Colombia - Cerro Matoso Nickel Project : Loan 1762 - Sponsors" and Shareholders" Agreement - Conformed

LOAN NUMBER 1762 CO Sponsors' and Shareholders' Agreement (Cerro Matoso Nickel Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and EMPRESA COLOMBIANA DE NIQUEL LIMITADA and BILLITON OVERSEAS LIMITED and COMPANIA DE NIQUEL COLOMBIANO S.A. and INSTITUTO DE FOMENTO INDUSTRIAL and THE SHELL PETROLEUM COMPANY LIMITED and THE HANNA MINING COMPANY Dated -Dao--eA'e/ W o , 1971 LOAN NUMBER 1762 CO SPONSORS' AND SHAREHOLDERS' AGREEMENT AGREEMENT, dated 8eA-3 o**, 1979, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and, on the other side, EMPRESA COLOMBIANA DE NIQUEL LIMITADA (ECONIQUEL), BILLITON OVERSEAS LIMITED (BILLITON) and COMPANIA DE NIQUEL COLOMBIANO, S.A. (CONICOL) (hereinafter sometimes individually called "Shareholder" and collectively called "the Shareholders"), and INSTITUTO DE FOMENTO INDUSTRIAL (IFI), THE SHELL PETROLEUM COMPANY LIMITED (SHELL) and THE HANNA MINING COMPANY (HANNA) (hereinafter sometimes individually called "Sponsor" and collec- tively called "Sponsors"). WHEREAS by the Loan Agreement of even date herewith between the Bank and the Borrower, the Bank has agreed to make to the Borrower a loan in various currencies equivalent to eighty million dollars ($80,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Shareholders and the Sponsors undertake certain obligations with respect to the Borrower and said loan; and WHEREAS the Shareholders and the Sponsors, in consideration of the Bank's entering into the Loan Agreement with the Borrower, have agreed to undertake the obligations set forth in this Agree- ment; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Loan Agreement including the Recitals thereto have the respective meanings therein set forth, and the term "Affiliate" means any Sponsor or any company directly or indirectly controlled by, or under common control with, a Shareholder, including with respect to BILLITON, N. V. Koninklijke Nederlandsche Petroleum Maatschappij, a Netherlands company (hereinafter called "Royal Dutch"), The "Shell" Transport and Trading Company, Limited, an English company (hereinafter referred to as "Shell T. and T.") and any company, in whatever country organized, in which Royal Dutch and Shell T. and T. both together or either of them directly or indirectly at the time in question -2- own or have the right to exercise control of share capital carrying more than fifty per cent (50%) of the voting rights. ARTICLE II Payment of Capital Section 2.01. (a) At such times and in such amounts as shall be needed by the Borrower for the purpose of complying with its obligations under the Loan Agreement and meeting its financial obligations, the Shareholders shall make payments to the Borrower for ordinary shares of the capital stock issued by the Borrower in an aggregate amount in pesos (or, if permitted under the laws and regulations of the Guarantor, in currencies other than pesos) equivalent to not less than seventy-five million dollars ($75,000,000); provided, however, that (i) the portion of this amount to be applied by the Borrower towards the acquisition, at historic dollar value, of all the assets of the Joint Venture shall not exceed the equivalent of twenty--seven million dollars ($27,000,000); and (ii) the payments to be made by. the Share- holders pursuant to this paragraph shall be made either in cash or by reducing the debt referred to in Section 5.05 (c) of the Loan Agreement by an amount equal to the amount of the payment to be made to the Borrower. (b) The obligations of each Shareholder under this Section shall be several and not joint and proportionate as follows: forty-five per cent (45%) shall be the obligation of ECONIQUEL, thirty-five per cent (35%) shall be the obligation of BILLITON and twenty per cent (20%) shall be the obligation of CONICOL. (c) The obligations of each Shareholder under this Section shall be independent of each other and neither ECONIQUEL, BILLITON nor CONICOL shall be entitled to deny or delay performance of its obligations on the grounds of non-performance by any or all of the other Shareholders. ARTICLE III Provision of Funds Section 3.01. (a) The Shareholders shall, in addition to the funds specified in Section 2.01 of this Agreement and to the other funds made available to the Borrower out of the Loan, the Chase Loan and the EXIM Loan, make payments to the Borrower for ordinary -3- shares of the capital stock issued by the Borrower at such times and in such aggregate amounts in pesos (or, if permitted under the laws and regulations of the Guarantor, in currencies other than pesos), up to an equivalent of one hundred and twenty-five million dollars ($125,000,000), as shall be needed by the Borrower for the purpose of complying with its obligations under the Loan Agreement and meeting its financial obligations. (b) The obligations of each Shareholder under this Section shall terminate on the earlier of: (i) the Completion Date; or (ii) the date when the Shareholder shall have made payments pursuant to paragraph (a) of this Section in an aggregate amount equal to its proportion, as set forth in paragraph (c) of this Section, including the proviso thereto, of the equivalent of one hundred and twenty-five million dollars ($125,000,000) referred to in paragraph (a) of this Section. (c) The obligations of each Shareholder under this Section shall be several and not joint and proportionate as follows: forty-five percent (45%) shall be the obligation of ECONIQUEL, thirty-five percent (35%) shall be the obligation of BILLITON and twenty per cent (20%) shall be the obligation of CONICOL; pro- vided, however, that once an aggregate amount equivalent to thirty-two million five hundred thousand dollars ($32,500,000) has been provided by the Shareholders to the Borrower under this Section, CONICOL shall have the option not to provide any addi- tional funds under this Section; and if CONICOL shall exercise, totally or partially, such option, any such additional funds not provided by CONICOL to the Borrower, as required by this Section, shall be provided by BILLITON, in addition to its own share. (d) The obligations of each Shareholder under this Section shall be independent of each other and neither ECONIQUEL, BILLITON nor CONICOL shall be entitled to deny or delay performance of its obligation on the grounds of non-performance by any or all of the other Shareholders. ARTICLE IV Other Covenants Section 4.01. (a) Each of the Shareholders shall exercise its rights and powers as a shareholder of the Borrower and every other right, power and remedy available to it to cause the Borrower -4- punctually to perform all of its obligations under the Loan Agreement and the Listed Documents to which the Borrower is a party, and shall not take any action which would prevent or interfere with the performance by the Borrower of such obliga- tions. (b) The Bank and each Shareholder shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, the Bank and each Shareholder shall from time to time, at the request of either party, exchange views through their representa- tives with regard to the progress of the Project, the performance by such Shareholder of its obligations under this Agreement, the performance by the Borrower of its obligations under the Loan Agreement, and other matters relating to the purposes of the Loan. (c) Each Shareholder shall furnish or cause to be furnished to the Bank all such information as the Bank shall reasonably request concerning the matters specified in paragraph (b) of this Section. (d) The Bank and each Shareholder shall promptly inform each other of any condition which interferes with, or threatens to interfere in any material respect with, the progress of the Project, the accomplishment of the purposes of the Loan, the perfoimance by the Borrower of its obligations under the Loan Agreement or the performance by such Shareholder of its obliga- tions under this Agreement; provided, however, that any informa- tion which has come to the knowledge of one of the parties to this Agreement in a confidential manner shall be disclosed to the other parties to this Agreement solely in the discretion of such party. (e) The provisions of this Section shall not be construed so as to require any provision of funds, materials, equipment or personnel to the Borrower in addition to the funds to be provided to the Borrower pursuant to Sections 2.01 and 3.01 of this Agree- ment. Section 4.02. Each Shareholder shall, not later than four months after the end of each fiscal year, furnish to the Bank certified copies of its audited financial statements (balance sheets,, statements of income and expenses and related statements) for such fiscal year, including the report of the auditors thereon. -5- Section 4.03. (a) The obligations of each Shareholder under Sections 2.01 and 3.01 of this Agreement shall be suspended in the event of physical impossibility for the Borrower for a period of one hundred and eighty (180) consecutive days, or for a period of one hundred and eighty (180) days in the aggregate within any nine-month period, to carry out the Project, as a result of war (declared or not), invasion of or revolution in the territories of the Guarantor, or of any act or acts, or omission to act, of the Guarantor or of any governmental authority of the Guarantor not provoked by a failure of the Borrower to comply with any law or regulation of the Guarantor or of a governmental authority of the Guarantor; provided, however, that if within a period of eighteen (18) months after the date of suspension of such obligations the events giving rise thereto shall have ceased to exist, the obliga- tions of each Shareholder hereunder shall resume their full force and enforceability as if no such suspension had occurred, except that if the obligations of each Shareholder hereunder shall have been suspended for a continuous period of more than six (6) months, the date on which such obligations shall be fully resumed shall be a date nine (9) months after the date on which such physical impossibility shall have ceased. The expression "physical impossibility for the Borrower to carry out the Project" shall include any involuntary divestiture of: (i) all or a substantial part of the assets of the Borrower; or (ii) all or a substantial part of the shares of the Borrower held by BILLITON or CONICOL. (b) Each Shareholder shall be permanently freed from its obligations under Sections 2.01 and 3.01 of this Agreement if, eighteen (18) months after the date of suspension under paragraph (a) of this Section of such obligations, the physical impossi- bility therein referred to shall still continue. Section 4.04. Until the termination of this Agreement, neither ECONIQUEL, BILLITON nor CONICOL nor any of its Affiliates shall assign, sell or otherwise dispose of, or pledge or otherwise encumber, any share subscription rights or shares in the capital stock of the Borrower, without the prior written consent of the Bank, any such consent to be always conditional upon the assump- tion by the assignee, purchaser or creditor of all the obligations of the corresponding Shareholder under this Agreement; provided, however, that no consent of the Bank shall be required for any transfer of such rights or shares to any Affiliate of the trans- ferring Shareholder if such Affiliate shall assume all the obligations of such Shareholder under this Agreement. -6- Section 4.05. IFI, SHELL and HANNA, severally and not jointly, hereby respectively and unconditionally guarantee the punctual performance of the obligations under th4 s Agreement of ECONIQUEL, BILLITON and CONICOL, respectively, and of any Affil- iate of ECONIQUEL, BILITON or CONICOL to which ECONIQUEL, BILLITON or CONICOL, respectively, shall have transferred any of its respective subscription rights or shares in the Borrower, all as set forth in this Agreement. Section 4.06. HANNA shall cause Hanna International Corpora- tion, so long as the latter is the technical advisor referred to in Section 4.02 of the Loan Agreement, to participate with the Borrower, as and when required, in the preparation and the carry- ing out of the program referred to in Section 4.07 of the Loan Agreement in accordance with, and to the extent required by, the terms and provisions of the Technical Services Agreement covering services inside Colombia. Section 4.07. (a) Any controversy between the parties to this Agreement, and any claim by any such party against any other such party, arising under this Agreement which shall not be determined by agreement of the parties shall be submitted to arbitration by an Arbitral Tribunal as hereinafter provided. (b) There shall be two parties to such arbitration, namely, the Bank on one side, and on the other side, such Sponsors and Shareholders as shall (i) have been designated by the Bank in the notice provided for in paragraph (d) below, or (ii) have insti- tuted arbitration proceedings against the Bank pursuant to this Section. (c) The Arbitral Tribunal shall consist of three arbitrators appointed as follows: one arbitrator shall be appointed by the Bank; one arbitrator shall be appointed by ECONIQUEL, BILLITON, CONICOL, IFI, SHELL and HANNA or, if, within sixty (60) days following the giving of the notice referred to in paragraph (d) below, they shall not agree, by the Inter-American Commercial Arbitration Commission, and the third arbitrator (hereinafter sometimes called the Umpire) shall be appointed by agreement of such two arbitrators or, if, within thirty (30) days following their appointment, they shall not agree, by the Inter-American Commercial Arbitration Commission. If, within sixty (60) days following the giving of the notice referred to in paragraph (d) below, the Bank shall fail to appoint an arbitrator, such arbitrator shall be appointed by the Inter-American Commercial Arbitration Commission. In case any arbitrator appointed in accordance with this Section shall resign, die or become unable to act, a s'ccessor arbitrator shall be appointed in the same manner as herein prescribed for the appointment of the original arbitrator and such successor shall have all the powers and duties of such original arbitrator. (d) An arbitration proceeding may be instituted under this Section upon notice by any party to this Agreement instituting such proceeding to all of the other parties to this Agreement. Such notice shall contain a statement setting forth the nature of the controversy or claim to be submitted to arbitration, the nature of the relief sought and the names of such Sponsors or Shareholders who will participate in the proceeding. (e) The Arbitral Tribunal shall convene at such time and place as shall be fixed by the Umpire. Thereafter, the Arbitral Tribunal shall determine where and when it shall sit. (f) Subject to the provisions of this Section and except as the parties to the arbitration shall otherwise agree, the Arbitral Tribunal shall decide all questions relating to its competence and shall determine its procedure. All decisions of the Arbitral Tribunal shall be by majority vote. (g) The Arbitral Tribunal shall afford the parties to the arbitration as well as all the parties to this Agreement which may not be parties to the arbitration, a fair hearing and full rights of participation in the arbitration. The Arbitral Tribunal shall render its award in writing. Such award may be rendered by default. An award signed by a majority of the Arbitral Tribunal shall constitute the award of such Tribunal. A signed counterpart of the award shall be transmitted to each party to this Agreement. Any such award rendered in accordance with the provisions of this Section shall be final and binding upon the parties to this Agreement. Each party to this Agreement shall abide by and comply with any such award rendered by the Arbitral Tribunal in accor- dance with the provisions of this Section. (h) The parties to the arbitration shall fix the amount of the remuneration of the arbitrators and such other persons as shall be required for the conduct of the arbitration proceedings, If the parties to the arbitration shall not agree on such amount before the Arbitral Tribunal shall convene, the Arbitral Tribunal shall fix such amount as shall be reasonable under the circum- stances. The Bank, ECONIQUEL, BILLITON, CONICOL, IFI, SHELL -8- and HANNA shall each defray its own expenses in the arbitration proceedings. The costs of the Arbitral Tribunal shall be divided between and borne equally by the two parties to the arbitration. Any question concerning the divi7ion of the costs of the Arbitral Tribunal or the procedure for payment of such costs shall be determined by the Arbitral Tribunal. (i) The provisions for arbitration set forth in this Section shall be in lieu of any other procedure for the determination of controversies between the parties to this Agreement, or any claim by any such party against any other such party, arising under this Agreement. (j) If within thirty (30) days after counterparts of the award shall be delivered to the parties to this Agreement the award shall not be complied with, any party to the arbitration may enter judgment upon, or institute a proceeding to enforce, the award in any court of competent jurisdiction against any party bound by such award, may enforce such judgment by execution or may pursue any other appropriate remedy against any party bound by such award for the enforcement of the award or the provisions of this Agreement. (k) Service of any notice or process in connection with any proceeding under this Section or in connection with any proceeding to enforce any award rendered pursuant to this Section may be made upon the parties to this kgreement in the manner provided in Section 4.10 of this Agreeient. The parties to this Agreement waive any and all other re,uirements for the service of any such notice or process. Section 4.08. This Agreement shall come into force and effect on the Effective Date of the Loan Agreement. Section 4.09. This Agreement and the obligations of the parties hereunder shall terminate when the Loan Agreement shall terminate in accordance with its terms. Section 4.10. Any notice or request required or permitted to be given or made under this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall have been delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified, or at such other address as such party shall have designated by notice to the party giving such notice or making such request. -.9- Section 4.11. The obligations of ECONIQUEL, BILLITON, CONI- COL, IFI, SHELL and HANNA under this Agreement shall not be discharged except by performance and then only to the extent of such performance. Except as otherwise provided in this Agreement, such obligations shall not be subject to any prior notice to, demand upon or action against the Borrower or the Guarantor, or against any party to this Agreement or to the Listed Documents, or to any prior notice of, or demand with regard to, any default, and shall not be impaired by any of the following: any extension of time, forbearance or concession given to the Borrower or the Guarantor or to any party under this Agreement or the Listed Documents; any assertion of, or failure to assert, or delay in asserting, any right, power or remedy against the Borrower or the Guarantor or against any party under this Agreement or the Listed Documents, or in respect of any security for the Loan; any modifi- cation or amplification of the provisions of the Loan Agreement or the Guarantee Agreement or the Sponsors' and Shareholders' Agree- ment or the Listed Documents; any failure of the Borrower or any other party to this Agreement or the Listed Documents to comply with any requirement of any law, regulation or order of the Guarantor or of any political subdivision or agency of the Gua- rantor. Section 4.12. If at any time the Guarantor shall be subro- gated to the rights of the Bank under the Loan Agreement, the Guarantor shall then ipso facto be subrogated to the rights of the Bank under this Agreement and be entitled to enforce the obliga- tions of ECONIQUEL, BILLITON, CONICOL, IFI, SHELL and HANNA pursuant to the terms of this Agreement as if it were an original party thereto. Section 4.13. This Agreement shall be governed by and con- strued in accordance with the laws of the District of Columbia, United States of America, as at the time in effect. Section 4.14. The following addresses are specified for the purposes of Section 4.10 of this Agreement: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America - 10 - Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WIJI) For the Shareholders: (i) Empresa Colombiana de Niquel Limitada Carrera 7 No. 26-20 Piso 8 Bogoti, Colombia Cable address: Telex: ECONIQUEL 43262 NICO (ii) Billiton Overseas Limited c/o Billiton International Metals B.V. 19 Louis Couperusplein The Hague The Netherlands Cable address: Telex: BILLITON 31702 The Hague (iii) Compa?ffa de Nfquel Colombiano, S.A. Carrera 10 No. 27-27, Piso 4 Bogotg, Colombia Telex: 396-041216 For the Sponsors: (i) Instituto de Fomento Industrial Calle 16 No. 6-66 Bogota, Colombia Cable address: Telex: IFI 44642 Bogot5 (ii) The Shell Petroleum Company Limited Shell Centre London, S.E. 1 England - 11 - Cable address: Telex: SHELLPET 919-651 London (iii) The Hanna Mining Company 100 Erieview Plaza Cleveland, Ohio, 44114 United States of America Cable address: Telex: HANNACO 98-0582 Cleveland 98-0588 IN WITNESS WHEREOF: (i) the Bank, ECONIQUEL, CONICOL, IFI and HANNA, acting through their representatives thereunto duly autho- rized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written; and (ii) BILLITON and SHELL, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in London, England, and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean EMPRESA JOLOMBIANA DE NIQUEL LIMITADA By Authorized Representative - 12 - BILLITON OVERSEAS LIMITED By Authorized Representative COMPANIA DE NIQUEL COLOMBIANO, S.A. By D - W J.6J IL Authorized Representative INSTITUTO DE FOMENTO INDUSTRIAL Byt /V. q0AA,w sa- ~e Lm." Authorized Representative THE SHELL PETROLEUM COMPANY LIMITED By WAA9 C Authorized Representative THE HANNA MINING COMPANY ByieRpeeav Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this Q 2 .day of 197-. FOR SECRETARY