT to guarantee requests related tothe General Sales Tax – IGV; and up to US $5,000,000.00 (FIVE MILLION and00/100 US DOLLARS) will be for to the issuance of letters of credit, which willbe available under the protection of the Indirect Line of Credit until thecorresponding shipping documents that represent  title transfer have been received by DRP andwhich amount is

 

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different from and in addition to the US $5,000,000.00 million referredto in Clause 3.2.1.

 

Without prejudice of what is indicated in the preceding paragraph, **DRP** declares to know and to accept that the maximum amount foruse of the Indirect Line of Credit will be US $13,000,000.00 (THIRTEEN MILLIONand 00/100 US DOLLARS) which does not include bonds in favor of the Peruvian  Government to comply with obligations relatedto the Modified PAMA.

 

The Indirect Line of Credit will be ruled, in the specific by the termsand conditions of the Fifth Clause and in the general by the Sixth andfollowing Clauses.

 

3.2.3  Any otherline of credit requested by DRP as long as the AGENT accepts said request.

 

3.3                                 The Banks agree to grant **DRP**,subject to the terms and conditions of this Line of Credit Contract, variousloans and/or credits in dollars during the period comprehended from the date inwhich the Preceding Conditions are met for the execution of Disbursementsuntil, but excluding the Final Date of Expiration for the maximum amount of US$ 40,000,000.00 (FORTY MILLION AND 00/100 US DOLLARS) with the clarificationmentioned in numeral 3.2 of this same Clause. Subject to the conditions of this Line of Credit Contract, during saidperiod **DRP** may take loans, pay or re-take loansfor the amount previously mentioned, for all or in part or request the issuanceof bond or letters of credit as it may correspond.

 

3.4                                 The maximum amount for use of the Line of Credit thatthe Banks grant in virtue of this Line of Credit Contract shall be at all timesthe amount that results lesser than (i) 40,000,000.00 and (ii) the Base Amountof the Loan

 

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plus the maximum use of the Indirect Line of Credit.  In case that as a consequence of thevariations of the Base Amount of the Loan, the amount used from the Line ofCredit is above the maximum allowable amount contemplated in the paragraph, the**AGENT** shall have the faculty to demand prepayment  (without any penalty)from **DRP** of the sum that is necessary for the used amount of theLine of Credit to become equal or lesser than the maximum allowable amount inconformance with what is disposed by this numeral.  **DRP** shallcomply with making said payment within thirty (30) calendar days following thedate in which it were required by the **AGENT**.

 

3.5                                 The term of use for the Line of Credit is of nine (9)months counted from the 23rd of September of 2005, with finalexpiration on the 23rd of June 2006. The term for the Peruvian Revolving Credit may be extended for anadditional term of three (3) months, with final expiration on the 22ndof September 2006, subject to (i) the approval of the PAMA extension on thepart of the competent authority,  undersatisfactory terms for the BANKS; (II) that DRP demonstrates to thesatisfaction of the Banks that it is diligently seeking to establish a Take–outfinancing in substitution or replacement of the Line of Credit; and (iii) that **DRP** has obtained from Servicios Mineros Integrados S.A.C.the funds corresponding to Section 2 of the Ferrites Loan or alternatively,that DRP demonstrates to the Banks, to their satisfaction, that it has thealternative financing sources (including the generation of cash for **DRP**) to constitute the banking bond letter, supportive,unconditional, irrevocable and of automatic realization  banking bond letter in favor of the Ministryof Energy and Mines stemming from the extension of the PAMA on the latest datein which it must be constituted.

 

For effects of the previous numeral (i), it will be understood that theapproval of the extension of the PAMA is satisfactory for the BANKS if:

 

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(a)          the investment related to the sulfuric acid plantsassociated to the Modified PAMA for the period 2006 is for an investment amountnot greater than US $8,000,000.00 (Eight Million US Dollars);

 

(b)         the total period to carry out the Modified PAMA is nolesser than three (3) years; and

 

(c)          the amount of said investments is not greater as awhole than US $110,000,000.00 (ONE HUNDRED AND TEN MILLION AND 00/100 USDOLLARS)

 

3.6                                 **DRP** is obligated to use the funds that result from thefirst disbursement that is made in accordance to the terms of this Line ofCredit Contract to pay the total of the amount that DRP owed Banco de Creditodel Peru, in virtue of the Line of Credit Contract in Foreign Currency that ison record on Public Deed dated September 25, 2002.

 

3.7                                 At any time **DRP** may requestthe reduction of the maximum amount for the Line of Credit mentioned previous numeral3.2. Once the maximum amount of the Line of Credit is reduced, the same willnot be able to be restored again, without previous unanimous approval of theWorking Banks.

 

3.8                                 Without prejudice of what is disposed in the Twelfthand Thirteenth Clauses DRP obligates itself to pay fully the AGENT fully forthe loans and/or credits that are open in virtue of this Line of Credit on theFinal Expiration Date.

 

3.9                                 The Banks, the **AGENT** and **DRP** agree that the Modification and Extension of the Term ofthis Line of Credit Contract will have effect from the 15th ofDecember of 2005, date on which the first disbursement will take place and willbe modified and will automatically extend the line of

 

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credit contract dated September 25, 2002 to which numeral 2.2 of thePrevious Second Clause refers to.

 

**FOURTH:****  OF THE TERMS AND CONDITIONS OF THE REVOLVINGLINE OF CREDIT REFERRED TO IN CLAUSE 3.2.1.**

 

4.1                                 Of the Commitments:  From the datein which the Preceding Conditions are fulfilled for the Execution of the firstdisbursement in accordance to this Line of Credit Contract and up to butexcluding the Final Date of Expiration, each one of the Banks that had made aCommitment irrevocably obligates itself to make one or various disbursementsfor a total aggregate amount of capital equivalent to its correspondingCommitment and within the sub-limits detailed in Attachment I. The obligationof each Bank to make a disbursement is subject, in each case, to thesatisfaction of each one of the Preceding Conditions for the Carrying out ofthe Disbursements.

 

4.2                                 Of the amount:  The amount ofthe individual loans requested by DRP cannot be lesser than US$1,000,000.00 except in the case where the disposable amount for the RevolvingLine of Credit is lesser than said amount and it shall be in amounts multipleof US $ 200,000.00.  Nevertheless, theparties recognize that said amounts may be lesser in cases that as a result ofthe payment of a letter of credit or the execution of a bond letter, theindirect credit becomes a loan.

 

4.3                                 Disbursements:  Eachdisbursement done under the cover of the Revolving Line of Credit shall be doneon the Disbursement Date indicated in the Request for Disbursement.  The Requests for Disbursement shall bepresented by**DRP** to the **AGENT**no later than 5:00 pm on the third working day previous to the desiredDisbursement Date.

 

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No later than 1:00 pm on the Disbursement Date each Bank will place atthe immediate disposal of the **AGENT** theproportional amount of their corresponding Commitment for each disbursementrequested, in the account and office indicated by the **AGENT**.  If **DRP** hadsatisfied the Preceding Conditions for the Execution of the Disbursements, the **AGENT** shall place the total amount deposited by the Banks atthe immediate disposal of **DRP**, in theaccounts that for the purpose of the Line of Credit DRP maintains at the officeindicated by the **AGENT**.  The disbursement on the part of the **AGENT** dos not imply a certification by this one that thePreceding Conditions for the Execution of Disbursements have been satisfied nora renounce of any claim against**DRP** fornon-fulfillment.

 

4.4                                 Of the terms: As long as the term of use of the Line of Creditallows it, keeping into consideration what is agreed in numeral 3.5 of theThird Clause, the loans shall have terms of 1, 2 or 3 months, at the choice of **DRP**, manifested in writing to the **AGENT**in the corresponding Disbursement Request.

 

4.4                                 Of the rate of interest:  The rate of compensatory interest that thedisbursements shall generate under the cover of the Revolving Line of Credit,during the terms of use of the Line of Credit shall be the LIBOR rate to 1, 2or 3 months (depending on the term for disbursement requested by **DRP**) plus 3.5%, 3.75% and 4.25% correspondingly.  The LIBOR rate to 1, 2 or 3 months is theinterest rate at which, for the same term, deposits of Eurodollars are offered inthe inter-banking market in London, rate registered daily at 11:00 hours accordingto what appears in the LIBO page on the monitor from the REUTERS informationsystem (adjusted if necessary to 1/16 of the closest upper 1%).  The parties agree and establish that the rateof interest agreed for this loan is floating in nature, in accordance to thevariations of the LIBOR rate and in virtue of that, the **AGENT**shall proceed to set the rate that corresponds to each

 

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loan with two (2) working days anticipation to the date foreseen for thedisbursement of the corresponding loan, keeping into account the LIBOR ratethat appears on the Reuters Monitor on that date.  The amount that **DRP**shall pay for interests at the end of said term will be established on thisbasis.

 

Delay in the fulfillment of payment of interest and/or capital for theloans on their corresponding Expiration Dates, shall be subject from thatmoment and until the total cancellation of the expired obligations, to thepayment of late interest at a rate of 3% per annum, in addition to compensatoryinterests.  For said effect **DRP** will incur in automatic delay without need orrequirement for any notice, in accordance to what is ordered in section 1 ofArticle 1333 of the Civil Code.

 

4.6                                 Of the Promissory Notes:  Eachdisbursement made under the cover of the Revolving Line of Credit shall beinstrumented by means of the issuance, on the part of **DRP**,of a Promissory Note in favor of each Bank prorated in measure to thepercentage of their corresponding Commitments for the total amount of eachdisbursement, for that purpose the promissory note format that has beenincluded as Attachment IV shall be used and which forms an integral part ofthis contract.  Each one of the Banks iscommitted not to endorse said Promissory notes in favor of third parties,except if said endorsement is done as a result of a cession or participation inthe frame of what is disposed in the Sixteenth Clause of this Line of CreditContract.  The parties declare that thisPromissory Note format may be modified by the **AGENT**at any time, as long as said modifications are the result of imperative changesin the Peruvian legislation that regulates Promissory notes.

 

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The Promissory notes issued in such manner shall be sent by **DRP** directly to each one of the Banks, with the **AGENT** receiving a copy of them.

 

4.7                                 Of the repayment of the loans: Without prejudice of what is disposed in the Twelfthand Thirteenth Clauses, **DRP** isobligated to pay to the **AGENT** the loanson the corresponding Expiration Dates, for which it authorizes the **AGENT** to charge to whichever of the accounts **DRP** maintains with the **AGENT** the amountthat is owed in accordance to what is disposed in the Sixth Clause.

 

**FIFTH****: OF THE TERMS AND CONDITIONS OF THE INDIRECT LINEOF CREDIT REFERRED TO IN CLAUSE 3.2.2.**

 

5.1                                 Of the Commitments:  From the datein which the Preceding Conditions are met for the execution of the firstdisbursement in accordance to this Line of Credit Contract and until, butexcluding the Final Date of Expiration, each one of the Banks that had made aCommitment is irrevocably obligated to issue one or various letters of credit and/orbond letters for a total aggregate amount of capital equivalent to the sublimit of the Indirect Line of Credit established in Attachment I.  The obligation of each Bank to grant anindirect credit is also subject in each case to the satisfaction of each one ofthe Preceding Conditions for the Carrying out of Disbursements.

 

5.2                                 Of the issuance of Letters of Credit:  As long as **DRP** requests in writing by means of the execution andpresentation to the **AGENT** of theRequest for Disbursement, within three (3) working days advance notice, one ofthe Banks, at the election of **DRP**, shall aspart of the credit granted to **DRP** in virtueof the Indirect Line of Credit to which this contract refers to, issue 

 

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Letters of Credit for payment of the importation ofraw materials, concentrates or materials carried out by **DRP**.

 

The issuance of the letters of credit done under the cover of theIndirect Line of Credit shall be done on the Disbursement Date indicated in theRequest for Disbursement.  The Requestsfor Disbursement shall be presented by **DRP** to the **AGENT** no later than 5:00 pm on the third working day beforethe desired Disbursement Date.

 

No later than 1:00 pm on the Disbursement Date, the corresponding Bankshall issue the corresponding letter of credit, as long as **DRP**had satisfied the Preceding Conditions for the Carrying out ofDisbursements.  The Issuance of theletter of credit on the part of the corresponding Bank does not imply acertification by this one that the Preceding Conditions have been satisfied nora renounce against any claim against **DRP** for theirnon-fulfillment.  The Letter of creditshall be sent to the beneficiary directly by the issuing Bank, and copy of theletter of credit shall be sent to **DRP**.

 

At the time of honoring the letter of credit, the corresponding Bankshall communicate immediately to the **AGENT** of thepayment made, being applicable what is stipulated in numeral 5.4 following.

 

# **5.3**                                 Of the value of the Letters of Credit: The amount for the letters of credit requested by DRP shall not belesser than us$ 100,000.00 except in case where the amount available for theIndirect Line of Credit is inferior to said amount or a different amount wereapproved by the Bank issuing the letter of credit.

# ** **

5.4                                 Of the terms of the Letters of Credit:  Aslong as the term for use of the Line of Credit allows it, keeping intoconsideration what is agreed in

 

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numeral  3.5. of the ThirdClause, the letters of credit shall have the terms requested by **DRP** and approved by the **AGENT**, the samewhich, in principle, shall not exceed the term of three months, being in anycase, said term renewable or extended, previous approval from the issuing Bank.

 

5.5                                 Of the payment of the Letters of Credit:  At thetime of payment of a letter of credit issued in virtue of what is disposed inthis Clause, the Banks in prorating in function to the percentage of theircorresponding Commitments, shall finance **DRP** the amountowed, by means of granting a loan for a term of up to tree (3) months under theterms and conditions set in the Fourth Clause and other Clauses of thisdocument; except where **DRP** requeststhe **AGENT** to collect immediately the amountpaid in the letter of credit, for which, by means of this **DRP**authorizes from here on the **AGENT** to chargeto its regular account or to any of its account(s) the corresponding amount, inconformance with what is disposed in the Sixth Clause.

 

5.6                                 Of the Issuance of the Bond Letters:  Aslong as **DRP** requests it in writing, by means ofthe execution and presentation to the **AGENT** of aRequest for Disbursement, one of the Banks, at the election of **DRP**, shall, as part of the credits granted to **DRP** in view of the Indirect Line of Credit to which thiscontract refers to, issue (i) bond letters for the benefit of the NationalCustoms Superintendence – CUSTOMS and (ii) bond letters in Strict Compliance forthe benefit of the National Tax Administration Superintendence – SUNAT.

 

The issuance of the bond letters done under the cover of the IndirectLine of Credit shall be done on the Disbursement Date indicated in the Requestfor Disbursement.  The Requests forDisbursement shall be presented to

 

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the **AGENT** by **DRP**no later than 5:00 pm on the first working day prior to the desired Disbursementdate.

 

No later than 1:00 pm on the Disbursement Date, the corresponding bankshall issue the bond letter, as long as **DRP** hassatisfied the  Preceding Conditions forthe Execution of Disbursements.  Theissuance of the bond letter on the part of the corresponding Bank does notimply a certification that the Preceding Conditions have been satisfied nor a renunciationto any claim against **DRP** for theirnon fulfillment.  The bond letter shallbe sent by the issuing Bank directly to **DRP**  and **DRP** shall sendcopy of the bond letter to the **AGENT**.

 

In a case where the bond letter is to be honored, the correspondingBank shall immediately communicate to the **AGENT** theissuance of the payment, being applicable what is stipulated in the followingnumeral 5.8.

 

5.7                                 Of the terms (expiration) of the BondLetters:  As long as the term of use ofthe Line of Credit allows it, keeping into consideration what is agreed innumeral 3.5 of the Third Clause, the bond letters shall have the termsrequested by DRP and approved by the **AGENT**.

 

5.8                                 Of the payment of the Bond letters:  The parties recognize that the payment of thebond letters shall be done by the issuing Bank immediately and at the simplerequest of the beneficiary, reason why it is précised that the opposition andexception of their execution, if they were pertinent, shall be made directly by**DRP** against the executingbeneficiaries, freeing the Bank from all responsibility for proceeding with therequired payment in an immediate manner. Only once the Bank has honored the bond letter, shall it notify **DRP** of it not placing into effect any of the requests that **DRP** may send to the Bank to suspend, retain or deny paymentdemanded by the beneficiary.

 

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Once the bond letter is honored by the Bank, **DRP**is obligated to reimburse said amount, for which it authorizes the **AGENT** from here on to charge to his account or in any of itsaccounts the corresponding amount in conformance to what is disposed in theSixth Clause.  In the case where **DRP** does not have enough funds in its account(s) saiddeficit will be computed as an amount used from the Revolving Line of Credit ,stipulated in Clause 3.2.1

 

**SIXTH:****OFTHE PAYMENT OF THE LINE OF CREDIT.**

 

6.1                                 Of the Payment of the Line of Credit:  it iscondition of this Line of Credit Contract and specially regarding the paymentof capital and compensatory and late interests and other expenses, commissions,services and taxes (except for the taxes that are charged for the **AGENT’S**  or Bank’sprofit t, which payment and economic cost will solely assumed by said parties)to which there were place, that all the payments shall be made in the samecurrency that has been agreed and granted for each loan in accordance to whatis disposed in article 1237 of the Civil Code. For this purpose **DRP** shall placeat the disposal of the **AGENT**proportionally to the account of the Banks to which it corresponds no laterthan 12:00 pm on each Expiration Date or other date in which it may correspondto make a payment to the **AGENT** or theBanks, enough funds to fully attend to the payments and it authorizes the **AGENT** hereon to charge the amounts owed to any of itsaccounts in national or foreign currency, which  it maintains in any of the **AGENT’S**  Branches inthe country or overseas, or to any funds or values in any currency it has onhand to be credited or delivered, without the need for previous authorizationnor later conformity.  The **AGENT** shall also have the right to retain and apply to theamortization and/or cancellation of what **DRP** owed to theBanks, any

 

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amount, deposit or value of any nature that for any reason it holds orwhich is destined to be credited or delivered.

 

Later on that same day, and as long as the **AGENT**had received the payments before 12:00 pm, the **AGENT**shall distribute the funds proportionately to each Bank as it may correspond..  The payments received by the **AGENT** after 12:00 pm shall be considered as made the nextday, in which case the late interest rate pointed in numeral 4.5 of the FourthClause shall be applicable.

 

The **AGENT** shall specifically be authorizedby **DRP** to on his own acquire at theexchange market which is legally available, the foreign currency necessary toapply for the amortization and/or cancellation of the debt, with charge to anyof the accounts in national currency that **DRP** may have atthe Bank or at any of its subsidiaries or branches.

 

6.2                                 Of the Prepayments:  Theamounts of principal owed by **DRP** to theBanks related to the Line of Credit shall be able to be paid in advance by **DRP** totally or partially at any time, free from any penaltyor commission.  When making a total orpartial prepayment, **DRP** shall notifythe **AGENT** in writing two working days inadvance of the date on which it shall make the prepayment, indicating theamount of the anticipated payment.

 

6.3                                 Taxes:  All the payments that the **AGENT** receive with regard to disbursements granted underthis Line of Credit Contract shall be made free from any tax or other chargethat has the effect of reducing the total amount to be received by each Bankaccording to what is agreed in this Line of Credit Contract.  As a consequence, **DRP**shall assume the cost that implies that each Bank will receive an amount equalto the agreed one, without any deduction. Nevertheless, the parties recognize that **DRP**is not obligated, nor will economically assume the cost for any tax that is

 

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applicable to the profit that the Banks or the **AGENT**receive as a consequence of their participation in this Line of CreditContract.

 

**SEVENTH****: OF THE COMMISSIONS**

 

**DRP** isobligated to pay the following commissions:

 

7.1                                 Structuring Commission:  **DRP** will pay the **AGENT** forconcept of Structuring Commission US $200,000.00 (TWO HUNDRED THOUSAND and00/100 US DOLLARS).  The structuringCommission shall be paid on the Closing Date. ..

 

7.2                                 Agency Commission:  **DRP** shall pay the **AGENT**, forConcept of Agency Commission US $30,000.00 (THIRTY THOUSAND AND 00/100 US DOLLARS)during the period of use of the Line of Credit.

 

7.3                                 Commitment Commission:  **DRP** shall pay the **AGENT** forconcept of Commitment Commission, during the term of use of the Line of Creditan amount equivalent to 0.375% yearly of the non used average amount of thetotal amount of Working Banks Commitments that shall be calculated from thedaily portions not used starting from the date in which the conditions for theexecution of Disbursements are fulfilled from which a quarterly average shallbe obtained onto which  the previouslyrate shall be applied.  This Commissionshall be paid by expired quarter within the first ten (10) days of thefollowing trimester.  For purposes ofcalculation the nominal amount of the letters of credit and the bond letters towhich the Fifth Clause Refers, shall be considered as “amount used” from theLine of Credit.  The CommitmentCommission shall be shared amongst the Banks, prorated according to thepercentage that each one of their Commitments represents in relation to thetotal syndicated amount  of the Line ofCredit

 

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7.4           Commission for Issuance of Letter of Credit: **DRP** shall paythe **AGENT**, for concept of Commission forIssuance of Letter of Credit the following amounts:

 

7.4.1        Against the issuance of the Letter of Credit anamount equivalent to 0.25% per trimester or fraction of the amount of thecorresponding letter of credit payable by **DRP** to the **AGENT** on the date of issuance of the letter of credit. Thiscommission shall be delivered to the Bank issuing the letter of credit and.

 

7.4.2        Against the receiving of the shippingdocuments, an amount equivalent to 0.25% flat of the amount of thecorresponding letter of credit or amount negotiated, payable by **DRP** to the **AGENT** on thedate of receiving of the shipping documents are received. This commissionsshall be delivered to the Bank issuing the letter of credit.

 

7.4.3        Other expenses: DRP shall reimburse the AGENT those expenses in which the Banks incurfor the purpose of issuing a Letter of Credit, including telex, postage andother expenses related to the issuing bank.

 

7.5           Commission for Issuance of Bond Letters:  **DRP** shall pay the **AGENT** forCommission for the Issuance of Bond Letters and amount equivalent to 1.5%yearly for the total amount of the corresponding bond letter. This commissionshall be delivered to the bond letter issuing bank.

 

7.6           Additional Taxes:  Thepreviously indicated commissions do not include the IGV nor other lawful taxesthat may fall upon them being those taxes chargeable to DRP. Nevertheless,in no event shall **DRP** beresponsible,

 

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nor shall iteconomically assume the taxes for the profits that the Banks or the **AGENT** receives as a result of their participation in thisLine of Credit Contract.

 

**EIGHTH:  CONDITIONS PREVIOUS TO THE DATE OF CLOSURE**

 

Are conditions previous to the Date of Closure:

 

8.1           Legalcapacity of **DRP**:  The receipt on the part of the **AGENT** of certified copy with proof of registration of theGeneral Meeting of Stockholders of **DRP** authorizingthe subscription and execution of this Line of Credit Contract and theGuarantee Contracts and the naming its representatives for the signature of thesame.

 

8.2           FinancialStatements: The receipt on the part of the **AGENT**of the copies of the audited financial statements corresponding to the economicfinancial period closed the 31st of December of 2004 and thenon audited financial statements corresponding to the second trimester of the2005 period, accompanied of a certification from **DRP**,recent in date, that said financial statements have been prepared in thecorrect and complete manner and in accordance to GAAP in Peru.

 

8.3           InternalApprovals:  Receipt by the **AGENT** of the approval of the conditions for the Line ofCredit from the competent offices of each one of the Banks.

 

8.4           DueDiligence – Insurance:  Satisfactorydetermination for the Banks of the due diligence carried out by the **AGENT** of the review of the **DRP**insurance policies.

 

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8.5           Deliveryof the Copy of the Subordinate Loan: Receipt on the part of the **AGENT** of a copy of the Subordinate Loan, properly signed,between **DRP** and DRR, under satisfactory termsfor the banks.

 

8.6           FinancialDocumentation:  The parties hadarrived to a definite agreement on the terms and conditions contemplated in theFinancing Documents.

 

8.7           Non-existenceof Litigation:  The receipt on part ofthe **AGENT** of a certificate signed by theGeneral Manager of **DRP** or who everexercises those functions in his absence, stating that with the exception ofwhat has been revealed to the **AGENT** beforethe signing of this contract or revealed in this Line of Credit Contract, thereis no action, investigation, suit, written claim or legal process pendingagainst **DRP** or its goods, in any court,commission or government committee, meeting, government agency or arbitrationthat were known by a member of the administration or management of **DRP**, with exception of: (i) any action, investigation,demand, written claim or legal process that had been resolved in last instanceagainst **DRP** and could cause a Material AdverseEffect on **DRP**; and (ii) those informed tothe **AGENT** as part of the “InformationReported”, contained in **Attachment V.**

 

8.8           Authorizationsand Approvals: If necessary, all the authorizations and governmentapprovals necessary to carry out operations by **DRP**havebeen obtained and are fully valid and current with the exception of: (i) thosethat, which absence (not obtained or expired) could not cause an AdverseMaterial Effect; or (ii) those contained in the “Reported Information”that forms part of **Attachment V.**

 

8.9           **DRP** licenses:  All the substantial contracts, substantialconcessions and licenses necessary to carry out the operations of DRP have beenobtained and are found fully valid and current, with the exception of: (i) thosewhich

 

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absence (not obtained or expired) would notcause a Material Adverse Effect; (ii) those contained in the “ReportedInformation” that forms part of **Attachment V.**

 

8.10         Insurance:  The endorsement in favor of the **AGENT**, for the benefit of the Banks, of the insurancepolicies that cover the **DRP** assets andthat have been issued by first rate insurance companies, with the levels ofpersonal insurance and deductibles which are current to date.

 

8.11         Nonexistence of government Action:  Thatthe Peruvian Government has not promulgated legislation nor has taken anyaction that in the criteria and reasonable discretion of the Majority of Banks may limitthe export ability of **DRP**, for itsproducts.

 

8.12         Nonexistence of Material Adverse Effect and Adverse material Change:  That no circumstances or situation hasoccurred, that in the criteria and reasonable discretion of the Majority of theBanks, may cause a material adverse change or may have a materialadverse effect on: (i) the Peruvian financial system, (ii) theinternational financial system, (iii) the Peruvian or internationalcapital markets; (iv) the political or economic surroundings in Peru, or (v) thetributary or monetary policies of the Peruvian government, its laws andregulations; and in any of these cases as long as each one of these cases, thesame could reasonably cause a material adverse effect in the capacity of allthe Banks to fulfill its obligations undertaken in this Line of CreditContract.

 

8.13         Nonexistence of Adverse material Effect and Change of Adverse Material in **DRP** and/or Affiliates: From the date of the last audited financial statements, no circumstancesor situations that, to the criteria and reasonable discretion of the Majorityof the Banks, may cause a Material Adverse Change or may have aMaterial Adverse Effect in: (i) the capacity

 

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for repayment of the loans and/or credits onthe part of **DRP** and/or Affiliates; o (ii) thebusiness, operations, property, actives or liabilities of **DRP**and/or Affiliates, have been produced.

 

The legal representative of DRP will certifywhat is indicated in the previous paragraph, according to the format containedin Attachment IX of this Contract.

 

8.14         Nonexistence of tax burdens on the income and assets of **DRP**:  That the assets and accounts receivable of **DRP** are free of any burden or tax, except for thosecontemplated in the Line of Credit Contract or that are defined as AllowableBurdens.

 

The legal representative of DRP will certifywhat is indicated in the previous paragraph, according to the format containedin Attachment IX of this Contract.

 

8.15         Paymentof Commissions:  That **DRP** has paid the **AGENT** thecommissions that correspond in accordance to what is disposed in the SeventhClause, as well as any other expenses, services and applicable fees that mustbe paid under this Line of Credit Contract.

 

8.16         Paymentof Taxes:  The receipt on the part ofthe AGENT of a certificate signed by the **DRP** legalRepresentative, according to the format contained in Attachment IX of thisContract, declaring that **DRP** isfulfilling its labor and tax obligations, with the exception of those that havebeen informed to the **AGENT** or areinformed to the **AGENT** as part of the “ReportedInformation” contained in Attachment V.

 

8.17         LegalOpinions:  The receipt on the part ofthe AGENT of the Legal Opinion of their lawyers confirming the subordinationof: (i) the guarantees

 

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for indebtedness of DRP and its affiliatedunder (A) the Bonds, plus any interest, rights and owed expenses, and (B) theRenco Loan in an aggregate amount of no more than US $15,5000,000.00 (ii) anyother obligation or DRP debt and its affiliates; for the DRP debt existingunder the Peruvian revolving credit facility.

 

8.18         Renewalof the Credit Facilities:  Receipt onthe part of the AGENT of the documents that credit the signing of therenewal of the credit facility granted by Congress/CIT in favor of DRR.

 

**NINTH: CONDITIONSPRECEDING THE EXECUTION OF DISBURSEMENTS**

 

Are conditions preceding the execution of the disbursements of thecredits and/or loans to which this Line of Credit Contract refers to.

 

9.1           GuaranteeContracts and establishment of Collection Accounts:  The receipt on the part of the **AGENT** of the addenda to the Guarantee Contracts, with theexception of the Trust Contract, properly executed by **DRP**and its conformity with relation to the establishment of the CollectionAccounts in Lima and Miami. Also **DRP** shall havecomplied with the sending of notifications to the **DRP**customers instructing them to make their payments at the Collection Accountsand the **AGENT** shall have received copy of thedocument that shows receipt of said notifications.

 

The accounts receivable that are generatedfrom the sale of **DRP** concentrates to CORMIN as aresult of the Ferrites Project, after the obligations of the Ferrites Loan havebeen fully cancelled shall be considered Accounts receivable of Eligible Buyersas long as they are part of the Guarantee Contracts. The accountsreceivable granted in trust by

 

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DRP in fulfillment of the obligationsnecessary for the obtaining of the Modified PAMA are excluded from theGuarantee Contracts.

 

9.2           Presentationof Request for Registration in the Addenda of the Contract for Global andFloating Pledge:  That the requestfor registration in the corresponding Public Registry of the addenda to theGlobal and Floating Pledge granted by **DRP** in favor ofthe **AGENT**, for the benefit of the Banks. Theaddenda to the Global and Floating Pledge in force will include a specificexclusion of the inventory of products related to the Ferrites Project, amongstwhich are found (a) the unprocessed Ferrites; (b) the products underprocess of production or being processed at the Ferrites plants, (c) thematerials necessary for the processing of the Ferrites, (d) the Ferritesthat result from the DRP zinc circuit which are mixed with the other Ferritesto be processed by the Ferrites processing plant, (e) the concentratesthat are produced as a result of the processing of the Ferrites; and (f) theresidues derived from the processing of Ferrites at  the processing plant for Ferrites.

 

9.3           LoanBase Amount Certificate: The receipt on the part of the **AGENT** of a certificate signed by the General Manager,Finance Vice President, Treasurer or those who exercise their functions in thecase of their absence, establishing the Base Amount of the Loan.

 

9.4           NonExistence of Adverse Material Effect and Adverse Material Change:  That no circumstances or situations have beenproduced that, to the criteria or reasonable discretion of the Majority of theBanks, may cause a material adverse change or may have a materialadverse effect on: (i) the Peruvian financial system, (ii) theinternational finance system, (iii) the Peruvian or international capitalmarket; (iv) the political or economic environment in Peru or (v) thetax or monetary policies of the Peruvian government, its laws and regulations;and as long as each of those cases

 

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the same may reasonably cause a materialadverse effect in the capacity of all of the Banks to fulfill their obligationsundertaken in the present Line of Credit Contract.

 

9.5           Nonexistence of Material Adverse Effect and Material Adverse Change at **DRP** and/or Affiliate: That from the date of the last audited financial statementscircumstances or situations that to the criteria and reasonable discretion ofthe Majority of the Banks have not been produced that may cause a MaterialAdverse Change or may have a material Adverse Effect on: (i) thecapacity for repayment of the loans and/or credit on the part of **DRP** and/or Affiliates, or (ii) the business,operations, property, assets or liabilities of **DRP**and/or Affiliates.

 

9.6           Fulfillmentof the **DRP** obligations:  That**DRP** is foundin fulfillment of all  Obligationsestablished in this contract, including the Financial Obligations, withexception of what is established in the second paragraph of numeral 11.18 ofthe Eleventh Clause.

 

9.7           Non-Existenceof Government Action:  That thePeruvian Government has not promulgated legislation not has taken from the dateof Closure, any action that to the criteria and reasonable discretion of theMajority of the Banks may limit export on the part of **DRP** of its products.

 

9.8           Non-Existenceof any Event of Non-fulfillment: That on the Date of Disbursement no eventof non-fulfillment has been produced that remains without being rectified.

 

9.9           Declarationsand Guarantees:  That thedeclarations and guarantees made by **DRP** in theTenth clause of this Line of Credit Contract and in the Guarantee Contracts arecorrect and true to the date in which they were made in all material aspectsunless the defect in such declaration or

 

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guarantee may not reasonable cause aMaterial Adverse Effect in the situation of DRP, and as long as when thatdeclaration or guarantee had been true and correct in all its aspects in thedate on which they were made.

 

9.10         Fulfillmentof the PAMA:  That, to the Date ofDisbursement **DRP** must be in fulfillment of thePAMA, in accordance to what is established in the agreement executed with thecompetent government authorities, as they periodically modified it, except forwhat is contained in the “reported Information”.

 

Also under DS. No. 046-2004-EM, DRP isin the process of presenting the request for exceptional extension of the termfor the fulfillment of the building of the sulfuric acid plant projectcomprehended in the PAMA.

 

9.11         Authorizationsand Approvals:  If they arenecessary, all the authorizations and government approvals to carry out theoperations of **DRP** have been obtained and arefully valid and in force, except those that: (i) where their absence (notobtained or terminated), may not cause Material Adverse Effect and (ii) thosecontemplated in the “reported Information” which forms part of AttachmentV of this Contract. Also, all the substantial contracts, substantial concessionand necessary licenses to carry out **DRP** operationshave been obtained and are fully valid and current, except for thosecontemplated in the ‘Reported Information”.

 

**TENTH: DECLARATIONSAND ASSERTIONS**

 

**DRP** declares andasserts to the Banks that except for what is indicted in the “ReportedInformation” as **Attachment V** to the present Lineof Credit Contract:

 

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10.1         Organizationand Qualification:  **DRP** is a commercial society of limited responsibilityorganized and in existence under the Peruvian legislation, which is permittedunder the Peruvian laws, to be owner of its goods and carry its ordinaryactivities.

 

10.2         Powersand Authorizations:  **DRP** possess and has granted its representatives all thepowers and authorizations necessary to execute this Line of Credit Contract,the Guarantee Contracts and other Financing documents and to fulfill all theobligations undertaken in each one of them.

 

10.3         ObligatoryFulfillment. This Line of Credit Contract, the Guarantee Contracts andother Finance Documents constitute valid and binding obligations, of obligatoryfulfillment for **DRP**, except for what is ordered inthe applicable legislation in matter of bankruptcy, insolvency andrestructuring of assets.

 

10.4         GovernmentAuthorizations:  **DRP**has all the government authorizations necessary under the current legislationto fulfill the present Line of Credit Contract, the guarantee Contracts andother Financing Documents and to fulfill the obligations undertaken in each oneof them; the same are found in force and are not subject to any condition orrequirement. Any authorization that **DRP** requiredfrom the Date of Closing shall be obtained by it opportunely, except thosewhere their (not obtained or expired) will not cause a material Adverse Effect.

 

10.5         Non-Existenceof Conflicts:  The signing andexecution, on the part of **DRP** of thisLine of Credit Contract, of the Guarantee Contracts and other FinancingDocuments: (i) is not in conflict nor creates a situation onnon-fulfillment with regard to (a) any of the terms, conditions orprovisions of the statutes and other documents of the constitution of **DRP**, (b) any law or regulation that is applicable toit, or any sentence, judicial mandate or

 

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decree from any court or pertinent authority,(c) any agreement or contract in which **DRP**is part or by which it is obligate (ii) it cannot result in thecreation or imposition of any tax, burden or affectation (a) cannotreasonably, cause a Material Adverse Effect in the situation of **DRP** and had been properly informed to the **AGENT** previous to the date of closing ; (b) iscontemplated in the present Line of Credit Contract, including the AllowableBurdens.

 

Excepted from this declaration are thoseconflicts that do not cause Material Adverse Effect.

 

10.6         Legal Situation:  **DRP** is not in asituation of non-fulfillment under any law or regulation that is applicable toit, or sentence, judicial mandate or decree from any court or pertinentauthority, except where that situation of no fulfillment may reasonablycause a Material Adverse Effect in the situation of **DRP**and had been properly informed to the **AGENT** previousto the date of Closing.

 

10.7         Financial Statements:  **DRP** has madeavailable to the **AGENT** its Financial Statements tothe 31st of December 2004, properly audited and its FinancialStatements to September 30, 2005. All this financial information had beenprepared in proper and complete manner in accordance to GAAP in Peru andreflects in a precise manner the financial condition of **DRP**.To the Date of Closing **DRP** does notposes direct liabilities or contingencies that need to be reflected in itsfinancial statements in accordance to the GAAP in Peru, more than those (i) referredto or reflected in the mentioned financial statements on said dates, (ii) emergingfrom the present Line of Credit Contract, of the Guarantee Contracts and otherFinance Documents, (iii) communicated to the **AGENT**;or (iv) that result from the regular course of the **DRP**operations or that are considered Allowed Debt. To the Date of Closure,

 

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no material Adverse Change has occurred in the consolidated financialcondition of **DRP** from that financial conditionreflected in the financial statement to the 31st of December of2004, except for (a) said material adverse Change had been corrected orrectified by **DRP** or the **AGENT**or the Banks had renounced to their right to claim for said Material AdverseChange; or (b) **DRP** would haveinformed the **AGENT** of said material AdverseChange before the Date of Closing.

 

10.8         Legal Processes:  There is no action, investigation, writtenclaim, demand/or legal process pending against **DRP**or its goods in any court, commission or government committee, assemblygovernment agency or arbitration, that to the knowledge of any member of theadministration or management of **DRP** may causea Material Adverse Effect. Excepted from this declaration are: (i) thosethat do not cause material Adverse Effect; and (ii) those reported as “DisclosedInformation” according to **Attachment V**.

 

10.9         Revelation:  To the Date of Closing the declarations madeby the members of the administration or the management of **DRP**in this document and in the Contracts of Guarantee, do not include falsedeclaration of any fact nor omit intentionally any material fact that may causethat the information provided by **DRP** lead theBanks to incur in error. To the Date of Closing there is no fact known to **DRP** that has not been revealed to the **AGENT**and that may result in a Material Adverse Effect for **DRP**.

 

10.10       Non-existence of Fortuitous or ForceMajeure Cases: the business and properties of **DRP** have notbeen affected by fire, explosion, accidents, strikes, forced stoppages orany other labor problem, drought, storm, hail, earthquakes, embargoes or anyother circumstance that, in a reasonable manner may cause a MaterialAdverse Effect to **DRP**.

 

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10.11       Non-existence of Harm to the Environment:  **DRP** operatesits business fulfilling all the norms and regulations that are applicable to itin accordance to the legislation and environmental regulation referred to themining metallurgical activities, and within the frame of the current PAMA (withthe exception of those obligations indicated in the second paragraph of section 9.10)and in conformity with the Modified PAMA. No harmful, toxic or dangerousmaterial, defined that way by those norms, has been or is being released,ejected, spread or liberated by **DRP** inviolation of any norm of the mining metallurgical legislation or regulation,except that actions appropriate and accepted by the corresponding governmentauthorities and revealed to the **AGENT** are beingtaken to remediate this situation. Any harmful, toxic or dangerous materialthat **DRP** transports shall be subject to theenvironmental norms that are applicable to it adopting the appropriate andaccepted actions by the corresponding government authorities.

 

10.12       Taxes:  **DRP** hasprepared, signed and presented before the competent authority the forms for allthe tributes and taxes to which it is legally obligated and has paid the same,except for those that are being claimed by **DRP** through theappropriate challenge recourses and over which if it were required inaccordance to GAAP in Peru, the provisions and reserves have been made in the **DRP** accounting books. There is no procedure or disputepending between **DRP** and the government authorityin matter of tributes and taxes, different from those detailed in Attachment V,which forms integral part of this contract, as it were modified by **DRP** periodically. Excepted from this declaration are: (i) thosethat do not cause Material Adverse Effect; and (ii) those reported as “DisclosedInformation” according to **Attachment V.**

 

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10.13       Immunity:  **DRP** does notpossess immunity regarding the jurisdiction and court, tribunal, arbitration orany tribunal or regarding any legal process or suit.

 

10.14       Rank:  All the obligations that **DRP**assumes under the present Line of Credit Contract are obligations of firstranking for **DRP** and therefore, they havepreeminence regarding the other obligations, direct or indirect, present orfuture, for **DRP**, except for: (i) thosespecifically indicated in the General law of the Bidding Contest as it weremodified or replaced from time to time: (ii) those established in theModified PAMA and (iii) those that are generated from the Ferrites Loanand the Ferrites Project. In that sense, the obligations that may arisefor **DRP** from the generic guarantee grantedin relation to the Bonds, and the Renco Loan are contractually subordinatedregarding to the **DRP** obligations undertaken invirtue of this Line of Credit Contract.

 

The obligations contained in exceptions (ii) and (iii) previouslyreferred to shall have the same ranking as the obligations that **DRP** undertakes before **THE****BANKS** in this Line of Credit Contract.

 

10.15       Maintenance of the Congress/CIT creditfacility: DRR maintains a credit facility with Congress/CIT, exceptwhere said credit facility be substituted by another that complies with at aminimum, terms and conditions similar to those contained in said creditfacility.

 

10.16       Financing related to the Ferrites Project:  DRP has executed a contract for financingwith Servicios Mineros Integrados S.A.C. and guarantee granted by TrafiguraBeheer B.V. on the 10th of December of 2005, to thesatisfaction of the BANKS, by means of which, a line of credit grants up to theamount of US $30,000,000.00. The first US$ 10,000,000 (“Tranche 1”), deductedthe commissions, expenses and other concepts will be

 

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deposited in an “escrow account” (which disbursement in favor of **DRP** shall be found mainly subject to the perfection of theguarantees in favor of Servicios Mineros Integrados S.A.C. in the correspondingpublic Registries). The disbursement of the remnant of the line of credit ofthe Ferrites Loan is conditioned to the fulfillment and/or occurrence of a series ofconditions or preceding events to the disbursements, as it is described in saidfinancing document.

 

**ELEVENTH****: DRP OBLIGATIONS**

 

By means of this Clause, **DRP** assumesbefore the Banks the following Obligations:

 

11.1         Financial Obligations:  Provide the **AGENT**within thirty (30) working days after each finance quarter a certificate signedby its General Manager, Vice President of Finance Treasurer or who exercisestheir functions in case of their absence, certificate that **DRP**is found in compliance with the Net Minimum Consolidated Assets.

 

11.2         Information

 

(i) Veracity: Provide correct and true information by formulating the Request ofDisbursement and at all times, through the life of the present Line of CreditContract.

 

(ii) Financial Information: remit to the **AGENT** or who hedesignates, as long as such designation has been informed in writing to **DRP**, complete financial information, the Audited FinancialStatements and Non-Audited Quarterly Financial Statements prepared by **DRP**, in accordance to GAAP in Peru and any information thatthe **AGENT** reasonably requests in a periodicmanner. The Financial Audited Statements shall be provided

 

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within a period no longer than one hundred and twenty (120) days fromthe closing of each exercise (December 31) during the term of this Line ofCredit Contract and the Non audited Financial Statements shall be providedwithin thirty (30) days from the closing of each trimester, being obligated topromptly communicate to the **AGENT** or towhom he designates, any fact or circumstance that may give origin to asubstantial deterioration in the income, profit, capacity to pay and/orfinancial situation of **DRP**. Also, sendto the **AGENT** or to whom he designates anon-audited version of the financial statements of **DRP**to the closing of each quarterly exercise.

 

(iii) Additional Information:  Remit to the **AGENT**within a prudent period after its request, any additional information that wererequired with relation to the present line of Credit Contract, the GuaranteeContracts and the capacity of **DRP** to complywith the obligations undertaken in virtue of said documents.

 

(iv) Information regarding Accounts Payable and CollectedAccounts:  Send to the **AGENT** each time that this requests it, within a prudentperiod, the detail of the accounts receivable and collected accounts during theperiod that, in each opportunity the **AGENT** indicatesto him.

 

(v) Information regarding Eligible Concentrate InventoryAccounts:  for the case of theEligible Concentrate Inventory accounts that were composed totally or partiallyby inventory in transit to La Oroya from general deposit warehouses, **DRP** shall specify said warehouses in writing to the **AGENT** within the thirty (30) calendar days following to thedates of execution of this Line of Credit Contract (except in the case oftransfer of an important part of those concentrates to places notspecified by **DRP** to the **AGENT**in the period set, under this assumption DRP is obligated to provide immediatenotice to the **AGENT** of the destination).

 

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(vi) Restricted Subsidiaries: Remit to the **AGENT** theupdate of Attachment II from the present document, in the measure in which therelation of the Restricted Subsidiaries by **DRP** and/or DRRis modified.

 

11.3         Notification of Extraordinary Events:  Promptly notify the **AGENT**regarding the occurrence of some of the following events, including a descriptionof their nature and the actions that **DRP** plans totake with regard to: (i) some Event of non-fulfillment and/or (ii) somelitigation, arbitration or administrative procedure in which **DRP** is a party and that if resolved in an unfavorable mannerfor **DRP**, may have an Adverse materialEffect.

 

11.4         Maintenance of books and accountingregistries: Keep its books and accounting registries in accordance to principles andaccounting practices of general acceptance in Peru, committing before the Banksto have the annual financial statements of the company to be reviewed by anexternal auditing firm of international reputation, giving notice in anopportune manner to the **AGENT** of theauditors selected. The registries shall be kept with enough detail to pin pointthe investments made, their costs and if the case were the progress of theirexecution, in each case as GAAP requires it in Peru.

 

11.5         Inspection:  Allow that technical personnel of the **AGENT**, or that which he designates, as long as suchdesignation is informed in writing to **DRP**, to verifythe information provided and the correct application of the resources grantedin virtue of the credits and/or loans granted by the Banks to **DRP** under the fame of this Line of Credit Contract, as wellas carry out inspections of the plant and **DRP** premises.Up to four inspections maybe done regarding inventory quantity, to the accountof **DRP**, and up to two with regard toinventory quality  (these last ones shallbe made at the time

 

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that any of the other four inspections on quantity of the inventory of **DRP** are done). For this effect the annual periods shall becomputed from the Date of Closing to the fulfillment of the anniversary of saiddate.

 

11.6         **Existence and Capacity**:  maintain their existence as commercial societyof limited responsibility under the Peruvian law.

 

11.7         Non-participation in Non-connectedactivities:  Remain in thecurrent line of business and abstain form participating direct orindirectly in non-related activities. What is ordered in this numeral does notlimit the possibility of **DRP** to grantfinancing, assistance, benefits and improvements to the local colleges,government organizations and communities as it has been doing previously.

 

11.8         Use of the Resources: Dedicatethe resources of the credits and/or loans that the Banks grant it in the frameof this contract, with the purpose mentioned in the Third Clause of this Lineof Credit Contract.

 

11.9         Payments to Affiliates:  Limit the payments to DRR and its affiliates,excluding the Commercial Accounts to DRR to $333,333.33 per month for any concept.

 

11.10       Maintenance of the Congress/CIT creditfacility : during the duration of this facility DRR shall keep thecredit facility granted by Congress/CIT under the terms that satisfy the BANKSexcept is said credit availability is substituted for another that at leastcomplies with similar terms and conditions to those contained in said creditfacility.

 

11.11       Maintenance of Assets: Maintainin good condition according to the type of business that **DRP**carries out, the plant and other productive areas necessary for the developmentof it social purpose, and periodically carry

 

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out necessary repairs, with exception of those that may not causean Adverse Material Effect on **DRP**.

 

11.12       Limitation of the Disposal of Assets:  Abstain, during the term of the present Lineof Credit, from selling, leasing, transferring or ceding the use of the fixedassets necessary to maintain production and sales of the company estimated inthe request for credit presented to the Banks, except when: (i) it is inthe normal course of its business; (ii) said fixed assets are no longernecessary to carry out their operations, (iii) the fixed assets areconsidered, in accordance to previous practices as exceeding or obsolete, (iv) whichhave been replaced or are to be replaced in the daily course do **DRP** business, (v) be considered Allowable Charges(Transfer in Trust of the Ferrites Project), (vi) are considered a cessionin use or assignation according to what is contained in the “ReportedInformation”, which forms part of this Line of Credit Contract as **Attachment V**.

 

Except if there were and Event of Non-fulfillment not resolved by **DRP** within the corresponding period for cure **DRP** may dispose of its assets as it is stipulated in numerals(i) to (iv) preceding as long as within a period of 360 days, theamount of said transaction does not exceed, in an individual case  the amount of US $1,000,000.00 and as awhole, US $2,000,000.00. For any sale that exceeds said amounts **DRP** shall obtain the previous satisfaction from the **AGENT** and as long as it has the express authorization is inwriting of the Majority of the Banks. The Banks commit to do their best effortto provide response to the mentioned request within a maximum period of ten (10) workingdays from its presentation, and in case that said period transpired without **DRP** receiving any response, the request will be understoodas approved. This obligation does not limit, nor prohibits: (a) the agreements that are for exploration andexploitation of new projects in the DRP concession in 

 

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Cobriza which  allow thirdparties to carry out investments in said concession in exchange for theparticipation in the earnings, profit or royalties of said projects (“Farm-out”)or the closure of the Cobriza mine operations, nor the sale of fixed assetsthat is done as a result of the same.

 

11.13       Pledge over Social Participations:  Provide to the **AGENT**on the Date of Closing a certificate signed by the Vice-President of DRCayman,in accordance to **Attachment X**, in virtue of whichsaid company commits not to charge, pledge or and in any other form affectin favor of third parties the percentage that results from subtraction to the33.33% of the representative stock of the social capital of DRP, the percentageof social participation that are owned by stockholder workers or former workersfrom Centromin, Metaloroya or **DRP** and itssuccessors, grantors or any other stockholder different from DRCayman.

 

11.14       Government Authorizations:  Keep current, during the term of this Line ofCredit Contract all the licenses, substantial permits and in general anyauthorization that is necessary for the normal development of its activitiesand the execution of this Line of Credit Contract, except those that: (i) whichabsence may not cause an Adverse Material Effect; or (ii) are foundcontained in the “Reported Information”.

 

11.15       Taxes:  Comply with paying all the tributes and taxesthat correspond to it in accordance to the applicable legislation in virtue tothe tax stability granted through the Guarantee Contracts and InvestmentPromotion Measures with the Peruvian Government, except for those tributes thatare being questioned and/or claims against **DRP** through theappropriate challenging recourses and with regard to which in the case the PeruGAAP requires that the reserves and corresponding measures be made in the booksand accounting registries of **DRP**.

 

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11.16       Abstention from Mergers or Splits: Abstain form participatingin processes of merger or split and not to sell or transfer all or asubstantial part of its fixed assets to any person, nor acquire all, orsubstantially all, the assets of any person, without previous expressauthorization in writing from the Majority of the Banks, the same which willnot be denied without justifiable reason.

 

11.17       Fulfillment of the Law: Be up todate in the fulfillment of its tax, labor obligations, including those derivedfrom the social security legislation and private administration of the pensionfund, as well as the remainder aspects of the Peruvian or foreign legislationthat are applicable to it and any regulation with regard to them, unless that: (i) theneed to fulfill said legislation or regulation is being debated and/orquestioned by **DRP**, in good faith through theappropriate means and provisions in the books and accounting records of **DRP** had been made for them; (ii) its non fulfillmentcould not cause an Adverse Material Effect on DRP; (iii) such situationhad been informed to the **AGENT** beforethe Closing Date; or (iv) it refers to the situation contained in Clause11.18 of this Contract.

 

11.18       Fulfillment of the EnvironmentalLegislation: Without prejudice of the obligation contemplated in the previousnumeral, comply with each and every one of the obligations that theenvironmental mining metallurgical current legislation imposes, keeping intoconsideration: (i) what is ordered in the PAMA with the exception of theobligation referred to in the second paragraph of Clause 9.10 of this Contract,(ii) the Modified PAMA and (iii) Supreme Decree No. 046-2004-EM.Also the obligation of fulfillment contained in this Clause includes that ofdoing the studies and fulfilling the requirements established in the laws andcorresponding rules.

 

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In the same manner, in the case that **DRP**were to violate any of the norms that are applicable to it from the legislationand environmental legislation referred to the mining-metallurgical activitiesor were not to fulfill any of the obligations it undertakes in itscorresponding PAMA or Modified PAMA and any other environmental obligation aslong as said non fulfillment could cause a Material Adverse Effect on **DRP** (the lack of delivery of the Bond Letter to MEM, thelack of creation of the Guarantee Trust or any other guarantee that thePeruvian Government may demand would be considered Adverse MaterialEffect), **DRP** shall inform the **AGENT** of said fact as a condition preceding to the executionof disbursements. The Banks commit to carry out disbursements in favor of **DRP**, in accordance to what is ordered in the Line of CreditContract, except that once reported, to the criteria of the Majority of theBanks, this will be a material non-fulfillment.

 

11.19       Request for Extension of the PAMA:  DRP shall request the Ministry of Energy andMines of Peru (“MEM”) the exceptional deferment of the terms for thefulfillment of the PAMA according to Supreme Decree NO. 046-2004-EM  published on 29-12-2004 no later than the 31stof December 2005.

 

11.20       Purposefully left blank

 

11.21       Trust:  To establish a Trust in Administration andGuarantee, within sixty (60)  calendardays following the Closing Date, on all the accounts receivable, including thepresent and future rights to collect for DRP, resulting from 100% of DRP sales contracts (including accountsreceivable to CORMIN, once the total of the debt contracted with ServiciosMineros S.A.C., according to the Ferrites Loan is paid), except for accountsreceivable  resulting from salescontracts with an annual value not greater than US $27,500.00 to be assigned tothe trust to be set in

 

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function to the investment budget for the Modified PAMA  in accordance to what is disposed in Article 7of Supreme Decree No. 046-2004-EM, or any norm that substitutes it.

 

11.22       Non existence of Hedging Agreements withspeculative purposes: Abstain from executing hedging contracts with speculative purposes,which do not have as essential purpose to protect themselves from the eventualfluctuation of the interest rates  andmonetary exchange, as well as the price of concentrates, fuel and finalproducts.

 

11.23       Transactions and contracts withaffiliated or associated individuals:  Abstain from celebrating with affiliatedcompanies or associated individuals transactions that offer less advantageousconditions than those that **DRP** wouldobtain if the transaction were celebrated with non related third parties. Excludedfrom the limitations referred to in this numeral are the obligations that **DRP** has with Affiliates or associated individuals which aredetailed in Attachment VI which forms integral part of this Line of CreditContract and the Administration Commissions.

 

11.24       Obligations: Comply onor before the date of expiration, with all the obligations that it hasundertaken in virtue of this or other contracts that has celebrated and whichnon-fulfillment may at the criteria or reasonable discretion of theMajority of the Banks and may result in Material Adverse Effect for **DRP**, unless said non-fulfillment (i) is being debatedor claimed by DRP, in good faith, through the appropriate means and (ii) overwhich the corresponding **DRP** accountingbooks have the corresponding reserves and provisions in accordance to the GAAPin Peru.

 

11.25       Limitation of the undertaking of debtsand financial obligations: Abstain from undertaking, create or incur in any debt or financialoperation other than the Allowed Debt.

 

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11.26       Limitation of Burdens:  Abstain from creating or undertaking burdenson any of their books, assets or contractual rights, present or future, exceptwhere it is: (i) burden specifically created, required or allowed by thisLine of Credit Contract or the Guarantee Contracts, and  (ii) Allowed Burdens. **DRP** may not constitute additional burdens on thoseassets or rights included in the Guarantee Contracts, except for thosespecifically  contained in this Line ofCredit Contract.

 

11.27       Certificate indicating the Base Amount ofthe Loan:  Send to the **AGENT** a Certificate signed by its General Manager, FinanceVice-President, Treasurer of who exercise their functions in their absence,establishing the Base Amount of the Loan with effective date of the 20thof each calendar month, as well as the detail of the accounts that were  used for the determination; keeping thisinformation under the character of sworn declaration. This Certificate shall bedelivered by **DRP** to the **AGENT**within five working days after the twentieth of each calendar month. ThisCertificate shall be in force for the following calendar month counted from thetwentieth of each month, except where **DRP** presents tothe **AGENT** a new Certificate in the interimin replacement of the first one, in which case this new Certificate will be inforce for the remaining days until the 20th of the next calendarmonth.

 

11.28       Limitation in the distribution ofdividends:  Abstain fromdistributing dividends or pay subordinate debts, in case that an Event of NonFulfillment is produced or in case that there is delinquency in the contractualobligations with the Banks and/or the AGENT, subject to what is disposed inClause 11.9

 

11.29       Contractual Subordination:  DRP shall deliver to the AGENT the documentsthat accredit that the guarantee given by DRP and its Affiliates

 

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as support of the Renco Loan and the Bonds are contractuallysubordinated to the obligations that DRP has undertaken in favor of the Banksin virtue of the Line of Credit.

 

11.30       (Left blank intentionally)

 

11.31       Satisfactory legal opinions:    **DRP** shalldeliver to the **AGENT** legal opinion signed by the **DRP** attorneys, in accordance to the formats enclosed as attachmentVII. Also, **DRP** shall provide the AGENT, withthat information required by the Bank lawyers so that they may emit,within sixty (60) days counted from the date in which this Line of Contractbecome effective, as indicated in numeral 3.10, a legal opinion satisfactory tothe Banks, regarding: (a) the contractual subordination of the genericguarantee granted by **DRP** in favor ofthe Bonds and the Renco Loan to the Obligations that **DRP**undertakes in virtue of this Line of Credit Contract; (b) subordination ofthe Subordinate Loan to the fulfillment of the Payment Obligations that **DRP** undertakes in virtue of this Line of Credit Contract,and; (c ) verification that under insolvency or bankruptcy of DRR, theobligations that DRP undertakes under this Line of Credit Contract areobligations of first ranking for **DRP**, and,therefore, they have pre-eminency regarding the other obligations, direct orindirect, present or future for DRP, except for: (i) those specificallyindicated in the General Law of the Bidding System as it were modified orreplaced from time to time, (ii) those established in the Modified PAMAand (iii) those that are as a consequence of the Ferrites Project.

 

This obligation will be considered as validly fulfilled if and only ifall the legal opinions required are in terms satisfactory to the Banks.

 

11.32       Follow up of the Modified PAMA:  DRP is obligated to regularly report to theAGENT regarding the progress in the process of the request for

 

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extension of the PAMA until its approval, in accordance to what isestablished in D.S. 046-2004-EM.

 

11.33       Inventory Review: DRP willfacilitate the review by a technical independent consultant, designated by theAGENT, of the condition of the fixed assets and DRP inventories that arenecessary to determine the Base Amount of the Loan.

 

**TWELFTH:**** EVENTS OF NON FULFILLMENT**

 

The parties agree that each one of the following circumstancesconstitute an Event of Non-fulfillment.

 

12.1         Non fulfillment in the Obligation to Pay:  If **DRP** did notcomply with the payment of (i) any amount corresponding to principal orinterests of any of the loans and/or credits granted under the present Line ofCredit Contract, (ii) any commission, fee or expense that it has to pay orreimburse in virtue of this Line of Credit, the Guarantee Contracts or theother Finance Documents, or (iii) any other obligation undertaken underthis Line of Credit Contract, the Guarantee Contracts or the other FinancingDocuments.

 

12.2         Falsification of any Declaration orGuarantee:  If any of thedeclarations or guarantees made by **DRP** in thisLine of Credit Contract is false or uncertain and such circumstance continueswithout being corrected for a period of fifteen (15) calendar days from thenotary notification sent by the **AGENT** in suchcase.

 

12.3         Non fulfillment of Obligation:  If **DRP** does notfulfill any of the obligations undertaken under the present Line of CreditContract or the Guarantee

 

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Contracts, different from the Obligation to Pay referred to in numeral12.1 of this Twelfth Clause, or if **DRP** incurs inadditional different debt or indebtedness obligation other than the AllowedDebt.

 

If **DRP** did not fulfill any of theobligations to which numerals 11.2 (Information, 11.3 (Notification of SpecialEvents, 11.4 (Maintaining of Books and Accounting Registries), 11.5(Inspection), 11.6 (Existence and Ability), 11.11 (Maintenance of Assets),11.14 (Government Authorizations),  11.15(Taxes),  11.17 (Fulfillment of the Law),11.24 (Obligations) and 11.27 Certificate indicating the Base Amount of theLoan), it shall correct said non-fulfillment (if said non-fulfillment iscorrectable) within thirty (30) calendar days following to the notarynotification sent by the **AGENT** for thatpurpose.

 

In the case where **DRP** does notfulfill any of the obligations to which numerals 11.18 (Fulfillment of theEnvironmental Legislation), 11.19 (Request for the Extension of the PAMA) referto or other obligation not specified in the previous paragraph, it will beunderstood that this does not have period to redress.

 

12.4         Non fulfillment of the FinancialObligation: If **DRP** does not fulfill any of theFinancial Obligations described in numeral 11.1 of the Eleventh Clause of thiscontract and that non-fulfillment were not cured within thirty (30) calendardays following the notary notification sent for that purpose by the **AGENT**.

 

12.5         Bankruptcy or Insolvency: If **DRP** or any of its Affiliates initiate or has initiatedagainst them and is declared as admissible a procedure for bankruptcy,insolvency, restructuring of  goods orbidding process in accordance to the applicable legislation in this matter.

 

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12.6         Non-fulfillment of Obligationscontemplated in other contracts (Cross Default):  If **DRP**, DRR or anyof their Affiliates does not fulfill any of the obligations undertaken invirtue of other financing contract that they have, as long as saidnon-fulfillment is for amounts greater than: (i) US $500,000.00 in thecase of **DRP** and/or DRR; and (ii) US $1,000,000.00 in the case of any of the **DRP** or DRRAffiliates and as long as in each case the resolution of the anticipatedexpiration for the fulfillment of its obligations derived from said contract,except for the anticipated expiration of the financial obligations contained inthe Ferrites Loan that may be generated as a consequence of **DRP** not obtaining the approval of the Modified PAMA by April 30,2006.

 

Nevertheless, the parties precise that in facing the non fulfillment inthe Bonds and the Renco Loan, the amounts to which the previous paragraphrefers to are not applicable, and non-fulfillment will be considered (i) whenan event of non fulfillment is declared in conformity to what is established inthe documents that regulate said operations, and/or (ii) in the case ofany request or demand for execution of the **DRP** guaranteesand/or their subsidiaries had granted in said operations, and/or (iii) incase of any payment or attempted payment of the obligations guaranteed by **DRP** and/or its subsidiaries in virtue of the Bonds and theRenco Loan, except for previous written consent of the Majority of the Banks.

 

12.7         Non-validity of Guarantee Contracts:  If any of the Guarantee contracts isrescinded, is resolved or it stops from (i) creating a valid and completeguarantee over the property subject to such guarantee, with the prioritygranted in it, or (ii) found in full validity and force, by being declaredinefficient and without value by arbitration organization or competentjurisdiction. Exceptionally, if within the term of twelve (12) months fromcreation of the Trust Contract in Administration and Guarantee, the same isdeclared null or non efficient at the request of a third party this will not

 

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constitute and Event of Non-Fulfillment, according to the present Lineof Credit Contract, as long as the Cession of Rights Contract for Collection isin force and properly ceded in favor of the AGENT in such a manner that THEAGENT is not harmed by the declaration of nullity or inefficacy.

 

12.8         Invalidity of the Financing Documents:  If any of the Financing Documents (excludingfor these purpose the Trust in Administration Guarantee contract, within theterm of twelve (12) months from its constitution) stopped from being executableor required.

 

12.9         Government Authorizations:  If any government authorization that may berequired by **DRP** with regard to this Line ofCredit Contract, the Guarantee contracts or the Financing Documents, stopsbeing in full force or efficacy and as long as this caused a Material AdverseEffect.

 

12.10       Change in Stock Ownership:  If DRR stops from possessing directly orindirectly 66.66% of the **DRP** stock,except where it has the approval of the majority of the Banks.

 

12.11       Existence of Burdens over the OroyaProductive Unit: If **DRP**, burdened, transferred, affected orin any other form allowed by law disposed of the mining concessions and/orassets of its ownership that are related to or physically located at theProductive Unit of La Oroya, except for Allowed Burdens and except for thedisposal of assets referred to In Clause 11.11 including the disposal of theassets of the Cobriza mine, as well as the agreements for “farm-out” and “jointventure” contained in Clause 11.12 of this Line of Credit Contract.

 

12.12       Expropriation:  If on the date after the Date of Closing thePeruvian government carries any action that in the criteria and reasonablediscretion of the Majority of the Banks, (i) may result in thedeprivation of

 

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any of the rights of the Banks as creditors under this Line of CreditContract, or (ii) confiscate, expropriate or nationalize the property orcontrol of **DRP** over the goods matter of thisLine of Credit Contract or the Guarantee Contracts.

 

12.13       Political Violence:  If on date after the Closing Date, any act ofwar occurs (declared or non declared), civil war, revolution, insurrection orterrorism in the Republic of Peru that has a Material Adverse Effect in theability of **DRP** to fulfill its obligationsunder this Line of Credit Contract and the Guarantee Contracts.

 

12.14       Adverse Material Effect:  If on a date after the execution of this Lineof Credit Contract any act or circumstance that under the criteria andreasonable discretion of the Majority of the Banks occurs that may cause aMaterial Adverse Effect.

 

12.15       Adverse Material Change:  If on the date after the execution of thisLine of Credit Contract any act or circumstance occurs that to the criteria orreasonable discretion of the Majority of the Banks causes a Material AdverseChange.

 

12.16       Non fulfillment of the PAMA and ModifiedPAMA:  If (a) **DRP** has not fulfilled any of the obligations undertaken invirtue of the PAMA as it were modified from time to time, in accordance withthe agreements in force executed with the competent government authorities and,as long as said non-fulfillment causes a Material Adverse Effect on **DRP** (with exception of the fulfillment of the investmentsrelated to the building of the sulfuric acid plant); or (b) if **DRP** has not fulfilled any of its obligations undertaken invirtue of the Modified PAMA, as it were modified from time to time, inconformity with the current agreements executed with the competent

 

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government authorities and as long as said non-fulfillment cause aMaterial Adverse Effect on **DRP**.

 

For the case of the Modified PAMA referenced in previous literal b) itwill be understood that the non-delivery of the bond letter to the MEM or thenon creation of the Guarantee Trust in support of the obligations undertaken inthe Modified PAMA (or any other guarantee that may be demanded by thePeruvian Government in substitution of the guarantees previously referenced),has a Material Adverse Effect.

 

12.17       Negative Resolution on the part ofthe MEM:  If MEM rejects therequest for extension for the PAMA presented by DRP. It is understood asrejection, that the Resolution of the MEM is consented in the lastadministrative instance.

 

12.18       Use of Section 2 of the FerritesLoan:  If on the last dateto constitute the bond in favor of MEM, **DRP** has notobtained from Servicios Mineros Integrados S.A.C. the funds corresponding to Section 2of the Ferrites Loan or, alternatively , financing from other source (includingthe generation of cash from DRP) the funds that would be necessary toconstitute said bond.

 

**THIRTEENTH: CONSEQUENCES IN THE EVENT OF NON-FULFILLMENT.**

 

13.1         In the case where any of the Events ofNon-fulfillment described in the previous clause were produced, and as long,they existed, the term to cure said Event of Non-fulfillment had expiredwithout **DRP** rectifying it, the **AGENT** may, as long as the Majority of the banks request it,declare this Line of Credit Contract terminated, in accordance to what isordered in Article 1430 of the Civil Code, by means of writtennotification sent via notary to **DRP**,accompanying a settlement of the owed balance according

 

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to what isordered in numeral 7 of article 132 of the General Law of the FinancingSystem and the Insurance System and/organic Law of the Superintendence ofBanking and Insurance Law No. 26702; understanding this Line of CreditContract as closed, without the need for other communication or formality,  considering as expired the term and demandingthe immediate payment of the owed amounts; in which case the **AGENT** shall have the right to execute and/or legally sue forthe full payment of the owed amounts, as well as execute the guarantees towhich the Fourteenth Clause of this Contract refers to and the promissorynotes. The delay on the part of the **AGENT** and/orBanks in the exercise of this right does not mean in any case the presumptionof renunciation to the same.

 

13.2         If the assumption contemplated in the previousnumeral arose and as long as the **AGENT** does notcollect the full amount that **DRP** owes,compensatory and late penalty interests at the highest rates the **AGENT** has established and are allowed by law will be applied.

 

**FOURTEENTH:****GUARANTEES**

 

As guarantee for the fulfillment of theobligations it undertakes in virtue of this Line of Credit Contract. **DRP** obligates itself to grant in favor of the **AGENT**,  for thebenefit of the Banks the following guarantees that will be ruled by theircorresponding contracts and addenda:

 

14.1         Cession of Rights for Accounts Receivable, infavor of the **AGENT** in benefit of the Banks thatare originated from the sales that it obtains from contracts or salesoperations of their products, as well as the collections that are generatedfrom them, as long as said accounts receivable are Accounts Receivables ofEligible Buyers, for which **DRP** willproceed to execute the Addenda to the corresponding Guarantee Contract.

 

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Said Addendawill specifically exclude a: (i) the accounts receivable that DRPmaintains with CORMIN derived from the Ferrites Project, exclusion that willremain in force until DRP has paid the total of the debt contracted withServicios Mineros S.A.C. according to the Ferrites Loan, and (ii) theaccounts receivable from the sales contracts of DRP to be assigned to theassets in the trust to be constituted in function to the budget for investmentscorresponding to the Modified PAMA, in accordance to what is disposed in Article 7of Supreme Decree No. 046-2004-EM, or any norm that modifies orsubstitutes it, for a maximum amount of $27,500.000 US

 

14.2         Fist and Preferential Global and FloatingPledge in favor of the **AGENT**, for thebenefit of the Banks, over the totality of the concentrates (in beds), productsin process and finished products maintained and/or prepared by **DRP**; for which it will proceed to sign the Addenda to thecorresponding Guarantee Contract.

 

Said Addendato the Global and Floating Pledge Contract, in force shall specifically excludethe inventory of products related to the Ferrites Projects, amongst which are: (a) theFerrites without processing; (b) the product under processing forproduction or processing in the Ferrites plant, (c) the materialsnecessary for the processing of the Ferrites, (d) the Ferrites that resultfrom the zinc circuit at DRP which are mixed with the other Ferrites to beprocessed by the Ferrites processing plant (e) the concentrates that areproduced as a result of the processing of the Ferrites; and (f) theresidues derived from the processing of the Ferrites in the mentionedprocessing plant.

 

14.3         Trust in Administration and Guarantee, in whichall the accounts payable are ceded, including the right to current and futureDRP collections, resulting from 100% of the local and international salescontracts of DRP,

 

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excluding: (i) theaccounts receivable of DRP from CORMIN derived from the Ferritess Projects,until the total of the debt contracted before Servicios Mineros S.A.C.according to the Ferrites Loan is totally paid, and (ii) the AccountsReceivable for up to US $27,500,000.00 resulting from the sales contracts ofDRP that are assigned to fulfill the Modified PAMA obligations.

 

**FIFTEENTH:****INDEMNIFICATION**

 

By means of this Clause, **DRP**obligates itself to indemnify the **AGENT** and itsDirectors, executives and employees (herein in this clause “theIndemnifiable  Parties”) for any loss,harm or expense that any of the Indemnifiable Parties suffers or incurs as aconsequence of this Line of Credit Contract, including, but not limited toprofessional fees for lawyers and expenses arisen from the transactioncelebrated, unless said loss or expense is as a consequence of the guilt ornegligence of said Indemnifiable Party.

 

**SIXTEENTH:**** CESSIONS AND PARTICIPATIONS**

 

DRP, the AGENT and the Banks authorize in anexpress and irrevocable manner for any Bank to be able to cede in all or in part infavor of one or other financial institutions, national or foreign, thecontractual position that it occupies in the present Line of Credit Contract,cedes the rights that the same grants it (without as a consequence of thiscession the terms and conditions of the **DRP** obligationsunder this Line of Credit Contract being modified) as well as any other act oroperation related to the Line of Credit that may be carried out inaccordance to the law, in favor of one or more of the cessionaries. In casethat the bank that accepts the cession or participation were a bank withoutdomicile in Peru (“Foreign Bank”), said Foreign Bank will economicallyundertake any tax that burdens what he receives from it and what result fromthe granting of a credit from overseas.

 

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For this purposes, **DRP**is obligated to execute the documents that are necessary to carry out theauthorized transfers according to the previous paragraph.

 

Regardless of what is previously disposed,Banco de Credito is obligated to hold a percentage of no less 34%  of the total of the amounts committed by theWorking Banks, except where it cedes its position in this Line of CreditContract to another first rate bank, previous consent of DRP, whose consent may bewithheld without justification.

 

In the case of cessions or participationsrelated to the issuance of letters of credit or bond letters, the cession shallbe valid, if and only if the accepting bank for the cession or participation isa fist rate bank commercially accepted for the issuance of the bond letters orletters of credit.

 

**DRP**shall not be able to cede or transfer itscontractual position without the previous authorization of the AGENT and all ofthe Banks.

 

**SEVENTEENTH:**** MODIFICATION OF THE CONTRACT.**

 

17.1         The parties reserve the right to modify theterms of this Line of Credit Contract at the time that they estimate itappropriate. The modifications introduced shall enter into force from theexecution of the contract that for that purpose is executed or on the date inwhich the parties agree. Any modification to this Line of Credit Contract,shall be done necessarily through Public Deed, except for those that refer toaddresses, facsimiles, electronic mails and/or authorized persons to issuecommunications, in which case it will be enough to communicate suchmodifications by means of a notary letter.

 

17.2         (Missing from contract)

 

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17.3         Without prejudice from the previouslymentioned, any change in the terms and conditions of this Line of CreditContract which implies: (i)a reduction or extension in the amount of capital; (ii) areduction or increase in the interest rate, be it compensatory or lateinterest; (iii) an extension or reduction of the term; (iv)reduction orincrease in the amount of the commissions; and (v) any modification in theGuarantee Contracts, shall necessarily have the approval in writing of thetotal of the Working Banks participating in the Line of Credit.

 

Any otherchange in the terms and conditions of this Line of Credit shall have theapproval in writing of the Majority of the Banks.

 

**EIGHTEENTH:****COSTS AND EXPENSES**

 

18.1         All the costs and expenses that are originated forthe **AGENT** as a consequence of thepreparation, negotiation and execution of this contract, including but notlimited to professional fees for lawyers, the due diligence expenses, theexpenses derived from the participation and/or syndication of the **AGENT**, the expenses derived from the creation andadministration of the Trust of Accounts Receivable and the commissions that thebanks in which Collection Accounts are established collect as a consequence ofthis Line of Credit Contract will be assumed and paid by **DRP**.

 

18.2         Also, all the legal and non legal expenses thatmay be originated as a consequence of the collection of the sums that **DRP** may owe to the Banks and/or the **AGENT** in virtue of this Line of Credit Contract and/or theexecution of the Guarantee Contracts will be assumed and paid by **DRP**.

 

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18.3         In the same manner the commissions and expensesthat the corresponding banks may collect from the **AGENT**who participate in one or another manner in the Letters of Credit issued by theagent, to which the fifth Clause of this document refers to. The **AGENT** is obligated to deliver to **DRP**a copy of the evidence of the payment that the corresponding bank(s) provide tothem will be assumed and paid by **DRP**.

 

**18.4****       **Without prejudice of what is established in theprevious paragraphs, all the additional costs and expenses that are derivedfrom the Line of Credit Contract, including the notary changes derived from therising to Public Deed of these documents, as well as the Certification andSimple Copies of the same for the **AGENT** shall beassumed by **DRP.**

 

**NINETEENTH:**** NOTIFICATIONS**

 

Any notification, request, demand, consent,designation, direction, instruction certificate or other communication to beissued under this Line of Credit Contract shall be given in writing or sent viafacsimile (with written confirmation of the reception, confirmation may bedone via facsimile) to the address and facsimile number indicated below for **DRP** and the **AGENT** and whenit is required by Peruvian law, to the addresses of **DRP**and the **AGENT** indicated in the introduction ofthis Line of Credit Contract, or any other address that is communicated inwriting for that effect by **DRP** and the **AGENT**:

 

**DRP**

 

Attention: Henry Eric Peitz and/or AlbertBruce Neil
| Address: |   | Av. Victor Andres Belaunde 147,                      |
|----------|--------|------------------------------------------------------|
|     |   | Via 155                                              |
|     |   | Centro Empresarial Real – Torre Real 3, Piso 9, |
|     |   | San Isidro                                           |

 

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| Facsimile: | 215-1235 |
|------------|----------|
|       | 215-1281 |

 

**AGENT:**

 

Attention:Juana Cossio and/or MiriamCastañeda
| Address:        |   | Centenario 156                   |
|-----------------|--------|----------------------------------|
|            |   | Las Laderas de Melgarejo         |
|            |   | La Molina                        |
|            |   | Division de Mercado de Capitales |
| Facsímile: |   | 313-2556                         |

 

TO THE BANKS:      At the addresses indicated in theintroduction to this Line of Credit Contract.

 

For any variation in the domicile of theother party to be opposable it must be communicated to the other party bywritten notice of no less than fifteen (15) calendar days computed from thedate in which said address modification will take place, making expressreference that said variation is referred to the domicile cited in the presentdocument and indicating when the address change. will enter into force

 

**TWENTIETH:**** OF THE AGENT AND THE BANKS**

 

20.1         Each one of the Banks, by means of this and inan irrevocable manner designates Banco de Credito del Peru as **AGENT** for the effects stemming from this Line of Credit Contractand of the Financing Documents and by means of it each Bank authorizes the **AGENT** to carry the actions, exercise the powers and fulfillthe obligations that correspond to it in accordance to the terms of this Lineof Credit Contract. As a consequence the functions of **AGENT**for effects of the Line of credit they will include (but will not be limitedto), those of disbursement **AGENT**, receiptof payments from **DRP**,  **AGENT** for theconstitution of guarantees, for the receipt of documents to be delivered to **DRP** under the Line of Credit Contract and for the executionof any measure to which the Banks

 

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have a rightto under the Line of Credit Contract, amongst others. The parties recognize andagree that all the notifications that need to be made from the Banks to **DRP** and from **DRP** to theBanks, shall be made only and exclusively through the **AGENT**.

 

Also, it isagreed that any notification or communication that **DRP**provides to the **AGENT** will be understood as madeto all of the Banks. Any information that is knowledge of the **AGENT** or the Banks shall be considered as if it werecommunicated and notified by **DRP** and in saidevent **DRP** will not incur in anynon-fulfillment for not having informed of such matter to the **AGENT** or to the Banks, at the time that said informationshould have been communicated or notified to the **AGENT**.

 

The functionsof the **AGENT** under this Line of CreditContract and the other Financing Documents imply the execution of certainactions under the direction of the Banks according to the proceduresestablished in this contract. It does not imply a relationship ofrepresentation and in any case constitute the exercise by the **AGENT** of a mandate without representation of the Banks. As aconsequence, the **AGENT** has no fiduciary duty norany kind of obligation with the Banks beyond those specified in this contract.

 

20.2         The **AGENT** may executeany action that it needs to execute under this Line of Credit Contract or anyFinancing Document by means of agents or representatives. The **AGENT** shall not be responsible for the actions of saidagents or representatives except that in his selection of those it had incurredin inexcusable culpability.

 

20.3         The **AGENT**shallhave the right to act (or not to act) in basis to any communication receiveaccording to what is established in this Line of Credit Contract and that itreasonably believes to be correct, genuine and

 

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executed bythe authorized persons. All decisions that the **AGENT**must make for the fulfillment of its functions, shall have the approval of theMajority of the Banks in accordance to the definition established in Clause 1.1.Therefore, any action or abstention by the **AGENT**in theframe of this Line of Credit Contract will be fully justified if it is based ina communication from a Majority of the Banks. Any action or abstention adoptedby the **AGENT** that is based in the vote of aMajority of the Banks shall be obligatory for all of the Banks.

 

Nevertheless,the **AGENT** may demand from the Bankscertain guarantees or indemnifications before taking any action or abstainingfrom it, under this Line of Credit Contract and the Financing Documents, whenit considers that in taking such action or abstaining from taking it may incurin responsibilities not contemplated in its function as **AGENT**,and shall have all the right to refuse to exercise any action or abstentionuntil the Banks have provided said guarantees or indemnifications.

 

20.4         For the effects of this Line of CreditContract, it will be presumed that the **AGENT** does notknow of the occurrence of a non-fulfillment on the part of **DRP** nor an Event of Non-Fulfillment  if it has not received a communication inwriting in that sense from a Bank or from **DRP** or anyother person that is part of the granting of the Line of Credit. Saidcommunication shall be made in writing and shall specify that is a notificationof a non-fulfillment.

 

Once the Eventof Non-Fulfillment is known, the **AGENT** shalltake the action that is indicated to him by the Majority of the Banks. Until itreceives said instructions the **AGENT** shall,but will not be obligated to take the actions or abstaining from acting,according to what is necessary with regard to said non-fulfillment orNon-fulfillment Event in the measure

 

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that they areprudent with the purpose of protecting the interest of the Banks.

 

20.5         Each Bank shall declare by means of this thatany action or abstention adopted by said Bank and any decision taken shall bein an individual manner and shall be the result of its own analysis of thesituations and documents presented and evaluated. Each Bank declares that the **AGENT** has not made any declaration, affirmation orqualification of any kind with regard to the analysis and evaluation that eachBank must make and no decision of a Bank is nor will be based in anydeclaration, affirmation or own information provided by the **AGENT**, except in its function as **AGENT**collector for DRP documents.

 

20.6         The **AGENT** may, inits capacity as a Bank participate in this Line of Credit Contract, for whichit shall have all the rights and assume all the obligations that correspond tothe Banks under the Financing Documents. In said situation, the term Bank shallinclude the **AGENT** in its function as Bank andnot as **AGENT**.

 

20.7         The **AGENT** may renouncehis position and cede its contractual position as **AGENT**in this Line of Credit Contract. The Banks and **DRP**provide from this point their irrevocable agreement for the **AGENT** to renounce its function as **AGENT**by means of a written notification addressed to the Banks and to **DRP** with no les than 20 days anticipation. Nevertheless,said renounce shall not be effective until a new **AGENT**has been designated, in accordance to what is disposed further below in thisLine of Credit Contract.

 

On the dateindicated by the **AGENT** to make its resignationeffective, its functions and responsibilities as such shall end.

 

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The Banksshall elect amongst them the Bank that will occupy the position of **AGENT**. From that date the term **AGENT**will refer to the new institution that is constituted as such.

 

20.8         The Banks will be obligated to indemnify the **AGENT** (in its role as **AGENT** and notas Bank) proportionally with their participation in the Line of Credit, in thesame manner as its subsidiaries or affiliates as well as its correspondingdirectors, executives or employees (each one a “Subject of Indemnification”)for all loss, responsibility, claim, damage or expense (“Indemnifiable  Damages”) incurred by any of them as a resultfrom, derived from or related direct or indirectly with any investigation,litigation or any kind of procedure related to the operations contemplatedunder this Line of Credit Contract or other Financing Document, includingamongst other, lawyer’s fees and cost of payments for legal or non-legaltransactions; in the measure in which said Indemnifiable Damages have not beenpaid by DRP, its subsidiaries or affiliates.

 

**TWENTY FIRST:****NO RENEGOTIATION**

 

The parties specifically agree that thisContract does not constitute not could be interpreted under any circumstance asa renegotiation of obligations and therefore agree to renounce to give it suchtreatment in the case that for some reason that was interpreted.

 

Also, in the case of the guarantees to whichthe Guarantee Contracts refer to, the parties specifically agree that thoseshall serve to back and guarantee all the obligations of this Contract, reasonwhy they agree against what is established in article 1283 of the CivilCode in the case that for any reason it is interpreted that there isrenegotiation, what they declare from this moment does not to exist.

 

----

 

**TWENTY SECOND:****APPLICABLE LEGISLATION**

 

In everything not foreseen in this document,for the present Line of Credit Contract is ruled by the Legislation of theRepublic of Peru.

 

**TWENTY THIRD:**** ARBITRATION**

 

23.1         The parties specifically agree that anyconflict or controversy that may rise amongst them as a consequence of theinterpretation or execution of this Line of Credit Contract, included thoserelated to is nullity and invalidity shall be resolved by means of arbitrationlaw, under an Arbitration Tribunal composed by three members that have to beBarr Lawyers, carried in accordance to the National and International  Rules of Conciliation and Arbitrationfrom the Chamber of Commerce of Lima.

 

23.2         The Arbitration Tribunal shall be formed in thefollowing manner:  each one of theparties shall designate an arbiter and the third one shall be designated ofcommon agreement by the first two, who shall Preside over the ArbitrationTribunal.

 

23.3         The arbitration will take place in the city ofLima and the duration of the same shall not be able to exceed sixty (60)working days, counted from the date of installation of the Arbitration Tribunalthrough the issuance of the corresponding decision.

 

23.4         The Arbitration Tribunal’s decision shall befinal and cannot be appealed

 

23.5         The expenses that the arbitration causes shallbe for the charge of the loosing party.

 

23.6         In the case that any of the party(ies) decidedto present a recourse of nullification against the arbitration decision beforethe Legal Branch, it shall previously create in favor of the opposing party aBond letter, issued

 

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by a firstrate  Bank with headquarters in Lima foran equivalent to US $50,000.00 (FIFTY THOUSAND US DOLLARS AND 00/100),executable in case that said recourse in final decision was not declared withfoundation. Said Bond Letter must be in force during the time that the promotedprocess is open.

 

Add to this the Clauses required by Law andelevate this Minute. to Public Deed

 

Lima, December 14, 2005

 

 
| /s/ H. E. Peitz     |                      | /s/ Andres Arredondo Bellido |   |
|---------------------|---------------------------|------------------------------|--------|
| Henry Eric Peitz    | Andres Arredondo Bellido  |
| DOE RUN PERU S.R.L. | BANCO DE CREDITO DEL PERU |

 

----

 

 

ATTACHMENTI

 

LISTOF BANK COMMITMENTS

 
| **BANK**                             | ** ** | **TOTAL AMOUNT OF  COMMITMENT** | ** ** | **SUB LIMITS**   | ** ** |
|--------------------------------------|------------|-------------------------------------------|------------|-----------------------|------------|
| Banco de  Crédito del Perú |       | US$40’000,000.00                     |       |                  |       |
| Sub Limit Revolving Line of Credit   |       |                                      |       | US$40’000,000.00 |       |
| Sub Limit Indirect Line of Credit    |       |                                      |       | US$13’000,000.00 |       |

 

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ATTACHMENTII

 

LISTOF RESTRICTED DRP AND DRR SUBSIDIARIES

 

1. FabricatedProducts Inc.

 

2.  DR Land Holdings.

 

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ATTACHMENT III

 

MODEL FORDISBURSEMENT REQUEST

 

Lima, [     of         of      ]

 

Sirs

 

BANCO DE CRÉDITO DEL PERÚ

Agent for the Banks of the

Line of Credit Contract

Att:                                                                                                                                         [                          ]

 

Of our consideration:

 

By means of this,DOE RUN PERU S.R.L. a society of limited responsibility (herein, DRP) makesreference to the Line of Credit Contract dated(         ), executed between DRP,the Banks to which reference is made to and Banco de Credito del Peru, in itsroll as Agent (herein, the AGENT).  Theterms in capitals used and not defined in this document, shall have themeanings given to the same in the Line of Credit Contract.  In that sense, DRP notifies in an irrevocablemanner that, in accordance to section (4.3, 5.2 or 5.6) of the Line of CreditContract requires a (Disbursement, the issuance of a letter of credit or theissuance of a bond letter) in conformity with what is stipulated in the Line ofCredit Contract and according to the terms established next.

 
|   | (i)    | Date of the  Disbursement         | (                 ) |
|--------|--------|-----------------------------------|----------------------------------------------------------------------------------------------------------|
|   |   |                              |                                                                                                     |
|   | (ii)   | Total amount of  the Disbursement | (                 ) |
|   |   |                              |                                                                                                     |
|   | (iii)  | Expiration date                   | (                 ) |
|   |   |                              |                                                                                                     |
|   | (iv)   | Interest Rate                     | (                 ) |

 

----

 
|   | (v)    | Issuing Bank | (                 )*  |
|--------|--------|--------------|------------------------------------------------------------------------------------------------------------|
|   |   |         |                                                                                                       |
|   | (vi)   | Beneficiary: | (                 )*  |
|   |   |         |                                                                                                       |
|   | (vii)  | Concept:     | (                 )** |

 

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*  (For issuance of bond letters or letters ofcredit

 

** (Only for issuanceof bond letters)

 

DRP certifiesthat the following declarations are true on this date and shall be true on theDate of Disbursement.

 

(A)                              After the Disbursement is made, the total amount usedunder the Line of Credit shall not exceed the total amount of the BankCommitments, which are detailed in Attachment I of the Line of Credit Contract.

 

(B)                                DRP has complied with the Preceding Conditions for theCarrying out of Disbursements to which the Ninth Clause of the Line of CreditRefers to.

 

(C)                                DRP is fulfilling all the obligations it hasundertaken in virtue of the Line of Credit Contract and no Events ofNon-fulfillment have been produced, as contemplated in the Twelfth Clause ofthe Line of Credit Contract.

 

Without anyfurther, we remain of you,

 

Sincerely,

 

 

DOE RUN PERUS.R.L.

 

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ATTACHMENT IV

 

PROMISSORY NOTEMODEL

 

No                                   

 

PROMISSORY NOTE

 

FOR:  US $                                        

 

EXPIRES ON:                  

 

We owe and we are obligated topay fully and unconditionally, to the order of (    ) the Bank, or to whom he had transferredthis Promissory note, as long as said endorsement had been made in conformitywith what is contemplated in the Line of Credit Contract dated (  ), the amount of US $(       AND 00/US DOLLARS), amount received toour full satisfaction and which we are obligated to return in the samepreviously indicated currency, on the date indicated as expiration, at thepremises of the Bank in this city or at the place where collection was mad,plus the compensatory interest equivalent in Libor rate to (30, 650 or 90) daysplus (3.5% 3.75% or 4.25%) yearly which are generated while it is in force,being stipulated that if the payment for the capital plus the compensatoryinterest agreed upon at theF expiration of this Promissory Note were not made,we will additionally credit to the moratory interest, at a rate of 3% (threepercent) yearly in addition to reimbursement for expenses, services and taxesto which there

 

----

 

were place, until the fullcancellation of the amount to be liquidated; in addition to notary, legalexpenses and taxes and other expenses that there may be.

 

The LIBOR rate at ninety (30,60 or 90) is the interest rate at which for the same period deposits inEurodollars are offered in the inter-banking market in London, registered dailyat 11:00 hours, as it appears in the LIBOR page of the REUTERS informationsystem (adjusted if necessary to 1/16% of the closest upper 1% ).  The parties agree and establish that theinterest rate agreed for this loan is variable in accordance to the variationsof the LIBOR rate.

 

For Payment with Charge toAccount, according to article 53 of Law No. 27287, order the charge to:

 

 
| **Name of the Banking  Institution** | ** ** | **Type of Account** | ** ** | **Number or Code for the  Account** | ** ** |
|-----------------------------------------------------|------------|-------------------------------|------------|---------------------------------------------------------|------------|
|                                                |       |                          |       |                                                    |       |

 

All the extensions of theexpiration of this Promissory Note are specifically accepted be it for itstotal amount, lesser or greater amount that the holder had granted us,  extensions that will be enough to be noted onthis same document without it being necessary that for its full validity it beexecuted again.  The holder is obligatedto inform of the extensions it grants, on the simple request of any obligatedparty for this Promissory Note, as well as not to grant any more extensionsfrom the date of notarial notification that any of said obligated party addressto him according to article 49.5 and 49.6 of Law No. 27287.

 

We specifically and irrevocablyauthorize the BANK, to upon expiration or at a later date, may attend to thepayment of this promissory note, by means of charge or compensations with thenecessary amounts that exists in our accounts or deposits that we maintain insaid BANK, whichever the currency of said accounts may be, according to article132.11 of Law No. 26702.

 

----

 

This Promissory Note iscommercial in nature and therefore is subject to the norms of the Law of TitlesValue and to the executive procedure of the Civil Procedural Code.

 

We submit to the competence ofthe judges of the Judicial District of Lima, setting as domicile for thispurpose that indicated at the end of this document where the notary and legalactivities will validly be carried out for the purpose of its payment.

 

The accounts, deposits, goodsor values that we maintain at the BANK or in any of its subsidiaries or  branches may be destined for the partial ortotal payment of this Promissory Note, its interests, capital and/or otherobligations established in this Promissory Note; being said goods affected infirst ranking guarantee with power of application or direct realization and inthe cases of goods other than money, to the best bidder, free from allresponsibility for the price that is obtained according to article 1069 of theCivil Code.

 

Lima,              of                  of2005

 
| Legal Name:                                  |   | DOE RUN PERU  S.R.L.                                                                                                                                           |
|----------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| RUC No.                                      |   | 20376303811                                                                                                                                                    |
| Address:                                     |   | Victor  Andres Belaunde 147                                                                                                                                    |
|                                         |   | Via Principal 155,                                                                                                                                             |
|                                         |   | Centro Empresarial Real – Torre Real 3                                                                                                                    |
|                                         |   | Piso 9 San  Isidro, Lima                                                                                                                                       |
|                                         |   |                                                                                                                                                           |
| Representatives:                             |   | (               )                                                                        |
| Identified  with:                            |   | (               )                                                                        |
|                                         |   |                                                                                                                                                           |
| Information for  the Registration of Powers: |   | (                          ) |
|                                              |        |                                                                                                                                                                |  |  |

 

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| Extended for  US   $                                                                                     |   | Extended for  US   $                                                                                     |   | Extended for  US   $                                                                                      |
|----------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|
|                                                                                                     |   |                                                                                                     |   |                                                                                                      |
| With  expiration on  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU  |   | With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU |   | With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU  |
|                                                                                                     |   |                                                                                                     |   |                                                                                                      |
| With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU |   | With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU |   | With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO   DEL PERU |
|                                                                                                     |   |                                                                                                     |   |                                                                                                      |
| With expiration  on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU |   | With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU |   | With  expiration on.  In conformance with the terms of this document.  Date   BANCO DE CREDITO  DEL PERU  |

 

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ATTACHMENT V

 

REPORTED INFORMATION (DISCLOSURE SCHEDULE)

 

Introduction

 

The information container inthis document of “Disclosure Schedule” is disclosed only for the purposesestablished in the Line of Credit Contract and no information contained in thisdocument or in said Contract may be considered as any admission from any of theparties to any third party of any subject in general (including, withoutlimitation, the violation of any legal norm or the non-fulfillment of anycontract).  The information prepared andprovided as “Disclosed Information”  iscommunicated only with the purpose of providing the requested informationaccording to the Line of Credit Contract. The information was not prepared or communicated keeping into accountits possible presentation to third parties. By reporting this information, Doe Run Peru S.R.L. declares in anexpress manner that it does not renounce to any client-attorney privilegeassociated with said information; not it renounces any protection provided bythe doctrine of product in process of lawyers or accountants regarding thesubjects reported or discussed in this document.  The inclusion of any information as “DisclosedInformation” may not be considered as a means of establishing  standard of materialness.

 

I.                                             EIGHTH:CONDITIONS PRECEDING TO THE DATE OF CLOSING

 

8.7         Nonexistence of Litigation:

 

Doe Run PeruS.R.L. (herein “DRP”) declares that with the exception of what  disclosed to the AGENT before the executionof the Line of Credit Contract or whatever was disclosed in this Contract andin this Attachment

 

----

 

of “DisclosedInformation” – there is no action, investigation, suit, claim written or legalpending process against DRP or its goods in any court, commission or governmentcommittee, assembly, government agency or arbitration that were known to anymember of the administration or management of DRP with the exception of:

 

(i)                                     anyaction, investigation, suit, claim written or legal process  having been resolved in last instance againstDRP and which may cause a Material Adverse Effect on DRP; and

 

(ii)                                  thosethat are disclosed next, and that are divided in the following areas of thelaw:

 

----

 

1.               TaxProceedings

 
| **File N°**         | ** ** | **Recourse** | ** ** | **Jurisdiction** | ** ** | **Matter**                                                                                                                                                                                                                     | ** ** | **Amount Challenged (S/)** |
|-------------------------------|------------|--------------|------------|------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------|
| 0150340001712                 |       | Claim        |       | SUNAT            |       | Income tax corresponding to fiscal 1998, SUNAT does not recognize the  balance in favor of Income Tax for S/ 23’777,848 and imposed the Fine  Resolution for the improper increase on the balance in favor of Income Tax. |       | 31’554,421(Fine)                |
|                          |       |         |       |             |       |                                                                                                                                                                                                                           |       |                                 |
| 0150340003872 y 0150340003877 |       | Claim        |       | SUNAT            |       | IGV and Fine resolutions linked to the return of the Balance in Favor  of the Exporter IGV corresponding to the month of July 2004, which amount was  reduced from S/.21’911,859 to S/. 14’438,919.                  |       | 7’472,940                       |
|                          |       |         |       |             |       |                                                                                                                                                                                                                           |       |                                 |
| 0150340004098                 |       | Claim        |       | SUNAT            |       | Income tax and IGV corresponding to fiscal                                                                                                                                                                                     |       | US$120’000,000 (aprox.)         |

 

----

 
|      |   |   |   |         |   | 1999, 2000 and 2001, Fine Resolutions for infractions typified in  numerals 1 and 2 or Article 178 of the Tax Code and payments to the account  of the Income Tax for the months of January, March, April, May and June of  1999 and February of 2000.              |   |           |
|-----------|--------|--------|--------|--------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|      |   |   |   |         |   |                                                                                                                                                                                                                                                                |   |           |
|      |   | Claim  |   | Tax Tribunal |   | Real Estate Tax corresponding to fiscal 1998, 1999 and 2000 and Fine  Resolution for alleged reduction of the taxable base in the presentation of  the sworn declaration of Real Estate Tax registered by the Municipality of  Santa Rosa de Sacco – La Oroya. |   | 1’276,818 |
|      |   |   |   |         |   |                                                                                                                                                                                                                                                                |   |           |
| 2605-2005 |   | Claim  |   | Tax Tribunal |   | Real Estate Tax corresponding to fiscal 2002 and 2003 and Fine  Resolution for not presenting sworn declarations of the                                                                                                                                             |   | 2’586,316 |

 

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|     |   |   |   |         |   | Real Estate Tax and presenting incomplete information, registered by  the Municipality of La Oroya.                                |   |       |
|----------|--------|--------|--------|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------|--------|------------|
|     |   |   |   |         |   |                                                                                                                               |   |       |
|     |   | Claim  |   | Tax Tribunal |   | Municipal charges corresponding to fiscal 2000, 2001, 2002 and 2003,  registered by the Municipality of La Oroya                   |   | 177,625.50 |
|     |   |   |   |         |   |                                                                                                                               |   |       |
| 641-2005 |   | Claim  |   | Tax Tribunal |   | Real Estate Tax corresponding to fiscal 2000, 2001, 2002 and 2003,  registered by the Municipality of San Pedro de Coris (Cobriza) |   | 1,798,002  |
|     |   |   |   |         |   |                                                                                                                               |   |       |
| 640-2005 |   | Claim  |   | Tax Tribunal |   | Real Estate Tax corresponding to fiscal 2004, registered by the  Municipality of San Pedro de Coris (Cobriza).                     |   | 245,408    |

 

2.               LaborProceedings

 

a.               Actionpresented by the Employees Union – La Oroya Division against DRP and CentrominPeru S.A. (1999) for allegedly not complying with its labor, legal andcontractual obligations.  The initialclaim was for S/. 6’350,700.00 but as a result of the number

 

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of employeesthat has opted for withdrawing their claim, the amount of the claim has beenreduced to approximately S/ 800,000.00 plus legal interest.

 

b.              Claimspresented by certain DRP workers (154 workers) that allege the non fulfillmentof legal and contractual obligations (“individual processes of reimbursement ofbenefits – deductions”).  The averageclaim for each worker is US $21,000.00

 

                        Accordingto the Stock Transfer Contract Centromin Peru must assume any obligationrelated to these legal processes in the measure that the claims refer toactions previous to the 23rd of October 1997.  Although it is probable that the plaintiffsobtain a favorable decision the amount to be paid is lesser than claimed.  Even further, it is anticipated that at least80% of any amount paid according to order issued by the court shall be paid byCentromin Peru S.R.L. and only the balance is to be paid by DRP.

 

c.               Claimspresented by certain DRP workers (173 workers) for Indemnification due toProfessional Disease – Silicosis) at various courts.  To date the average of each claims is US$18,000.00.

 

According tothe Stock Transfer Contract, Centromin Peru must undertake any obligationrelated to those legal proceedings in the measure that the claims  refer to acts previous to the 23rdof October of 1997.  To date, the resultfrom the proceedings have been mixed, being DRP who has prevailed in certaincases and the plaintiffs in others.

 

----

 

3.                                       OtherProceedings:

 

a.                                       Claimfor indemnification for alleged environmental damage presented by the “CivilAssociation of Municipalities from the Junín Region” against DRP, CompañíaMinera Volcan S.A. and Sociedad Minera Corona SA., by means of which anindemnification for US $5,000,000,000.00 is claimed.  The company responded the suit on the 13thof October 2005.  The process continuesits normal course at the Civil Court in Jauja.

 

b.                                      ContentiousAdministrative Claim presented by DRP against the Ministry of Energy and Minesfor the imposition of an 18 UIT fine due to the fatal accident of a company worker.

 

c.                                       Claimsand procedures revealed by  ̈The Doe Run Resources Corporation ̈ in forms 10K 10Qand other public documents before the Securities and Exchange Commission(SEC)  in the USA.

 

d.                                      AdministrativeContentious Claim presented by DRP against the Municipality of Yauli - La Oroyafor the imposition of a fine of S/. 9 ́479,693.00 in relation to construction,that allegedly, has been done without building licenses.

 

e.                                       Appealpresented by DRP against the fine imposed by the Municipality of Yauli – La Oroyafor alleged non fulfillment of civic duties (painting of facades and exhibitingof national flag) for the approximate amount of S/. 13,080.00.

 

8.8         Authorizationsand Approvals:

 

If necessaryall the authorizations and government approvals necessary to carry out DRPoperations that had been obtained and are fully valid and in force with theexception of those:

 

----

 

(i)                                     whichabsence (not obtained or expired), cannot cause a Material Adverse Effect; or

 

(ii)                                  thosecontained in this listing of “disclosed Information”

 

 
| **License/Authorization/Permit**                                                                                                   | ** ** | **Status**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Modification  of the benefit concession for additional installations without modifying the  capacity – Building Authorization |       | As part of  the process of regularization to obtain the Extension of the Benefit Concession,  the 19th of September 2005, DRP requested before the General  Mining Bureau (“DGM”) the building license.  The building License will be granted after the DGM has made a technical  analysis of the Plant and has received the report from the General Bureau of  Environmental Affairs (“DGAAM”). The verbal information that DRP has  indicates that this last report has been completed but there is no assurance  that the authorization be issued. |
|                                                                                                                               |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Modification  of the benefit concession for additional installations without modifying the  capacity – Working Permit         |       | DRP may not request the working permit  until:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                               | (i)        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | the  construction of the Ferrites Plant, as it is indicated in the building  license is complete; |
|                                                                                                                               |       | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | the DGM has  carried out a technical verification which cannot be done until at least  March 2006 and not later than the 30th of June 2006, without  prejudice of the indicated, no assurance has been obtained that the license  may be obtained until the 30th of June 2006; and, |
|                                                                                                                               |       | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | a change in  the current PAMA to include the Environmental Handling Plan for the Ferrites  Plant, this request was already presented. |

 

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| Cobriza  Tailings Deposits        |   | By means or  RD No. 325-2005-MEM/DGM of the 21st of November 2005, the General  Mining Bureau ordered the stoppage of the works of two tailings deposits  located in the areas denominated “North Area” and “Platanal” considering that  the deposits are not authorized due to technical observations during the  procedure initiated by the company when obtaining said permits.  Process to obtain working permits for both deposits was begun during the  years there were technical observations made for both of them. Those for the  deposit located in the “North Area” have been corrected. The ones for el  Platanal have not.  The General Mining Bureau has issued conformity for “North Area” and the  process for the working permit continues, before the authorization is issued  the corresponding inspection will be carried out.  According to this situation the company will request that the measure of  stoppage to be lifted With regard to the tailings deposit located in the area  named “El Platanal”, the company will reinitiate the process according to  what is ordered by the General Mining Bureau. |
|-----------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Residual  Waters Treatment Permit |   | Before the  expiration of the current PAMA (June 2007) DRP must build an industrial water  treatment plant for the Smelter. The extension of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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|                               |   | the PAMA  that DRP will request before December 31, 2005 will not provide additional  time to complete this project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Health  Authorization for Releases |   | •  In July 2003, Doe Run Peru  S.R.L. requested from DIGESA the authorization for eight (8) discharge  points. Four correspond to the Zinc Smelter and four to the Refinery (files  No. 087-03V and No. 082-03V correspondingly)

•  In May 2005, DRP obtained the  authorization for the use of two discharge points, while the other six were  denied

•  These decisions have been  appealed before the Vice Minister of Health, in two separate appeals, each  one for three discharge points. One of these appeals has been denied and the  other is pending from decision.

•  DRP considers that the denials  are null since although the releases currently exceed the maximum permissible  levels (LMP): (i) those excesses are allowed by the current PAMA (under  jurisdiction of the MEM) and therefore DIGESA cannot reject the request of  the Company; and, (ii) before the expiration of the PAMA the company shall be  able to adjust its levels of discharge to comply with the applicable LMP as a  result of the start up of the industrial water treatment plant and other PAMA  projects.

•  Currently, DRP only uses five  discharge |

 

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|   |   | points, two of which have been approved. The other three discharge  points have already been eliminated.

•  Once that the industrial water  treatment plant and other PAMA projects have been fulfilled and DRP will  require of a single sanitary authorization for releases. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

8.9         Licenses:

 

All thesubstantial contracts, substantial concessions and licenses needed to carry outthe operations of DRP have been obtained and are fully valid and in force withthe exception of:

 

(i)                                     those,whose absence (not obtained or expired) may not cause a Material AdverseEffect;

 

(ii)                                  thosecontained in this listing of “Disclosed Information”, heading I of this AttachmentV (numeral 8.8 of the Line of Credit Contract).

 

8.16 Paymentof Taxes

 

DRP isfulfilling its labor and tax obligations with the exception of those that hadbeen informed to the AGENT or are informed to the AGENT as part of the“Disclosed Information”  in heading IIIof this Attachment V, (numeral 11.15 of the Line of Credit Contract).

 

II.                                         NINTHCONDITIONS PRECEDING TO THE CARRYING OUT OF DISBURSEMENTS

 

9.10Fulfillment of the PAMA

 

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That to thedate of Disbursement, DRP must be found in compliance of the PAMA, inconformity with what is established in the agreements executed with thecompetent government authorities, as they were periodically modified, exceptfor what is contained in this “Disclosure Information”.

 

Also, thatDRP, under Supreme Decree No. 046-2004-EM is in the process of presenting therequest for exceptional extension of the term for the fulfillment of theconstruction of the sulfuric acid plant comprehended in the La Oroya PAMA(herein the “PAMA Extension”).  Thelatest date to present said request is December 31, 2005.

 

With regard tothe “Disclosed Information”, we indicate the following:

 

1.               DRPhas been fined with 11.8 UITs, by the General Mining Bureau of EnvironmentalAffairs for the delay in the implementation of a commitment under the currentPAMA.

 

2.               Thealleged delay corresponds to the following projects:

 

•             PAMA Project No. 5:Water Treatment Plant – Copper Refinery.

 

•             PAMA Projects No. 8,9, 10 and 11 – Industrial Effluents Water Treatment Plant.   PAMA Project No. 16 – Sewage – Treatment ofSolid Domestic Residues.

 

Project No. 5has been concluded.  The rest of theprojects shall be completed in the year 2006. None of them shall be included in the extension of the PAMA.

 

9.1Authorizations and Approvals:

 

We refer tothe declaration contained in heading I of this Attachment V (numeral 8.8 of theLine of Credit Contract), under the same terms indicated in it.

 

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III            TENTH: DECLARATIONS AND GUARANTEES

 

10.8                           LegalProceedings

 

There is noaction, investigation, written claim, suit or legal proceeding pending againstDRP or its goods in any court, commission or government committee, assembly,government agency or arbitration that to the knowledge of any member of theadministration or management of DRP;

 

a.                                       Maycause a Material Adverse Effect, or,

 

b.                                      Wouldnot have been disclosed in this document of “Disclosed Information”, inaccordance to heading 1. 8.7 of the Line of Credit Contract.

 

10.11             Nonexistence of harm to the environment.

 

Except forwhat is indicated in numerals 8.8 and 9.10 DRP operates its business fulfillingall the norms that are applicable to it in accordance to the legislation andenvironmental regulation relating the mining metallurgical activities andwithin the frame of the current PAMA, and in conformance with the ModifiedPAMA, once it is approved within the frame of modification and extensionprocedure for the PAMA that will be processed according to what is ordered bySupreme Decree No. 046-2004-EM.  Noharmful, toxic or dangerous material, defined by said norms, is released,launched, spread or liberated by DRP in violation of any norm of the law orenvironmental mining metallurgical applicable legislation, except for what areappropriate and accepted actions by the government authorities and revealed tothe AGENT that are being taken to remediate this situation.  Any harmful toxic or dangerous material thatDRP transports shall be subject to the environmental

 

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norms thatwere applicable to it adopting the appropriate and accepted actions by thecorresponding government authorities.

 

IV.                                 ELEVENTH:  DRP OBLIGATIONS

 

Theinformation contained in the preceding headings shall be considered asDisclosed Information for effects of Clauses 11.14, 11.15 and 11.18 whereapplicable.

 

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ATTACHMENT VI

 

LISTING OF COMMERCIALOPERATIONS EXECUTED WITH AFFILIATES.

 
| 1      |   | Contract  named “Hedging Services Contract” executed between Doe Run Peru S.R.L. and  The Doe Run Resources Corporation, dated November 1, 200, modified July 1,  2004 and as it is modified from time to time                                                                          |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                              |
| 2      |   | Contract  named “International Sales Agency Services Contract” celebrated between Doe  Run Peru S.R.L. and the Doe Run Resources Corporation dated November 1, 2000,  as it were modified from time to time. The services from this contract are  suspended since the 1st of July 2004. |
|   |   |                                                                                                                                                                                                                                                                                              |
| 3      |   | Subordinate  loand denominated “Revised and Attended Subordinated Promissory Note” granted  by The Doe Run Resources Corporation in favor of Doe Run Peru S.R.L. in the  amount of US $139,062,500.00 dated December 9, 2005                                                            |
|   |   |                                                                                                                                                                                                                                                                                              |
| 4      |   | Guarantee  granted by Doe Run Peru S.R.L. regarding the granting of one or more  Preferential Loans for the amount of US $15,500,000.00 in favor of Renco.                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                              |
| 5      |   | Guarantee  granted by Doe Run Peru S.R.L. for the Bonds issued by The Doe Run Resources  Corporation.                                                                                                                                                                                             |

 

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ATTACHMENT VII

 

FORMS FOR LEGAL OPINIONS

 

Document sentin original signed December 14, 2005

 

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ATTACHMENT VIII

FERRITES LOAN

 

According towhat is required in the Ferrites Loan definition incorporated in the “Line ofCredit Contract in Foreign Currency”, please find next a summary of the termsand conditions of said Loan:

 

I       FINANCING CONTRACT (“Working CapitalFinance Facility Agreement”)

 

1.1         FinancingLine

 

a.               FinancingLine:  With date December 10, 2005, DoeRun Peru S.R.L. (herein “DRP” or the “Company”) executed a contract forfinancing for working capital (“Working Capital Finance Facility”, herein“Financing Contract – Trafigura) for up to the amount of US $ 30,000,000.00,plus interest, commissions and other (herein the “Ferrites Loan”), withServicios Mineros Integrados S.A.C. (herein Servicios Mineros”) a subsidiary ofTrafigura Beheer B.V. (herein “Trafigura”), to use said fund in the fulfillmentof the obligations that are borne from the request of the extension of its PAMAto be presented to the Ministry of Energy and Mines (herein, “MEM”) accordingto what is ordered in Supreme Decree No. 046-2004-EM (herein Modified PAMA), aswell as for other corporative purposes.

 

b.              DisbursementSections and Amortization:  In accordanceto the Financing Contract – Trafigura, DRP may use the financing linepreviously described in the four following sections:

 

a.               Section1:  For the amount of US $10,000,000.00(Ten Million US Dollars), less expenses and costs (“Commitment Fee”,

 

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“arrangementFee” and “Expenses”).  Said funds shallbe deposited on the 12th of December 2005, in a special account(“Escrow Account”) open for that purpose at Banco Wiese Sudameris (herein“BWS”) and shall be distributed by the BWS to a special account designated byDRP, once the conditions contemplated in Clause 4.2 of the Escrow Agreement aremet, executed between DRP, Servicios Mineros and the BWS on the 10thof December 2005 and which forms integral part of the Financing Contract –Trafigura, as Attachment T (Appendix T).

 

The payment ofthe financial obligations derived from the disbursement of Section 1(“amortization schedule”), will be done as disposed in literals (a) and (b) ofClause 9.2 of the Financing Contract – Trafigura, depending if the ModifiedPAMA is or is not obtained before the 30th of April 2005.

 

b.              Section2: Once the preceding conditions are fulfilled for the disbursement of Section2, set in Clause 7.2 of the Trafigura -Financing Contract (as well as thoseindicated in Attachment H, Part 2), Servicios Mineros, will present DRP theamount that is lesser than (i) US $10,000,000.00 (Ten Million US Dollars) or80% of the amount estimated of Concentrates to be produced and delivered by DRPwithin the next 12 months to the disbursement of Section 2 in favor ofConsorcio Minero Cormin S.A. (herein “Cormin”), a subsidiary of Trafigura,according to the Purchase-Sale agreement of Concentrates described in NumeralII of this Attachment.

 

One of theConditions to be fulfilled Previous to the disbursement corresponding toSection 2 to take place is that DRP obtains the approval of the Modified PAMAfrom the

 

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Ministry ofEnergy and Mines as it is described in the Financing Contract – Trafigura.

 

The minimumamount to be requested for Section 2 will be equal to US $ 6,000,000.00 (SixMillion US Dollars).

 

The payment ofthe financial obligations derived from the disbursement form Section 2(“amortization schedule”) will be made according to what is disposed in Clause9.3 of the Trafigura –Financing Contract.

 

c.               Section3:  If before September 30, 2007 or the31st of October 2008 (if section 2 is disbursed): (i) DRP will transfer toCormin Concentrates which silver content is lesser than the amount of silverover which the price for delivery was established for Concentrates, accordingto the document named “Silver Forward Pricing Supplement to the SalesContract”, executed by DRP and Cormin on December 10, 2005, and (i) this “shortdelivery” results in the obligation of DRP to compensate Cormin for loses of noless than  US $100,000.00 for eachmonthly delivery, DRP may request Servicios Mineros that in the future itadvances the funds necessary to comply with said payment obligation, for amaximum consolidated financing amount of up to US $10,000,000.00 (Ten MillionUS Dollars).

 

The payment ofthe financial obligations derived from the disbursement of Section 3(“amortization schedule”) will be done according to what is disposed in Clause9.7 of the Trafigura –Financing Contract.

 

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d.              Section4:  DRP shall have at its disposal thefunds corresponding to this Section in the case that: (i) DRP had not obtainedthe approval of the Modified PAMA by MEM before the 30th of April2006, and (ii) the Section 2 had not been used by DRP.

 

The amount tobe disbursed for Section 4 shall be the difference between (“right to top up”)

 

(i)                                     thePrincipal of  Section 1, which is pendingfrom payment (“outstanding”) on the date of the disbursement of Section 4, and

 

(ii)                                  thePrincipal of Section 1, that would be pending from payment in case that what isdisposed in Clause 9.1 (b) and not what is disposed in Clause 9.1 (a)(“accelerated payment”), if the approval of the Modified PAMA were not obtainedbefore the 30th of April 2005) were applicable.      NOTE THEY HAVE THE INCORRECT YEAR)

 

The amount forSection 4 shall not be lesser than US$1,000,000.00            (One million US Dollars), nor greater than US $3,000.000.00 (Three    Million USDollars).

 

The payment ofthe financial obligations derived from the disbursement                 of Section 4 (“amortization schedule”), will be doneaccording to what      is disposed inClauses 9.4 and 9.5 of the Trafigura - Financing   Contract.

 

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1.2Guarantees:

 

From theLoads, Burdens, Contracts and Fiduciary Transfer:  That with the purpose of guarantying thepayment of the principal, interest, commissions and other expenses derived fromthe Trafigura –Financing Contract, Servicios Mineros has requested DRP thegranting and execution of certain contracts, prerogatives, loads and/or burdenson the goods, assets and rights of the Company, which are described next:

 

a)                                      ATrust Guarantee Contract in virtue of which the Ferrites, the Products under Process the Concentrates and theResidues and Wastes(1) that derive from the process of the Ferrites at the FerritesPlant will be transferred, asan asset in trust (herein the “Ferritess Assets”),administered by a trust company.

 

b)                                     AMining Floating Pledge Contract on all of the Ferritess, Products underProcess, Concentrates and Residues and Wastes that are derived from theprocessing of the Ferrites at in the Ferrites Plant.

 

c)                                      Acontract for Right of Way (“Right of Way”) that will allow Servicios Minerosand/or the trust company access to the Ferrites in the case of execution ordirect sale of any of the assets to which literals a) and b), preceding, referto.

 

d)                                     ACession of Rights and Obligations that DRP holds in virtue of the Purchase-SaleContract of Concentrates in favor of the trust company in its roll as trusteeof the Ferrites Assets, in the case that as part of the execution of theFerrites Assets it is decided to convert the trust in guarantee into one inguarantee and administration.

 

e)                                      ACession of the Rights that DRP has in virtue of the Purchase Sale contract ofConcentrates in favor of the trust company in its roll as trustee of theFerrites Assets,

 

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(1) Named in English “Tailings”.

 

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in case that as part of the execution of the Ferritess Assets it isdecided to convert the trust in guarantee into one of guarantee inadministration.

 

At the time ofthe execution of the Trafigura Financing Contract (December 10, 2005), only theMining Floating Pledge Contract has been executed in favor of ServiciosMineros.

 

It iscondition for DRP to enjoy the right to request Sections 2, 3 and 4 of the Trafigura–Financing Contract that DRP and Servicios Mineros (and if the case were Corminand the trust company) execute the documents indicated in literals (a), (c),(d) and (e), preceding, before January 20, 2005.

 

II             PURCHASE SALE CONCENTRATE CONTRACT

 

2.1         Ofthe Contract for Purchase-Sale of Concentrate: DRP has signed with Cormin the Contract for Purchase-Sale ofConcentrates Number 103-4-CM-163-S (including its modifications, herein thePurchase-Sale Concentrate Contract”) in virtue of which:

 

a)              DRPcommits to transfer in favor of Cormin the totality of the zinc and silverconcentrates (herein the “concentrates” that (i) are derived from either theFerrites located in the Benefit Concession Huanchan Lot A-ONE and Huanchan LotB or the Ferrites that result as a the final result of the waste process fromthe zinc metallurgical circuit of the Company(2) (herein, jointly defined as“Ferrites”); and (ii) are produced in the Ferrites processing plant (herein the“Ferrites Plant”) that for such purpose the Company has built within the areaof the Benefit Concession Refinery 1 and 2” as 

 

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(2) Which currently are being processed at the PilotPlant

 

 

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well as fromany other extension or modification that is made on said Benefit Concessionand,

 

b)             Cormincommits to pay the sale price for the concentrates transferred by DRP producedat the Ferrites Plant (herein the Cormin- Accounts Receivable”) once deductedprincipal, interest, commissions and other expenses associated to the WorkingCapital Facility.  It must be highlightedthat Cormin, Servicios Mineros and DRP have agreed that the cash flow that isproduced from the Cormin – Accounts Receivable be first destined to the paymentof principal, interest, commissions and expenses derived from the TrafiguraFinancing Contract.

 

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ATTACHMENT IX

 

DRP POWER CERTIFICATES/NUMERALS 8.13, 8.14AND 8.16

 

Lima, December14, 2005

 

Sirs

Banco deCredito del Peru

Present

 
| Attn:  |   | Mr. Jorge  Mujica    |   |
|--------|--------|----------------------|--------|
|   |   | Ms. Lucia  Barrantes |   |

 

Dear Sirs:

 

I declare thatDRP has prepared, executed and presented before the competent authority theforms for all the tributes and taxes to which it is legally obligated and haspaid the same, except for those that are being claimed by DRP through theappropriate challenging recourses and over which, if it were required inaccordance to the GAAP in Peru, the provisions or reserves have been made inthe DRP accounting books.  There is noprocedure or any pending dispute between DRP and government authority in matterof tributes and taxes, different from those detailed in Attachment V, whichforms an integral part of this contract, as it were modified by DRPperiodically.  Excepted from thisdeclaration are: (i) those that do not cause Material Adverse Effect; and (ii)those reported as “Disclosed Information” according to Attachment V of the Lineof Credit Contract

 

Sincerely,

 

 

Henry EricPeitz

Vice PresidentFinance and Treasury

DOE RUN PERUS.R.L.

 

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Lima December 14, 2005

 

 

Sirs.

Banco de Credito del Peru

Present

 

 
| Attn:  |   | Mr. Jorge  Mujica                                                    |                      |
|--------|--------|----------------------------------------------------------------------|---------------------------|
|   |   | Miss Lucia  Barrantes                                                |                      |
|   |   |                                                                 |                      |
| Ref:   |   | Non existing  of Material Adverse Effect and Adverse Material Chance |
|   |   |                                                                 | in DRP  and/or Affiliates |
|        |        |                                                                      |                           |  |

 

 

Of our consideration:

 

By means of this, in relationto what is disposed in numeral 8.13 of the Modification and Extension of theTerm of the Line of Credit Contract executed between Banco de Credito del Peruand Doe Run Peru S.R.L. executed with date December 14, 2005, we comply withdeclaring the following:

 

That from the date of the lastaudited financial statements no circumstances or situations that to thecriteria and reasonable discretion of Doe Run Peru S.R.L. may cause a MaterialAdverse Change or may have an Adverse Material Effect on:

 

(i)                                     theability for repayment of the loans and/or credits by Doe Run Peru S.R.L. and/orAffiliates, or

 

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(ii)                                  thebusiness, operations, property, assets or liabilities of Doe Run Peru S.R.L.and/or Affiliates.

 

This declaration is issued withthe purpose of complying with the preceding conditions established in theEighth Clause of the Modification and Extension of the Term of the Line ofCredit Contract.

 

 

Henry Eric Peitz

Vice President of Finance andTreasury

DOE RUN PERU S.R.L.

 

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Lima December 14, 2005

 

 

Sirs.

Banco de Credito del Peru

Present

 

 
| Attn:  |   | Mr. Jorge  Mujica                                                  |                 |
|--------|--------|--------------------------------------------------------------------|----------------------|
|   |   | Miss Lucia  Barrantes                                              |                 |
|   |   |                                                               |                 |
| Ref:   |   | Non  existence of burdens with regards to the income and assets of |
|   |   |                                                               | Doe Run Peru  S.R.L. |
|        |        |                                                                    |                      |  |

 

Of our consideration:

 

By means of this in relation towhat is disposed in numeral 8.14 of the Modification and Extension of the Termof the Line of Credit Contract, executed on December 14, 2005 we comply withdeclaring the following:

 

That assets and accountsreceivable of Doe Run Peru S.R.L. are free from any burden or tax except thosecontemplated in the Modification and Extension of the Term of the Line ofCredit Contract or that are defined as Allowed Burdens in said contract.

 

This declaration is issued withthe purpose of complying with the preceding conditions established on theEighth Clause of the Modification and Extension of the Term of the Line ofCredit Contract.

 

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Henry Eric Peitz

Vice President of Finance andTreasury

DOE RUN PERU S.R.L.

 

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ATTACHMENT X

 

NEGATIVE CERTIFICATE OF PLEDGE ON STOCK

 

(According to PDF signed Attachment)

 

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TABLE OF CONTENTS

 
| FIRST:      | DEFINITIONS                                                                                                                                             | 1  |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|----|
| SECOND:     | BACKGROUND                                                                                                                                              | 17 |
| THIRD:      | OBJECT OF  THE CONTRACT                                                                                                                                 | 18 |
| FOURTH      | OF THE TERMS  AND CONDITIONS OF THE                                                                                                                     | 24 |
| FIFTH       | REVOLVING  LINE OF CREDIT REFERENCED IN CLAUSE 3.2.1. OF THE TERMS AND CONDITIONS OF THE  INDIRECT REVOLVING LINE OF CREDIT REFERENCED IN CLAUSE 3.2.2. | 27 |
| SIXTH       | OF THE  PAYMENT OF THE LINE OF CREDIT                                                                                                                   | 31 |
| SEVENTH     | OF THE  COMMISSIONS                                                                                                                                     | 33 |
| EIGHT       | CONDITIONS  PRECEDING TO THE DATE OF CLOSING                                                                                                            | 39 |
| NINTH       | CONDITIONS  PRECEDING TO THE CARRYING OUT OF DISBURSEMENTS                                                                                              | 39 |
| TENTH       | DECLARATIONS  AND GUARANTEES                                                                                                                            | 42 |
| ELEVENTH    | DRP OBLIGATIONS                                                                                                                                         | 48 |
| TWELFTH     | EVENTS OF  NON FULFILLMENT                                                                                                                              | 59 |
| THIRTEENTH  | CONSEQUENCES  OF THE EVENT OF NON-FULFILLMENT                                                                                                           | 64 |
| FOURTEENTH  | GUARANTEES                                                                                                                                              | 65 |
| FIFTEENTH   | INDEMNIFICATION                                                                                                                                         | 67 |
| SIXTEENTH   | CESSATION  AND PARTICIPATIONS                                                                                                                           | 67 |
| SEVENTEENTH | MODIFICATION  OF THE CONTRACT                                                                                                                           | 68 |
| EIGHTEENTH  | COSTS AND  EXPENSES                                                                                                                                     | 69 |

 

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| NINETEENTH:    | NOTIFICATIONS               | 70 |
|----------------|-----------------------------|----|
| TWENTIETH      | OF THE AGENT  AND THE BANKS | 71 |
| TWENTY FIRST   | NO  RENEGOTIATION           | 75 |
| TWENTY  SECOND | APPLICABLE  LEGISLATION     | 76 |
| TWENTY THIRD   | ARBITRATION                 | 76 |

 
| TABLE OF  ATTACHMENTS |                                                                  |   |
|-----------------------|-----------------------------------------------------------------------|--------|
| ATTACHMENT I          | LIST OF BANK  COMMITMENTS                                             |   |   |   |
| ATTACHMENT  II        | LIST OF  RESTRICTED DRP AND DRR SUBSIDIARIES                          |   |   |   |
| ATTACHMENT  III       | DISBURSEMENT  REQUEST MODEL                                           |   |   |   |
| ATTACHMENT  IV        | PROMISSORY  NOTE MODEL                                                |   |   |   |
| ATTACHMENT V          | REPORTED  INFORMATION (DISCLOSURE SCHEDULE)                           |   |   |   |
| ATTACHMENT  VI        | LIST OF  COMMERCIAL OPERATIONS WITH AFFILIATES                        |   |   |   |
| ATTACHMENT  VII       | LEGAL  OPINION FORMAT – ESTUDIO FERRERO ABOGADOS                 |   |   |
| ATTACHMENT  VIII      | FERRITES  LOAN                                                        |   |   |   |
| ATTACHMENT  IX        | CERTIFICATES  OF THE DRP REPRESENTATIVE / NUMERALS 8.13 8.14 AND 8.16 |   |   |
| ATTACHMENT X          | NEGATIVE  PLEDGE CERTIFICATE ON SOCIAL PARTICIPATIONS                 |   |   |

 

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