The Award Payment. Upon enforcement of or a settlement concerning the Alumbrera Court Awarded Rights that results in the receipt of consideration (before deducting reasonable costs and disbursements) set out in the left hand column of the following table (the “Court Award”), the Grantor is required under the Participation Agreement to immediately deliver to the Company the amount (whether in cash or, in the case of a settlement with a third party, if applicable, its equivalent in freely tradeable securities) set out in the right hand column of the following table (the “Payment to Samco Gold”): Court Award Payment to Samco Gold Up to US$50 million US$1.4 million More than US$50 million to US$100 million US$1.4 million + 30% of the amount of the Award in excess of US$50 million More than US$100 million US$16.4 million + 50% of the amount of the Award in excess of US$100 million In lieu of the Payment to Samco Gold, for a prescribed period of time, the Company will also have the right under the Participation Agreement to acquire from the Grantor the Assignable Rights (the “Buy-out”) by paying the Grantor US$50 million, provided these purchase funds are not raised through the issue of shares or convertible securities of the Company or its affiliates. In the event that there is a change of control concerning the Company (the “Acquisition”), the Company must pay US$50 million to the Grantor (the “Acquisition Payment”) concurrently with the completion of such Acquisition, which is deemed under the Participation Agreement to complete the Company’s acquisition of the Assignable Rights. If the Acquisition Payment is not made concurrently with completion of the Acquisition, the Participation Agreement will terminate without the Company acquiring any interest in the Assignable Rights. The Grantor would then be required to reimburse the Company for the Option Payment from proceeds received by the Grantor arising from the Legal Action. If at any time following the payment of the Award Payment the Grantor were to seek to secure further rights, interests or other compensation in regards to the Assignable Rights (i.e. beyond those from a Court Award), any proceeds arising (less reasonable costs) will be divided equally between the Grantor and the Company. The Grantor has a right to terminate the Participation Agreement commencing on the three hundred and sixty fifth (365th) day following the Arbitrator’s Decision or, if later, the date on which any available appeal therefrom is exhausted. The Company may terminate the Participation Agreement at any time. If the Participation Agreement is terminated before receipt of the Court Award, Buy-out or Acquisition, and if the Grantor first receives proceeds arising from enforcement, settlement, sale, assignment or other form of monetization of the Assignable Rights (the “Proceeds”), the Grantor will forthwith: − reimburse the Option Payment to the Company, − reimburse any reasonable costs incurred by the Company in respect of the Assignable Rights, and − if the Grantor terminates the Participation Agreement as described above and if the Proceeds are received by the Grantor within one (1) year of termination of the Participation Agreement, pay to the Company an amount equal to ten percent (10%) of the Proceeds over US$50 million. The Board considers that the funds arising from the Participation Agreement will allow the Company to continue to focus its attention on the development of its core EDM and Xxxxxx projects which the Company believes to be very promising. Most significantly, the Participation Agreement allows this to be achieved without equity dilution to shareholders at a time where capital markets are proving to be a difficult environment to source capital.
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