Exhibit 10.5


 


EXECUTION VERSION


 




 


 





COMPLETION
AGREEMENT


 


among


 


APEX SILVER MINES
LIMITED,


as Sponsor


 


BARCLAYS CAPITAL,

as Technical Agent


 


BNP PARIBAS,


as Administrative Agent


 


and


 


JPMORGAN CHASE BANK,
N.A.,

as Collateral Agent


 


 


Dated as of December 1,
2005




 


 





 





















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
  ARTICLE I DEFINITIONS

  	
  2

  
	
   

  	
  1.01 Definitions

  	
  2

  
	
   

  	
  1.02 Interpretation

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II COMPLETION

  	
  2

  
	
   

  	
  2.01 Completion

  	
  2

  
	
   

  	
  2.02 Waiver of Completion Conditions

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III GUARANTEE

  	
  3

  
	
   

  	
  3.01 Guarantee

  	
  3

  
	
   

  	
  3.02 Payments Free and Clear of Taxes, Etc.

  	
  4

  
	
   

  	
  3.03 Subrogation

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
  THE SPONSOR

  	
  6

  
	
   

  	
  4.01 Representations and Warranties of the Sponsor

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS OF THE SPONSOR

  	
  9

  
	
   

  	
  5.01 Completion Undertaking

  	
  9

  
	
   

  	
  5.02 Pari Passu Obligations

  	
  9

  
	
   

  	
  5.03 Contingent Support Deficiencies

  	
  9

  
	
   

  	
  5.04 Available Cash

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI COMPLETION DEFAULTS

  	
  10

  
	
   

  	
  6.01 Completion Defaults

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
  11

  
	
   

  	
  7.01 Termination of Agreement

  	
  11

  
	
   

  	
  7.02 Governing Law

  	
  12

  
	
   

  	
  7.03 Waiver of Jury Trial

  	
  12

  
	
   

  	
  7.04 Severability

  	
  12

  
	
   

  	
  7.05 Confidentiality

  	
  12

  
	
   

  	
  7.06 Notices

  	
  12

  
	
   

  	
  7.07 Benefits of Agreement

  	
  13

  
	
   

  	
  7.08 Remedies

  	
  13

  
	
   

  	
  7.09 Counterparts

  	
  13

  
	
   

  	
  7.10 Consent to Jurisdiction

  	
  14

  
	
   

  	
  7.11 Amendments

  	
  15

  
	
   

  	
  7.12 Effectiveness

  	
  15

  
	
   

  	
  7.13 Judgment Currency

  	
  15

  
	
   

  	
  7.14 No Waivers

  	
  15

  
	
   

  	
  7.15 Successors and Assigns

  	
  15

  
	
   

  	
  7.16 Expenses

  	
  15

  
	
   

  	
  7.17 Collateral Agent, Technical Agent and
  Administrative Agent Protections

  	
  15

  



 


i





















 


	
  APPENDICES

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  B

  	
  COMPLETION TEST

  	
   

  
	
   

  	
   

  	
   

  
	
  B-1

  	
  FORM OF PHYSICAL FACILITIES CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  B-2

  	
  FORM OF PRODUCTION CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  B-3

  	
  FORM OF ENVIRONMENTAL CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  B-4

  	
  FORM OF MARKETING CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  B-5

  	
  FORM OF LEGAL AND OTHER CONDITIONS CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  B-6

  	
  FORM OF FINANCIAL CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  C

  	
  SPONSOR BUDGET

  	
   

  



 


ii





















 


COMPLETION
AGREEMENT


 


This Agreement, dated as of December 1, 2005, is
made among:


 


APEX SILVER MINES LIMITED, an exempted company incorporated
with limited liability under the laws of the Cayman Islands (the “Sponsor”),


 


BARCLAYS CAPITAL, a public limited company organized
under the laws of England and Wales, as Technical Agent for and on behalf of
the Senior Lenders from time to time party to the Common Security Agreement
(the “Technical Agent”),


 


BNP PARIBAS, a banking institution organized under the
laws of France, as Administrative Agent for and on behalf of the Senior Lenders
and the Hedge Banks from time to time party to the Common Security Agreement
(the “Administrative Agent”), and


 


JPMORGAN CHASE BANK, N.A., a national banking
corporation, as Collateral Agent for and on behalf of the Senior Lenders and
the Hedge Banks from time to time party to the Common Security Agreement (the “Collateral Agent”).


 


WHEREAS:


 


A.            The
Borrower, an indirect wholly-owned subsidiary of the Sponsor, proposes to incur
the Secured Debt Obligations and has entered into the Common Security
Agreement, the Senior Loan Agreements, the Hedge Guaranty and the Security
Documents;


 


B.            Apex
Metals, an indirect wholly-owned subsidiary of the Sponsor, proposes to incur
the Apex Metals Obligations and has entered into the Mandatory Metals Hedge
Agreements and certain other Financing Documents;


 


C.            The
Sponsor has authorized the execution and delivery of this Agreement to
undertake specified obligations to induce the Senior Lenders and the Hedge
Banks to extend credit to the Borrower and Apex Metals as the Sponsor will
receive significant benefits from such extensions of credit; and


 


D.            All
things have been done which are necessary to constitute this Agreement a valid
contract.


 


NOW, THEREFORE, in consideration of the premises and
of the execution of the Common Security Agreement and Senior Loan Agreements by
the Senior Lenders and of the making of Senior Loans thereunder and the
extensions of credit made by the Hedge Banks as contemplated by the Mandatory
Metals Hedge Agreements, the Sponsor hereby agrees with the Technical Agent,
the Administrative Agent and the Collateral Agent, for and on behalf of the
Senior Lenders and the Hedge Banks, as follows:


 





















 


ARTICLE I



DEFINITIONS


 


1.01         Definitions.  Except for terms defined in this Agreement
and the Appendices to this Agreement, defined terms in this Agreement and the
Appendices hereto, which may be identified by the capitalization of the first
letter of each principal word thereof, have the meanings assigned to them in
the Common Security Agreement (including Appendix A thereto).


 


1.02         Interpretation.  The rules of interpretation set forth in
clauses (a) to (j) of Section 1.02 of the Common Security
Agreement shall apply, with necessary changes, to this Agreement as if set
forth in full in this Section.


 


ARTICLE II



COMPLETION


 


2.01         Completion.  “Completion”
shall occur (subject to Section 7.01(c)) on the date upon which the
Borrower has satisfied each of the requirements, tests and conditions described
and set forth in Appendix B and in the text of the forms of certificates
attached hereto as Appendix B-1 through Appendix B-6 (taken together, the “Completion Test”) and has delivered each
of the following certificates to the Administrative Agent (in the case of (e) below)
or the Technical Agent (for delivery to the Senior Lenders):


 


(a)           A Physical Facilities Certificate executed
by a Senior Officer and verified by the Independent Engineer, substantially in
the form set forth in Appendix B-1.


 


(b)           A Production Certificate executed by
a Senior Officer and verified by the Independent Engineer, substantially in the
form set forth in Appendix B-2.


 


(c)           An Environmental Certificate executed
by a Senior Officer and verified by the Independent Engineer, substantially in
the form set forth in Appendix B-3.


 


(d)           A Marketing Certificate executed by a
Senior Officer and verified by the Independent Engineer, substantially in the
form set forth in Appendix B-4.


 


(e)           A Legal and Other Conditions
Certificate executed by a Senior Officer, substantially in the form set forth
in Appendix B-5.


 


(f)            A Financial Certificate executed by
a Senior Officer, substantially in the form set forth in Appendix B-6.


 


The Completion Certificates may be delivered together
or separately in any order and at any time and from time to time; provided that (i) the certificates
required by clauses (e) and (f) shall be dated as of a date not
earlier than the latest of the dates of the certificates required by
clauses (a), (b), (c) and (d), above.


 


2





















 


2.02         Waiver of Completion Conditions.  Completion shall occur, even if the
conditions set forth in Section 2.01 have not been satisfied, if the
Technical Agent (on behalf of and at the direction of each Secured Party)
delivers a notice to the Administrative Agent, the Collateral Agent, the
Borrower and the Sponsor stating that Completion has occurred.


 


ARTICLE III



GUARANTEE


 


3.01         Guarantee.


 


(a)           The
Sponsor, as a primary obligor and not merely as a surety, unconditionally and
irrevocably guarantees to the Collateral Agent, the Administrative Agent, the
Technical Agent, each Senior Lender and each Hedge Bank and their respective
successors and assigns the full and punctual payment by (i) the Borrower
of all Secured Debt Obligations and (ii) Apex Metals of all obligations of
Apex Metals incurred under the Mandatory Metals Hedge Agreements (including all
Mandatory Metals Hedge Transactions executed thereunder) including all
obligations of payment and performance thereunder (such obligations being
herein collectively called the “Apex Metals
Obligations”) that, in any such case, are or become due and payable
prior to Completion, when and as the same shall become due and payable, whether
at maturity, upon acceleration, early termination or otherwise (subject to any
exclusions or applicable grace periods), according to their terms (such
obligations being herein collectively called the “Guaranteed Obligations”). 
In case of the failure of any Guaranteed Obligor to so pay any
Guaranteed Obligation, the Sponsor agrees to make such payment in full
forthwith upon demand, in Dollars, in cash, at such times and in the same
manner as required of such Guaranteed Obligor.


 


(b)           The
Sponsor agrees that its Completion Guarantee shall be unconditional and
irrevocable, irrespective of the invalidity or unenforceability of the
Guaranteed Obligations, the absence of any action to enforce the same, any
waiver or consent by any Senior Lender or any Hedge Bank with respect to any
provision of this Agreement, the Common Security Agreement or any of the other
Financing Documents, the recovery of any judgment against any Guaranteed
Obligor or any action to enforce the same, the insolvency or bankruptcy of any
Guaranteed Obligor or any other circumstance which might otherwise constitute a
legal or equitable claim, right, discharge or defense of a guarantor or surety
(other than complete payment in full in Dollars of the Guaranteed Obligations)
or otherwise impair the right of the Collateral Agent, the Administrative
Agent, the Technical Agent, any Senior Lender or any Hedge Bank to enforce the
obligations of the Sponsor hereunder. 
The Sponsor waives, to the extent permitted under applicable law,
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of any Guaranteed Obligor, any right to
require a proceeding first against any Guaranteed Obligor, any requirement that
the Collateral Agent, the Administrative Agent, the Technical Agent, any Hedge
Bank or any Senior Lender exhaust any right, power or remedy or proceed against
any Guaranteed Obligor or against any other Person under any guarantee of, or
security for any Guaranteed Obligation, protest, notice (including, without
limitation, notice of acceptance of this Completion Guarantee and notice of any
liability to which it may apply) and all demands whatsoever and agrees, that
its 


 


3





















 


Completion
Guarantee shall remain in full force and effect and will not be discharged
except by complete payment in full, in cash and in Dollars of the Guaranteed
Obligations.  In the event that any
payment to the Senior Lenders or Hedge Banks in respect of any Guaranteed
Obligation is rescinded or must otherwise be returned for any reason
whatsoever, the Sponsor shall remain liable for such Guaranteed Obligation to
the extent provided herein as if such payment had not been made (and if the
Sponsor’s obligations under the Completion Guarantee have been terminated in
accordance with this Agreement, such obligations shall be reinstated to the
extent necessary for the Sponsor to comply with the foregoing provisions of
this sentence).  The Sponsor agrees that
it will pay or reimburse the Collateral Agent, the Administrative Agent, the
Technical Agent, each Senior Lender and each Hedge Bank on demand for all
reasonable and documented costs and expenses (including, without limitation,
reasonable and documented fees and disbursements of counsel) incurred by the
Collateral Agent, the Administrative Agent, the Technical Agent, such Senior
Lender or such Hedge Bank, as the case may be, in connection with the
rescission or restoration of the Completion Guarantee, including any such costs
and expenses incurred in defending against any claim alleging that any payment
constituted a preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.


 


(c)           The
Sponsor agrees that the Senior Lenders or the Hedge Banks may at any time and
from time to time, either before or after the maturity thereof, without notice
to or further consent of the Sponsor, extend the time of payment of, exchange
or surrender or fail to perfect collateral for, or renew, any of the Guaranteed
Obligations owed to it, and may also make any agreement with any Guaranteed
Obligor for the extension, renewal, payment, compromise, discharge or release thereof,
in whole or in part, or for any modification of the terms thereof or of any
agreement between Senior Lenders or the Hedge Banks and any Guaranteed Obligor,
without in any way impairing or affecting the Completion Guarantee.


 


3.02         Payments Free and Clear of Taxes, Etc.


 


(a)           Except
as required by law, any and all payments made by the Sponsor under the
Completion Guarantee to the Collateral Agent, the Administrative Agent, the
Technical Agent, any Senior Lender or any Hedge Bank shall be made free and clear
of and without deduction or withholding for any and all present or future
withholding, income, stamp and other taxes, levies, imposts, deductions, duties
or similar charges imposed by the government of the Cayman Islands or any
political subdivision or taxing authority thereof or therein or by any other
jurisdiction from or through which payments are made (other than any of the
foregoing imposed on the net income of the Collateral Agent, the Administrative
Agent, the Technical Agent, any of the Senior Lenders or any Hedge Bank, or any
franchise or other tax imposed on the Collateral Agent, the Administrative
Agent, the Technical Agent, any of the Senior Lenders or any Hedge Bank, by a
jurisdiction by virtue of the Collateral Agent’s, the Administrative Agent’s,
such Senior Lenders’ or such Hedge Banks’ connection with such jurisdiction
other than a connection arising solely under this Agreement, the Common
Security Agreement or any other Financing Document) (such taxes herein referred
to as “Taxes”).  If the Sponsor shall be required by law to
deduct any Taxes from or in respect of any payment under the Completion
Agreement to the Collateral Agent, the Administrative Agent, the Technical
Agent, any Senior Lender or any Hedge Bank, (i) such payment shall be
increased so that, after 


 


4





















 


all required
deductions for Taxes have been made, such payment shall not be less than the
amount that would have been paid by the Sponsor had no such deductions for
Taxes been required and made, (ii) the Sponsor shall make such deductions
and (iii) the Sponsor shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law.  If the Collateral Agent, the Administrative
Agent, the Technical Agent, any Senior Lender or any Hedge Bank pays any such
Taxes, the Sponsor shall, upon demand by the Collateral Agent, the
Administrative Agent, the Technical Agent, such Senior Lender or such Hedge
Bank and submission of reasonable documentary evidence of such payment,
reimburse the Collateral Agent, the Administrative Agent, the Technical Agent,
such Senior Lender or such Hedge Bank for such payments.  The Collateral Agent, the Administrative Agent,
the Technical Agent, each Senior Lender and each Hedge Bank shall use its
reasonable efforts to avoid or mitigate the need for any additional payments by
the Sponsor under this Section, provided
that the Collateral Agent, the Administrative Agent, the Technical
Agent, such Senior Lender or such Hedge Bank shall not be required hereunder to
take any action which is commercially disadvantageous to it or which it
determines violates or is otherwise impermissible under the regulatory
requirements to which it is subject.  If
so requested, the Sponsor shall furnish to the Collateral Agent and the
Administrative Agent original or certified copies of tax receipts in respect of
any Taxes withheld as required under this Section 3.02 as promptly as
reasonably practicable.


 


(b)           Each
Senior Lender, each Hedge Bank, the Administrative Agent and the Collateral
Agent shall notify the Sponsor if it shall have actual knowledge of any event
or circumstances occurring after the date of this Agreement which will give
rise to a payment obligation to it under clause (a) of this Section 3.02
as promptly as practicable after it obtains actual knowledge thereof and of its
applicability to payments due under this Agreement.  Such affected Secured Party will inform the
Sponsor in writing of the basis and amount of each payment obligation under
clause (a) of this Section 3.02. 
The failure of such affected Secured Party to provide such notice will
not affect the obligation of the Sponsor under its Completion Guarantee or
under this Section 3.02 or give rise to a claim on, or liability of, such
affected Secured Party.


 


(c)           The
obligations of the Sponsor under clause (a) and (d) of this Section 3.02
shall survive the payment, prepayment or assignment of Guaranteed Obligations
and the termination of this Agreement.


 


(d)           The
Sponsor agrees to pay upon demand any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment or purchase made under the Completion Guarantee or from
the execution, delivery or registration of, or otherwise with respect to, the
Completion Guarantee or this Agreement (other than taxes that would be excluded
from the definition of “Taxes” in clause (a) of this Section 3.02
pursuant to the parenthetical phrase in the first sentence of such clause (a)).


 


5





















 


3.03         Subrogation.  The Sponsor hereby agrees that until (a) the
payment and satisfaction in full of all the Guaranteed Obligations and (b) the
expiration and termination of the Senior Loan Commitments of the Senior Lenders
under the Senior Loan Agreements and the termination of all outstanding
Mandatory Metals Hedge Transactions, it shall not exercise any right or remedy
arising by reason of any performance by it of its guarantees in Section 3.01,
whether by subrogation or otherwise, against the Borrower or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES OF THE SPONSOR


 


4.01         Representations and Warranties of the Sponsor.  The Sponsor represents and warrants to the
Collateral Agent and the Administrative Agent for and on behalf of the Senior
Lenders and the Hedge Banks that:


 


(a)           Organization.  The Sponsor (i) is incorporated and validly
existing and in good standing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite corporate power and authority under
the laws of the jurisdiction of its incorporation to own its property and to
carry on its business as currently conducted; and (iii) is duly qualified
to do business in and is in good standing in all other jurisdictions where
necessary in light of the business it conducts and the Property it owns and
intends to conduct and own and in light of the transactions contemplated by
this Agreement and the other Financing Documents to which it is a party, except
where the failure to so qualify or be in good standing could not reasonably be
expected to have a Material Adverse Effect;


 


(b)           Ownership
of the Borrower.  At the date
hereof, (i) the Sponsor owns 100% of the issued and outstanding share
capital of Apex Luxembourg; (ii) Apex Luxembourg owns 100% of the issued
and outstanding share capital of Apex Sweden, at least one quota of Apex Metals
in the amount of 1,000 Swiss Francs and one share of the Borrower; (iii) Apex
Sweden owns all of the issued and outstanding share capital of the Borrower
except for two shares and at least 99.79% of the issued and outstanding quotas
of Apex Metals; and (iv) Apex Metals owns one share of the Borrower.


 


(c)           Authority.  The Sponsor has all requisite corporate power
and authority to enter into each Transaction Document to which it is a party
and to incur and perform its obligations provided for herein and therein;


 


(d)           Binding
Agreements.  Each Transaction
Document to which the Sponsor is a party which has been executed and delivered
by the Sponsor on or prior to the date hereof, has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles;


 


6





















 


(e)           Consents
and Approvals.  All
Authorizations and Government Approvals which are necessary for (i) the
execution and delivery by the Sponsor of this Agreement and the other Financing
Documents and (ii) the performance of its obligations hereunder and
thereunder have been obtained and are in full force and effect (except for
those specified in the legal opinions delivered in satisfaction of the
conditions precedent referred to in Section 11.02(h) of the Common Security
Agreement which are to be obtained following the Closing Date but prior to the
Initial Disbursement Date), and no other action by, and no notice to or filing
with, any Governmental Authority or other Person is required for such
execution, delivery or performance and all fees and taxes required for the
legality or enforceability of such documents have been paid (except for (i) those
specified in the legal opinions delivered in satisfaction of the conditions
precedent referred to in Section 11.02(h) of the Common Security
Agreement which are to be paid following the Closing Date but prior to the
Initial Disbursement Date, (ii) those which are immaterial and of a
ministerial nature and (iii) those payable in the Cayman Islands as
specified in the legal opinion of Cayman counsel as being payable in connection
with enforcement in the Cayman Islands);


 


(f)            No
Conflicts.  The execution,
delivery and performance by the Sponsor of each of the Financing Documents to
which it is or is intended to be a party and the consummation of the
transactions contemplated thereby do not and will not (i) violate any
provision of its Organizational Documents, any Authorization, any Government Rule or
any Government Approval applicable to the Project or the Sponsor, (ii) conflict
with, result in a breach of or constitute a default under any Financing
Document or any mortgage, indenture, loan, credit agreement or other agreement
to which the Sponsor is a party or by which it or its property may be bound or
affected in any material respect, or (iii) result in, or create any Lien
(other than a Sponsor Permitted Lien) upon or with respect to any of the
properties now owned or hereafter acquired by the Sponsor;


 


(g)           No
Litigation.  There are no
actions, suits or proceedings pending against or, to the knowledge of the
Sponsor, threatened against, or affecting the Sponsor or any of its properties
before or by any Governmental Authority or before any arbitrator other than
those which have been disclosed in writing to the Senior Lenders on or prior to
the date hereof or those which could not reasonably be expected to result in a
Material Adverse Effect.  There is no
existing default by the Sponsor under any applicable order, writ, injunction or
decree or other decision of any Governmental Authority or any arbitrator;


 


(h)           Project
Information.  As of the date
hereof and the Initial Disbursement Date, the Project Information relevant to
the Sponsor and other information provided by or on behalf of the Sponsor in
writing to the Senior Lenders (as may have been superseded, modified or
corrected by later information provided in writing by or on behalf of the
Sponsor in accordance with the Financing Documents), considered as a whole,
does not contain any material misrepresentation or misstatement (or omit any
material fact or circumstance necessary in order to make the information
contained therein not misleading); provided that,
the Sponsor’s sole representation with respect to projections, estimates or
other expressions of view as to future circumstances set out in the Project
Information shall be that such projections, estimates or other expressions of 


 


7





















 


view as to future circumstances (i) were prepared
in good faith and with due care and (ii) were based on reasonable
assumptions as to all factual and legal matters material to the estimates
therein as of their respective date(s) of delivery;


 


(i)            No
Immunity.  The Sponsor is
subject to civil and commercial law with respect to its obligations under each
of the Financing Documents to which it is a party.  The execution, delivery and performance by
the Sponsor of each of the Financing Documents to which it is a party
constitute private and commercial acts rather than public or governmental
acts.  Neither the Sponsor, nor any of
its assets, is entitled to any right of immunity in any jurisdiction from suit,
court jurisdiction, judgment, attachment (whether before or after judgment),
set-off or execution of a judgment or from any other legal process or remedy
relating to the obligations of the Sponsor under any of the Financing Documents
to which it is a party;


 


(j)            Taxes.  The Sponsor has filed or caused to be filed
all tax returns required to be filed by it, and has paid all taxes shown to be
due and payable on such returns, or on any assessments made against it or any
of its properties, and all other taxes, assessments, fees, liabilities or other
charges imposed on it or on its properties by any Governmental Authority, in
each case after giving effect to any applicable extensions, except for any such
taxes, assessments, fees, liabilities and other charges (i) the payment of
which is being contested in good faith and by appropriate proceedings and for
which adequate reserves are being maintained in accordance with U.S. GAAP and
Applicable Accounting Principles or (ii) the failure of which to file or
pay could not reasonably be expected to have a Material Adverse Effect.  As of the date hereof, there are no material
disputes pending or, to its knowledge, threatened, between the Sponsor and any
Governmental Authority relating to taxes;


 


(k)           Ranking.  The obligations of the Sponsor under this
Agreement will at all times rank pari passu
in right of payment with or senior in right of payment to all other unsecured
obligations of the Sponsor, other than those which have priority under the law
of the Cayman Islands;


 


(l)            Financial
Condition.  The financial
statements of the Sponsor delivered in accordance with Section 4.02 of the
Sponsor Pledge Agreement are true, complete and correct and fairly present in
all material respects the financial condition and results of operations of the
Sponsor as at the end of, and for, such fiscal year or each fiscal quarter, as
the case may be, in accordance with U.S. GAAP consistently applied (subject, in
the case of quarterly financial statements, to normal year-end adjustments and
the absence of notes).  The Sponsor does
not have as of the date of such financial statements any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments required to
be included or noted in financial statements prepared in accordance with U.S.
GAAP, except (i) as referred to or reflected or provided for in such
financial statements or, in the case of the financial statements delivered
pursuant to Section 11.01(h) of the Common Security Agreement, as
arising solely from the execution and delivery of the Financing Documents or (ii) as
notified in writing to the Administrative Agent 


 


8





















 


concurrently with the delivery of such financial
statements.  There has been no material
adverse change in the business, assets, operations or condition, financial or
otherwise, of the Sponsor from that set forth in such financial statements (as
supplemented by any information delivered therewith pursuant to the preceding
sentence, if any) as of the date thereof; and


 


(m)          Dedicated
Cash.  As of the date hereof,
the Sponsor (i) has available to it Dedicated Cash in an amount of not
less than $51,069,000 and (ii) has deposited $10,893,780 of such amount in
an identified securities account maintained with The Bank of New York as
collateral agent and securities intermediary with respect to the Convertible
Notes bearing interest at 4.0% (the “Escrow
Account”) for the purpose of paying interest on such Convertible
Notes when the same becomes due and payable. 
As of the Initial Disbursement Date, the Sponsor will have deposited
$9,855,180 in an identified securities account maintained with an institution
and on terms reasonably acceptable to the Sponsor and the Administrative Agent
(the “Additional Escrow Account”)
for the purpose of paying interest on any of the Convertible Notes when the
same becomes due and payable.


 


(n)           Share
Funding.  The Sponsor has
authorized but not yet issued a sufficient number of common shares of the
Sponsor to permit the Sponsor to fund the Share Funding Amount in accordance
with Section 5.05 hereof.


 


ARTICLE V



COVENANTS OF THE SPONSOR


 


Until termination of this Agreement, the Sponsor shall
perform the following covenants:


 


5.01         Completion Undertaking.  The Sponsor undertakes to use commercially
reasonable efforts to cause the Borrower (a) to construct, complete and
render operational the physical facilities of the Project as contemplated by
the Project Description by the Limit Completion Date and (b) to achieve
Completion by the Limit Completion Date.


 


5.02         Pari Passu Obligations.  The Sponsor shall ensure that its obligations
under each of this Agreement, the Transfer Restrictions Agreement, the Sponsor
Pledge Agreement, the Project Document Guarantee and the Concentrate Sales
Guarantee rank at all times pari passu
with or senior to all of its other unsecured and unsubordinated indebtedness,
except obligations under such indebtedness that are preferred solely by
bankruptcy, insolvency or other laws of general application affecting creditors’
rights generally.


 


5.03         Contingent Support Deficiencies.  In the event that at any time a Contingent
Support Deficiency exists as identified in a Cost to Complete Certificate, the
Sponsor shall propose to the Administrative Agent an Acceptable Funding Plan
for funding such Contingent Support Deficiency within ten (10) days of the
date of such Cost to Complete Certificate. 
The Administrative Agent shall notify the Sponsor of its receipt of the
Acceptable Funding Plan.  In the event
that the Administrative Agent (acting at the direction of the Majority Secured
Parties) 


 


9





















 


accepts such
Acceptable Funding Plan, the Sponsor shall diligently pursue such plan and
shall have ninety (90) days from the date on which the Administrative Agent has
notified the Sponsor of the acceptance of such Acceptable Funding Plan to
deposit, in immediately available funds, the total aggregate amount of the
Contingent Support Deficiency to be funded in connection with such Acceptable
Funding Plan.  In the event that the
Administrative Agent (acting at the direction of the Majority Secured Parties)
rejects such Acceptable Funding Plan or in the event that the Sponsor has
failed to propose an Acceptable Funding Plan within ten (10) days of the
date of the Cost to Complete Certificate identifying the Contingent Support
Deficiency, the Sponsor shall immediately and without demand, notice or
presentment of any kind or nature whatsoever, deposit in the Contingent Support
Account, in immediately available funds, an amount equal to the Contingent
Support Deficiency on the date of the rejection of its plan or, where it has
not presented a plan, the date on which such plan was due to be presented.  The Sponsor shall submit additional
Acceptable Funding Plans in the event that additional funds are required to
cause the Contingent Support Requirement to be satisfied without regard as to
whether the Sponsor may be currently implementing an Acceptable Funding Plan
with respect to a previously identified Contingent Support Deficiency.


 


5.04         Available Cash.  The Sponsor shall (a) expend its
Available Cash in material compliance with the Sponsor Budget and (b) following
the Initial Disbursement Date, upon the release of funds by the issuer of
letters of credit issued to support obligations of the Borrower under the
Material Project Documents, cause an additional $10,374,480 in cash to be
deposited in the Additional Escrow Account by no later than September 30,
2006.


 


5.05         Share Funding.  The Sponsor shall issue to the EPCM
Contractor on behalf of the Borrower a number of shares in the Sponsor having a
value as determined under the EPCM Contract of up to $4,000,000 on the date
such amount is due to the EPCM Contractor under the EPCM Contract.  The
Sponsor shall, on behalf of ASC Bolivia, issue into escrow in accordance with the
Transmission Line Loan Agreement and the Transmission Line Security
Documents a number of shares having a value as determined under the
Transmission Line Loan Agreement and the Transmission Line Security
Documents sufficient to cause the aggregate amount of funds to be made
available under the Transmission Line Loan Agreement to equal $22,280,148.


 


ARTICLE VI



COMPLETION DEFAULTS


 


6.01         Completion Defaults.  The occurrence and continuance of any of the
following events shall be a “Completion
Default”:


 


(a)           Payment
Default.  the Sponsor defaults
in respect of any payment obligation, when and as such payment is due and
payable under this Agreement, and such default continues unwaived or unremedied
for the period specified for the relevant underlying obligation of the Borrower
set forth in Section 10.01(a) of the Common Security Agreement after
written notice thereof is given to the Sponsor by the Collateral Agent or the
Administrative Agent;


 


10





















 


(b)           Breach
of Representation or Warranty Under this Agreement.  a representation, warranty or statement
confirmed or made by the Sponsor contained in any written certificate, notice
or other document provided to any Secured Party under or pursuant to any
Financing Document to which it is a party shall have been incorrect in any
material respect when made or deemed to be made or repeated (except if stated
to have been made solely as of an earlier date); or


 


(c)           Breach
of Covenant.  the Sponsor
fails to comply with any of its obligations under:


 


(i)  Section 5.05
(Share Funding); or


 


(ii) any other
provision of this Agreement not previously referenced in this Article VI
and such failure continues unremedied for 30 days after written notice thereof
is given to it by the Administrative Agent at the direction of the Majority
Secured Parties specifying such default and requiring that it be remedied.


 


ARTICLE VII



MISCELLANEOUS


 


7.01         Termination of Agreement.


 


(a)           Subject
to the reinstatement provisions of Sections 3.01(b), 7.01(b) and
7.01(c), this Agreement (and the associated representations and warranties and
Completion Obligations) shall terminate upon the earlier of (i) Completion
or (ii) payment of all outstanding Guaranteed Obligations and the
termination or cancellation of all Senior Loan Commitments and termination of
all outstanding Mandatory Metals Hedge Transactions.


 


(b)           Upon
the termination of this Agreement, the obligations of the Sponsor hereunder,
other than such obligations as are provided under clauses (a), (c) and
(d) of Section 3.02 and Sections 7.13 and 7.16, shall terminate
and the Sponsor shall not have any further liability to the Senior Lenders and
the Hedge Banks hereunder.


 


(c)           Notwithstanding
termination under clause (i) of Section 7.01(a), this Agreement
shall be automatically reinstated and shall continue in full force and effect
if (i) within 180 days following Completion, the Majority Secured Parties
notify the Sponsor that they intend to commence legal action to establish that
any certificate delivered under Section 2.01 was false in any material
respect as of its date, (ii) within 180 days following the Sponsor’s
receipt of such notice, such legal action is commenced and (iii) a court
of competent jurisdiction renders a judgment that such certificate was false in
any material respect as of its date.


 


11





















 


(d)           Notwithstanding
termination under clause (i) of Section 7.01(a), the Sponsor shall
not be relieved of any obligations hereunder that arose prior to the occurrence
of Completion but which remain unpaid as of Completion.


 


7.02         Governing Law.  This Agreement shall be governed by and
construed in accordance with the law of the State of New York.


 


7.03         Waiver of Jury Trial.  Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.


 


7.04         Severability.  If any provision of this Agreement shall be
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.


 


7.05         Confidentiality.  Each of the Collateral Agent, the Administrative
Agent, the Technical Agent, the Hedge Banks and the Senior Lenders agrees to
maintain the confidentiality of the information disclosed to it concerning the
Sponsor, except that the information may be disclosed (a) to its Related
Parties including accountants, legal counsel and other advisers, (b) to a
guarantor of any Guaranteed Obligor’s obligations under the Financing
Documents, (c) to any insurer or guarantor of Senior Loan Obligations held
by a Senior Lender, (d) to the extent requested by any regulatory or
Governmental Authority, (e) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (f) in the case
of any Senior Lender that is a governmental agency or entity, to other parts of
its government in accordance with its usual policies, (g) to any other
party to this Agreement, (h) in connection with the exercise of any duties
or remedies hereunder or any suit, action or proceeding relating to this
Agreement or under the Loan PRI Policy (or in satisfaction of the insureds’
obligations thereunder) or the enforcement of rights hereunder, (i) subject
to an agreement containing provisions substantially the same as those of this Section 7.05
(which shall name the Sponsor as third party beneficiary thereof), to any
permitted assignee of or Participant in, or any prospective permitted assignee
or Participant in, any Secured Debt Obligations, (j) with the consent of
the Sponsor or (k) to the extent such information (i) becomes
publicly available other than as a result of a breach of the obligations
contained in this Section 7.05 or (ii) becomes available to the
Administrative Agent, the Collateral Agent, any Senior Lender or any Hedge Bank
on a nonconfidential basis from a source other than the Sponsor (it being
understood in the case of sections (a), (b) and (c) hereof that any
such Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential).


 


7.06         Notices.


 


(a)           Any
notice, request, demand, consent, designation, direction, instruction,
certificate, report or other communication to be given hereunder shall be given
in the English language and will be duly given when delivered in writing or
sent by facsimile transmission (with written confirmation of receipt, which
confirmation may be by facsimile transmission) or when delivered by any other
reasonable means to a party at its address and facsimile 


 


12





















 


transmission numbers
as indicated below or to such other address as may be furnished for this
purpose by such party at:


 


	
  If to the Sponsor, at:

  	
   

  
	
   

  	
   

  
	
  Apex Silver Mines Limited

  	
   

  
	
  Walker House, Mary Street

  	
   

  
	
  George Town, Grand Cayman,
  Caymans Islands

  	
   

  
	
  British West Indies

  	
   

  
	
  Tel:

  	
  (303) 839-5060

  	
   

  
	
   

  	
  (888) 696-2739

  	
   

  
	
  Fax:

  	
  (303) 839-5907

  	
   

  
	
  Attn:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Apex Silver Mines
  Corporation

  	
   

  
	
  1700 Lincoln Street, Suite 3050

  	
   

  
	
  Denver, CO 80203

  	
   

  
	
  Tel:

  	
  (303) 839-5060

  	
   

  
	
   

  	
  (888) 696-2739

  	
   

  
	
  Fax:

  	
  (303)839-5907

  	
   

  
	
  Attn:

  	
  Chief Financial Officer

  	
   

  



 


 


If to the Borrower, the Technical Agent, the
Collateral Agent, or the Administrative Agent, at the respective address
indicated therefor in Section 15.08 of the Common Security Agreement.


 


(b)           Any
notice or certificate delivered by the Sponsor to the Technical Agent, the
Collateral Agent or the Administrative Agent shall be deemed to have been given
to each Senior Lender and each Hedge Bank for all purposes hereunder.


 


7.07         Benefits of Agreement.  Nothing in this Agreement or any other
Financing Document, express or implied, shall give to any Person, other than
the parties hereto and their successors and permitted assigns under this
Agreement, the Senior Loan Agreements, the Common Security Agreement and the
Mandatory Metals Hedge Agreements, any benefit or any legal or equitable right
or remedy under this Agreement.


 


7.08         Remedies. 
Except as and to the extent otherwise provided in this Agreement, no
remedy herein conferred upon the Collateral Agent or Administrative Agent is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder, under the Common Security Agreement, the Senior Loan Agreements, the
Transfer Restrictions Agreement or the Security Documents or now or hereafter
existing at law or in equity or by statute or otherwise.


 


7.09         Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so 


 


13





















 


executed and
delivered shall be an original, but all the counterparts shall together
constitute one and the same instrument.


 


7.10         Consent to Jurisdiction.


 


(a)           The
Sponsor hereby irrevocably consents and agrees, for the benefit of each other
party, that any legal action, suit or proceeding against it with respect to its
obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement may be brought in any Federal or State court
located in the Borough of Manhattan, The City of New York (a “New York court”), and hereby irrevocably
accepts and submits to the non-exclusive jurisdiction of each such New York
court or New York Federal court, as the case may be, with respect to any such
action, suit or proceeding.  The Sponsor
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions, suits or proceedings brought in any such New
York Federal court and such New York court and hereby further waives and agrees
not to plead or claim in any such New York Federal court that any such action,
suit or proceeding brought therein has been brought in an inconvenient forum.


 


(b)           The
Sponsor agrees that a final judgment against it in any action, suit or
proceeding taken in a New York court or New York Federal court in accordance
with clause (a) shall be conclusive and may be enforced in any
jurisdiction by suit on the judgment, a certified copy of which judgment shall
be conclusive evidence thereof, or by any other means provided by applicable
law.


 


(c)           To
the extent that the Sponsor has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution,
execution, sovereign immunity or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity to the fullest extent
permitted by law, in respect of its obligations under this Agreement.


 


(d)           The
Sponsor hereby irrevocably appoints CT Corporation System, with offices at the
date of this Agreement at 111 8th Avenue, New York, New York 10011, as its
authorized agent on which any and all legal process may be served in any such
action, suit or proceeding brought in any Federal or State court located in the
Borough of Manhattan, The City of New York. 
The Sponsor agrees that service of process in respect of it upon such
agent, together with written notice of such service given as provided in Section 7.06,
shall be deemed to be effective service of process upon it in any such action,
suit or proceeding.  The Sponsor agrees
that the failure of such agent to give notice to it of any such service shall
not impair or affect the validity of such service or any judgment rendered in
any action, suit or proceeding based thereon. 
If for any reason such agent shall cease to be available to act as such,
the Sponsor agrees to designate a new agent in the Borough of Manhattan, The
City of New York, on the terms and for the purposes of this Section 7.10.  Nothing herein shall be deemed to limit the
ability of any party hereto to serve any such legal process in any other manner
permitted by applicable law or to obtain jurisdiction over any such party or
bring actions, suits or proceedings against it in such other jurisdictions, and
in such manner, as may be permitted or required by applicable law.


 


14





















 


7.11         Amendments.  This Agreement may be amended only by an
agreement in writing signed by each party hereto.


 


7.12         Effectiveness.  This Agreement shall come into full force and
effect upon (a) its execution and delivery by each of the parties named on
the signature pages hereof and (b) the effectiveness of the Common
Security Agreement in accordance with Section 15.20 thereof.


 


7.13         Judgment Currency.  The obligations of the Sponsor to make
payments hereunder shall not be discharged by an amount paid in any currency
other than Dollars, whether pursuant to a court or arbitral judgment or
otherwise, to the extent that the amount so paid upon conversion to Dollars and
transferred to New York, New York under normal banking procedures does not
yield the amount of Dollars due, and the Sponsor hereby, as a separate
obligation and notwithstanding any such judgment, agrees to indemnify the
Collateral Agent, the Administrative Agent, the Technical Agent, each Hedge
Bank and each Senior Lender against, and to pay to the Collateral Agent on
demand, in Dollars, any difference between the sum originally due in Dollars
and the amount of Dollars received upon any such conversion and transfer.


 


7.14         No Waivers.  No failure on the part of the Collateral
Agent, the Administrative Agent, the Technical Agent, any Hedge Bank or any
Senior Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this Agreement or any
other agreement or instrument referred to herein or therein shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under any such agreement or instrument preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.


 


7.15         Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns.


 


7.16         Expenses. 
The Sponsor shall pay all documented out-of-pocket expenses of the
Technical Agent, the Collateral Agent, the Administrative Agent, the Technical
Agent, the Hedge Banks and the Senior Lenders (including reasonable fees and
expenses of legal counsel) incurred in connection with the enforcement of any
provision of this Agreement and the collection of any amount due hereunder.


 


7.17         Collateral Agent, Technical Agent and Administrative
Agent Protections.  The
rights, benefits, privileges and protections conferred upon the Collateral
Agent, the Technical Agent and the Administrative Agent pursuant to Article XII
and Article XIII of the Common Security Agreement are expressly
incorporated herein by reference and shall extend to the Collateral Agent, the
Technical Agent and the Administrative Agent hereunder as if such rights,
benefits, privileges and protections were set forth in full herein.


 


15





















 


IN WITNESS WHEREOF the parties have caused this
Agreement to be duly executed as of the date first above written.


 


	
   

  	
  APEX SILVER MINES LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey G. Clevenger

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey G. Clevenger

  
	
   

  	
   

  	
  Title: President & CEO

  



 


S-1





















 


	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lucia Jaklitsch

  	
   

  
	
   

  	
   

  	
  Name: Lucia Jaklitsch

  
	
   

  	
   

  	
  Title: Vice President

  



 


S-2





















 


	
   

  	
  BNP PARIBAS,

  
	
   

  	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Stufsky

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey Stufsky

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew Lewis

  	
   

  
	
   

  	
   

  	
  Name: Matthew Lewis

  
	
   

  	
   

  	
  Title: Vice President

  



 


S-3





















 


	
   

  	
  BARCLAYS CAPITAL,

  
	
   

  	
   

  	
  as Technical Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Hogarth

  	
   

  
	
   

  	
   

  	
  Name: John Hogarth

  
	
   

  	
   

  	
  Title: Associate Director

  



 


S-4





















 


Appendix A


to Completion Agreement


 


DEFINITIONS


 


In this Appendix, the Completion Agreement and the
other Appendices hereto and in any other document that refers to this Appendix,
the following terms shall have the meanings assigned below and include the
plural as well as the singular (and unless otherwise specified, section references
in this Appendix are to sections of the Completion Agreement):


 


“Acceptable Funding
Plan” means a funding plan delivered by the Sponsor to the
Administrative Agent in connection with the funding of any Contingent Support
Deficiency that satisfies the following conditions:


 


(a)           such plan is predicated on a
commitment letter, underwriting letter or other firm underwriting commitment by
a commercial bank, investment bank or financial institution of reputable
international standing;


 


(b)           provides for funding in an amount at
least equal to the identified Completion Support Deficiency; and


 


(c)           does not provide for any recourse to
any Affiliated Obligor or any assets of any Affiliated Obligor other than the
Sponsor.


 


“Additional Escrow
Account” has the meaning given to that term in Section 4.01(m).


 


“Agreement”
means this Completion Agreement.


 


“Available Cash”
means cash and Cash Equivalents (excluding any cash or Cash Equivalents posted
in the Equity Account and the Contingent Support Account) available to the
Sponsor for general corporate purposes and not pledged to any Person or
escrowed for any purpose.


 


“Borrower”
means Minera San Cristóbal S.A., a sociedad
anónima organized under the laws of Bolivia.


 


“Cash Equivalent”
means, at any time:


 


(a)           any evidence of Indebtedness for
Borrowed Money, maturing not more than one year after such time, issued or
guaranteed by the United States government or an agency thereof; or


 


(b)           investments in securities or bank
instruments rated at least “A” by S&P or “A2” by Moody’s or “A-1” by
S&P or “P-1” by Moody’s and with maturities of not more than one year; or


 


(c) money market
funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the investment Company Act of 1940, as
amended and (ii) have portfolio assets of at least $1,000,000,000.


 


A-1





















 


“Common Security
Agreement” means the Common Security Agreement, dated as of the date
hereof, among the Borrower, Apex Sweden, Apex Luxembourg, Apex Metals, the
Administrative Agent, the Hedging Coordinators, the Lead Arrangers, the
Technical Agent, the Collateral Agent, the Securities Intermediary, and the
Senior Lenders and Hedge Banks from time to time party thereto.


 


“Completion”
has the meaning set forth in Section 2.01.


 


“Completion
Certificates” means each of the certificates referred to in Section 2.01.


 


“Completion Default”
has the meaning set forth in Section 6.01.


 


“Completion
Guarantee” means all guarantee, payment and indemnity obligations of
the Sponsor under Section 3.01.


 


“Completion
Obligations” means the Completion Guarantee and the Completion
Undertaking.


 


“Completion Test”
has the meaning set forth in Section 2.01.


 


“Completion
Undertaking” means the undertakings of the Sponsor under Section 5.04.


 


“Convertible Notes”
means the 2.875% convertible notes due 2024 issued by the Sponsor under an
Indenture of Trust dated March 16, 2004 between the Sponsor and The Bank
of New York as trustee and the 4.0% convertible notes due 2024 issued by the
Sponsor under an Indenture of Trust dated October 15, 2004 between the
Sponsor and The Bank of New York as trustee.


 


“Dedicated Cash”
means the sum of (a) Available Cash plus (b) the sum of (i) amounts
deposited in the Escrow Account and the Additional Escrow Account and (ii) cash
posted to support the issuance of letters of credit required pursuant to the
terms of the Material Project Documents (excluding any cash posted to meet the
escrow requirements under the Ports Agreement).


 


“Environmental
Certificate” means the certificate referred to in clause (c) of
Section 2.01.


 


“Escrow Account”
has the meaning ascribed to such term in Section 4.01(m).


 


“Financial
Certificate” means the certificate referred to in clause (f) of
Section 2.01.


 


“Guaranteed
Obligations” has the meaning set forth in Section 3.01(a)


 


“Guaranteed Obligor”
means each of the Borrower and Apex Metals.


 


A-2





















 


“Legal and Other
Conditions Certificate” means the certificate referred to in
clause (e) of Section 2.01.


 


“Marketing
Certificate” means the certificate referred to in clause (d) of
Section 2.01.


 


“Physical
Facilities Certificate” means the certificate referred to in
clause (a) of Section 2.01.


 


“Production
Certificate” means the certificate referred to in clause (b) of
Section 2.01.


 


“Senior Officer”
means the President or Chief Executive Officer of the Borrower.


 


“Sponsor Budget”
means a general budget attached as Appendix C hereto for the activities of the
Sponsor during the period from the Closing Date through the Limit Completion
Date referred to in Section 11.02(a)(iii) of the Common Security
Agreement.


 


“Sponsor Permitted
Liens” has the meaning set forth in the Sponsor Pledge Agreement.


 


 “Taxes” has the meaning set forth in
clause (a) of Section 3.02.


 


A-3





















 


Appendix B


to Completion Agreement


 


COMPLETION TEST


 


The “Completion
Test Period” is a period of 100 continuous days during which the
Borrower’s production facilities operate for 90 days or more, ending on or
before the Limit Completion Date, provided that downtime of up to 240 hours
during this period will not require the test to be restarted.  The Completion Test shall be prospective in
nature; the Borrower shall inform the Technical Agent and Independent Engineer at
least 15 days prior to start of the scheduled test.  The Independent Engineer shall be on site for
the commencement and scheduled completion of the Completion Test, with further
visit mid-way through the Completion Test Period as deemed appropriate by the
Independent Engineer and the Technical Agent. 
The Completion Test may be stopped at the discretion of the Borrower and
restarted at any point, with the approval of the Technical Agent and the
Independent Engineer which shall not be unreasonably withheld, prior to the
Limit Completion Date.  Should a stopped
Completion Test be restarted then a new prior notification to the Technical
Agent and Independent Engineer shall be required.


 


Satisfaction of the Completion Test shall require
delivery of the completed certifications in the forms attached as Appendix B-1
through Appendix B-6 to the Completion Agreement.  The Technical Agent shall receive
certificates B-1 through B-4 and B-6 in accordance herewith.  Certificate B-5 shall be delivered directly
to the Administrative Agent.  Upon
receipt and review of certificates B-1 through B-4 and B-6, the Technical Agent
shall deliver the certificates to the Administrative Agent together with a
notification of its conclusions as to whether the relevant documentary
components of the Completion Test have been satisfied.


 


In performing the Completion Test, the Borrower will
conduct the required sampling and assaying in accordance with standard
international mining practices.  All
weight measures referred to in certificates submitted in connection with the
Completion Test will be on a dry basis. 
Measurement of moisture content will be made to adjust the weightometer
and other records to a dry basis.  The
sampling locations and laboratory assay procedures will be verified by the
Independent Engineer.  In cases where a
materiality assessment is required, the Technical Agent, acting on behalf of
the Secured Parties, may determine in concert with the Independent Engineer and
the Borrower appropriate materiality thresholds.


 


During the Completion Test Period, the Borrower shall
operate the Project in accordance with the Operating Plan then in effect and
accepted pursuant to Section 8.14 of the Common Security Agreement.  References below and in the annexed
certificates to the accepted Operating Plan then in effect shall mean at any
time the Initial Operating Plan, or, if there have been any updates or
revisions thereto that have been accepted pursuant to Section 8.14 of the
Common Security Agreement, the latest such update or provision that has been so
accepted.


 


Summarized below are the requirements and components
of the Completion Test:


 


(a)                                  Physical Facilities Test A certificate in
the form of Appendix B-1 signed by the President of the Borrower, verified by
the Independent Engineer, to the effect that:


 


(i)                                     physical
facilities of the Project substantially the same as those described in the
Development Plan, attached as Appendix H to the Common Security Agreement,


 


B-1





















 


have been installed and have become operational and
the conditions of the Mechanical Completion test in the EPCM Contract have been
satisfied;


 


(ii)                                  as
of the date of such certificate, the Borrower has accepted all work and
equipment performed and delivered under the EPCM Contract in accordance
therewith, except for any work the non-acceptance of which will not materially
and adversely affect the operability of the Project, including safety and
environmental performance;


 


(iii)                               as
of the date of such certificate, the items and quantities of capital spares
inventory set out in Annex 3 to such certificate are on hand at or near the
Project facilities or arrangements have been made to procure such items to
restore the quantities of capital spares in inventory to the levels specified
in such Operating Plan and these reasonably can be expected to be on hand at or
near the Project facilities within 6 days or such longer periods as may be
dictated by the delivery schedule of ordered long lead-time items which
have been used prior to the date of such certificate;


 


(iv)                              as
of the date of such certificate, no material Project Costs have been incurred
that remain unpaid (unless provided for by satisfactory retentions by the
Borrower and other than Project Costs that are disputed); and


 


(v)                                 as
of the date of such certificate, the accepted Operating Plan then in effect
demonstrates a Reserve Tail for the Project in an amount at least 40% of the
reserves as outlined in the Initial Operating Plan remaining to be mined after
the scheduled final maturity of the Senior Loan Facilities.


 


(b)                                 Production Test A certificate in the form
of Appendix B-2 signed by the President of the Borrower, verified by the
Independent Engineer, to the effect that during the Completion Test Period:


 


(i)                                     the
Project mined, crushed and milled ore at an average rate of not less than
ninety per cent (90%) of the forecast production rate for the Completion Test
Period, as described in the accepted Operating Plan then in effect;


 


(ii)                                  the
Project achieved an average grade for the silver, zinc and lead contained in
the ore mined of not less than ninety per cent (90%) of the forecast grade for
the Completion Test Period, as described in the accepted Operating Plan then in
effect; and the blast hole to model reconciliation was within 10% of the
forecasted mine block model (the blast hole to model reconciliation calculation
is defined in Annex 2 to Appendix B-2);


 


(iii)                               the
Project has achieved an average zinc equivalent recovery rate for the silver,
zinc and lead contained in the ore milled of not less than ninety per cent
(90%) of the forecast average zinc equivalent recovery rate for the Completion
Test Period, as described in the accepted Operating Plan then in effect (the
recovery 


 


B-2





















 


calculation and zinc equivalent calculation is defined
in Annex 3 to Appendix B-2);


 


(iv)                              the
Project has produced zinc metal equivalents contained in the concentrates
produced at a rate not less than ninety five per cent (95%) of the forecast
zinc metal equivalent rate for the production period in which the Completion
Test Period occurs, as described in the accepted Operating Plan then in effect
(the zinc metal equivalent calculation is defined in Annex 3 to Appendix B-2);
and


 


(v)                                 there
was a period of 30 continuous Operating Days within the Completion Test Period
during which the Project mined an average of not less than 40,000 tonnes of ore
per day, and a period of 30 continuous Operating Days within the Completion
Test Period during which the Project milled an average of not less than 40,000
tonnes of ore per day.  An “Operating Day”
means any day other than a day on which the operations of the Project ceased
for more than 12 continuous hours due to force
majeure or on which work of the facilities of the Project was
prohibited by applicable law, regulation, order or labor agreement.


 


(c)                                 Environmental Test A certificate in the
form of Appendix B-3 signed by the President of the Borrower, confirmed by the
Independent Engineer and by the Social Consultant, to the effect that as of the
date of such certificate:


 


(i)                                    construction
and operation of the Project conforms in all material respects with applicable
World Bank Environment, Health & Safety Guidelines and the Equator
Principles (as identified in Annex 1 to Appendix B-3);


 


(ii)                                 construction
and operation of the Project conforms in all material respects with all
applicable Bolivian environmental laws, rules, regulations and orders of
governmental authorities;


 


(iii)                              the
Closure Plan (as identified in Annex 2 to Appendix B-3) has been approved by
all applicable Governmental Authorities and is in all material respects in
compliance with the Environmental Guidelines and all applicable Environmental
Laws in Bolivia; and


 


(iv)                             the
activities of the Borrower during the period of construction of the Project
comply in all material respects with the requirements and recommendations of
the SDCR Report.


 


(d)                                Marketing Test A certificate in the form of
Appendix B-4 signed by the President of the Borrower, confirmed by the
Independent Engineer, to the effect that by the date of such certificate (i) at
least two shipments of Project concentrates have been shipped by Apex Metals
from the port of Mejillones aggregating a minimum of 6,000 tonnes of each of
Lead Concentrates and Zinc Concentrates, and (ii) at least one shipment
each of Lead Concentrates and Zinc Concentrates from the Project has been
shipped to an Acceptable Buyer under a Third Party Concentrate Sales Agreement
and full and final payment for each such shipment has been received without
material deduction or penalty for quality or 


 


B-3





















 


impurity reasons. 
Bulk Concentrate shall only be utilized for this test if contemplated in
the relevant production period in the Operating Plan then in effect and if
discussed and agreed in advance with the Independent Engineer.


 


(e)                                  Legal and Other Conditions Test A
certificate in the form of Appendix B-5 signed by the President of the
Borrower, and having annexed thereto an opinion of counsel in Bolivia
acceptable to the Administrative Agent supporting the certifications described
in items (ii) and (iii) below, to the effect that:


 


(i)                                     no
Default or Event of Default has occurred and is continuing;


 


(ii)                                  each
of (A) the Mining Concessions is in full force and effect, and (B) the
Material Project Documents and Security Documents is in full force and effect
in all material respects or, in the case of any Material Project Document no
longer in effect, has been replaced in accordance with the Common Security Agreement
with an agreement that is in full force and effect in all material respects;


 


(iii)                               all
security interests required under the Common Security Agreement to be created
and perfected on or prior to Completion have been created and perfected and are
in full force and effect in all material respects, subject only to the
applicable qualifications and exceptions set forth in the opinions of counsel
to the Borrower delivered on the Initial Disbursement Date;


 


(iv)                              all
Government Approvals required for the operation of the Project and the
performance of the Financing Documents and the Material Project Documents have
been obtained and are in full force and effect;


 


(v)                                 all
insurance coverage required to be in full force and effect after the start-up
of commercial production operations at the Project pursuant to Article V
of the Common Security Agreement is in full force and effect and complies with
the requirements of said Article V; and


 


(vi)                              the
Project is operating in accordance with prudent engineering and operating
practices and standards.


 


(f)                                    Financial Test A certificate in the form of
Appendix B-6 signed by the President of the Borrower, confirmed (as to item (ii) below)
by the Independent Engineer, to the effect that:


 


(i)                                    the
balance on deposit in the Debt Service Reserve Account and Operating Reserve
Account is not less than the minimum balance specified for Completion in
Sections 4.06 and 4.07 of the Common Security Agreement; and


 


(ii)                                 based
on


 


(a)                                  the
actual number of recovered zinc-equivalent pounds produced by the Borrower
during the Completion Test Period;


 


B-4





















 


(b)                                 the
actual inputs (including all factors identified in the Initial Financial Model,
such as power, fuel, labor, etc) utilized for such production during the
Completion Test Period, and


 


(c)                                  fixed
unit prices for such inputs as set forth in the Initial Financial Model,


 


the nominal operating cost-per-pound of zinc
equivalent produced by the Borrower during the Completion Test Period (at such
fixed unit input prices) did not exceed 110% of the forecast operating
cost-per-pound of zinc equivalent set forth in the Initial Financial
Model.  Annex 2 to Appendix B-6 describes
the methodology for updating the inputs into the Financial Model for the
purpose of calculating this efficiency test.


 


Submission of Certificates.  The Certificates may be delivered, together
with any supporting documentation which the Borrower and the Independent
Engineer have agreed is required, together or separately in any order and at
any time and from time to time, provided that the certificates referred to in (e) and
(f) above shall be dated as of a date not earlier than the date of the
latest of the certificates referred to in (a), (b), (c), and (d) above.


 


B-5





















 


Appendix B-1


to Completion Agreement


 


FORM OF PHYSICAL
FACILITIES CERTIFICATE


 


I, [Name of
President], President of Minera San Cristóbal S.A. (the “Borrower”),
hereby certify on behalf of the Borrower that, as of the date hereof:


 


(a)                                  a
copy of the Project Description specified in Appendix H to the Common
Security Agreement that incorporates all amendments and changes to such
Appendix H that have been made on or prior to the date hereof is attached
hereto as Annex 1.  As of the date
hereof, all amendments and changes to such Appendix H have been made in
accordance with Section 8.12(c) of the Common Security Agreement;


 


(b)                                 (i)                                     between
the dates of [         ]
and [        ],
[names of employees or agents], [titles], inspected the equipment and
physical facilities of the Project.  We
have considered whether, in our reasonable judgment, the equipment and physical
facilities described in Annex 1 have been installed and have become
operational, in each case at the time of such inspection.  Our work involved inspection of equipment and
facilities and operation thereof, only to the extent necessary to identify such
equipment and facilities and the attributes thereof, if any, referred to in
Annex 1 and to conclude whether such equipment and facilities have become
operational.  Such inspections and
observations were those we, in our reasonable judgment, deemed necessary for
the purposes of delivering this certificate;


 


(ii)                                  we
have noted in the analysis attached hereto as Annex 2 a description of the
equipment which we identified as meeting the requirement of each item listed in
Annex 1, together with a description thereof reasonably sufficient for
purposes of such identification.  The
equipment measures and amounts stated in Annex 2 represent approximate
figures and actual measures and amounts may vary depending upon various
factors, including actual characteristics of available equipment.  Where measures and amounts relating to the actual
equipment installed are approximately those set forth in Annex 1, we have
deemed the installed equipment to be substantially the same as that described
in Annex 1 and have stated the relevant amount or measure in the description
included in Annex 2;


 


(iii)                               based
on and subject to the foregoing, as of the date hereof, equipment and physical
facilities of the Project substantially the same as those described in Annex 2
have been installed and are operational;


 


(c)                                  the
Borrower has delivered (with a copy to the Technical Agent) a copy of the Certificate
of Mechanical Completion (as defined in Section 8.1 of the EPCM Contract)
issued on [insert date] with
respect to [insert portion of the facility to
which the certificate relates] in accordance with Article 8 of
the EPCM Contract.  [insert additional Certificates of Mechanical
Completion as necessary].  As
of the date hereof, Certificates of Mechanical Completion have been delivered
by the Borrower with 


 


B-1-1





















 


respect to all portions of the project facilities,
which certify that all conditions of achieving Mechanical Completion as set
forth in the EPCM Contract have been satisfied;


 


(d)                                 as
of the date hereof, the Borrower has delivered notification of its
acceptance of delivery of each of the physical facilities to, and all other
work performed by and equipment delivered by, the contractor under the EPCM
Contract (subject to exception or conditions, if any, none of which would be
reasonably expected to have a material adverse effect on the operation of the
Project, including safety and environmental performance, substantially as
contemplated in the Common Security Agreement and subject to such warranties
and similar provisions as are set out in the EPCM Contract);


 


(e)                                  as
of the date hereof, the items and quantities of capital spares inventory, which
are attached as Annex 3 hereto, are either on hand on or near the facility
of the Project in Bolivia or the Borrower has entered into arrangements to
procure such items to restore the quantities of capital spares in inventory to
the quantities set forth in such Annex 3, and such arrangements have been
made pursuant to an established procurement system that will provide capital
spares in a sound and efficient manner such that such spares and consumables
can be expected to be held in stock at the Project’s facilities or (as the case
may be) will be available from the supplier(s) for dispatch within 6 days (or
such longer periods as may be dictated by the delivery schedule of ordered
long lead-time items which have been used prior to the date hereof) of the
request by the Borrower.  As of the date
hereof, the items and quantities of consumables set forth in Annex 3 are
either on hand at a facility of the Project in Bolivia or have been purchased
by the Borrower;


 


(f)                                    as
of the date hereof, (i) all Project Costs have been paid for by the
Borrower (other than Project Costs which are being disputed by the Borrower in
good faith) or (ii) as to those Project Costs which have not been so paid
for, the Borrower has sufficient funds available to make such payments; and


 


(g)                                 as
of the date hereof, the current Operating Plan (which Operating Plan has been
approved in accordance with Section 8.14 of the Common Security Agreement)
demonstrates a Reserve Tail equal to 80,000,000 tonnes of ore, which amount is
at least 40% of the reserves as outlined in the Initial Operating Plan,
remaining to be mined after the Final Maturity Date.


 


This is the certificate referred to in Section 2.01(a) of
the Completion Agreement, dated as of December 1, 2005 among the Sponsor,
the Technical Agent, the Administrative Agent and the Collateral Agent.  Capitalized terms used herein and in the
annexes hereto, except as otherwise defined herein, shall have the meanings
assigned to them in the Completion Agreement or the Common Security Agreement,
dated as of December 1, 2005, among the Borrower and the other parties
thereto, as the same may be amended from time to time (the “Common Security
Agreement”).


 


B-1-2





















 


IN WITNESS WHEREOF, I, [Name of President], on behalf of the Borrower have caused
this certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  MINERA SAN
  CRISTÓBAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: President

  



 


B-1-3





















 


[Name of Independent Engineer],
a                               
organized under the laws of                           ,
has performed such inspections, observations, analyses and other procedures
which we have, in our reasonable judgment, deemed necessary for purposes of
this certificate.  Such procedures, and
the names of our employees or agents who performed them, are described in
Annex 4 to this Physical Facilities Certificate.


 


Based on such procedures, we hereby certify that we
have no reason to believe that each of the certifications of the Borrower set
forth hereinabove is not true and correct in all material respects as of the
date hereof.


 


IN WITNESS WHEREOF, [Name
of senior officer of Independent Engineer] has caused this
certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Independent Engineer]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  	
   

  
	
   

  	
   

  	
  [Position]

  	
   

  



 


B-1-4





















 


Annex 1

to Physical Facilities Certificate


 


PHYSICAL FACILITIES


 


[When certificate
is given, attach copy of Appendix H to the Common Security Agreement, as
amended pursuant to Section 8.12(c) of the Common Security Agreement
as of the time the certificate is delivered.]


 


B-1-5





















 


Annex 2

to Physical Facilities Certificate


 


EQUIPMENT


 


B-1-6





















 


Annex 3

to Physical Facilities Certificate


 


CAPITAL SPARES INVENTORY


 


Required Capital Spares
Inventory


 


All spares are to be of
equivalent quality to the items they replace.


 


Main Transformer


 


1                                          Spare
transformer


3                                          HV
bushing including gasket


6                                          LV
bushing including gasket (3kV/450)


 


C.                                    Gyratory
Crusher Spares


 


	
  DESCRIPTION

  	
   

  	
  Qty

  	
   

  	
  Unit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Drive Motor

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eccentric Assembly

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  >for Counterbalance
  Add

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Main Shaft Assembly
  with Oversize Lower Mantle

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Countershaft Assembly

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spider Bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Outer Eccentric Bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eccentric Wearing Ring

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Inner Eccentric Bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Upper Hydraulic Piston
  Bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lower Hydraulic Piston
  Bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bottom Piston Wearing
  Ring

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shaft Wearing Ring

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Countershaft Bearings

  	
   

  	
  2

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mainshaft Sleeve

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Head Nut

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


B-1-7





















 


D.                                    Coarse
Ore Conveyor System Spares


 


Awaiting additional
information


 


E.                                    SAG
Mill & Ball Mill Spares


 


	
  DESCRIPTION

  	
   

  	
  Qty

  	
   

  	
  Unit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Pad Bronze Insert
  (set of 4)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust Pad Bronze
  Insert (set of 4)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Pad Installation
  Hardware (kit for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust Pad Installation
  Hardware & Shims (kit for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Pad Restrictor
  Hardware & Seals (kit for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hose Assemblies (set
  for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wiper Teflon Set w/
  Hardware (2 thrust / 2 non-thrust)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acoustic Sensor

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Pad Bronze Insert
  (set of 4)

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust Pad Bronze Insert
  (set of 4)

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Pad Installation
  Hardware (kit for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust Pad Installation
  Hardware & Shims (kit for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Pad Restrictor
  Hardware & Seals (kit for 1 bearing)

  	
   

  	
  1

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hose Assemblies (set
  for 1 bearing)

  	
   

  	
  2

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wiper Teflon Set w/
  Hardware (2 thrust / 2 non-thrust)

  	
   

  	
  2

  	
   

  	
  set

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lift Tip Sensitive RTD

  	
   

  	
  12

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust Tip Sensitive
  RTD

  	
   

  	
  4

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Screw Pump
  (Conditioning Circuit)

  	
   

  	
  2

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Electric Motor
  (Conditioning Circuit) 25 HP

  	
   

  	
  2

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Screw Pump (HP Circuit)

  	
   

  	
  2

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Electric Motor (HP
  Circuit) 150 HP

  	
   

  	
  2

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Temperature Sensor
  (Power Pack)

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


B-1-8





















 


	
  Electrical
  for the ring motors

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CCV transformer for SAG drive

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CCV transformer for BM drive

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spare excitation
  trnsfmr for SAG & BM

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stator coils for SAG
  mill

  	
   

  	
  12

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stator coils for BM
  mill

  	
   

  	
  12

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Partial Rotor coils for
  SAG mill

  	
   

  	
  4

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Partial Rotor coils for
  BM mill

  	
   

  	
  4

  	
   

  	
  ea

  	
   

  



 


F.                                    Flotation
Cells – Spares


 


	
  Type

  	
   

  	
  DESCRIPTION

  	
   

  	
  Qty

  	
   

  	
  Unit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  130 SmartCell

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  130 SmartCell

  	
   

  	
  Complete Connection Box
  Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 190

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 164

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 144

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No.120

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 66d

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 164

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 66d

  	
   

  	
  Complete Mechanism Assy

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


G.                                    Regrind
– Vertimill Spares


 


	
  DESCRIPTION

  	
   

  	
  Qty

  	
   

  	
  Unit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spare motor

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust roller bearing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spherical roller
  bearing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


B-1-9





















 


	
  Shaft stabilizer
  bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Screws (no liners)

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 recycle inlet

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


H.                                   Lime
Vertimill Spares


 


	
  DESCRIPTION

  	
   

  	
  Qty

  	
   

  	
  Unit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spare motor

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thrust roller bearing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spherical roller
  bearing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shaft stabilizer
  bushing

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Screws (no liners)

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 recycle inlet

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


I.                                        Filters
– Spares


 


	
  Spare drive motor

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  End plate RPH

  	
   

  	
  4

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  filter plate

  	
   

  	
  4

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  membrane plate

  	
   

  	
  4

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Axial piston pump PV
  032-r1-KIS

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  quadruple pump RIC6

  	
   

  	
  1

  	
   

  	
  ea

  	
   

  



 


J.                                       Concentrate
Thtks & Tailings Thtk - Spares


 


Awaiting additional information


 


B-1-10





















 


Annex 4

to Physical Facilities Certificate


 


DESCRIPTION OF
INDEPENDENT ENGINEER PROCEDURES


 


[To
be completed at time of delivery]


 


B-1-9





















 


Appendix B-2


to Completion Agreement


 


FORM OF PRODUCTION
CERTIFICATE


 


I, [Name of
President], President of Minera San Cristóbal S.A. (the “Borrower”),
hereby certify on behalf of the Borrower that, as of the date hereof:


 


(a)                                  Attached
to this certificate as Annex 1 are copies of operating records, bills of lading
and other data and documentation relating to production by the San Cristobal
Project during the periods referred to in clause (e) below.  Such documentation accurately reflects, in
all material respects, the production of the San Cristobal Project during the
period to which it relates, and evidences compliance with the certifications
set forth in sections (i) through (v) of clause (f) below.


 


(b)                                 All
sampling procedures relevant to the matters covered by this certificate were
conducted by the Borrower in accordance with standard international mining
practices; all assaying was conducted by the Borrower in accordance with
standard international mining practices. 
The sampling locations and laboratory assay procedures have been
verified by the Independent Engineer.


 


(c)                                  The
Independent Engineer was provided with (i) the Borrower’s most recently
approved updated operating plan (accepted as contemplated in Section 8.14
of the Common Security Agreement) that covers the Completion Test Period,
together with the current block model and mine plan included in such operating
plan (collectively, the “Operating Plan”), and (ii) the past 12 months’
operating reports for the Borrower.  The
Operating Plan is in all material respects consistent with, and contemplates
operating and production results not materially divergent from those projected
in, the Initial Operating Plan and Initial Financial Model on which the October 12,
2005 Information Memorandum delivered to the Secured Parties was based (except
for such material changes thereto, if any, as have been previously furnished to
the Secured Parties, reported on by the Independent Engineer, and approved by
the Majority Secured Parties as provided in Section 8.14 of the Common
Security Agreement).


 


(d)                                 The
Operating Plan was provided to the Independent Engineer at least 30 days prior
to the start of the Completion Test Period. 
Notice of the start of the Completion Test Period was given to the
Independent Engineer at least 15 days prior to the start of such period.  The start date of the Completion Test Period
occurred no earlier than October 2007, unless prior to such start date the
Borrower operated the San Cristobal Project at or near full design capacity.
The mine plan included in the Operating Plan was adhered to during the
Completion Test Period.


 


B-2-1





















 


(e)                                  For
purposes of this certificate,


 


(i)                                     “Completion
Test Period” is a period of 100 continuous days, ending on or before December 31,
2008 (the “Limit Completion Date”), during which the Borrower’s production
facilities operated for 90 days or more, provided that downtime of up to 240
hours during this period will not require the test to be restarted.


 


(ii)                                  “Operating
Day” is any day other than a day on which the operations of the Project
ceased for more than 12 continuous hours due to force majeure or on which work
of the facilities of the Project was prohibited by applicable law, regulation,
order or labor agreement.


 


(iii)                               “force
majeure” is defined as (a) an act of God, labor dispute and industrial
action of any kind (including, without limitation, a strike, interruption,
slowdown and other similar action on the part of organized labor), a lockout,
act of the public enemy, war (declared or undeclared), civil war, sabotage,
blockade, revolution, riot, insurrection, civil disturbance, terrorism,
epidemic, cyclone, tidal wave, landslide, lightning, earthquake, flood, storm,
fire, adverse weather conditions, expropriation, nationalization, act of
eminent domain, laws, rules, regulations or orders of governmental authority,
acts of other private and public companies, explosion, breakage or accident to
machinery or equipment or power or transmission line or railroad tracks or
equipment or ports or other facility, embargo, inability to obtain or delay in
obtaining equipment, materials, transport, event of political force majeure or
any other event whether similar to the foregoing or not which is not within the
reasonable control of the Borrower, and which has a material adverse effect on
the ability of the Borrower to operate the Project in all material respects in
accordance with the Operating Plan and (b) in the case of any Project
Document or any Material Project Counterparty, an event of force majeure or
uncontrollable force or other similar term as such term is defined or used in
such Project Document.


 


(f)                                    Production
Test. During the Completion Test Period, the Borrower achieved the
following results of operations at the San Cristobal Project:


 


(i)                                     the
Project mined, crushed and milled ore at an average rate of not less than
ninety per cent (90%) of the forecast production rate for the Completion Test
Period, as described in the Operating Plan;


 


(ii)                                  the
Project achieved an average grade for the silver, zinc and lead contained in
the ore mined of not less than ninety percent (90%) of the forecast grade for
the Completion Test Period, as described in the Operating Plan; and the blast
hole to model reconciliation (utilizing the method of calculation described in
Annex 2 to this Certificate) was within ten percent (10%) of the forecasted
mine block model;


 


B-2-2





















 


(iii)                               the
Project achieved an average zinc equivalent recovery rate for the silver, zinc
and lead contained in the ore milled of not less than ninety percent (90%) of
the forecast average zinc equivalent recovery rate for the Completion Test
Period, as described in the Operating Plan (the recovery calculation and zinc
equivalent calculation methodology is described in Annex 3 to this
Certificate);


 


(iv)                              the
Project produced zinc metal equivalents contained in the concentrates produced
at a rate not less than ninety five percent (95%) of the forecast zinc metal
equivalent rate for the production period in which the Completion Test Period
occurs, as described in the Operating Plan (the zinc metal equivalent
calculation methodology is described in Annex 3 to this Certificate); and


 


(v)                                 there
was a period of 30 continuous Operating Days within the Completion Test Period
during which the Project mined an average of not less than 40,000 tonnes of ore
per day and, a period of 30 continuous Operating Days within the Completion
Test Period during which the Project milled an average of not less than 40,000
tonnes of ore per day.


 


This is the certificate referred to in Section 2.01(b) of
the Completion Agreement, dated as of December 1, 2005 among the Sponsor,
the Technical Agent, the Administrative Agent and the Collateral Agent.  Capitalized terms used herein and in the
annexes hereto, except as otherwise defined herein, shall have the meanings
assigned to them in the Completion Agreement or the Common Security Agreement,
dated as of December 1, 2005, among the Borrower and the other parties
thereto, as the same may be amended from time to time (the “Common Security
Agreement”).


 


B-2-3





















 


IN WITNESS WHEREOF, I, [Name of President], on behalf of the Borrower have caused
this certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  MINERA SAN
  CRISTÓBAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: President

  	
   

  



 


B-2-4





















 


[Name of Independent Engineer], a                               
organized under the laws of                           ,
has performed such inspections, observations, analyses and other procedures
which we have, in our reasonable judgment, deemed necessary for purposes of
this certificate.  Such procedures, and
the names of our employees or agents who performed them, are described in Annex
4 to this Production Certificate.


 


Based on such procedures, we hereby certify that (1) we
have no reason to believe that any of the certifications of the Borrower set
forth hereinabove is not true and correct in all material respects as of the
date hereof, and (2) we concur with the statement made in the second
sentence of paragraph (c) of the foregoing certificate.


 


IN WITNESS WHEREOF, [Name of senior officer of
Independent Engineer] has caused this certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Independent Engineer]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  	
   

  
	
   

  	
   

  	
  [Position]

  	
   

  



 


B-2-5





















 


Annex 1

to Production Certificate


 


OPERATING RECORDS


 


[Attach copies of
operating records, bills of lading and other data and documentation relating to
San Cristobal Project production and operations during relevant period,
including data demonstrating compliance with the certifications set forth in
the Production Certificate.]


 


B-2-6





















 


 Annex 2

to Production Certificate


 


BLAST HOLE TO MODEL
RECONCILIATION


 


The following is an outline of the procedures that
will be detailed by the Borrower for use in the reconciliation of the blast
hole grade and location data base to geologic model.  The procedures will be fully detailed over
the next 12 months (prior to the acceptance of the 2007 Operating Plan) and
provided to the Independent Engineer for inclusion, subject to the Independent
Engineer’s concurrence, in this Annex 2 to Appendix B-2 to the Completion
Agreement.


 


Borrower personnel are developing a suite of
procedures for optimizing blasthole models (short range model) and checking the
reconciliation of these models against the exploration model (long-range
model).  The required input for these procedures are:


 


1.                                       The
blast hole dataset (XYZ collar location, sampled depth, assays.  Optional
items include drilled depth and geology.)


 


2.                                       The
blast hole model (XYZ dump of block centroids, estimated grades and other
relevant geological items). Estimation parameters used in preparing the blast
hole model should also be provided.


 


3.                                       The
exploration model covering the area of the blast hole model (XYZ dump of block
centroids, estimated grades and other relevant geological items.) Estimation
parameters used in preparing the exploration model should also be provided.


 


4.                                       Exploration
composites used in preparation of the exploration model in the area provided
(XYZ location of composite centroid, composite length, composited grades and
other relevant geological items.)


 


5.                                       Diglines
for determining the routing of blast hole model blocks (e.g. waste,ROM, crushed
leach and mill).  These can be provided either as closed polygons or
polylines with left and right codes.


 


6.                                       Monthly
pit progress surveys. These can be provided either as closed polygons or
polylines with left and right codes or tins.


 


7.                                       Client
monthly reconciliation results (through saleable product).


 


At least three months of full production data are
required before blast hole model performance can be reasonably assessed.  Data for any shorter period can only be used
for the purpose of this methodology with the Independent Engineer’s
concurrence.


 


B-2-7





















 


The Borrower will have automated procedures for
performing the following analyses:


 


1.                                       Check
of the blast hole model against the blast holes by backmarking.


 


2.                                       Check
of blast hole model estimation parameters by cross validation.  While the Borrower understands the use of
cross validation, at this stage the Borrower will complete further
investigation into whether this analysis will be used as part of the
reconciliation analysis.  If not, then a
more up to date procedure that replaces this analysis will be included.  If this analysis type is not included, a
detailed explanation of the change will be presented and will be subject (for
purposes of this test) to the Independent Engineer’s concurrence.


 


3.                                       Bias
test of blast holes against the composites using the estimation parameters
found by cross validation.  While the
Borrower understands the use of cross validation, at this stage the Borrower
will complete further investigation into whether this analysis will be used as
part of the reconciliation analysis.  If
not, then a more up to date procedure that replaces this analysis will be
included.  If this analysis type is not
included, a detailed explanation of the change will be presented and will be
subject (for purposes of this test) to the Independent Engineer’s concurrence.


 


4.                                       Check
of the blast hole model against long-range model by back marking.


 


5.                                       Check
of monthly client reconciliation by independently calculating long-range and
short range production using the models, dig lines in monthly progress.


 


B-2-8





















 


Annex 3

to Production Certificate


 


CALCULATION METHODOLOGY


 


Zinc equivalents in mined ore


 


Lbs zinc in ore +


 


lbs of lead in ore (0.30/0.50) +


 


ozs of silver in ore (5.75/0.50)


 


Based on blast hole samples


 


Zinc equivalent pounds produced


 


Lbs of zinc in zinc con +


 


lbs of lead in lead con * (0.30)/0.50) +


 


lbs of zinc in bulk con * (70/85) +


 


lbs of lead in bulk con * (92/95)*(0.30/0.50) +


 


ozs Ag in zinc con * (5.75/0.50)
+


 


ozs Ag in lead con * (5.75/0.50)
*[0.95/( ((ozs Ag in tonne of zinc con - 3.5)*(0.7))/(ozs Ag in tonne of zinc
con))] +


 


ozs Ag in bulk con * (5.75/0.50)
*[0.90/( ((ozs Ag in tonne of zinc con - 3.5)*(0.7))/(ozs Ag in tonne of zinc
con))].


 


(“ozs in Ag in tonne of zinc con”
will be the average Ag content per tonne of zinc con achieved during the test
period)


 


Zinc equivalent recovery


 


Zinc equivalent pounds produced/ zn pounds in mill
feed +


 


lead pounds in mill feed *(0.3)/(0.5) +


 


silver ounces in mill feed * (5.75)/(0.50)


 


(where mill feed is calculated on metallurgical
balance).


 


B-2-9





















 


Annex 4

to Production Certificate


 


DESCRIPTION OF
INDEPENDENT ENGINEER PROCEDURES


 


[To
be completed at time of delivery]


 


B-2-10





















 


Appendix B-3


to Completion Agreement


 


ENVIRONMENTAL CERTIFICATE


 


I, [Name of
President], President of Minera San Cristóbal S.A. (the “Borrower”),
hereby certify on behalf of the Borrower that, as of the date hereof:


 


(a)           Construction of the Project complies
in all material respects with, and the Project is being operated in all
material respects in compliance with, the Environmental Guidelines specified in
Annex 1.


 


(b)           Construction of the Project conforms
in all material respects with, and the Project is being operated in compliance
in all material respects with, all applicable Environmental Laws of Bolivia.


 


(c)           The Closure Plan (identified in Annex
2) has been approved by all applicable Governmental Authorities and is in
compliance in all material respects with the Environmental Guidelines and all
applicable Environmental Laws of Bolivia.


 


(d)           The activities of the Borrower during
the period of construction of the Project comply in all material respects with
the recommendations and requirements of the SDCR Report.


 


This is the certificate referred to in Section 2.01(c) of
the Completion Agreement, dated as of December 1, 2005 among the Sponsor,
the Technical Agent, the Administrative Agent and the Collateral Agent.  Capitalized terms used herein and in the
annexes hereto, except as otherwise defined herein, shall have the meanings
assigned to them in the Completion Agreement or the Common Security Agreement,
dated as of December 1, 2005, among the Borrower and the other parties
thereto, as the same may be amended from time to time (the “Common Security
Agreement”).


 


B-3-1





















 


IN WITNESS WHEREOF, I, [Name of President], on behalf of the Borrower have caused
this certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  MINERA SAN
  CRISTÓBAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: President

  	
   

  



 


B-3-2





















 


[Name of Independent Engineer],
a                           
organized under the laws of                             ,
have performed such inspections, observations, analyses and other procedures
which we have, in our reasonable judgment, deemed necessary for purposes of
this certificate.  Such procedures, and
the names of our employees or agents who performed them, are described in
Annex 3 to this Environmental Certificate.


 


Based on such procedures, we hereby certify that we
have no reason to believe that the certifications of the Borrower set forth in
paragraphs (a), (b) and (c) above are not true and correct in
all material respects as of the date hereof.


 


IN WITNESS WHEREOF, [Name
of senior officer of Independent Engineer] has caused this
certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Independent Engineer]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  	
   

  
	
   

  	
   

  	
  [Position]

  	
   

  



 


The undersigned have performed such inspections and
observations which we have, in our reasonable judgment, deemed necessary for
purposes of this certificate.  Based on
such procedures, we hereby certify that we have no reason to believe that the
certification of the Borrower set forth in paragraph (d) above is not true
and correct in all material respects as of the date hereof.


 


IN WITNESS WHEREOF, the undersigned have caused this
certificate to be duly executed.


 


	
  Dated:

  	
  [On Common Ground]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  	
   

  
	
   

  	
   

  	
  [Position]

  	
   

  



 


B-3-3





















 


Annex 1

to Environmental Certificate


 


ENVIRONMENTAL GUIDELINES


 


“Environmental Guidelines” means the following
guidelines as in effect on the date of the Completion Agreement applicable to
the Project (referred to in the Equator Principles framework):  (a) World Bank Environmental, Health and
Safety Guidelines (i) Mining and Milling – Open Pit dated August 11,
1995, (ii) Pollution Abatement and Prevention Handbook 1998: General
Environmental Guidelines, (iii) Operational Policy 4.01 (Environmental
Assessment), (iv) Operational Policy 4.04 (Natural Habitats), (v) Operational
Policy 4.11 (Cultural Property), (vi) Pollution Abatement and Prevention
Handbook 1998: Part III Project Guidelines, Monitoring, and Base Metal and
Iron Ore Mining and (vii) the Reclamation and Closure Plan Section in
the Knight-Piesold Environmental Assessment of the Project (Closure Plan) and (b) IFC
Safeguard Policies dated September 1998.


 


B-3-4





















 


Annex 2


to Environmental
Certificate


 


CLOSURE PLAN


 


B-3-5





















 


Annex 3

to Environmental Certificate


 


DESCRIPTION OF
INDEPENDENT ENGINEER PROCEDURES


 


[To
be completed at time of delivery]


 


B-3-6





















 


Appendix B-4


to Completion Agreement


 


FORM OF MARKETING
CERTIFICATE


 


I, [Name of
President], President of Minera San Cristóbal S.A. (the “Borrower”),
hereby certify on behalf of the Borrower that, as of the date hereof:


 


(a) the Borrower has
produced from the Project, transported by rail to the port of Mejillones,
Chile, and caused to be shipped from the port of Mejillones, Chile, in at least
two shipments (as detailed on Annex 1 hereto), an aggregate amount not less
than 6,000 tonnes each of Lead Concentrates and Zinc Concentrates; and


 


(b) at least one
shipment of Lead Concentrates and one shipment of Zinc Concentrates produced at
the Project have been shipped to Acceptable Buyers under Third Party
Concentrate Sales Agreements, all as detailed on Annex 1 hereto, and Apex
Metals has received full and final payment for each such shipment from such
Acceptable Buyers without material deduction or penalty for quality or impurity
reasons.


 


No Bulk Concentrate was included for purposes of any
of the foregoing tests (except (a) to the extent contemplated in the
accepted Operating Plan in effect for the relevant production period, (b) as
detailed in Annex 1 hereto, and (c) as accepted in advance for the purpose
of this test by the Independent Engineer).


 


This is the certificate referred to in Section 2.01(d) of
the Completion Agreement, dated as of December 1, 2005 among the Sponsor,
the Technical Agent, the Administrative Agent and the Collateral Agent.  Capitalized terms used herein and in the
annexes hereto, except as otherwise defined herein, shall have the meanings
assigned to them in the Completion Agreement or the Common Security Agreement,
dated as of December 1, 2005, among the Borrower and the other parties
thereto, as the same may be amended from time to time (the “Common Security
Agreement”).


 


B-4-1





















 


IN WITNESS WHEREOF, I, [Name of President], on behalf of the Borrower have caused
this certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  MINERA SAN
  CRISTOBAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: President

  	
   

  



 


B-4-2





















 


[Name of Independent Engineer],
a                                   
organized under the laws of                              ,
has performed such inspections, observations, analyses and other procedures
which we have, in our reasonable judgment, deemed necessary for purposes of
this certificate.  Such procedures, and
the names of our employees or agents who performed them, are described in Annex
2 to this Marketing Certificate.


 


Based on such procedures, we hereby certify that we
have no reason to believe that the certification of the Borrower set forth
above is not true and correct in all material respects as of the date hereof.


 


IN WITNESS WHEREOF, [Name
of senior officer of Independent Engineer] has caused this
certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Independent Engineer]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  	
   

  
	
   

  	
   

  	
  [Position]

  	
   

  



 


B-4-3





















 


Annex 1 

to Marketing Certificate


 


DETAILS OF SHIPMENTS,
BUYERS, PAYMENT


 


[To
be completed at time of delivery]


 


B-4-4





















 


Annex 2

to Marketing Certificate


 


DESCRIPTION OF
INDEPENDENT ENGINEER PROCEDURES


 


[To
be completed at time of delivery]


 


B-4-5





















 


Appendix B-5


to Completion Agreement


 


FORM OF LEGAL AND
OTHER CONDITIONS CERTIFICATE


 


I, [Name of
President], President of Minera San Cristóbal S.A. (the “Borrower”),
hereby certify on behalf of the Borrower that, as of the date hereof:


 


(a)           No Default or Event of Default has
occurred and is continuing.


 


(b)           Each of (i) the Mining
Concessions is in full force and effect, and (ii) the Material Project
Documents and Security Documents is in full force and effect in all material
respects or, in the case of any Material Project Document no longer in effect,
has been replaced in accordance with the Common Security Agreement with an
agreement that is in full force and effect in all material respects.


 


(c)           The security interests required under
the Common Security Agreement to be created after the Initial Disbursement Date
and to be created and perfected on or prior to the Completion Date have been
created and are perfected to the extent required under the Common Security
Agreement and are in full force and effect in all material respects, subject
only to the applicable qualifications and exceptions set forth in the opinions
of counsel to the Borrower delivered on the Initial Disbursement Date.


 


(d)           All Government Approvals that are required
for operation of the Project and the performance of the Financing Documents and
the Material Project Documents have been obtained and are in full force and
effect.


 


(e)           All insurance coverage required to be
in full force and effect after the start-up of commercial production operations
at the Project pursuant to Article V of the Common Security Agreement is
in full force and effect and complies with the requirements of said Article V.


 


(f)            The Project is operating in
accordance with prudent engineering and operating practices and standards.


 


(g)           Attached is a true copy of the legal
opinion of Quintanilla & Soria Abogados, Bolivian counsel to the Borrower,
dated the date hereof, confirming the matters set forth in paragraphs b(i), (c)
and (d) above.


 


This is the certificate referred to in Section 2.01(e) of
the Completion Agreement, dated as of December 1, 2005 among the Sponsor,
the Technical Agent, the Administrative Agent and the Collateral Agent.  Capitalized terms used herein and in the
annexes hereto, except as otherwise defined herein, shall have the meanings
assigned to them in the Completion Agreement or the Common Security Agreement,
dated as of December 1, 2005, among the Borrower and the other parties
thereto, as the same may be amended from time to time (the “Common Security
Agreement”).


 










* The named firm may be replaced by the Borrower with other counsel
acceptable to the Administrative Agent.


 


B-5-1





















 


IN WITNESS WHEREOF, I, [Name of President], on behalf of the Borrower have caused this
certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  MINERA SAN
  CRISTÓBAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: President

  	
   

  



 


B-5-2





















 


Appendix B-6


to Completion Agreement


 


FORM OF FINANCIAL
CERTIFICATE


 


I, [Name of
President], President of Minera San Cristóbal S.A. (the “Borrower”),
hereby certify on behalf of the Borrower that, as of the date hereof:


 


(a)           Attached
to this certificate as Annex 1 are copies of operating records and other
documentation relating to production by and operation of the Project during the
period referred to in paragraph (b). Such documentation accurately reflects, in
all material respects, the production and operation of the Project during the
period to which it relates.


 


(b)           For
purposes of this certificate, the Completion Test Period started on [start
date] and ended on [end date], both inclusive. The downtime hours during such
period are identified in the Production Certificate delivered pursuant to
clause (b) of Section 2.01 of the Completion Agreement. The
Completion Test Period referred to below is the same as the Completion Test
Period defined in and utilized for the purposes of such Production Certificate.


 


(c)           Based
on:


 


(i)            the actual number of recovered
zinc-equivalent pounds in Lead Concentrates, Zinc Concentrates and Bulk
Concentrates produced by the Borrower during the Completion Test Period,


 


(ii)           the actual inputs (including all
factors identified in the Initial Financial Model, such as power, fuel, labor,
etc) utilized for such production during the Completion Test Period, and


 


(iii)          fixed unit prices for such inputs as
set forth in the Initial Financial Model,


 


the nominal operating cost-per-pound of zinc
equivalent produced by the Borrower during the Completion Test Period (at such
fixed unit prices) did not exceed 110% of the forecast operating cost-per-pound
of zinc equivalent set forth in the Initial Financial Model.  Annex 2 to this Certificate describes the
methodology for updating the inputs into the Financial Model for the purpose of
calculating this test; and “zinc equivalent”
shall mean zinc metal contained in Zinc Concentrates, value of lead
contained in Lead Concentrates, the value of lead and zinc contained in Bulk Concentrates
and the value of silver contained in all three concentrates, as computed in the
manner described in Annex 3 to the Production Certificate.


 


(d)  As of the date of this Certificate, (i) the
credit balance of the Debt Service Reserve Account is $                      ,
which is not less than the minimum balance of $                      
specified for Completion in Section 4.06 of the Common Security Agreement,
and (ii) the credit balance of the Operating Reserve Account is $                        ,
which is not less than the minimum balance of $                      
specified for Completion in Section 4.07 of the Common Security Agreement.


 


B-6-1





















 


This is the certificate referred to in Section 2.01(f) of
the Completion Agreement, dated as of December 1, 2005 among the Sponsor,
the Technical Agent, the Administrative Agent and the Collateral Agent.  Capitalized terms used herein and in the
annexes hereto, except as otherwise defined herein, shall have the meanings
assigned to them in the Completion Agreement or the Common Security Agreement,
dated as of December 1, 2005, among the Borrower and the other parties
thereto, as the same may be amended from time to time (the “Common Security
Agreement”).


 


B-6-2





















 


IN WITNESS WHEREOF, I, [Name of President], on behalf of the Borrower have caused this
certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  MINERA SAN
  CRISTÓBAL S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:  President

  	
   

  



 


B-6-3





















 


[Name of Independent Engineer],
a                               
organized under the laws of                           ,
has performed such inspections, observations, analyses and other procedures
which we have, in our reasonable judgment, deemed necessary for purposes of
this certificate.  Such procedures, and
the names of our employees or agents who performed them, are described in
Annex 3 to this Financial Certificate.


 


Based on such procedures, we hereby certify that we
have no reason to believe that each of the certifications of the Borrower set
forth in paragraph (c) above is not true and correct in all material
respects as of the date hereof.


 


IN WITNESS WHEREOF, [Name
of senior officer of Independent Engineer] has caused this
certificate to be duly executed.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Independent Engineer]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name]

  	
   

  
	
   

  	
   

  	
  [Position]

  	
   

  



 


B-6-4





















 


Annex 1

to Financial Certificate


 


OPERATING RECORDS


 


[Attach copies of
operating records and other data and documentation relating to San Cristobal
Project production and operations during relevant period, including data
demonstrating compliance with the certifications set forth in paragraph (c) of
the Financial Certificate.]


 


B-6-5





















 


Annex 2

to Financial Certificate


 


METHODOLOGY FOR
CALCULATION OF THE UNIT COST TEST


 


The Unit Cost US$/lb Zn shall be calculated according
to the following procedure:


 


•                                          The
values describing the Borrower’s performance contained in the Initial Financial
Model on sheet,                   
will be updated, with the participation and concurrence of the Independent
Engineer, based on annualized results obtained over the Completion Test Period.


 


•                                          The
performance values to be updated will be based on an audit of mine and mill
production records and G&A records, including operating fixed and variable
consumption items, for the Completion Test Period.  The Independent Engineer will work with
Borrower budgeting personnel at the project site, and with the Sponsor and
Borrower modelling personnel to verify and concur with performance values and
effects to be input.


 


•                                          Costs
are to be obtained from the regular reports submitted (or to be submitted) by
the Borrower including all onsite cash costs of the Borrower (mining through
in-country concentrate transportation and placing in storage at the port), any
cash environmental expenditures and the general administrative cash costs of the
Borrower’s offices at the minesite and in Bolivia but excluding any costs of
loading concentrates on-board ships, concentrate transportation and insurance
costs from port to customers and all treatment and refining charges.


 


•                                          Cash costs
are also to be determined net of (i) any VAT, except to the extent that
such VAT (A) were not recoverable by the Borrower in accordance with the
rates and regulations in effect at the time incurred and (B) would not
have been recoverable by the Borrower under the rules and regulations in
effect at the Closing Date and (ii) any costs which were capitalized by
the Borrower in accordance with US GAAP. Annex 3


 


B-6-6





















 


Annex 3

to Financial Certificate


 


DESCRIPTION OF
INDEPENDENT ENGINEER PROCEDURES


 


[To
be completed at time of delivery]


 


B-6-7





















 


Appendix C


to Completion Agreement


 


 


SPONSOR BUDGET


 


C-1