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29.1 Affiliated Company Assignment

The Company shall have the right to assign all (but not less than all) its rights and interest under this Agreement to an Affiliate subject to notification to the State, provided that the Affiliate acknowledges and agrees to assume all of the obligations of the Company under this Agreement, has the capacity to perform those obligations, and that the Parent Company guarantee the obligations of the Affiliate to the same extent of the guarantee provided by the Parent Company on behalf of the Company.

29.2 Third Party Assignment

The Company shall have the right, with the prior written approval by the State, which approval shall not be unreasonably withheld or delayed, to freely assign all its rights and interest under this Agreement to a third party, provided that third party acknowledges and agrees to assume all of the obligations of the Company under this Agreement, and has the capacity to perform those obligations. Nothing in this Section shall grant the State any right to approve any arrangement by the Company for the financing of the Project, the creation of security interests or the transfer or assignment of interests in this Agreement or in respect of the Project in connection with such financing.

29.3 Capacity of Successors and Assigns

No assignment of any or all of the Company’s rights hereunder shall be made, and none shall be effective, if the assignee lacks the technical, financial and managerial capacity to honour the obligations in this Agreement.

29.4 Release

On any effective assignment of this Agreement to a third party approved by the State, the Company and the Parent Company shall be released from liabilities under this Agreement to the extent assumed by the third party.

29.5 No Assignment by State

The State shall not transfer or assign its rights or obligations in this Agreement or create or permit to be created any encumbrance or claim on its rights in this Agreement.

*See related provisions at 8.1 Security Interest and 37.7 Conflicts of Interest.

Example 1
14.1 Assignment by THE STATE.

(a) During the Term of this Agreement, THE STATE shall not transfer or assign its rights or obligations in this Agreement or in the Mine or create or permit to be created any encumbrance or claim on its rights in this Agreement or on all or any portion of the Mine. The foregoing shall not prohibit the CENTRAL BANK from transferring or selling shares of the capital stock of Company owned by it to another governmental entity of the STATE. The STATE shall not sell, mortgage, divest, lease, otherwise dispose of or terminate the Fiscal Reserve and assets leased hereunder during the Term of this Agreement.
(b) The restrictions and obligations set forth in Section 14.1(a) shall be recorded in the Public Registry of Mining Rights. Any attempted disposition in violation of Section 14.1(a) shall be void.

14.2 Assignment by COMPANY.

(a) The rights and interests of COMPANY under this Agreement may be transferred or assigned and the duties and obligations of COMPANY under this Agreement may delegated, in whole or in part, at any time only (i) as provided in Article 10 or this Article 14, or (ii) to an Affiliate of COMPANY (for the duration of the time such Affiliate remains an Affiliate of COMPANY), provided, however, that COMPANY shall remain liable for the performance of all such obligations.
(b) COMPANY may transfer or assign fifty-one percent (51%) or less of its rights, interests, and/or obligations or both under this Agreement to a Qualified Successor at any time without the prior written consent of THE STATE.
(c) Except as provided in Section 14.2(a), COMPANY may not transfer or assign more than fifty-one percent (51%) of its rights, interests and/or obligations under this Agreement without the prior written consent of the STATE, which consent shall not be unreasonably withheld, conditioned or delayed.
(d) For purposes of this Section 14.2, a Change of Control of COMPANY (to any Person that is not an Affiliate of COMPANY) or a Change in Management shall be deemed a transfer by COMPANY of its rights, interests and/or obligations under this Agreement.
(e) COMPANY shall give the STATE Notice at least thirty (30) Days prior to any proposed transfer of its rights, interests and/or obligations under this Agreement, other than a transfer subject to Section 14.2(a) or Section 14.2(b). Such Notice shall specify (i) the name and address of the proposed transferee or assignee, (ii) a description of the technical capabilities and mining experience of the proposed transferee or assignee, and (iii) reasonable information on the financial stability of the proposed transferee or assignee. The STATE shall give expedited attention to such Notice, and in any event shall be deemed to have approved the proposed transferee or assignee if it fails to approve or disapprove the proposed transferee or assignee within ninety (90) Days after receipt of the Notice of the proposed transfer or assignment.
(f) Nothing in this Section 14.2 shall grant THE STATE any right to approve any arrangements by COMPANY for the financing of the construction, development or expansion of the Mine, the creation of security interests or the transfer or assignment of interests in this Agreement or in respect of the Mine in connection with such financing.
(g) Any transferee or assignee of the rights and obligations of COMPANY under this Agreement (other than in the case of transfer or assignment of equity in COMPANY) shall agree to assume the obligations of COMPANY under this Agreement, and such provision shall be incorporated in and made part of the instrument of assignment or transfer, a copy of which shall be furnished to the STATE.

[…]

17.4 Successors and Assigns.
Subject to the limitations on transfer contained in Article 14, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties.

Example 2
ASSIGNMENT

COMPANY may, with the consent of the Minister (in accordance with Section xx of the Act), assign its interest in a Large Scale Mining Licence and this Agreement and Government covenants that the consent of the Minister to such an assignment shall not be withheld in the circumstances set out in Clauses 0 and 0. No assignment of an interest in a Large Scale Mining Licence may be made without the assignment to such person of a concomitant interest in this Agreement and vice versa.
If COMPANY assigns its entire interest in a Large Scale Mining Licence and its rights and obligations under this Agreement in accordance with Clause 0, then upon the assignee becoming party to this Agreement, COMPANY shall be discharged from any further liability in respect of any obligation which accrues after the date of that assignment, without prejudice to pre-existing rights accrued to Government against COMPANY and vice versa.

Example 3
22 ASSIGNMENT

22.1 To Affiliates
The Parties acknowledge that Licensee contemplates transferring this Agreement and the License, and its rights and interests thereunder, to an Affiliate. The Licensee shall have the right to transfer its rights and interest under the License and this Agreement to an Affiliate subject to notification to the Licensing Authority.

22.2 To Third Parties
Licensee shall have the right to freely transfer its rights and interest under the License and this Agreement to a third party, but subject to prior approval by the Licensing Authority, which approval shall not be unreasonably withheld or delayed.

Example 4
Section 22 – Assignment, Encumbrance and Change of Control

22.1 General Rules. Except as provided in this Section 22,

(a) no sale, assignment, pledge or other transfer of the rights of the (Concessionaire) or the (Operating Company) under this Agreement or under any Exploration License or Mining License issued under this Agreement, by operation of law or otherwise,
(b) no direct or indirect transfer of Management Rights with respect to the (Concessionaire) or the (Operating Company), or of the right to share in profits of the (Concessionaire) or the (Operating Company), by operation of law or otherwise, and
(c) no transfers by the (Concessionaire) or the (Operating Company) other than in the ordinary course of renewal and replacement of its properties of any interest in any (Mine), Mining Plant or Infrastructure to any Person is valid unless it has received the prior written consent of the (Government). Terms used in this Section 22 are defined in Section 22.9.

22.2 Transfers to (Operating Company). The (Concessionaire) may appoint the (Operating Company) to conduct the Operations on its behalf in accordance with the terms and conditions of this Agreement and of any operating or other agreement between the (Concessionaire) and the (Operating Company) (the “(Project) Operating Agreement”), provided, that at all times the (Operating Company) shall be a wholly-owned subsidiary of the (Concessionaire) and shall be incorporated in (Country). Prior to the Effective Date, the (Concessionaire) shall deliver to the (Government) a complete and accurate copy of the (Project) Operating Agreement and subsequent to the Effective Date, the (Concessionaire) shall deliver to the (Government) a complete and accurate copy of any and all amendments to the (Project) Operating Agreement, in each case within 3 Business Days after the effective date thereof. All rights, obligations and undertakings of the (Concessionaire) provided in this Agreement in connection with the Operations shall be deemed assigned to and assumed by the (Operating Company) to the extent applicable and appropriate for purposes of conducting the Operations and, except for any provision of this Agreement that specifically refers to the (Operating Company), for purposes of this Agreement, other than in this Section 22, the term “Concessionaire” shall be deemed to mean the Operating Company when referring to any activities undertaken by the (Operating Company) pursuant to the (Project) Operating Agreement, provided that the (Operating Company) may not engage in any transaction described in Section 22.3 or 22.4 without the prior consent of the (Government).

22.3 Other Transfers Permitted Without Prior Consent.

(a) The transfer of rights under this Agreement and under any Exploration License or Mining License issued under this Agreement as a consequence of a merger or consolidation of the (Concessionaire) with another entity does not require such consent if the transaction does not result in a Change of Control, the surviving entity is a corporation organized under the laws of (Country) that delivers to the Minister concurrently with such merger or consolidation written representations and warranties as to such corporation as set forth in Section 21.1 immediately after giving effect to such merger or consolidation and assumes in a writing satisfactory to the (Government) all liabilities of the (Concessionaire) under this Agreement and under any Exploration License or Mining License issued under this Agreement, and (i) the survivor is an “Eligible Applicant” under the Mining Law and a Permitted Transferee under Section 22.6, and (ii) the survivor has in the reasonable judgment of the Minister the technical skills, experience, and financial resources necessary to carry out its obligations under this Agreement and under any such Exploration and Mining Licenses.
(b) A transfer by the (Concessionaire) of all of its interest in this Agreement and under any Exploration License or Mining License issued under this Agreement and to the related Mine, Mining Plant and Infrastructure to an Affiliate of the (Concessionaire) at a time at which the (Concessionaire) is not in default in the performance of its obligations under this Agreement does not require such consent if the beneficial owners of the right to share in profits of the Affiliate and the holders of Management Rights with respect to the Affiliate are the same as for the (Concessionaire) immediately prior to such action, the Affiliate that delivers to the Minister concurrently with such transfer written representations and warranties as to such corporation as set forth in Section 21.1 made immediately after giving effect to such transfer and assumes in a writing satisfactory to the (Government) all liabilities of the (Concessionaire) under this Agreement and such Mining Licenses, and (i) the (Concessionaire) remains jointly and severally liable for the performance of its obligations under this Agreement, and (ii) the transferee is an “Eligible Applicant” under the Mining Law and a Permitted Transferee under Section 22.6.
(c) A direct or indirect transfer of Management Rights in the (Concessionaire) independently of any transfer or purported transfer of any interest in this Agreement and under any Exploration License or Mining License issued under this Agreement does not require such consent if it does not result in a Change of Control, or in a Prohibited Person acquiring Management Rights in the (Concessionaire).
(d) A direct or indirect transfer of any right to share in the profits of the (Concessionaire) does not require such consent if it does not result in a Prohibited Person or the members of the immediate family of such Prohibited Person being deemed entitled to receive in excess of 5% of the profits of the (Concessionaire).

22.4 Transfers with Consent. Any other transfer referred to in Section 22.1 and not covered by Section 22.5 requires the prior written consent of the (Government), provided that the consent of the (Government) shall not be unreasonably withheld in the case of a transfer after completion of both the Phase I Capacity Test and Phase II Capacity Test as described in Section 6.2 of all of the (Concessionaire’s) interest under this Agreement, under any Exploration License or Mining License issued under this Agreement and all Mining Plant, Infrastructure and other property of the (Concessionaire) used in connection with this Agreement at a time at which the (Concessionaire) is not in default in the performance of its obligations under this Agreement if the transferee delivers to the Minister concurrently with such transfer written representations and warranties as to such corporation as set forth in Section 21.1 made immediately after giving effect to such transfer and assumes in a writing satisfactory to the (Government) all liabilities of the (Concessionaire) under this Agreement and such Exploration and Mining Licenses, and (a) the transferee is an “Eligible Applicant” under the Mining Law and a Permitted Transferee under Section 22.6 and (b) the transferee has in the reasonable judgment of the Minister the technical skills, experience, and financial resources necessary to carry out its obligations under this Agreement and such Exploration and Mining Licenses.
22.5 Right to Encumber.

(a) Each of the (Concessionaire) and the (Operating Company) may mortgage, charge or otherwise encumber (collectively, “Mortgage”) all or any portion of its interest under this Agreement and under any Exploration License or Mining License issued under this Agreement to finance a portion of the cost of constructing and acquiring any current mines, Additional Concession Area Mine, Contiguous Area Mine, Mining Plant, Infrastructure and other property contemplated by the Modified Bid Materials or any Approved Feasibility Study upon receipt of prior written consent thereto from the (Government). Other than in the case of Permitted Liens,
(a) the Mortgage must extend to all rights of the (Concessionaire), or the (Operating Company), as applicable, under such Exploration or Mining Licenses and to substantially all of such [mines], Additional Concession Area Mine, Contiguous Area Mine, Mining Plant, Infrastructure, and other property (including intellectual property) necessary for Operations (“Pledged Assets”), and
(b) the holder of such Mortgage must agree in writing with the (Government) to the terms of this Section 22.5 and to any transfer restrictions set forth in such Exploration and Mining Licenses. Subject to its confidentiality rights under this Agreement, the (Government) will provide the (Concessionaire), the (Operating Company) and any lender with such documents as any of them shall reasonably request in connection with any transaction with respect to such Mortgage.
(b) Any foreclosure or other exercise of remedies under such Mortgage must result in a transfer of the rights of the (Concessionaire), or the (Operating Company), as applicable, under this Agreement and the Pledged Assets to a single Person who satisfies all the requirements for an assignee set forth in the proviso contained in Section 22.4.
(c) “Permitted Liens” shall mean Liens created solely for the purpose of securing Indebtedness incurred to finance or refinance the purchase price or cost (including the cost of installation, repair, or improvements) of Movable assets acquired after the Effective Date (by purchase or otherwise), including after acquired inventory, equipment, or other tangible or intangible Movable assets, provided that no such Lien shall extend to or cover any assets other than the assets so acquired and improvements thereof.

22.6 Permitted Transferee. A “Permitted Transferee” is a Person defined as such in regulations issued by the (Government) specified as being for the purpose of identifying eligible recipients of Mining Licenses issued under the Mining Law.
Pending the issuance of such regulations, a Person is a “Permitted Transferee” if (i) it is not a Prohibited Person, does not have an officer or director who is a Prohibited Person, and is not controlled by a Prohibited Person, and (ii) no Person or Persons holding in the aggregate (x) in excess of 5% of the voting rights ordinarily empowered to control the management of such Person or (y) in excess of 5% of the rights to share in the profits of such Person is or are Prohibited Persons. A “Prohibited Person” for the purposes of this Section 22.6 is a Person identified as such in regulations issued under the authority of the Ministry of Finance and the Ministry of Justice and applicable to the holders of licenses issued under the Mining Law. Pending the issuance of such regulations, a “Prohibited Person” is a Person with whom transactions are currently prohibited under any Sanctions List published by a Sanctions Committee of the United Nations Security Council or any equivalent measure issued by the World Bank, the European Union or the United States of America, or any Person that issues bearer shares or other instruments to evidence ownership of such Person that do not permit the identification of the owners of such Person.
22.7 Responsibility of (Concessionaire). It is the responsibility of the (Concessionaire) and its Controlling Persons to ensure that Management Rights with respect to the (Concessionaire) and the rights to share in the profits of the (Concessionaire) are structured and held in such a manner that transfers of such rights are made in compliance with this Section 22.
22.8 Disclosure; Consents; Exceptions; Fees.

(a) If the Minister questions whether a transfer occurred without a required consent, the relevant transferor has the burden of demonstrating that consent was not required.
(b) A transfer does not comply with the requirements of this Section 22 if any representations and warranties required to be delivered in connection with such transfer were not true and correct as of the date as of which they were made.
(c) If the (Concessionaire) or the (Operating Company) determines that a transfer occurred that did not comply with this Section 22, and reports such transfer to the Minister promptly thereafter, the (Concessionaire) or the (Operating Company), as applicable, is not in breach of its obligations under this Section 22 if within 60 days of such report it takes such actions as will result in such unpermitted transfer being reversed or otherwise remedied to the satisfaction of the Minister.

22.9 Terms used in Section 22. For the purpose of this Section 22:

(a) a “Change of Control” with respect to the (Concessionaire) occurs if a Person or Group other than the Person or Group that had Control of the (Concessionaire) at the time it executed this Agreement was granted or acquires Control of the (Concessionaire), or if there is a Change of Control within the Group that Controls the (Concessionaire);
(b) a “Change in Control” within a Group is deemed to occur if there is a change in the beneficial ownership of at least 33 1/3% of the Management Rights of the (Concessionaire) held within such Group (including both a change that comes about by expansion of a Group and a change that comes about through a transfer of Management Rights within a Group);
(c) a “Controlling Person” is a Person who Controls the (Concessionaire) or who is a member of a Group that Controls the (Concessionaire);
(d) a “holder” of a Management Right includes any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares the power to direct the exercise of such Management Right
(e) a Person holding the right to share in distributions from a Person that holds a right to share in the profits of the (Concessionaire) has the right to share in the profits of the (Concessionaire) if the second Person passes through distributions from the (Concessionaire) to the first Person without reflecting in the distribution its own income and expenses, or if the right to share in the profits of the (Concessionaire) represents a principal asset of the second Person.
(f) if a trust or other entity holds the rights to share in the profits of a Person, the beneficiaries of such trust are deemed to hold the rights to share in the profits of that Person. If Person A Controls Person B, and Person B has a 25% voting interest in the (Concessionaire), then Person A is deemed to hold 25% of the Management Rights in the (Concessionaire). And if Person Z Controls Person A, then Person Z is deemed to hold 25% of the Management Rights in the (Concessionaire), and a transfer of Person Z’s rights to a third party is within the scope of Section 22.2(c). But if there is no Person (or Group) that Controls Person B, then the (Concessionaire) does not have to look beyond Person B for persons who may be said to have Management Rights with respect to the (Concessionaire). Similarly, if Person A is entitled to a 10% share of the profits of Person B, and Person B’s sole asset is a 25% interest in the (Concessionaire), then Person A is deemed to hold the rights to share in 2.5% of the profits of the (Concessionaire).

Example 5
Assignment
26. (1) Subject to the provisions of this clause the Company may at any time assign, mortgage, charge, sublet or dispose of to any person with the consent of the Minister the whole or any part of the rights of the Company hereunder (including its rights to or as the holder of any Agreement Mining Tenement or any other lease, licence, easement or other title granted under or pursuant to this Agreement) and of the obligations of the Company hereunder subject however in the case of an assignment, subletting or disposition, to the assignee, sublessee or disponee (as the case may be) executing in favour of the State (unless the Minister otherwise determines) a deed of covenant in a form to be approved by the Minister to comply with, observe and perform the provisions hereof on the part of the Company to be complied with, observed or performed in regard to the matter or matters the subject of such assignment, subletting or disposition.
(2) Notwithstanding anything contained in or anything done under or pursuant to subclause (1) the Company shall at all times during the currency of this Agreement be and remain liable for the due and punctual performance and observance of all the covenants and agreements on its part contained in this Agreement and in the Agreement Mining Tenements and in all other leases, licences, easements or other titles the subject of an assignment, mortgage, subletting or disposition under subclause (1) provided that the Minister may agree to release the Company from such liability where the Minister considers such release will not be contrary to the interests of the State.
(3) Notwithstanding the provisions of the [country statutes], insofar as the same or any of them may apply:

(a) no assignment, mortgage, charge, sublease or disposition made or given pursuant to this clause of or over an Agreement Mining Tenement or other lease, license, easement or other title granted under or pursuant to this Agreement by the Company or any assignee, sublessee or disponee who has executed and is for the time being bound by deed of covenant made pursuant to this clause; and
(b) no transfer, assignment, mortgage or sublease made or given in exercise of any power contained in any such mortgage or charge, shall require any approval or consent other than such consent as may be necessary under this clause and no equitable mortgage or charge shall be rendered ineffectual by the absence of any approval or consent (otherwise than as required by this clause) or because the same is not registered under the provisions of the [statutes] as the case may be.

Example 6
33.5 Assignment and Succession. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the permitted successors by operation of law and permitted assignees of the parties including without limitation in the case of the (Government), all future manifestations or forms of public power exercising sovereign authority over all or part of the present territory of (Country).

REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE
PRIOR TO ANY USE OF THIS DOCUMENT.

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