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Assignment of Rights Agreement

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ASSIGNMENT OF RIGHTS AGREEMENT | Document Parties: ROYAL GOLD INC | Mario Ivan Hernández Alvarez  | Royal Gold Chile Limitada You are currently viewing:
This Assignment Agreement involves

ROYAL GOLD INC | Mario Ivan Hernández Alvarez | Royal Gold Chile Limitada

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Title: ASSIGNMENT OF RIGHTS AGREEMENT
Governing Law: Delaware     Date: 2/9/2007
Industry: Gold and Silver     Sector: Basic Materials

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Exhibit 10.9

Assignment of Rights Agreement

between

Mario Ivan Hernández Alvarez

as Assignor

R oyal G old Chile Limitada

as Assignee

and

Royal Gold Inc .

as Guarantor

 


 

Assignment of Rights Agreement

THIS ASSIGNMENT OF RIGHTS AGREEMENT (“ Agreement ”) effective January 16, 2007 (“ Effective Date ”) is by and between Mario Ivan Hernández Alvarez , Chilean, mining engineer, married with identification certificate number 4773296-K, domiciled at La Concepción 266, Suite 701, Providencia, Chile, (“ Assignor ”) and Royal Gold, Inc. a corporation organized and existing under the laws of the State of Delaware, United States of America, (“ Royal Gold Inc .”) acting on behalf of Royal Gold Chile Limitada, a Chilean limited liability company under formation (“ Royal Gold Chile ”) and as guarantor of the obligations of Royal Gold Chile hereunder, domiciled at Torre de la Costanera, Avenida Andres Bello 2711, 16th Floor, Santiago, Chile.

Recitals

     Compañia Minera Barrick Chile Limitada (“ Barrick ”) and Assignor are the parties to that certain Stock Purchase Agreement, dated June 30, 1998 (“ Pascua-Lama Contract ”) a true and complete copy of which is attached hereto as Exhibit A .

     Pursuant to the Pascua-Lama Contract, Assignor is entitled to receive as the balance of the price due from Barrick: (i) as provided in Clauses 4d) and 4e), an amount equivalent to a variable percentage of the value of gold produced by Barrick or it successors from mineral concessions located in whole or in part within an area identified in Annex A to the Pascua-Lama Contract, and (ii) as provided in Clause 4f), an amount equivalent to 0.4314% of proceeds from copper sold on and after January 1, 2017 that is produced by Barrick or it successors from mineral concessions located in whole or in part within an area identified in Annex A to the Pascua-Lama Contract, less certain specified deductions, all on the terms and conditions specified in the Pascua-Lama Contract (collectively, together will all rights granted to Assignor by the Pascua-Lama Contract in respect of such payments, “ Assignor’s Royalty Interest ”).

     Assignor desires to assign to Royal Gold Chile and Royal Gold Chile desires to acquire by assignment from Assignor one half of Assignor’s Royalty Interest (“ Purchased Royalty Interest ”), on the terms and subject to the conditions set forth in this Agreement.

     Royal Gold Chile also desires to acquire a right of first refusal to purchase all or any portion of the other one half of Assignor’s Royalty Interest and Assignor is willing to grant such a right to Royal Gold Chile, on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, conditions and agreements contained herein, Assignor and Royal Gold Chile (the “ Parties ”), intending to be legally bound, covenant and agree as follows.

Agreement

 


 

ARTICLE I
DEFINITIONS AND CONSTRUCTION

     1.1 Definitions . As used in this Agreement, the following terms, whether in singular or plural form, shall have the following meanings:

          (a) “ Acquisition ” means the consummation of the assignment of the Purchased Royalty Interest to Royal Gold Chile and of the other transactions contemplated by this Agreement.

          (b) “ Affiliate ” means with respect to any Person, any other Person controlling, controlled by or under common control with such Person, with “control” for such purposes meaning (i) the ownership of 50% or more of the equity interests or social rights in a Person, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or voting interests, by contract or otherwise.

          (c) “ Agreement ” has the meaning set forth in the Preamble.

          (d) “ Assignor ” has the meaning set forth in the Preamble.

          (e) “ Assignor’s Royalty Interest ” has the meaning set forth in the Recitals.

          (f) “ Barrick ” has the meaning set forth in the Recitals.

          (g) “ Business Day ” means any day other than a Saturday, a Sunday or a day on which banks are generally not open for the conduct of regular business in either Santiago, Chile, or Denver, Colorado, United States of America.

          (h) “ Chamber ” has the meaning set forth in Section 10.7(a).

          (i) “ Closing ” means the consummation of the Acquisition.

          (j) “ Closing Date ” has the meaning set forth in Section 2.4.

          (k) “ Contract Administration Rights ” has the meaning set forth in Section 5.3(b).

          (l) “ Dispute ” has the meaning set forth in Section 10.7(a).

          (m) “ Effective Date ” has the meaning set forth in the Preamble.

          (n) “ Encumbrance ” means any security agreement, financing statement filed with any Governmental Authority, conditional sale or contract right, lien, mortgage, indenture, pledge, option, encumbrance of any kind, constructive trust or other trust, claim, attachment, exception to or defect in title or other ownership interest of any kind which constitutes an interest in or claim against property, however arising.

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          (o) “Governmental Authority ” means the Republic of Chile, the United States of America, any region or state thereof, and any political subdivision or quasi-governmental authority of any of the same.

          (p) “ Indemnitee ” has the meaning set forth in Section 8.3(a).

          (q) “ Indemnitor ” has the meaning set forth in Section 8.3(a).

          (r) “ Losses ” means any claims, losses, liabilities, damages, penalties, costs, and expenses, including interest imposed in connection therewith, expenses of investigation, reasonable fees and disbursements of counsel and other experts, and the cost to any Indemnitee making a claim or seeking indemnification under this Agreement with respect to funds expended by such Indemnitee by reason of the occurrence of any event with respect to which indemnification is sought.

          (s) “ Notice ” has the meaning set forth in Section 10.1.

          (t) “ Notice of Proposed Transfer ” has the meaning set forth in Section 9.1.

          (u) “ Parties ” has the meaning set forth in the Recitals.

          (v) “ Pascua-Lama Contract ” has the meaning set forth in the Recitals.

          (w) “ Pascua-Lama Project ” means the cross-border precious metals project located in Region III, Chile, approximately 150 kilometers southeast of Vallenar, and in San Juan Province, Argentina.

          (x) “ Person ” means any natural person, Governmental Authority, corporation, general or limited partnership, limited liability company, joint venture, trust, association or unincorporated entity of any kind.

          (y) “ Purchase Price ” has the meaning set forth in Section 2.2.

          (z) ‘ Purchased Royalty Interest ” has the meaning set forth in the Recitals, and together with the Retained Royalty Interest constitutes Assignor’s Royalty Interest.

          (aa) “ Retained Royalty Interest ” means the one half interest in Assignor’s Royalty Interest that is not to be assigned to Royal Gold Chile at the Closing, but that will be retained by Assignor.

          (bb) “ Royal Gold Chile ” means Royal Gold Chile Limitada, a Chilean limited liability company under formation.

          (cc) “ Royal Gold Inc ”. has the meaning set forth in the Preamble.

          (dd) “ Transfer ” means sell, assign, transfer, subrogate, novate, pledge, hypothecate or encumber, in any form, directly or indirectly.

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     1.2 Rules of Construction . Unless otherwise expressly provided in this Agreement: (i) words used in this Agreement, regardless of the gender used, shall be deemed and construed to include any other gender, masculine, feminine, or neuter, as the context requires; (ii) the word “including” is not limiting, and the word “or” is not exclusive; (iii) the capitalized term “Section” refers to sections of this Agreement; (iv) references to a particular Section include all subsections thereof; and (viii) references to a “day” or number of “days” (without the explicit qualification “Business”) refer to a calendar day or number of calendar days.

     1.3 Exhibits . The following Exhibits attached hereto are incorporated in, and form a part of, this Agreement:

     Exhibit A      Pascua-Lama Contract

     Exhibit B      Form of Public Deed

ARTICLE II
PURCHASE AND SALE, CLOSING

     2.1 Purchase and Sale . Subject to the terms and conditions of this Agreement, at the Closing, Assignor shall assign and transfer to Royal Gold Chile and Royal Gold Chile shall purchase and pay the Purchase Price for the Purchased Royalty Interest, free and clear of all Encumbrances.

     2.2 Purchase Price . The purchase price for the Purchased Royalty Interest shall be US $20.5 million (“ Purchase Price ”), payable as herein provided.

     2.3 Payment of Purchase Price . At the Closing, Royal Gold Chile shall pay the Purchase Price to Assignor by bank wire transfer of immediately available funds to an account designated by Assignor at least three Business Days prior to the Closing.

     2.4 Closing . The Closing shall occur as promptly as possible, and in any event not later than the earlier of (i) March 10, 2007 or (ii) five Business Days following the satisfaction or waiver of the conditions set forth in Article VI, or on such other date as the Parties may agree (the “ Closing Date ”). The Closing shall take place at Avenida Andrés Bello N°2711, piso 16, comuna de las Condes, Santiago, Chile, or at such other place as the Parties may agree not later than three (3) Business Days prior to the Closing Date.

     2.5 Deliveries by Assignor . At the Closing, Assignor shall deliver, or cause to be delivered to Royal Gold Chile (unless previously delivered or waived in writing by Royal Gold Chile) the following:

          (a) a Public Deed in the form and substance of Exhibit B , assigning and transferring the Purchased Royalty Interest to Royal Gold Chile;

          (b) a certificate executed by Assignor, stating that the conditions set forth in Section 6.1 have been satisfied;

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          (c) an opinion of Assignor’s legal counsel in form and substance satisfactory to Royal Gold Chile and its legal counsel, acting reasonably, to the effect that Assignor has all the requisite power and authority to execute this Agreement, that Assignor has performed all the necessary acts to execute and deliver this Agreement, and that upon execution and delivery by Assignor, this Agreement will constitute Assignor’s valid and binding obligation and be enforceable against him in accordance with its terms; and

          (d) all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Royal Gold Chile to consummate the Acquisition.

     2.6 Deliveries by Royal Gold Chile . At the Closing, Royal Gold Chile shall deliver, or cause to be delivered to Assignor (unless previously delivered or waived in writing by Assignor) the following:

          (a) the Purchase Price, as provided in Section 2.3;

          (b) a certificate executed by an authorized officer of Royal Gold Chile, stating that the conditions set forth in Section 6.2 have been satisfied;

          (c) an opinion of Royal Gold Chile’s legal counsel in form and substance satisfactory to Assignor and its legal counsel, acting reasonably, to the effect that Royal Gold Chile has all the requisite corporate power and authority to execute this Agreement, that Royal Gold Chile has performed all the necessary acts to execute and deliver this Agreement, and that upon execution and delivery by Royal Gold Chile, this Agreement will constitute Royal Gold Chile’s valid and binding obligation and be enforceable against it in accordance with its terms; and

          (d) all such other assurances, consents, agreements, documents and instruments as may be reasonably required by Assignor to consummate the Acquisition.

     2.7 Further Assurances . On and after the Closing Date, each of the Parties will take all appropriate action and execute any documents, instruments or conveyances of any kind that may be reasonably requested by the other Party to carry out any of the provisions of this Agreement.

ARTICLE III
ASSIGNOR’S REPRESENTATIONS AND WARRANTIES

     Assignor represents and warrants to Royal Gold Chile, as of the date of this Agreement and as of the Closing, as follows:

     3.1 Title to Assignor’s Royalty Interest . Assignor owns the entire right, title, and interest in Assignor’s Royalty Interest free and clear of all Encumbrances or claims by third Persons. At the Closing Royal Gold Chile will acquire the Purchased Royalty Interest free and clear of all Encumbrances or claims by third Persons.

     3.2 Pascua-Lama Contract . A true and complete copy of the Pascua-Lama Contract is attached hereto as Exhibit A. The Pascua-Lama Contract is enforceable in accordance with its

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terms and has not been modified, supplemented, or amended. Assignor has not assigned, in whole or in part, Assignor’s Royalty Interest or any of his rights with respect thereto; granted or created any Encumbrances on or in respect of Assignor’s Royalty Interest; granted any options to purchase or rights of first refusal with respect to Assignor’s Royalty Interest; or agreed to any amendment to the Pascua-Lama Contract or waived any of his rights thereunder. Assignor has fully and timely performed all of his obligations under the Pascua-Lama Contract and there are no further actions required by him or on his behalf in order for him to be fully vested in and entitled to Assignor’s Royalty Interest. There does not exist under the Pascua-Lama Contract any event of default or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default on the part of Assignor or any other party thereto.

     3.3 Authority. Assignor has all requisite power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby by Assignor have been duly and validly authorized by all necessary action on the part of Assignor, and this Agreement has been duly and validly executed and delivered by Assignor, and is the valid and binding obligation of Assignor, enforceable against him in accordance with its terms.

     3.4 No Conflict; No Required Consents The execution, delivery, and performance by Assignor of this Agreement do not and will not (i) violate any provision of any law applicable to Assignor; (ii) conflict with, violate, result in a breach of, constitute a default under (without regard to requirements of notice, lapse of time, or elections of other Persons, or any combination thereof) or accelerate or permit the acceleration of the performance required by, any agreements to which Assignor is a party or by which he is bound or affected; or (iii) require any consent, approval, or authorization of, or filing of any certificate, notice, application, report, or other document with, any Governmental Authority or other Person, other than any filing required to be made by United States securities laws and the notification to Barrick of the Public Deed attached hereto as Exhibit A.

     3.5 No Litigation . No litigation, arbitration or other proceeding is pending, or to Assignor’s knowledge, threatened, against Assignor or involving Assignor’s Royalty Interest.

     3.6 Information and Data. Assignor has provided Royal Gold Chile with copies of all correspondence, notes, written information, data, and other documents in his possession or control relating to Assignor’s Royalty Interest, including all copies of all written communications with Barrick.

     3.7 Broker’s Fees . Assignor does not have any liability to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Royal Gold Chile could become liable or obligated.

ARTICLE IV
ROYAL GOLD CHILE’S REPRESENTATIONS AND WARRANTIES

     Royal Gold Chile represents and warrants to Assignor, as of the date of this Agreement and as of the Closing, as follows:

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     4.1 Organization of Royal Gold Chile . Royal Gold Chile is a Chilean limited liability company under formation that at the Closing Date will be duly organized, validly existing and owned by Royal Gold Inc. and an Affiliate of Royal Gold Inc. Royal Gold Inc, is duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite power and authority to conduct its activities as such activities are currently conducted.

     4.2 Authority. Royal Gold Inc. has all requisite corporate power and authority to execute, deliver, and perform this Agreement on behalf of Royal Gold Chile and to consummate the transactions contemplated hereby. At the Closing the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby by Royal Gold Chile will have been duly and validly authorized by all necessary action on the part of Royal Gold Chile. This Agreement has been duly and validly executed and delivered on behalf of Royal Gold Chile, and is the valid and binding obligation of Royal Gold Chile, enforceable against it in accordance with its terms.

     4.3 No Conflict; Required Consents The execution, delivery, and performance by Royal Gold Chile of this Agreement do not and will not (i) conflict with or violate any provision of the articles of incorporation or bylaws of Royal Gold Chile; (ii) violate any provision of any law applicable to Royal Gold Chile; (iii) conflict with, violate, result in a breach of, constitute a default under (without regard to requirements of notice, lapse of time, or elections of other Persons, or any combination thereof) or accelerate or permit the acceleration of the performance required by, any agreements to which Royal Gold Chile is a party or by which it is bound or affected; or (iv) require any consent, approval, or authorization of, or filing of any certificate, notice, application, report, or other document with, any Governmental Authority or other Person, other than any filing required to be made by United States securities laws and the notification to Barrick of the Public Deed attached hereto as Exhibit A.

     4.4 Broker’s Fees . Royal Gold Chile does not have any liability to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Assignor could become liable or obligated.

ARTICLE V
COVENANTS

     5.1 Cooperation . Assignor and Royal Gold Chile shall each use commercially reasonable efforts to take all steps within his or its power, and will cooperate with the other Party, to cause to be fulfilled those of the conditions to the other Party’s obligations to consummate the transactions contemplated by this Agreement that are dependent upon his or its actions, and to execute and deliver such instruments and take such other commercially reasonable actions as may be necessary to carry out the intent of this Agreement and to consummate the transactions contemplated hereby.

     5.2 Due Diligence . Following the execution of this Agreement, until the Closing Date or earlier termination of this Agreement, Royal Gold Chile shall have the exclusive right to conduct reasonable due diligence in respect of (i) the ownership, terms and conditions, validity, and good standing of the Assignor’s Royalty Interest, (ii) the ownership, terms and conditions, validity, and good standing of the concessions and minerals rights granted by the Chilean courts

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in respect of the Pascua-Lama Project; and (iii) the sufficiency of the surface rights and authorizations held by the operator to permit development of the Pascua-Lama Project. Assignor shall co-operate with Royal Gold Chile in respect to such due diligence, and, if requested by Royal Gold Chile, each shall use its reasonable efforts to facilitate direct communications between Royal Gold Chile and Barrick.

     5.3 Administration of Pascua-Lama Contract .

          (a) Immediately following the Closing the Parties shall jointly request that Barrick make one half of all payments due in respect of Assignor’s Royalty Interest to Assignor (to reflect Assignor’s ownership of the Retained Royalty Interest) and the other half of all such payments to Royal Gold Chile (to reflect Royal Gold Chile’s ownership of the Purchased Royalty Interest). If Barrick fails or refuses to make such separate payments to Assignor and to Royal Gold Chile, the Parties agree that all payments made by Barrick in respect of both the Retained Royalty Interest and the Purchased Royalty Interest shall be made to Royal Gold Chile and that Royal Gold Chile shall upon receipt of such payments disburse the amount thereof corresponding to the Retained Royalty Interest to Assignor.

          (b) The Parties acknowledge that if the Closing occurs, they will each own one half of all of the rights and interests that are now held by Assignor related to Assignor’s Royalty Interest, including the rights to (i) take payment in-kind, (ii) protest payments received and conduct an audit, (iii) inspect operations and designate a company for the resolution of any dispute with Barrick concerning commingling of mineral products, (iv) to resolve other disputes with Barrick, (v) acquire concessions that Barrick determines to abandon, and (vi) consent to a transfer of the mining concessions (“ Contract Administration Rights ”). The Parties agree that a further agreement between them concerning the exercise of the Contract Administration Rights will be necessary in order to secure to Royal Gold Chile the full benefit of its ownership of the Purchased Royalty Interest and to Assignor the full benefit of the Retained Royalty Interest. Promptly following execution of this Agreement, the Parties shall negotiate in good faith a supplemental agreement that address the manner in which they will exercise the Contract Administration Rights following the Closing.

ARTICLE VI
CONDITIONS

     6.1 Conditions to Royal Gold Chile’s Obligations . The obligation of Royal Gold Chile to consummate the transactions contemplated by this Agreement shall be subject to the following conditions, any of which may be waived by Royal Gold Chile in its sole discretion:

          (a) The representations and warranties of Assignor in this Agreement shall be true and accurate in all material respects at and as of the Closing with the same effect as if made at and as of the Closing.

          (b) Assignor shall have performed in all material respects all obligations and agreements and complied with all covenants in this Agreement to be performed and complied with by it at or before the Closing.

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          (c) No injunction or restraining order of any Governmental Authority of competent jurisdiction shall be in effect which prohibits the transactions contemplated by this Agreement and no action or proceeding shall have been instituted and remain pending before any Governmental Authority to restrain or prohibit any of the transactions contemplated by this Agreement.

          (d) The completion of due diligence to Royal Gold Chile’s reasonable satisfaction with respect to: (i) the ownership, terms, and conditions, validity, and good standing of the Assignor’s Royalty Interest, (ii) the ownership, terms and conditions, validity, and good standing of the concessions and minerals rights granted by the Republic of Chile in respect of the Pascua-Lama Project; and (iii) the sufficiency of the surface rights and surface use authorizations held by Barrick to permit development of the Pascua-Lama Project.

          (e) Receipt by Royal Gold Chile of justifiable opinions concerning the Acquisition from its legal and tax advisors that are satisfactory to Royal Gold Chile, acting reasonably and in good faith.

          (f) There shall have not been since the Effective Date any material adverse change in the value of, or prospects for, the Pascua-Lama Project .

     6.2 Conditions to Assignor’s Obligations . The obligation of Assignor to consummate the transactions contemplated by this Agreement shall be subject to the following conditions, any of which may be waived by Assignor in his sole discretion:

          (a) The representations and warranties of Royal Gold Chile in this Agreement shall be true and accurate in all material respects at and as of the Closing with the same effect as if made at and as of the Closing.

          (b) Royal Gold Chile shall have performed in all material respects all obligations and agreements and complied with all covenants in this Agreement to be performed and complied with by it at or before the Closing.

          (c) No injunction or restraining order of any Governmental Authority of competent jurisdiction shall be in effect which prohibits the transactions contemplated by this Agreement and no action or proceeding shall have been instituted and remain pending before any Governmental Authority to restrain or prohibit any of the transactions contemplated by this Agreement.

ARTICLE VII
TERMINATION

     7.1 Termination Events . This Agreement may be terminated and the transactions contemplated hereby may be abandoned:

          (a) at any time, by the mutual written agreement of Royal Gold Chile and Assignor;

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          (b) by either Royal Gold Chile or Assignor, upon Notice to the other Party, at any time, if the other Party is in breach or default of its respective covenants, agreements, or other obligations herein, or if any of its representations herein are not true and accurate in all material respects when made or when otherwise required by this Agreement to be true and accurate in all material respects, and such breach, default or failure is not cured within 30 days of receipt by the other Party of such Notice;

          (c) by either Royal Gold Chile or Assignor upon written notice to the other, if the Closing shall not have occurred on or before the March 10, 2007 for any reason other than a breach or default by such Party of its respective covenants, agreements, or other obligations hereunder, or any of its representations herein not being true and accurate in all material respects when made or when otherwise required by this Agreement to be true and accurate in all material respects; or

          (d) as otherwise provided herein.

     7.2 Effect of Termination .

          (a) If (i) this Agreement is terminated by Royal Gold Chile pursuant to Section 7.1(b) and (ii) Assignor is in breach in any material respect of any of its representations and warranties made herein or its covenants or agreements made herein (and Royal Gold Chile is not in breach in any material respect of any of its representations and warranties or covenants made herein), then:

               (i) Royal Gold Chile shall have all remedies available at law or in equity, including the right of specific performance and the right to seek money damages from Assignor for any Losses incurred by Royal Gold Chile; and

               (ii) Assignor shall promptly pay to Royal Gold Chile the sum of US $2 million as a penalty for such breach.

          (b) If (i) this Agreement is terminated by Assignor pursuant to Section 7.1(b) and (ii) Royal Gold Chile is in breach in any material respect of any of its representations and warranties made herein or its covenants or agreements made herein (and Assignor is not in breach in any material respect of any of its representations and warranties or covenants made herein), then:

               (i) Assignor shall have all remedies available at law or in equity, including the right of specific performance and the right to seek money damages from Royal Gold Chile for any Losses incurred by Assignor; and

               (ii) Royal Gold Chile shall promptly pay to Assignor the sum of US $2 million as a penalty for such breach.

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ARTICLE VIII
INDEMNIFICATION AND GUARANTY

     8.1 Indemnification by Assignor From and after Closing, and regardless of any investigation made at any time by or on behalf of Royal Gold Chile or any information Royal Gold Chile may have, Assignor shall defend, indemnify and hold harmless Royal Gold Chile, its Affiliates, officers, directors, employees, agents, and representatives, and any third party claiming by or through any of them, as the case may be, from and against any and all Losses arising out of or resulting from:

          (a) any representations and warranties made by Assignor in this Agreement not being true and accurate when made or when required by this Agreement to be true and accurate; or

          (b) any failure by Assignor to perform any of its covenants, agreements, or obligations in this Agreement.

     8.2 Indemnification by Royal Gold Chile . From and after Closing, Royal Gold Chile shall defend, indemnify and hold harmless Assignor and any third party claiming by or through him, as the case may be, from and against any and all Losses arising out of or resulting from:

          (a) any representations and warranties made by Royal Gold Chile in this Agreement not being true and accurate when made or when required by this Agreement to be true and accurate; or

          (b) any failure by Royal Gold Chile to perform any of its covenants, agreements, or obligations in this Agreement.

     8.3 Claims for Indemnity; Third Party Claims .

          (a) Whenever a claim for Losses shall arise for which one Party (“ Indemnitee ”) shall be entitled to indemnification under this Article VIII, Indemnitee shall give the indemnifying party (“ Indemnitor ”) Notice promptly after the first receipt of knowledge of such claim, and in any event within such period as may be necessary for Indemnitor to take appropriate action to resist such claim. Such Notice shall specify all facts known to Indemnitee giving rise to such indemnification rights. The right of Indemnitee for indemnification, as set forth in the Notice, shall be deemed agreed to by Indemnitor unless, within 30 days after receipt of such Notice, Indemnitor shall notify Indemnitee in writing that it disputes the right of Indemnitee to indemnification.

          (b) Upon receipt by Indemnitor of a Notice from Indemnitee with respect to any claim of a third party against Indemnitee, and acknowledgment by Indemnitor (whether after resolution of a dispute or otherwise) of Indemnitee’s right to indemnification hereunder with respect to such claim, Indemnitor shall assume the defense of such claim with counsel reasonably satisfactory to Indemnitee and Indemnitee shall cooperate to the extent reasonably requested by Indemnitor in defense or prosecution thereof and shall furnish such records,

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information and testimony and attend all such conferences, proceedings, hearings, trials and appeals as may be reasonably requested by Indemnitor in connection therewith. If Indemnitor acknowledges Indemnitee’s right to indemnification and elects to assume the defense of such claim, Indemnitee shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of Indemnitee. If Indemnitor has assumed the defense of any claim against Indemnitee, Indemnitor shall have the right to settle any claim for which indemnification has been sought and is available hereunder; provided that, to the extent that such settlement requires Indemnitee to take, or prohibits Indemnitee from taking, any action or purports to obligate Indemnitee, then Indemnitor shall not settle such claim without the prior written consent of Indemnitee, such consent not to be unreasonably withheld. If Indemnitor does not assume the defense of a third party claim or disputes Indemnitee’s right to indemnification, Indemnitee shall have the right to defend against such claim until Indemnitor’s obligation to indemnify is established pursuant to this Section 8.3, and Indemnitor shall have the right to participate in the defense of such claim through counsel of its choice, at Indemnitor’s expense, but Indemnitee shall have control over the defense and authority to resolve such claim, subject to this Section 8.3.

     8.4 Survival of Representations and Warranties; Limitations Unless specified otherwise in this Agreement, the representations and warranties of Assignor and Royal Gold Chile in this Agreement shall survive the Closing for a period of 24 months, except for (i) those contained in Sections 3.1 and 3.2, which shall survive indefinitely. Assignor and Royal Gold Chile shall have no liability under Sections 8.1 and 8.2, respectively, unless a claim for Losses for which indemnification is sought thereunder is asserted by Royal Gold Chile or Assignor, as the case may be, within the applicable survival period.

     8.5 Sole Remedy . Each Party acknowledges and agrees that, should the Closing occur, its sole and exclusive remedy against the other Party with respect to any breach of representation, warranty, covenant, agreement or obligation will be pursuant to the indemnification provisions set forth in this Article VIII.

     8.6 Guaranty . Royal Gold Inc. hereby unconditionally guarantees the obligations of Royal Gold Chile pursuant to the terms of this Agreement, including without limitation the indemnification obligations set forth in Section 8.2. If any indemnification obligation of the Royal Gold Chile is not paid in accordance with the provisions of this Article VIII, Assignor shall be entitled to collect the amount of any Loss from Royal Gold Inc.

ARTICLE IX
RIGHT OF FIRST REFUSAL

     9.1 Preemptive Rights . If Assignor intends to Transfer all or any part of t


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