PROPERTY.
ALL COSTS AND EXPENSES
INCURRED BY MSC IN CONNECTION WITH MAKING SUCH DETERMINATION SHALL BE PAID OR
REIMBURSED BY THE SUMITOMO INTERESTHOLDERS WITHIN 30 DAYS AFTER THE RECEIPT OF
AN INVOICE THEREFOR ACCOMPANIED BY APPROPRIATE SUPPORTING DOCUMENTATION.
IF
SUCH A RESTRICTION EXISTS, MSC SHALL PROVIDE THE SUMITOMO SHAREHOLDERS AND THE
APEX SHAREHOLDERS WRITTEN NOTICE, INCLUDING A REASONABLY DETAILED EXPLANATION,
OF SUCH RESTRICTION AND THE DESIGNATED SCG MEMBER SHALL BE PROHIBITED FROM
EXPLORING SUCH SELECTED OPEN PROPERTY UNDER THE TERMS OF THIS SECTION 7.9.
IF
NO SUCH RESTRICTIONS EXIST, MSC SHALL DELIVER A WRITTEN NOTICE TO THE SUMITOMO
SHAREHOLDERS THAT INDICATES WHETHER MSC ELECTS EITHER (I) TO PARTICIPATE IN THE
EXPLORATION OF THE SELECTED OPEN PROPERTY OR (II) NOT TO PARTICIPATE IN THE
EXPLORATION OF THE SELECTED OPEN PROPERTY AT THAT TIME.
NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN ARTICLE II, NO ELECTION SHALL BE MADE BY MSC WITHOUT
THE PRIOR WRITTEN APPROVAL OF AT LEAST ONE APEX MEMBER.
(C)
IF MSC ELECTS TO PARTICIPATE IN THE EXPLORATION OF A SELECTED OPEN
PROPERTY, THEN, SUBJECT TO APPLICABLE FINANCING DOCUMENTS, THE ESTATUTOS, AND
APPLICABLE LAW, THE SHAREHOLDERS SHALL CAUSE THEIR RESPECTIVE DIRECTORS TO
AMEND, OR OTHERWISE VOTE THEIR RESPECTIVE SHARES IN FAVOR OF AMENDING, THE THEN
APPLICABLE PROGRAM AND BUDGET, AS NECESSARY TO PROVIDE FOR SUCH EXPLORATION.
MSC SHALL THEN, IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, DEVELOP THE
EXPLORATION PROGRAM AND BUDGETS AND MANAGE THE EXPLORATION OF THE SELECTED OPEN
PROPERTY.
(D)
IF MSC ELECTS NOT TO PARTICIPATE IN THE EXPLORATION OF A SELECTED
OPEN PROPERTY, THEN MSC SHALL ENTER INTO A LEASE (OR SUCH OTHER APPROPRIATE
AGREEMENT) (THE "LEASE AGREEMENT") WITH THE DESIGNATED SCG MEMBER WHEREBY MSC
SHALL GRANT APPROPRIATE RIGHTS TO THE SELECTED OPEN PROPERTY TO THE DESIGNATED
SCG MEMBER FOR EXPLORATION.
THE LEASE AGREEMENT SHALL BE ON ARM'S-LENGTH TERMS
AND HAVE TERMS AND CONDITIONS MUTUALLY SATISFACTORY TO THE PARTIES THERETO
(INCLUDING AN APPROPRIATE ROYALTY PAYMENT TO MSC WITH RESPECT THERETO).
UPON
EXECUTION AND DELIVERY OF THE LEASE AGREEMENT, THE DESIGNATED SCG MEMBER SHALL
HAVE THE RIGHT TO EXPLORE THE SELECTED OPEN PROPERTY ON THE TERMS AND CONDITIONS
SET FORTH THEREIN AND IN THIS AGREEMENT AND SHALL DELIVER TO THE APEX
SHAREHOLDERS AND MSC IN WRITING INFORMATION REGARDING ITS EXPLORATION ACTIVITIES
AND EXPENDITURES (A "PERIODIC EXPLORATION REPORT") ON A CURRENT BASIS, BUT IN
ANY EVENT NO LESS FREQUENTLY THAN ONCE EACH CALENDAR QUARTER.
IN ADDITION TO
77
PERIODIC EXPLORATION REPORTS, THE SUMITOMO SHAREHOLDERS SHALL, OR SHALL CAUSE
THE DESIGNATED SCG MEMBER TO, PROMPTLY DELIVER TO MSC AND THE APEX SHAREHOLDERS
A COPY OF THE FINAL FEASIBILITY STUDY FOR A MINING OPERATION ON THE SELECTED
OPEN PROPERTY (A "FINAL FEASIBILITY STUDY").
(E)
AT ANY TIME UNTIL 60 DAYS AFTER THE DATE MSC AND THE APEX
SHAREHOLDERS RECEIVE A FINAL FEASIBILITY STUDY IN RESPECT OF THE SELECTED OPEN
PROPERTY (THE "APEX ELECTION PERIOD"), THE APEX SHAREHOLDERS SHALL HAVE THE
RIGHT TO ELECT TO ACQUIRE UP TO A 65% INTEREST IN THE SELECTED OPEN PROPERTY BY
DELIVERING A WRITTEN NOTICE