SETTLEMENT AND PURCHASE AND SALE AGREEMENT AMONG ASARCO LLC, AR SILVER BELL, INC., COPPER BASIN RAILWAY, INC., ASARCO SANTA CRUZ, INC., STERLITE (USA), INC. AND STERLITE INDUSTRIES (INDIA) LTD Dated as of March 6, 2009
Exhibit
4.42
EXECUTION VERSION
SETTLEMENT
AND
PURCHASE AND SALE
AGREEMENT
AMONG
ASARCO LLC,
AR SILVER ▇▇▇▇, INC.,
COPPER BASIN RAILWAY, INC.,
ASARCO SANTA ▇▇▇▇, INC.,
STERLITE (USA), INC.
AND
Dated as of March 6, 2009
TABLE OF CONTENTS
i
ii
Exhibits
Exhibit A
|
Form of Assignment and Assumption Agreement | |
Exhibit B
|
Form of ▇▇▇▇ of Sale | |
Exhibit C-1
|
Purchaser Opinion | |
Exhibit C-2
|
Guarantor Opinion | |
Exhibit D
|
Form of Purchaser Promissory Note | |
Exhibit E
|
Closing Accounts Statement Principles and Illustration | |
Exhibit F-1 through |
||
Exhibit F-4
|
Forms of Deeds | |
Exhibit G
|
Form of Leasehold Deed | |
Exhibit H
|
Form of Assignment and Assumption of Ground Lease Agreement | |
Exhibit I
|
Form of Patent Assignment | |
Exhibit J
|
Form of Trademark Assignment | |
Exhibit K
|
Services to be Included in Transition Services Agreement | |
Exhibit L
|
Form of Security Agreement | |
Exhibit M-1
|
Form of Sterlite Settlement Motion |
iii
Exhibit M-2
|
Form of Sterlite Agreed Order | |
Exhibit N-1
|
Form of Mortgage (Texas) | |
Exhibit N-2
|
Form of Mortgage (Arizona) | |
Exhibit O-1
|
First L/C | |
Exhibit O-2
|
Second L/C | |
Exhibit O-3
|
Form of Third L/C | |
Exhibit P
|
Environmental Claimants |
Seller Disclosure Schedule
Section 1.1A
|
Permitted Liens | |
Section 1.1B
|
Sellers’ Knowledge | |
Section 3.1(b)
|
Machinery and Equipment | |
Section 3.1(c)
|
Purchased Real Property | |
Section 3.1(e)(i)
|
Leases of Real Property (ASARCO as Lessee) | |
Section 3.1(e)(ii)
|
Leases of Personal Property | |
Section 3.1(e)(viii)
|
Insurance Policies | |
Section 3.1(e)(xiii)
|
Real Property Leases (ASARCO as Lessor) | |
Section 3.1(e)(xiv)
|
Royalty Agreements | |
Section 3.1(e)(xv)
|
Other Contracts | |
Section 3.1(g)
|
Motor Vehicles | |
Section 3.1(j)
|
Patents | |
Section 3.1(k)
|
Trademarks | |
Section 3.1(m)
|
Permits | |
Section 3.1(o)
|
Patented and Unpatented Mining Claims | |
Section 3.1(p)
|
Adversary Proceedings | |
Section 3.2(c)
|
Equity Securities | |
Section 3.2(e)
|
Retained Proceedings | |
Section 3.2(g)
|
Retained Real Property | |
Section 3.2(j)
|
Retained Contracts | |
Section 3.2(n)
|
Retained Adversary Proceedings | |
Section 3.5(a)
|
Assumed Contracts | |
Section 6.3(a)
|
Sellers Consents | |
Section 6.3(b)
|
Governmental Approvals | |
Section 6.4
|
Financial Information | |
Section 6.5
|
Compliance with Laws | |
Section 6.7
|
Purchased Real Property | |
Section 6.8(a)
|
Material Contracts | |
Section 6.9
|
Suppliers | |
Section 6.10(a)
|
Employee Benefit Plans | |
Section 6.10(b)
|
Pension Plans | |
Section 6.10(d)
|
Litigation Regarding Employee Benefit Plans | |
Section 6.11
|
Environmental Matters | |
Section 6.12(a)
|
Labor Matters | |
Section 6.12(b)
|
Labor Matters |
iv
Section 6.12(c)
|
Labor Matters | |
Section 6.13
|
Taxes | |
Section 6.14
|
Insurance | |
Section 8.2
|
Conduct of Business | |
Section 8.9
|
Bonds and Assurances | |
Section 9.2(b)
|
Severance Benefits | |
Section 9.3
|
Assumed Benefit Plans | |
Section 9.9
|
WARN Act | |
Section 11.3
|
Unions |
v
This SETTLEMENT AND PURCHASE AND SALE AGREEMENT (the “Agreement”), dated as of March 6, 2009
(the “Effective Date”), is entered into by and among ASARCO LLC, a Delaware limited liability
company (“ASARCO”); AR Silver ▇▇▇▇, Inc., a Delaware corporation (“ARSB”); Copper Basin Railway,
Inc., a Delaware corporation (“CBRI”); and ASARCO Santa ▇▇▇▇, Inc., a Delaware corporation (“Santa
▇▇▇▇”, together with ARSB and CBRI, “Non-Debtor Sellers”; ASARCO and Non-Debtor Sellers
collectively referred to herein as “Sellers”, and each individually, a “Seller”); and Sterlite
(USA), Inc., a Delaware corporation (“Purchaser”); and Sterlite Industries (India) Ltd, an Indian
limited liability company (“Guarantor”).
W I T N E S S E T H:
WHEREAS, ASARCO filed its voluntary petition for relief under chapter 11 of title 11 of the
United States Code (the “Bankruptcy Code”) on August 9, 2005;
WHEREAS, ASARCO owns 100% of the Equity Securities (as defined below) of each of the
Non-Debtor Sellers;
WHEREAS, the assets and liabilities of ASARCO are subject to the supervision and control of
ASARCO as debtor-in-possession subject and pursuant to the jurisdiction of the Bankruptcy Court (as
defined below);
WHEREAS, Sellers have determined that a prompt sale of the Purchased Assets (as defined below)
is necessary in order to preserve the value inherent in the Purchased Assets ultimately available
to the creditors of ASARCO;
WHEREAS, Sellers, Purchaser and Guarantor entered into that certain Purchase and Sale
Agreement, dated as of May 30, 2008 (the “Original PSA”), for the prompt sale of the Purchased
Assets by Sellers to Purchaser and such Original PSA was terminated by Sellers on October 22, 2008;
WHEREAS, notwithstanding the termination of the Original PSA, pursuant to Sections 363, 105(a)
and 1123(a)(5)(D) of the Bankruptcy Code and the applicable Federal Rules of Bankruptcy Procedure,
Sellers desire to sell to Purchaser, and Purchaser desires to purchase from Sellers, the Purchased
Assets on the terms and subject to the conditions contained in this Agreement; and
WHEREAS, in connection with the transactions contemplated hereby, Purchaser has delivered to
Sellers the Purchaser Opinion (as defined below) and Guarantor has delivered the Guarantor Opinion
(as defined below).
NOW, THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby,
the parties agree as follows:
1
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings
specified in this Section 1.1:
“Acquisition Proposal” means any proposal or offer for a merger, recapitalization, share
exchange, debt-for-equity exchange, distribution of securities for the benefit of the stakeholders
of ASARCO, consolidation or similar transaction involving a sale or purchase (directly or through a
proposed investment in equity securities, debt securities or claims of creditors) of all or
substantially all of the Purchased Assets or all or substantially all of the Equity Securities of
ASARCO or of the Non-Debtor Sellers, other than the transactions contemplated by the terms of this
Agreement. For the avoidance of doubt, an Acquisition Proposal does not include a proposal or
offer for a Stand-Alone Plan.
“Adjustment Amount” means, as of the date that a binding determination of the Closing Accounts
Amount has been made in accordance with Section 4.4, the product of (a) 1.6 multiplied by
(b) Agreed Working Capital minus the Closing Accounts Amount. In all cases, the Adjustment Amount
shall be expressed as a positive number.
“Affiliate” (and, with a correlative meaning “affiliated”) means, with respect to any Person,
(a) any other Person that directly, or through one or more intermediaries, controls or is
controlled by or is under common control with such Person or (b) any Subsidiary of such Person. As
used in this definition, “control” (including with correlative meanings, “controlled by” and “under
common control with”) means possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or partnership or
other ownership interests, by Contract or otherwise).
“Agreed Working Capital” means an amount equal to $253,000,000.00.
“Agreement” shall have the meaning set forth in the preamble hereto.
“Allocation” shall have the meaning set forth in Section 4.5.
“Ancillary Agreements” means the Assignment and Assumption Agreement, the ▇▇▇▇ of Sale, the
Transition Services Agreement, the Patent Assignment, the Trademark Assignment, the Deeds, the
Leasehold Deeds, the Mortgages, the Security Agreement and the other documents to be delivered in
connection therewith, Purchaser Promissory Note and the Assignment and Assumption of Ground Lease
Agreement.
“Applicable Law” means, with respect to any Person, any Law applicable to such Person or its
business, properties or assets.
“ARSB” shall have the meaning set forth in the preamble hereto.
“ASARCO” shall have the meaning set forth in the preamble hereto.
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“Asbestos Committee” means the official committee of unsecured creditors appointed for the Lac
d’Amiante du Québec Ltée (f/k/a Lake Asbestos of Quebec, Ltd.), Lake Asbestos of Quebec, Ltd.,
LAQ Canada, Ltd., CAPCO Pipe Company, Inc. (f/k/a Cement Asbestos Products Company) and Cement
Asbestos Products Company cases.
“Asbestos FCR” means Judge ▇▇▇▇▇▇ ▇. ▇▇▇▇, appointed by the Bankruptcy Court pursuant to
section 524(g) of the Bankruptcy Code to represent future asbestos-related claimants and any and
all Persons that may assert demands against ASARCO or any of its affiliated debtors but have not
presently done so.
“Asset Retirement Obligations” means those obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs.
“Assignment and Assumption Agreement” means an Assignment and Assumption Agreement among
Sellers and Purchaser, dated as of the Closing Date, substantially in the form of Exhibit A
hereto.
“Assignment and Assumption of Ground Lease Agreement” shall have the meaning set forth in
Section 5.2(d).
“Assumed Contracts” shall have the meaning set forth in Section 3.1(e).
“Assumed Environmental Liabilities” shall have the meaning set forth in Section
3.3(e).
“Assumed Liabilities” shall have the meaning set forth in Section 3.3.
“Assumed Pre-Petition Contracts” shall have the meaning set forth in Section 3.1(e).
“Assumption-Pending Pre-Petition Contracts” shall have the meaning set forth in Section
3.5(a).
“Back-Up Bid Agreement” shall have the meaning set forth in Section 8.10(f).
“Back-Up Bid Option” shall have the meaning set forth in Section 8.10(f).
“Bankruptcy Cases” means the chapter 11 cases commenced by ASARCO and its affiliated debtors
on or after August 9, 2005 (including any case commenced after the date of this Agreement), jointly
administered under Case No. 05-21207, but excluding the chapter 11 case commenced by Encycle/Texas,
Inc which was converted to a chapter 7 case.
“Bankruptcy Code” shall have the meaning set forth in the recitals hereto.
“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of
Texas, Corpus Christi Division or any other court having jurisdiction over the Bankruptcy Cases
from time to time.
3
“▇▇▇▇ of Sale” means a ▇▇▇▇ of Sale executed by Sellers, dated as of the Closing Date,
substantially in the form of Exhibit B hereto.
“Bonds” means (i) the $100,000,000 ASARCO Incorporated 7.875% Debentures due 2013; (ii) the
$150,000,000 ASARCO Incorporated 8.50% Debentures due 2025; (iii) the $71,900,000 Industrial
Development Authority of the County of Gila, Arizona Debentures due 2027; (iv) the $33,160,000
▇▇▇▇▇ and ▇▇▇▇▇ County, Montana Debentures due 2027; (v) the $27,740,000 Nueces River Authority
Debentures due 2027; (vi) the $34,800,000 ▇▇▇▇▇ & ▇▇▇▇▇ County, Montana Debentures due 2033; and
(vii) the $22,200,000 Nueces River Authority Debentures due 2018.
“Bonds and Assurances” shall have the meaning set forth in Section 8.9.
“Books and Records” means all books, records, data and files (in any form or medium, including
computerized or electronic) of the Business relating to the Purchased Assets including (i) all
books and records of account and other financial records (including Tax records or copies thereof);
(ii) all catalogues, brochures, advertising materials, forms of purchase orders, sales orders and
invoices and similar sales or marketing materials; (iii) all price lists, customer lists, supplier
lists, mailing lists and credit records; (iv) all manuals pertaining to software, products,
operations, research, development or maintenance; (v) all records or lists pertaining to supply,
production or distribution; (vi) all engineering reports and studies, environmental reports and
studies, surveys, engineering design plans, blueprints, or mine plans relating to Purchased Real
Property; (vii) operating records and operating, safety and maintenance manuals; and (viii) all
personnel records (including, personnel files, time and medical records) of all Transferred
Employees, personnel policies and procedures, labor relations records (including, all records
pertaining to collective bargaining, grievance files and settlements, arbitration decisions and
awards), and records relating to affirmative action plans, in each case, to the extent relating
specifically to the Purchased Assets, but excluding (A) any such items to the extent relating to
any Excluded Assets or Retained Liabilities, (B) any such items to the extent related or pertaining
to asbestos or asbestos-containing materials or products or to asbestos personal injury claims or
demands against Sellers, including claims which have been litigated, settled or otherwise dealt
with by Sellers or any one of the Sellers, and (C) bids, letters of intent, expressions of
interest, or other proposals received in connection with the transactions contemplated by the
Original PSA, this Agreement or any of the Ancillary Agreements or otherwise and information and
analyses relating to such communications (such items described in (A) through (C), the “Retained
Books and Records”).
“Business” means the business of mining, smelting and refining of copper and other metals as
conducted by Sellers on the date of this Agreement.
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by Law to close. Any event the scheduled
occurrence of which would fall on a day that is not a Business Day shall be deferred until the next
succeeding Business Day.
“Cash” shall have the meaning set forth in Section 3.2(a).
4
“Casualty” shall have the meaning set forth in Section 8.11.
“CBRI” shall have the meaning set forth in the preamble hereto.
“CFIUS” shall have the meaning set forth in Section 8.3(d).
“CFIUS Notice” shall have the meaning set forth in Section 8.3(d).
“Closing” shall have the meaning set forth in Section 5.1.
“Closing Accounts Amount” shall have the meaning set forth in Exhibit E hereto.
“Closing Accounts Statement” shall have the meaning set forth in Section 4.3(a).
“Closing Date” means the date on which the Closing occurs.
“Closing Payment” shall have the meaning set forth in Section 4.1.
“Coal Act” means the Coal Industry Retiree Health Benefit Act of 1992, as amended.
“COBRA” shall have the meaning set forth in Section 9.6(b).
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Collective Bargaining Agreements” means all collective bargaining agreements between ASARCO
and its Subsidiaries and any labor union or other representative of current ASARCO employees
(including material local agreements, amendments, supplements, letters and memoranda of
understanding of any kind) in effect on the Closing Date.
“Committee” shall mean the official committee of unsecured creditors of ASARCO appointed in
connection with the Bankruptcy Cases.
“Confidentiality Agreement” shall have the meaning set forth in Section 8.5.
“Confirmation Deadline” shall have the meaning set forth in Section 13.1(b).
“Contract” means any written contract, indenture, note, bond, loan, instrument, lease,
commitment or other agreement.
“Creditor Constituents” means the Committee, the Asbestos Committee, the Asbestos FCR, the
United States Department of Justice, the United Steel Workers Union, and the States of Washington,
Montana, Missouri, Arizona and Texas.
“Cure Claims” means all defaults as of the Closing Date, as determined by the Bankruptcy
Court, and all actual or pecuniary losses that have resulted therefrom and are necessary to cure
such defaults under any Assumption-Pending Pre-Petition Contract.
5
“Deeds” shall have the meaning set forth in Section 5.2(c).
“Deemed Value” means, in respect of the Purchase Price or a Superior Proposal, the aggregate
dollar value to Sellers of all cash and non-cash (as applicable) consideration comprising the
Purchase Price or Superior Proposal, as applicable, as determined by the Board of Directors of
ASARCO after consultation with its financial and legal advisors, the Creditor Constituents and such
other advisors as the Board of Directors of ASARCO chooses, in its sole discretion, to consult.
“Definitive Agreement” means a binding definitive written agreement, enforceable against the
parties thereto, that effects the consummation of a Superior Proposal. A Definitive Agreement does
not include an executed letter of intent or any other preliminary written agreement, nor does it
include any oral or written agreement in principle or acceptance of an offer or bid by any Person.
“Deposit” shall have the meaning set forth in Section 4.2.
“Disclosure Statement” means the disclosure statement relating to the Plan to be filed after
the date hereof by ASARCO with the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy Code
(including all schedules and exhibits thereto), as such disclosure statement may be amended or
modified from time to time, that, to the extent it describes this Agreement, Purchaser (and
Guarantor) and the transactions contemplated hereby, is in form and substance reasonably
satisfactory to Purchaser.
“Disclosure Statement Approval Date” means the date on which the Disclosure Statement shall
have been approved by the Bankruptcy Court.
“Effective Date” shall have the meaning set forth in the preamble hereto.
“Effective Order” means a Plan Confirmation Order entered by the Bankruptcy Court or the
United States District Court that has jurisdiction over the Bankruptcy Cases: (a) which the time to
appeal or seek certiorari, review, reargument, stay or rehearing has expired or has been waived; or
(b) as to which an appeal, petition for certiorari, review, reargument, stay or rehearing has been
filed, but no stay of the Plan Confirmation Order has been granted or is in effect (and no request
for such stay is pending); provided, that no order or judgment shall fail to be an “Effective
Order” solely because of the possibility that a motion pursuant to section 502(j) or 1144 of the Bankruptcy Code,
Rule 59 or 60 of the Federal Rules of Civil Procedure or Rule 9024 of the Federal Rules of
Bankruptcy Procedure may be filed with respect to such order or judgment.
“Employees” shall have the meaning set forth in Section 9.1(a).
“Enforceability Exceptions” means, with reference to the enforcement of the terms and
provisions of this Agreement or any other Contract, that the enforcement thereof is or may be
subject to the effect of (i) applicable bankruptcy, receivership, insolvency, reorganization,
moratorium, fraudulent conveyance, fraudulent transfer and other similar laws relating to or
affecting the enforcement of the rights and remedies of creditors or parties to
6
executory contracts
generally; (ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and the exercise of equitable powers by a court of
competent jurisdiction; and (iii) Applicable Law or public policy limiting the enforcement of
provisions providing for the indemnification of any Person.
“Environmental Claims” means any and all actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, notices of liability or potential liability,
investigations, proceedings, consent orders or consent agreements relating in any way to any
Environmental Law, any Environmental Permit or any Hazardous Materials.
“Environmental Law” means any Law pertaining to health, industrial hygiene, public safety,
occupational safety, mining, mine reclamation, natural or cultural resources, fish, wildlife or
other protected species or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601, et. seq.); the
Resource, Conservation and Recovery Act of 1976 (42 U.S.C. § 6901, et. seq.); the Toxic Substances
Control Act (15 U.S.C. § 2601, et. seq.); the Clean Water Act (33 U.S.C. § 1251, et. seq.); the Oil
Pollution Act of 1990 (33 U.S.C. § 2701, et. seq.); the Clean Air Act (42 U.S.C. § 7401, et. seq.);
the Atomic Energy Act (42 U.S.C. § 2011, et. seq.); the Hazardous Materials Transportation Act (49
U.S.C. § 5101, et. seq.); the Emergency Planning and Community Right-To-Know Act (42 U.S.C. 11001,
et. seq.); the Endangered Species Act of 1973 (16 ▇.▇.▇. §▇▇▇▇, et. seq.); the Federal Land Policy
and Management Act of 1976 (43 U.S.C. § 1701, et. seq.); the Lead-Based Paint Exposure Reduction
Act (15 U.S.C. § 2681, et. seq.); the Safe Water Drinking Act Amendments of 1996 (42 U.S.C. § 300);
the National Historic Preservation Act of 1966; the Mine Safety and Health Act (30 U.S.C. 801 et
seq.); the Surface Mining Control and Reclamation Act (30 U.S.C. 1201 et seq.) and state and local
counterparts of each of the foregoing.
“Environmental Permit” means any Permit required under any applicable Environmental Law.
“Equity Securities” means (i) with respect to any corporation, all shares, interests,
participations or other equivalents of capital stock of such corporation (however
designated), and any warrants, options or other rights to purchase or acquire any such capital
stock and any securities convertible into or exchangeable or exercisable for any such capital
stock, (ii) with respect to any partnership, all partnership interests, participations or other
equivalents of partnership interests of such partnership (however designated), and any warrants,
options or other rights to purchase or acquire any such partnership interests and any securities
convertible into or exchangeable or exercisable for any such partnership interests and (iii) with
respect to any limited liability company, all membership interests, participations or other
equivalents of membership interests of such limited liability company (however designated), and any
warrants, options or other rights to purchase or acquire any such membership interests and any
securities convertible into or exchangeable or exercisable for any such membership interests.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Arrangements” shall have the meaning set forth in Exhibit E.
7
“Excluded Assets” shall have the meaning set forth in Section 3.2.
“Excluded Payables” means all accounts payable (trade and other) of any Seller on the Closing
Date arising out of the Retained Liabilities or owing to any Affiliate of any Seller (other than
trade payables owing to Silver ▇▇▇▇).
“Excluded Receivables” shall have the meaning set forth in Section 3.2(l).
“Exon-▇▇▇▇▇▇ Provision” shall have the meaning set forth in Section 8.3(d).
“Final Arbiter” shall have the meaning set forth in Section 4.4(d).
“Financial Statements” shall have the meaning set forth in Section 6.4.
“First L/C” shall have the meaning set forth in Section 4.2(a).
“GAAP” means generally accepted accounting principles as in effect from time to time in the
United States.
“Governmental Authority” means any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, foreign or domestic,
including any governmental authority, agency, department, board, commission or instrumentality of
the United States or other country, any state, province, tribal authority or any political
subdivision of any of the foregoing, and any tribunal, court, arbitrator(s) or other private
adjudicator whose decisions are binding of competent jurisdiction, and shall include the Bankruptcy
Court.
“Grupo” means Grupo Mexico S.A.B. de C.V. and its subsidiaries or Affiliates other than ASARCO
and any subsidiary or affiliate owned or controlled by ASARCO.
“Guarantor” shall have the meaning set forth in the preamble hereto.
“Guarantor Opinion” means the opinion of counsel to Guarantor attached as Exhibit C-2
hereto, delivered to Sellers in connection with the execution and delivery of this Agreement.
“Hayden Settlement Agreement” means the Administrative Settlement Agreement and Order on
Consent for Removal Action, U.S. EPA Region IX, CERCLA Docket No. 2008-09, and the Administrative
Settlement Agreement and Order on Consent for Removal Action, U.S. EPA Region IX, CERCLA Docket No.
2008-13, by and among the U.S. Environmental Protection Agency, the Arizona Department of
Environmental Quality and ASARCO.
“Hazardous Materials” means any substance, material, pollutant, contaminant, waste, or special
waste, whether solid, liquid or gaseous, that is infectious, toxic, hazardous, explosive,
corrosive, flammable or radioactive or which is defined, designated, listed, regulated or included
in any Environmental Law, including asbestos or asbestos-containing material, petroleum or
petroleum additive substances, polychlorinated biphenyls or sewage.
8
“HSR Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder.
“Included Payables” shall have the meaning set forth in Exhibit E hereto.
“Included Receivables” shall have the meaning set forth in Exhibit E hereto.
“Inventory” means the inventories of raw materials, in-process and finished products of the
Business, including, supplies, materials and spare parts but excluding, to the extent owned by a
Seller, materials provided to a Seller pursuant to Tolling Arrangements or Exchange Arrangements.
“Inventory Amount” shall have the meaning set forth in Exhibit E hereto.
“Judgment Currency” shall have the meaning set forth in Section 14.1(g).
“Law” means any federal, tribal, state or local or provincial law (including common law),
statute, code, ordinance, rule, regulation, executive order, Order, administrative or judicial
decision, judgment or decree or other requirement enacted, promulgated, issued or entered by a
Governmental Authority.
“Leasehold Deeds” shall have the meaning set forth in Section 5.2(d).
“Leasehold Property” shall have the meaning set forth in Section 3.1(e)(i).
“Legal Proceeding” means any action, claim, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority of any nature, civil, criminal, regulatory or
otherwise, in law or in equity.
“Letters of Credit” shall have the meaning set forth in Section 4.2(c).
“Liabilities” means any and all debts, losses, liabilities, claims (including claims as
defined in the Bankruptcy Code), damages, demands under Section 524(g) of the Bankruptcy Code,
expenses, fines, costs, royalties, proceedings, deficiencies or obligations (including those
arising out of any Legal Proceeding, such as any settlement or compromise thereof or judgment or
award therein), of any nature, whether known or unknown, absolute, accrued, contingent or otherwise
and whether due or to become due, and whether or not resulting from third party claims, and any
reasonable out-of-pocket costs and expenses (including reasonable legal counsels’, accountants’, or
other fees and expenses incurred in defending any Legal Proceeding or in investigating any of the
same or in asserting any rights hereunder).
“Lien” means any lien, pledge, mortgage, deed of trust, security interest, attachment, levy or
other encumbrance affecting title.
“Manipulative Breach” means an intentional and willful material breach by ASARCO of its
obligations under Sections 8.2(d) (but only as it relates to Purchased Assets other than
Inventory or Included Receivables), 8.7(a), (b) and (d) or 8.10(b)
and (d) that gives rise to a termination right pursuant to Section 13.1(j) and such
act or omission giving rise to such
9
breach was performed with the intent to materially breach this
Agreement and to prevent the Closing hereunder, as determined by the Bankruptcy Court, after notice
and opportunity to be heard, which may be on an expedited basis.
“Matching/Topping Right” shall have the meaning set forth in Section 8.10(e).
“Material Contracts” shall have the meaning set forth in Section 6.8(a).
“Mission Mine Settlement Agreement” means that certain Settlement Agreement between the United
States of America, ASARCO, the Tohono ▇’▇▇▇▇▇ Nation, the San Xavier Allottee’s Association, and
the San Xavier District.
“Mortgages” shall have the meaning set forth in Section 5.3(k).
“Negotiation Period” shall have the meaning set forth in Section 4.4(b).
“Non-Debtor Contracts” shall have the meaning set forth in Section 3.1(e).
“Non-Debtor Sellers” shall have the meaning set forth in the preamble hereto.
“Non-Target Properties” means all real property that is not (i) a Real Property or (ii) a
Silver ▇▇▇▇ Property.
“Non-Union Employees” shall have the meaning set forth in Section 9.1(a).
“Non-US Taxing Jurisdiction” shall have the meaning set forth in Section 14.1(h).
“Objection Date” shall have the meaning set forth in Section 4.4(a).
“Objection Notice” shall have the meaning set forth in Section 4.4(a).
“Obligations” shall have the meaning set forth in Section 14.1(a).
“Obligations Currency” shall have the meaning set forth in Section 14.1(g).
“Order” means any final and non-appealable order, injunction, judgment, stipulation, decree,
ruling, writ, assessment or arbitration award issued by a Governmental Authority or any legally
binding and enforceable conciliation or settlement agreement with any Governmental Authority.
“Ordinary Course of Business” means the ordinary conduct of business of Sellers, taken as a
whole, relating to the Business, either (i) consistent with past practice during the pendency of
and, as applicable, taking into account the Bankruptcy Cases, or (ii) consistent with reasonably
prudent management of the Business (as determined by the Board in its business judgment) in
response to economic and industry conditions.
10
“Organizational Documents” means (i) in the case of any Person organized as a corporation, the
certificate or articles of incorporation of such corporation (or, if applicable, the memorandum and
articles of association of such corporation) and the bylaws of such corporation, (ii) in the case
of any Person organized as a limited liability company, the certificate of formation or
organization and the limited liability company agreement, operating agreement or regulations of
such limited liability company, (iii) in the case of any Person organized as a limited partnership,
the certificate of limited partnership and partnership agreement of such limited partnership and
(iv) in the case of any other Person, all constitutive or organizational documents of such Person
which address all matters relating to the business and affairs of such Person similar to the
matters addressed by the documents referred to in clauses (i) through (iii) above in the case of
Persons organized as corporations, limited liability companies or limited partnerships.
“Original PSA” shall have the meaning set forth in the recitals hereto.
“OSHA” means the Occupational Safety and Health Act of 1970, as amended.
“Patent Assignment” shall have the meaning set forth in Section 5.2(j).
“Patents” means issued United States and foreign patents and pending patent applications.
“Pension Plan” shall have the meaning set forth in Section 6.10(b).
“Periodic Taxes” shall have the meaning set forth in Section 10.2.
“Permits” means any approvals, authorizations, consents, licenses, permits or certificates.
“Permitted Liens” means (i) all Liens set forth in Section 1.1A of the Seller
Disclosure Schedule, (ii) statutory Liens for current taxes, assessments or other governmental
charges not yet delinquent or the amount or validity of which is being contested in good faith by
appropriate proceedings, to the extent that a reserve has been established therefor or such amount
has been deposited with the appropriate Governmental Authority or other adjudicating Person, (iii)
mechanic’s, materialman’s, warehouseman’s, carrier’s and similar liens for labor, materials or
supplies, as would not reasonably be expected to have, individually or in the aggregate, a Seller
Material Adverse Effect, (iv) purchase money security interests arising in the Ordinary Course of
Business, (v) any Lien arising out of a Tolling Arrangement or Exchange Arrangement, to the extent
not arising out of a breach of such Tolling Arrangement or Exchange Arrangement, (vi) rights of
landlords in respect of any Leasehold Property where the applicable lease is not in default, (vii)
any Lien that, pursuant to Section 363(f) of the Bankruptcy Code, will be released upon entry of
the Plan Confirmation Order; and (viii) such other Liens as would not reasonably be expected to
have, individually or in the aggregate, a Seller Material Adverse Effect.
“Person” means any natural person, corporation, limited partnership, limited liability
company, general partnership, joint stock company, joint venture, association, company,
11
trust,
bank, trust company, land trust, business trust or other organization, whether or not a legal
entity, and any Governmental Authority.
“Plan” means the plan of reorganization prepared by ASARCO and filed after the date hereof
with the Bankruptcy Court as (or intended to be) confirmed by the Plan Confirmation Order that
contains terms and conditions, that to the extent they relate to this Agreement, Purchaser,
Guarantor and the transactions contemplated hereunder, are reasonably satisfactory to Purchaser.
“Plan Confirmation Order” means an order of the Bankruptcy Court or the United States District
Court that has jurisdiction over the Bankruptcy Cases, that, to the extent the order relates to
this Agreement, Purchaser (and Guarantor) or the transactions contemplated hereunder is reasonably
satisfactory to Purchaser, and in a form acceptable to Sellers in all respects, approving this
Agreement and all of the terms and conditions hereof, and approving and authorizing Sellers to
consummate the transactions contemplated hereby, including the transfer of the Purchased Assets to
Purchaser. The Plan Confirmation Order shall find and provide, among other things, that (i) the
transfer of the Purchased Assets by Sellers to Purchaser pursuant to this Agreement (A) will be
legal, valid and effective transfers of the Purchased Assets; (B) will vest Purchaser with all
right, title and interest of Sellers in and to the Purchased Assets, free and clear of any Liens,
claims, interests and encumbrances, other than Permitted Liens and the Assumed Liabilities,
pursuant to Section 363(f) of the Bankruptcy Code (including any right of setoff, recoupment,
netting or deduction); (C) constitute transfers for reasonably equivalent value and fair
consideration under the Bankruptcy Code and under Applicable Law; and (D) qualifies for exemption
under section 1146(c) of the Bankruptcy Code such that Transaction Taxes will be exempted pursuant
to, and to the fullest extent allowed by, Section 1146(c) of the Bankruptcy Code; (ii) the
transactions contemplated by this Agreement are undertaken by Purchaser and ASARCO at arm’s length,
without collusion and in good faith within the meaning of Section 363(m) of the Bankruptcy Code;
(iii) ASARCO has complied with the notice requirements of Rules 2002, 6004, 6006 and 9014 of the
Federal Rules of Bankruptcy Procedure and any applicable rules of the Bankruptcy Court with respect
to the transactions contemplated by this Agreement, the Ancillary Agreements and by all other
agreements, documents and instruments contemplated in connection with this Agreement; (iv) ASARCO
has satisfied all of the requirements of, and are authorized pursuant to, Section 363(b) and (f) of
the Bankruptcy Code to enter into this Agreement and to consummate the transactions contemplated
hereby; and (v) present and future asbestos claims and demands are enjoined from being asserted
against ASARCO; ASARCO’s officers, directors and Subsidiaries; Purchaser, Guarantor and the
Purchased Assets (and against any officer, director, Affiliate or assets of Purchaser or Guarantor)
pursuant to a channeling injunction issued in compliance with Section 524(g) of the Bankruptcy
Code.
“Pre-Petition Contracts” shall have the meaning set forth in Section 3.1(e).
“Post-Petition Contracts” shall have the meaning set forth in Section 3.1(e).
“Proprietary Software” shall have the meaning set forth in Section 3.1(i).
“Proration Periods” shall have the meaning set forth in Section 10.2.
12
“Purchase Price” shall have the meaning set forth in Section 4.1.
“Purchased Assets” shall have the meaning set forth in Section 3.1.
“Purchased Real Property” shall have the meaning set forth in Section 3.1(c).
“Purchaser” shall have the meaning set forth in the preamble hereto.
“Purchaser Bad Faith Event” shall have the meaning set forth in Section 13.2(c).
“Purchaser Breach” shall have the meaning set forth in Section 4.2(e).
“Purchaser Claims” shall have the meaning set forth in Section 2.1(b).
“Purchaser Opinion” means an opinion of counsel to Purchaser delivered to Sellers in
connection with the execution and delivery of this Agreement attached as Exhibit C-1
hereto.
“Purchaser Promissory Note” means a promissory note in the principal amount of $600,000,000.00
(as adjusted pursuant to
Section 4.3(c) herein and Section 2.7 therein) issued at Closing by Purchaser to ASARCO Administration Company LLC (or such other Person as ASARCO may designate in accordance with the Plan) in the form of Exhibit D hereto.
Section 4.3(c) herein and Section 2.7 therein) issued at Closing by Purchaser to ASARCO Administration Company LLC (or such other Person as ASARCO may designate in accordance with the Plan) in the form of Exhibit D hereto.
“Purchaser Released Parties” shall have the meaning set forth in Section 2.1(a).
“Purchaser Releasing Party” shall have the meaning set forth in Section 2.1(b).
“Qualified Bank” means ABN AMRO Bank N.V., Chicago or any commercial bank with a rating of at
least A+ (S&P) and Aa2 (▇▇▇▇▇’▇) (except that if a bank is only rated by either S&P or ▇▇▇▇▇’▇ and
not both, such bank must have the minimum rating by either S&P or ▇▇▇▇▇’▇, as applicable) that is
organized or domiciled in the United States of America and that is reasonably satisfactory to
Sellers.
“Real Property” shall have the meaning set forth in Section 3.1(e)(i).
“Release” means disposing, discharging, injecting, spilling, leaking, leaching, dumping,
emitting, escaping, emptying, seeping, placing and the like into or upon any land or water or air
or otherwise entering into the environment.
“Release Conditions” shall have the meaning set forth in Section 2.1(c).
“Remedial Action” means all action to (a) investigate, clean up, remove, treat or handle in
any other way Hazardous Materials in the environment; (b) restore or reclaim the environment or
natural resources; (c) prevent the Release of Hazardous Materials so that they do not migrate,
endanger or threaten to endanger public health or the environment; or (d) perform remedial
investigations, feasibility studies, corrective actions, closures and post-remedial or post-closure
studies, investigations, operations, maintenance and monitoring on, about or in any Real Property.
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“Representatives” shall have the meaning set forth in Section 8.10(a)(ii).
“Retained Books and Records” shall have the meaning set forth in the definition of Books and
Records.
“Retained Liabilities” shall have the meaning set forth in Section 3.4.
“Santa ▇▇▇▇” shall have the meaning set forth in the preamble hereto.
“Santa ▇▇▇▇ ▇▇ Agreement” means the Santa ▇▇▇▇ Joint Venture Agreement, dated as of July 1,
1977, between Freeport Copper Company and Santa ▇▇▇▇, as amended, and as modified by that certain
Modification Agreement, dated as of April 11, 1990, among FCC, Freeport-McMoRan Inc., ASARCO Santa
▇▇▇▇ and ASARCO Incorporated, as further modified and amended.
“Second L/C” shall have the meaning set forth in Section 4.2(b).
“Securities Act” shall have the meaning set forth in Section 7.5.
“Security Agreement” means the Security Agreement, dated as of the Closing Date, between
Purchaser and ASARCO substantially in the form of Exhibit L hereto.
“Seller Claims” shall have the meaning set forth in Section 2.1(a).
“Seller Data Room” means the online IntraLinks data room set up by Sellers.
“Seller Disclosure Schedule” means the Disclosure Schedule delivered to Purchaser pursuant to
this Agreement.
“Seller Employee Benefit Plan” means each “employee pension benefit plan” (as defined in
Section 3(2) of ERISA), “employee welfare benefit plan” (as defined in Section 3(1) of ERISA),
stock option, stock purchase, stock appreciation right, incentive, deferred compensation plan or
arrangement, and other employee fringe benefit plan or arrangement maintained, contributed to or required to be maintained or contributed to
by Sellers or with respect to which any of Sellers or their Affiliates have any obligation or
liability.
“Seller Material Adverse Effect” means (a) a material adverse effect on the financial
condition of the Business (to the extent related to the Purchased Assets and Assumed Liabilities)
or the condition of the Purchased Assets, taken as a whole, or (b) any change, circumstance or
event that, individually or in the aggregate, would materially hinder or materially and adversely
affect Sellers’ ability to consummate the transactions contemplated by this Agreement, excluding,
in each case, any such effect, change, circumstance or event attributable to or resulting from (i)
the announcement, pendency or consummation of this Agreement, the sale of the Purchased Assets or
any other action by Sellers or its Affiliates required or expressly contemplated by this Agreement,
(ii) the conversion or dismissal of any Bankruptcy Case or the filing of additional petitions under
Chapter 11 of the Bankruptcy Code by or involving any of Sellers’ Affiliates, (iii) any outbreak of
hostility, terrorist activities or war, (iv) any changes in general economic (including changes in
the securities markets, commodity
14
prices or foreign exchange rates), political or regulatory
conditions generally, (v) any changes in economic, political or regulatory conditions in the mining
or smelting industries or other industries in which Sellers operate, (vi) any change in Applicable
Law or accounting regulations or interpretations thereof by any court, accounting regulatory
authority or other Governmental Authority, (vii) any action or omission of any Seller taken in
accordance with the terms of this Agreement or with the prior written consent of Purchaser, (viii)
any failure by any Seller to meet any projections, budgets, plans or forecasts (but not excluding
the underlying cause of such failure to meet projections, budgets, plans or forecasts) or (ix) any
expenses incurred by any Seller in the Ordinary Course of Business or in connection with this
Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby; provided,
however, that in the case of clauses (iv), (v) and (vi), such changes do not affect Sellers in a
materially disproportionate manner compared to other businesses conducting a business substantially
similar to the Business of Sellers. Any determination as to whether any condition or other matter
has a Seller Material Adverse Effect shall be made only after taking into account all proceeds or
amounts that are expected to be received by Purchaser with respect to such condition or matter from
insurance policies.
“Seller Released Parties” shall have the meaning set forth in Section 2.1(b).
“Seller Releasing Party” shall have the meaning set forth in Section 2.1(a).
“Sellers” shall have the meaning set forth in the preamble hereto.
“Sellers’ Accountants” means ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or such other
firm of independent accountants that ASARCO’s Board of Directors may approve and appoint to audit
Sellers’ financial statements.
“Sellers’ Knowledge” means the actual knowledge, without any requirement of inquiry or
investigation, of any of the individuals listed in Section 1.1B of the Seller Disclosure
Schedule.
“Silver ▇▇▇▇” means Silver ▇▇▇▇ Mining, L.L.C., a Delaware limited liability company.
“Silver ▇▇▇▇ Interests” shall have the meaning set forth in Section 3.1(h).
“Silver ▇▇▇▇ LLC Agreement” means that certain Membership Interest Agreement, dated February
5, 1996, among Ginrei, Inc., MSB Copper Corp. and ARSB, as amended, as located in section 2.05.04
of the Seller Data Room.
“Silver ▇▇▇▇ Property” means all real property owned or leased by Silver ▇▇▇▇.
“Stand-Alone Plan” means a plan of reorganization sponsored by a Person other than Purchaser
or Guarantor which the Board of Directors of ASARCO determines (after consultation with its legal
and financial advisors and the Creditor Constituents) in good faith would, if consummated and
taking into account all factors deemed relevant by the Board of Directors of ASARCO, be more
favorable to ASARCO and its stakeholders than the transactions
15
contemplated by this Agreement;
provided, however, that, for purposes of the stand-alone plan proposal only, any costs or benefits
of any claims which may be made against Purchaser or Guarantor under the Original PSA shall be
excluded from the analysis of such stand-alone plan.
“Sterlite Agreed Order” shall have the meaning set forth in Section
2.2.
“Sterlite Settlement Motion” shall have the meaning set forth in Section
2.2.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company,
joint venture or partnership of which such Person (a) beneficially owns, either directly or
indirectly, more than 50% of (i) the total combined voting power of all classes of voting
securities of such entity, (ii) the total combined equity interests, or (iii) the capital or profit
interests, in the case of a partnership; or (b) otherwise has the power to vote or to direct the
voting of sufficient securities to elect a majority of the board of directors or similar governing
body.
“Superior Proposal” means a bona fide written Acquisition Proposal that the Board of Directors
of ASARCO determines (after consultation with its legal and financial advisors) in good faith (i)
is reasonably likely to be consummated in a timely manner, taking into account all factors deemed
relevant by the Board of Directors of ASARCO (including all legal, financial and regulatory aspects
of the proposal and the Person making the proposal), (ii) if consummated would, taking into account
all factors deemed relevant by the Board of Directors of ASARCO (including the amounts that would
be owed to Purchaser under Section 13.2(b)(v) (if any) and if, and only to the extent,
this Agreement has not been terminated prior to the execution of a Definitive Agreement in respect of such Acquisition Proposal, the costs reasonably likely to be incurred
in connection with the negotiation of an Acquisition Proposal), result in a transaction more
favorable to ASARCO and its stakeholders than the transactions contemplated by this Agreement and
(iii) provides a Deemed Value to ASARCO and its bankruptcy estate that exceeds, by the Superior
Proposal Threshold, the Deemed Value of this Agreement and the transactions contemplated hereby;
provided, however, that, in the case of each of the foregoing clauses, for purposes of the
Acquisition Proposal only, any costs or benefits of any claims which may be made against Purchaser
or Guarantor under the Original PSA shall be excluded from the analysis of such Acquisition
Proposal.
“Superior Proposal Threshold” means $25,000,000 plus the amount that would be owed to
Purchaser under Section 13.2(b)(v) (if anything) following termination of this Agreement.
“Suppliers” shall have the meaning set forth in Section 6.9.
“Survey” shall have the meaning set forth in Section 8.8.
“Tax” means any (a) federal, state, provincial, territorial, municipal, local or foreign
income, profits, franchise, gross receipts, customs, duties, net worth, sales, use, goods and
services, gross receipts, withholding, value added, ad valorem, employment, social security,
disability, occupation, pension, real property, personal property (tangible and intangible), stamp,
duty, stamp duty, transfer, conveyance, severance, production, excise and other taxes,
16
withholdings, duties, levies, imposts and other similar charges and assessments (including any and
all fines, penalties and additions attributable to or otherwise imposed on or with respect to any
such taxes, charges, fees, levies or other assessments, and interest thereon) imposed by or on
behalf of any Taxing Authority, and (b) liability for the payment of any Tax (i) as a result of
being a member of a consolidated, combined, unitary or affiliated group that includes any other
Person, (ii) by reason of any obligation to indemnify or otherwise assume or succeed to the
liability of any other Person for Taxes, including, a Tax sharing, Tax indemnity or similar
agreement, or (iii) by reason of transferee or successor liability.
“Tax Return” means any return, report, declaration, election, statement, information return or
other document required to be filed with any Taxing Authority with respect to Taxes, including any
amendments thereof.
“Taxing Authority” means any Governmental Authority exercising any authority to impose,
regulate, levy, assess or administer the imposition of any Tax.
“Termination Date” shall have the meaning set forth in Section 13.1(c).
“Third L/C” shall have the meaning set forth in Section 4.2(c).
“Title Company” shall have the meaning set forth in Section 8.8.
“Title Policy” shall have the meaning set forth in Section 8.8.
“Title Report” shall have the meaning set forth in Section 8.8.
“Tolling Arrangements” means those commercial arrangements between ASARCO and certain third
parties pursuant to which ASARCO agrees to receive raw materials from such third parties for toll
conversion and return certain finished products to such third parties.
“Trademark Assignment” shall have the meaning set forth in Section 5.2(k).
“Trademarks” means United States, state and foreign trademarks, service marks, trade names and
logos and all applications to register the foregoing.
“Transaction Taxes” shall have the meaning set forth in Section 10.1.
“Transferred Employees” shall have the meaning set forth in Section 9.1(a).
“Transition Services Agreement” means the Transition Services Agreement, dated as of the
Closing Date, between Purchaser and ASARCO, to be negotiated in accordance with Section
8.14, which will include, among other things, the services and terms described in Exhibit
K hereto.
“Union Employees” shall have the meaning set forth in Section 9.1(a).
17
“Unions” means those unions listed in Section 11.3 of the Seller Disclosure Schedule.
“Unpaid Cure Claims Amount” means, with respect to any Assumption-Pending Pre-Petition
Contract, the aggregate amount of any Cure Claims that remains unpaid as of the Closing Date for
any reason, provided that if such amount remains disputed as of such date, the “Unpaid Cure
Claims Amount” shall be such amount as is asserted by the non-debtor counterparty to such Contract.
“WARN Act” shall have the meaning set forth in Section 9.9.
1.2
Other Terms. Other terms may be defined elsewhere in this Agreement and, unless otherwise
indicated, shall have such meaning throughout this Agreement.
1.3
Certain Rules of Construction. Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa. In addition, as used in
this Agreement, unless otherwise provided to the contrary, (a) all references to days, months or
years shall be deemed references to calendar days, months or years or (b) any reference to a
“Section,” “Article” or “Exhibit” shall be deemed to refer to a section or article of this
Agreement, a Disclosure Schedule or an exhibit attached to this Agreement. Unless the context
otherwise requires, the words “hereof,” “herein,” and “hereunder” and words of similar import
referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.
The words “include,” “includes,” or “including” shall be deemed to be followed by the words
“without limitation.” Unless otherwise specifically provided for herein, the term “or” shall not
be deemed to be exclusive. All references to dollar amounts are to the lawful currency of the
United States of America. A reference to any Law shall include all modifications, amendments and
re-enactments thereof.
ARTICLE II
SETTLEMENT AND RELEASE
SETTLEMENT AND RELEASE
2.1
Settlement and Release.
(a) Effective only if and when a Release Condition occurs, each Seller, on behalf of itself
and its successors, assigns, Representatives and Subsidiaries (each, a “Seller Releasing Party”),
will fully and forever irrevocably and unconditionally release and discharge each of Purchaser and
Guarantor and its successors, permitted assigns, Representatives and Affiliates (each a “Purchaser
Released Party” and collectively, “Purchaser Released Parties”) from any and all Liabilities both
at law and in equity which a Seller Releasing Party has, has ever had, or may hereafter have
against any Purchaser Released Party arising out of the Original PSA (collectively, the “Seller
Claims”). No release is made by any Seller Releasing Party unless and until a Release Condition
occurs and unless and until a Release Condition occurs all of the Seller Claims against each of
Purchaser and Guarantor shall remain fully enforceable. If no Release Condition occurs, the
release contained in this Section 2.1(a) shall not become operational or effective.
18
(b) Effective only if and when a Release Condition occurs, each of Purchaser and Guarantor, on
behalf of itself and its successors, assigns, Representatives and Subsidiaries (each, a “Purchaser
Releasing Party”), will fully and forever irrevocably and unconditionally release and discharge
each Seller and its successors, assigns, Representatives and Affiliates (each a “Seller Released
Party” and collectively, “Seller Released Parties”) from any and all Liabilities both at law and in
equity which a Purchaser Releasing Party has, has ever had, or may hereafter have against any
Seller Released Party arising out of the Original PSA (collectively, “Purchaser Claims”). No
release is made by any Purchaser Releasing Party unless and until a Release Condition occurs and
unless and until a Release Condition occurs all of the Purchaser Claims against Sellers shall
remain fully enforceable. If no Release Condition occurs, the release contained in this
Section 2.1(b) shall not become operational or effective.
(c) For purposes of this Agreement, a “Release Condition” means the occurrence after the entry
of the Sterlite Agreed Order by the Bankruptcy Court of any of the following: (i) the Closing
hereunder prior to or on the Termination Date; (ii) both (A) the termination of this Agreement
pursuant to Section 13.1(d) due to the Bankruptcy Court’s approval of a Superior Proposal
that is evidenced by a Definitive Agreement duly executed by all parties thereto and (B) subsequent
to such termination, the consummation by ASARCO and a Person other than Purchaser or Guarantor (or
any of their respective Affiliates) of such Superior Proposal; (iii) both (A) the termination of
this Agreement pursuant to Section 13.1(e) due to the Bankruptcy Court’s approval of a Stand-Alone
Plan approved and supported by the Board of Directors of ASARCO and (B) subsequent to such
termination, the consummation of such Stand-Alone Plan; (iv) both (A) the termination of this
Agreement pursuant to Section 13.1(b), (c), (f), (g),
(h)(ii), (j) or (m), and (B) subsequent to such termination, the
consummation by ASARCO and a Person other than Purchaser or Guarantor (or any of their respective
Affiliates) of a Superior Proposal; provided, that a Definitive Agreement for such Superior
Proposal is duly executed by all parties thereto no later than the 180th day following such
termination; or (v) the termination of this Agreement by Purchaser pursuant to Section
13.1(j) upon the occurrence of a Manipulative Breach; provided, however, that, with respect to
the foregoing clauses (ii), (iii), (iv) and (v), in no event shall a Release Condition be deemed to
have occurred if any Purchaser Bad Faith Event has occurred. For purposes of this Article
II and Section 13.2(b)(v), the Board of Directors of ASARCO shall make its
determination of whether or not an Acquisition Proposal is a Superior Proposal at the time the
Definitive Agreement for such Acquisition Proposal is executed by all parties thereto. For
avoidance of doubt, no Release Condition will occur if the Sterlite Agreed Order is not entered by
the Bankruptcy Court.
(d) Notwithstanding anything to the contrary contained herein, (i) Sellers agree that if this
Agreement has not been terminated, they shall not, and they shall cause the other Seller Releasing
Parties not to, commence any Legal Proceeding based on any Seller Claims and (ii) Purchaser and
Guarantor each agree that if this Agreement has not been terminated, neither shall, and each shall
cause the other Purchaser Releasing Parties not to, commence any Legal Proceeding based on any
Purchaser Claims.
2.2
Bankruptcy Court Approval of Settlement and Release. ASARCO shall file with the Bankruptcy
Court, as soon as practicable following the execution of this Agreement but in no event later than
five Business Days following the Effective Date, a motion pursuant to Rule 9019
19
of the Federal
Rules of Bankruptcy Procedure in substantially the form of Exhibit M-1 hereto (the
“Sterlite Settlement Motion”), and supporting papers seeking the entry of an agreed order of the
Bankruptcy Court in substantially the form of Exhibit M-2 hereto (the “Sterlite
Agreed Order”) approving the terms of this Article II, the Superior Proposal
Threshold, Sections 8.10(b), (c), (e) and
(f), and
Section 13.2(b)(v). Sellers shall use their commercially reasonable efforts to have the Sterlite Agreed Order entered as soon as practicable following the filing of the Sterlite Settlement Motion.
Section 13.2(b)(v). Sellers shall use their commercially reasonable efforts to have the Sterlite Agreed Order entered as soon as practicable following the filing of the Sterlite Settlement Motion.
2.3
Reservation of Rights. Except as set forth in this Article II, Purchaser,
Guarantor and Sellers reserve any and all rights and remedies existing at law or in equity or
arising out of or relating to the Original PSA, including those contained in Section
12.2 thereof, or otherwise, and except as set forth in this Article II
nothing herein shall be construed as or constitute a waiver or release of any such rights or
remedies.
ARTICLE III
SALE AND PURCHASE OF THE PURCHASED ASSETS
SALE AND PURCHASE OF THE PURCHASED ASSETS
3.1 Purchased Assets. Upon the terms and subject to the conditions contained herein, at the Closing,
Sellers shall sell, convey, transfer, assign and deliver to Purchaser, and Purchaser shall purchase and acquire from Sellers, free and clear of all Liens (other than
Permitted Liens), all of Sellers’ right, title and interest in and to all properties and assets,
whether tangible or intangible, used or held for use by Sellers in the conduct of the Business
(other than the Excluded Assets) (the “Purchased Assets”). Without limiting the generality of the
foregoing, the Purchased Assets shall include all of Sellers’ right, title and interest in and to
the following to the extent used or held for use in the conduct of the Business:
(a) all Inventory;
(b) all machinery, equipment, fixtures, furniture, computers, tools, parts, supplies and other
tangible personal property used, or held for use, in connection with the operation of the Business,
including the equipment and machinery listed in Section 3.1(b) of the Seller Disclosure
Schedule;
(c) the real property identified in Section 3.1(c) of the Seller Disclosure Schedule
(“Purchased Real Property”), including, all mines, dumps, impoundments, ▇▇▇▇▇ pads, tailings,
buildings, plants, warehouses, railroad tracks, rights of way, easements, facilities and other
improvements and fixtures thereon and appurtenances thereto and all mining rights, mineral rights,
mineral claims, riparian rights, water rights, water claims, water allocations and water delivery
contracts associated therewith;
(d) all accounts receivable of Sellers identified on the Books and Records as of the close of
business on the Closing Date other than any Excluded Receivables;
(e) subject to Section 3.2(j), all Contracts (A) that were entered into prior to the
filing of the Bankruptcy Cases to which ASARCO is a party that (i) have been assumed by ASARCO
prior to the date hereof (the “Assumed Pre-Petition Contracts”) or (ii) are assumed by ASARCO in
accordance with Section 3.5 (Contracts referred to in (i) and (ii) collectively
20
referred to
herein as, the “Pre-Petition Contracts”), (B) that have been entered into by ASARCO subsequent to
the filing by ASARCO of its voluntary petition for relief under Chapter 11 of the Bankruptcy Code,
but if entered into after the date hereof, solely to the extent entered into in the Ordinary Course
of Business (the “Post-Petition Contracts”), and (C) to which any Non-Debtor Seller is a party on
the date hereof or entered into after the date hereof in the Ordinary Course of Business (the
“Non-Debtor Contracts”, together with the Pre-Petition Contracts and the Post-Petition Contracts,
the “Assumed Contracts”), which may include (to the extent assignable):
(i) all leases, subleases, licenses or other agreements relating to the
occupancy of real property identified in Section 3.1(e)(i) of the Seller
Disclosure Schedule, together with all of Sellers’ right, title and interest in and
to all fixtures and improvements located thereon and all appurtenances, rights,
easements, rights-of-way and other interests incidental thereto, leased, subleased,
licensed or occupied by Sellers and used or held for use in the Business (the
“Leasehold Property,” the Leasehold Property and the Purchased Real Property collectively the “Real
Property”);
(ii) all leases of equipment, fixtures, furniture, computers, tools, parts,
supplies and other tangible personal property leased by Sellers and used or held
for use in the Business and identified in Section 3.1(e)(ii) of the Seller
Disclosure Schedule;
(iii) all Contracts with any Transferred Employees, which for clarification
shall not include the Collective Bargaining Agreements which are expressly excluded
from Assumed Contracts;
(iv) all Contracts through which any computer software system or program is
licensed to any Seller;
(v) all Contracts governing Tolling Arrangements with other Persons;
(vi) all Contracts with any customer of any Seller;
(vii) all Contracts with any supplier of any Seller;
(viii) the insurance policies identified in Section 3.1(e)(viii) of
the Seller Disclosure Schedule;
(ix) certain Seller Employee Benefit Plans as and to the extent provided in
Article IX, and the assets related thereto;
(x) all confidentiality agreements entered into between ASARCO and any
prospective bidder in connection with the transactions contemplated hereunder;
(xi) the leases and other assets assumed pursuant to the Mission Mine
Settlement Agreement and the Order of the Bankruptcy Court entered on April 9, 2008
approving the Mission Mine Settlement Agreement, including the Access
21
Agreement executed by certain of the parties to the Mission Mine Settlement Agreement on
April 13, 2007 and corresponding Tribal Council Resolution numbers 07-192 and
07-562, and two settlement agreements related to water rights issues in Arizona and
the Southern Arizona Water Rights Settlement Agreement that were approved by the
Bankruptcy Court in the Order entered under Docket No. 2320;
(xii) all rights of ASARCO under the Hayden Settlement Agreement and the
Mission Mine Settlement Agreement, including in respect of those certain trusts
created pursuant thereto;
(xiii) all leases of real property identified in Section 3.1(e)(xiii)
of the Seller Disclosure Schedule pursuant to which any Seller is a lessor of any Purchased Real Property;
(xiv) the royalty agreements identified in Section 3.1(e)(xiv) of the
Seller Disclosure Schedule;
(xv) the other Contracts identified in Section 3.1(e)(xv) of the
Seller Disclosure Schedule;
(xvi) Santa ▇▇▇▇ ▇▇ Agreement and, subject to Section 3.6, Silver ▇▇▇▇
LLC Agreement; and
(xvii) ASARCO’s right, title and interest in and to the Agreement among
Noranda Exploration, Inc., Four Metals Mining Company and ASARCO, dated July 6,
1978, entered into in connection with the exploration venture referred to as
“Ventura.”
(f) all prepaid rentals, deposits, security deposits, advances and other prepaid expenses of
any Seller other than those paid in connection with or relating to any Excluded Asset;
(g) all motor vehicles identified in Section 3.1(g) of the Seller Disclosure Schedule;
(h) subject to Section 3.6, the limited liability company interests of Silver ▇▇▇▇
owned by any Seller (“Silver ▇▇▇▇ Interests”);
(i) all copyrights, including copyrights in software, and all software and associated
documentation developed or owned by Sellers for use in the Business (the “Proprietary Software”),
including all goodwill associated with such Proprietary Software and all rights of Sellers to ▇▇▇
for and receive damages or other relief in respect of any past infringement or other violation of
any rights thereto;
(j) all Patents identified in Section 3.1(j) of the Seller Disclosure Schedule,
including all goodwill associated with such Patents and all rights of Sellers to ▇▇▇ for and
receive
22
damages or other relief in respect of any past infringement or other violation of any
rights thereto;
(k) all Trademarks identified in Section 3.1(k) of the Seller Disclosure Schedule
(including the name “ASARCO”), including all goodwill associated with such Trademarks and all
rights of Sellers to ▇▇▇ for and receive damages or other relief in respect of any past
infringement or other violation of any rights thereto;
(l) all Books and Records;
(m) all Permits used or held for use in the operation of the Business and listed in
Section 3.1(m) of the Seller Disclosure Schedule, in each case to the extent the same are
assignable;
(n) rights to any Tax refunds or credits for Taxes related to the ownership or operation of
the Business or the Purchased Assets and that are attributable to any taxable periods (or portions
thereof) beginning after the Closing Date or that relate to the portion of Transaction Taxes paid
by Purchaser pursuant to Section 10.1 if (and only if) Sellers have not borne any
Transaction Taxes or Sellers have received refunds or credits of all Transaction Taxes borne by
them pursuant to Section 10.1;
(o) all patented and unpatented mining claims identified in Section 3.1(o) of the
Seller Disclosure Schedule; and
(p) all rights and claims (whether contingent or absolute, matured or unmatured and whether in
tort, contract or otherwise) against any Person relating to the adversary proceedings listed in
Section 3.1(p) of the Seller Disclosure Schedule.
3.2
Excluded Assets. Notwithstanding the provisions of Section 3.1 to the contrary, the
properties, assets and rights of any Seller described below are expressly excluded from the
transactions contemplated by this Agreement and are not included in the Purchased Assets (the
“Excluded Assets”):
(a) all of Sellers’ cash and cash equivalents, on hand or in banks, certificates of deposit,
bank or savings and loan accounts and U.S. government securities of any kind or nature on the
Closing (collectively, “Cash”);
(b) rights to any Tax refunds or credits for Taxes (including credits against post-Closing
Taxes) related to the ownership or operation of the Business or the Purchased Assets and that are
attributable to any taxable periods (or portions thereof) ending on or prior to the Closing Date
but excluding any Tax refunds or credits for Taxes relating to the portion of Transaction Taxes
paid by Purchaser pursuant to Section 10.1 if (and only if) Sellers have not borne any
Transaction Taxes or Sellers have received refunds or credits of all Transaction Taxes borne by
them pursuant to Section 10.1;
(c) all Equity Securities (i) representing ownership in Sellers and (ii) listed in Section
3.2(c) of the Seller Disclosure Schedule and, in the case of each of the entities listed in
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Section 3.2(c) of the Seller Disclosure Schedule, all right, title and interest of any such
entities in their respective assets, claims and causes of action, property or business;
(d) all insurance policies except those set forth in Section 3.1(e)(viii) of the
Seller Disclosure Schedule;
(e) all rights, claims, causes of action, rights of recovery and rights of set-off, recoupment
or counterclaim of any kind arising under the Bankruptcy Code or applicable bankruptcy law,
including but not limited to claims against any Person relating to the adversary proceedings listed
in Section 3.2(e) of the Seller Disclosure Schedule;
(f) all rights, claims, causes of action, rights of recovery and rights of set-off of any kind
against current or former directors, officers or other employees of, or agents, accountants or
other advisors of or to, any Seller or any Affiliate of any Seller;
(g) the real property listed in Section 3.2(g) of the Seller Disclosure Schedule
including, all mines, dumps, impoundments, ▇▇▇▇▇ pads, tailings, equipment, vehicles, personal
property, buildings, plants, warehouses, railroad tracks, rights of way, easements, facilities and
other improvements and fixtures thereon and appurtenances thereto, all mining and mineral rights
associated therewith (whether pursuant to patented or unpatented mining claims, mineral leases or
otherwise), and any leases or subleases thereto or by any Seller and all Permits to the extent
relating thereto;
(h) all rights of ASARCO under, including in respect of that certain trust created pursuant
to, the Consent Decree entered in United States v. ASARCO Inc., et al., Civil Action No. 02-2079,
filed in the United States District Court for the District of Arizona;
(i) all rights of any Seller under this Agreement, the Ancillary Agreements and all other
agreements, documents and instruments contemplated in connection with this Agreement;
(j) the following Contracts:
(i) all Contracts related to the Bonds;
(ii) the Collective Bargaining Agreements;
(iii) all Seller Employee Benefit Plans, and the assets related thereto,
except as and to the extent provided in Article IX;
(iv) all Contracts between any Seller on the one hand and any Affiliate of any
Seller on the other, other than contracts solely between or among Sellers;
(v) the Contracts listed in Section 3.2(j) of the Seller Disclosure
Schedule;
(k) the deposits and prepaid expenses related to the Contracts described in Section
3.2(j) or any other asset described in this Section 3.2;
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(l) all rights, if any, of ASARCO in and to (i) the two promissory notes from Americas Mining
Corporation, due October 31, 2009 and May 31, 2010, respectively, in the aggregate original
principal amount of $223,250,000, (ii) all accounts receivable (trade and other) of any Seller
arising out of or in connection with any item described in this Section 3.2 and (iii) all
accounts receivable and any other rights to payment owing from any Affiliate of any Seller (other
than trade accounts receivable owing from Silver ▇▇▇▇) (collectively, the “Excluded Receivables”);
(m) all Retained Books and Records; and
(n) except as described in Section 3.1(p), all rights, claims, causes of action,
rights of recovery and rights of set-off, recoupment or counterclaim of any kind against any person
(whether contingent or absolute, matured or unmatured and whether in tort, contract or otherwise)
(i) relating to the assets, properties, business or operations of any Seller arising out of events
occurring prior to the Closing Date except to the extent arising out of (A) the operation of the
Business in the Ordinary Course of Business and (B) the Purchased Assets or Assumed Liabilities,
but not including any such rights described in Section 3.2(e) or clauses (ii) and (iii) of
this Section 3.2(n), (ii) which may arise in connection with discharge by Sellers of the
Retained Liabilities, including all rights and claims, (iii) relating to the adversary proceedings
listed in Section 3.2(n) of the Seller Disclosure Schedule, or (iv) against Grupo.
3.3 Assumed Liabilities. From and after the Closing, Purchaser shall assume, pay, perform and
discharge when due, and Purchaser acknowledges that it shall have no recourse from Sellers in
respect of, and further that Purchaser shall defend, indemnify and hold harmless each Seller, and
each Seller’s respective officers, directors, employees, agents, representatives and Affiliates,
from and against any costs, damages, demands, causes of action, Liabilities, lawsuits, judgments,
losses and expenses of any kind associated with, the following Liabilities (the “Assumed
Liabilities”):
(a) all Liabilities of any and all Sellers under or with respect to the Assumed Contracts
(other than Cure Claims);
(b) all amounts due and payable pursuant to all of the accounts payable (trade and other) of
Sellers on the Books and Records as of the close of business on the Closing Date (other than the
Excluded Payables);
(c) all Liabilities (i) arising on or after the Closing Date with respect to any Transferred
Employee or any Seller Employee Benefit Plan (as and to the extent such Seller Employee Benefit
Plan is being assumed pursuant to Article IX) or (ii) that are allocated to Purchaser
pursuant to Article IX or (iii) that are agreed to between Purchaser and the respective
Union;
(d) all Liabilities with respect to Taxes that are assumed by, or allocated to, Purchaser
pursuant to Article X, including, without limitation, the portion of Transaction Taxes and
Periodic Taxes for which Purchaser is liable under Sections 10.1 and 10.2;
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(e) except as provided in Sections 3.4(f), (g) and (h), all
Liabilities relating to any Environmental Laws regarding any of the Real Property (including all
Liabilities relating to Releases of Hazardous Materials at such properties or that have migrated or
in the future migrate off-site from such properties) irrespective of whether such Liabilities
relate to actions, omissions or events that occur or exist prior to or after the Closing Date (the
“Assumed Environmental Liabilities”);
(f) all Liabilities of any and all Sellers under or with respect to the Permits (to the extent
related to the Purchased Assets); and
(g) except as described in Sections 3.4(a) and (c), all Liabilities arising on
or after the Closing Date out of the operation of the Business or the ownership of the Purchased
Assets, including Liabilities in respect of Asset Retirement Obligations.
3.4 Retained Liabilities. Purchaser shall not assume or be obligated to pay, perform or otherwise
discharge any Liabilities of Sellers, other than those that are expressly assumed by Purchaser
hereunder as Assumed Liabilities (collectively, the “Retained Liabilities”). Without limiting the
generality of the foregoing, the Retained Liabilities include the following Liabilities of Sellers:
(a) Liabilities (other than the Assumed Liabilities) incurred in the Ordinary Course of
Business existing prior to the filing of the Bankruptcy Cases that are subject to compromise under
the Bankruptcy Cases;
(b) all Taxes of Sellers, and all Taxes related to Sellers’ ownership or operation of the
Purchased Assets or the Business, except (i) those Taxes related to the ownership or operation of
the Purchased Assets or the Business which are attributable to taxable periods or portions thereof
beginning on or after the Closing and (ii) those Taxes specified in Section 3.3(d);
(c) all Liabilities arising out of (but only to the extent relating to) any of the Excluded
Assets;
(d) all Liabilities arising out of the Bonds;
(e) all Liabilities relating to current or former employees of Sellers or any of their current
or former Affiliates, other than Transferred Employees, and all Liabilities with respect to
Transferred Employees arising prior to the Closing Date, except as may otherwise be provided in
Article IX or that are agreed to between Purchaser and the respective Union;
(f) all Liabilities relating to any Environmental Laws regarding any Non-Target Properties
(other than Liabilities relating to the off-site migration of Hazardous Materials from a Real
Property or Silver ▇▇▇▇ Property to a Non-Target Property), irrespective of whether such
Liabilities relate to actions, omissions or events that occur or exist prior to or after the
Closing Date, including any Liabilities relating to Hazardous Materials that, prior to the Closing
Date, were sent from a Real Property (other than by natural migration or to another Real Property or a Silver ▇▇▇▇ Property)
off-site for treatment, storage or disposal;
26
(g) all Liabilities relating to any toxic tort claim or other claim by a Person other than a
Governmental Authority to the extent it relates to exposure prior to the Closing Date to Hazardous
Materials (for the avoidance of doubt, with respect to any such claim that alleges exposure to
Hazardous Materials that occurred prior to the Closing Date and continued or continues after the
Closing Date, the portion of the Liability attributable to the pre-Closing exposure shall be a
Retained Liability and the portion attributable to the continuation of the exposure post-Closing
shall be an Assumed Liability); and
(h) all Liabilities for any natural resource damages at any Non-Target Property that result
from migrations or Releases of Hazardous Materials from Real Property that occurred prior to the
Closing Date and did not continue thereafter.
3.5 Contract Designation Rights.
(a) Contracts that were entered into prior to the filing of the Bankruptcy Cases to which
ASARCO is a party that, as of the date of this Agreement, have not been assumed by Sellers and are
to be assigned to Purchaser (the “Assumption-Pending Pre-Petition Contracts”) are identified in
Section 3.5(a) of the Seller Disclosure Schedule and all such contracts shall be assumed
and assigned hereunder. Purchaser shall timely deliver to Sellers such information or
documentation relating to “adequate assurance of future performance” as shall be reasonably
required in connection with the assumption and assignment of such Contracts pursuant to the Plan.
(b) At or prior to the Closing, to the extent not previously paid, Sellers shall pay any and
all Cure Claims with respect to all Assumption-Pending Pre-Petition Contracts; provided, that any
Unpaid Cure Claims Amounts shall be subject to Section 3.5(d).
(c) Nothing in this Agreement shall be construed as an attempt by any Seller to assign any
Contract to the extent that such Contract is not assignable without the necessary notice to or
consent of the other party or parties thereto, and such notice to or consent of such other party
has not been given or received, as applicable. Purchaser acknowledges that no adjustment to the
Purchase Price shall be made for any such Contracts that are not assigned and that Purchaser shall
have no claim against Sellers or any other Person in respect of such unassigned Contracts.
Notwithstanding the absence at Closing of one or more required consents to the assignment of a
Contract that is intended to be an Assumed Contract, following the Closing at such time as consent
has been obtained, or any requisite notice has been made or delivered, as applicable, the related
Contract shall be assigned to Purchaser automatically without any other conveyance or other action
by Purchaser. From and after the Closing, pending receipt or in the absence of any such consent,
Sellers will hold the benefit of such Contract that is intended to be an Assumed Contract for
Purchaser and subcontract to Purchaser all rights and obligations of Sellers thereunder to the
extent allowed by such Contract. As between
Sellers and Purchaser, Purchaser will be deemed to have fully assumed Sellers’ performance
obligations for any such Contract that is intended to be an Assumed Contract at Closing in
accordance with this Agreement.
(d) At the Closing, ASARCO shall deliver to Purchaser a statement of any Unpaid Cure Claims
Amount (and the Contract(s) corresponding thereto), including a calculation
27
thereof. Purchaser
shall be permitted (but not required), within 30 days after receipt of such statement, to pay any
Unpaid Cure Claims Amount, and within 10 days after any such payment, Purchaser shall provide a
written notice to ASARCO of such payment (and the Contract(s) corresponding thereto). To the
extent Purchaser pays any Unpaid Cure Claims Amount pursuant to this Section 3.5(d),
Sellers shall, within 10 days of receipt of notice from Purchaser delivered in accordance with this
Section 3.5(d), reimburse Purchaser in the amount of such payment; provided that, the Plan
Confirmation Order shall provide that, as between the Sellers and the counterparty of the
underlying Contract, (i) neither the payment nor the reimbursement of a disputed Unpaid Cure Claims
Amount shall constitute a waiver, admission or estoppel in respect of any claims or defenses that
ASARCO may have related to such Unpaid Cure Claims Amount or the underlying Contract and (ii)
ASARCO’s right to object, assert any counterclaim or exercise any setoff or other rights in
connection with such Unpaid Cure Claims Amount or the underlying Contract shall be preserved
regardless of any such payment or reimbursement; provided, however, that failure of the Plan
Confirmation Order to so provide shall not relieve the Sellers of their payment obligations as set
forth in this Section 3.5(d).
3.6 Silver ▇▇▇▇. The parties acknowledge that pursuant to the Silver ▇▇▇▇ LLC Agreement, the sale,
assignment and transfer by ARSB of its Silver ▇▇▇▇ Interests is subject to the consent of the other
members of Silver ▇▇▇▇. If such consent is not obtained prior to Closing, then (i) the Silver ▇▇▇▇
Interests and Sellers’ right in and to the Silver ▇▇▇▇ LLC Agreement will each be an Excluded Asset
and the shares of capital stock of ARSB will be a Purchased Asset and (ii) references in
Section 7.5 to Silver ▇▇▇▇ Interests will be deemed to refer to the capital stock of ARSB.
ARTICLE IV
PURCHASE PRICE AND PAYMENT
PURCHASE PRICE AND PAYMENT
4.1 Purchase Price. The total consideration paid by Purchaser to Sellers in consideration of the sale,
conveyance, transfer, assignment and delivery of the Purchased Assets is (i) an amount equal to:
(A) $1,100,000,000.00 (the “Closing Payment”), plus (B) the Purchaser Promissory Note
(collectively, the “Purchase Price”) and (ii) the assumption by Purchaser of the Assumed
Liabilities.
4.2 Deposit. Purchaser shall make available to ASARCO funds in the aggregate amount of $125,000,000.00
(the “Deposit”) as follows:
(a) Prior to the execution of this Agreement, Purchaser posted a letter of credit (the “First
L/C”) attached as Exhibit O-1 hereto issued in favor of ASARCO by ABN AMRO Bank N.V.,
Chicago in the amount of $50,000,000.00. After the entry of
the Sterlite Agreed Order by the Bankruptcy Court, Purchaser may amend the First L/C solely to
add the following to Annex A of the First L/C: “Funds under the Letter of Credit are payable in
accordance with the terms set forth in Section 4.2 of that certain Settlement and Purchase and Sale
Agreement, dated as of February ___, 2009, among, inter alia, the Beneficiary and the Account
Party.” Purchaser, with the prior written consent of Sellers (which consent shall not be
unreasonably withheld), shall have the right to exchange the First L/C for a replacement letter of
credit issued by a Qualified Bank in substantially the same form as the First L/C and on terms and
conditions reasonably satisfactory to Sellers.
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(b) Simultaneously with the execution of this Agreement, Purchaser has posted a second letter
of credit (the “Second L/C”) attached as Exhibit O-2 hereto issued in favor of ASARCO by
ABN AMRO Bank N.V., Chicago in the amount of $50,000,000.00. Purchaser, with the prior written
consent of Sellers (which consent shall not be unreasonably withheld), shall have the right to
exchange the Second L/C for a replacement letter of credit issued by a Qualified Bank in
substantially the same form as the Second L/C and on terms and conditions reasonably satisfactory
to Sellers.
(c) As promptly as practicable following (but not later than 5:00 p.m., Dallas, Texas time, on
the third Business Day following) the Disclosure Statement Approval Date, Purchaser will post a
third letter of credit (the “Third L/C”) in the form of Exhibit O-3 hereto issued in favor
of ASARCO by a Qualified Bank in the amount of $25,000,000.00 and ASARCO shall have received such
originally executed Third L/C enforceable against the issuer thereof. The First L/C, the Second
L/C and the Third L/C are collectively referred to herein as the “Letters of Credit.”
(d) Subject to Section 4.2(h), in anticipation of Closing and upon the agreement of
the parties, ASARCO shall draw on the Letters of Credit. All cash received by ASARCO (in
immediately available funds in an account designated by ASARCO) prior to or on the Closing Date
pursuant to such draw shall be credited against the Closing Payment at Closing and retained by
Sellers as a component of the Purchase Price. Alternatively, at least three Business Days prior to
the Closing Date, Purchaser may deliver a written notice to ASARCO instructing ASARCO that it shall
deliver the full amount of the Closing Payment to ASARCO pursuant to Section 5.3(a) at
Closing. In such case, at Closing, upon receipt of the Closing Payment pursuant to Section
5.3(a), ASARCO shall deliver to Purchaser each of the Letters of Credit for return to the
issuer thereof for cancellation (or any cash drawn and received pursuant to Section
4.2(h)).
(e) Immediately following the termination of this Agreement due to a material breach by
Purchaser or Guarantor of any of their respective representations, warranties or covenants or other
agreements hereunder (a “Purchaser Breach”), Sellers shall (i) be entitled to receive from
Purchaser and retain the Deposit and (ii) be entitled to draw upon all Letters of Credit at anytime
thereafter to obtain the Deposit and the receipt by Sellers of immediately available funds in an
account designated by ASARCO in an amount equal to the Deposit pursuant to such draw (or any draw
pursuant to Section 4.2(h)) shall satisfy Purchaser’s payment obligation in clause (i);
provided, that only $100,000,000.00 shall be paid to and may be drawn by Sellers if such
termination occurs prior to the Disclosure Statement Approval Date.
(f) Immediately following the termination of this Agreement for any reason other than (i) a
Purchaser Breach or (ii) by Purchaser pursuant to Section 13.1(j) upon the occurrence of a
Manipulative Breach, Sellers shall (x) be entitled to receive from Purchaser and retain
$50,000,000.00, (y) be entitled to draw upon any outstanding Letter of Credit at anytime thereafter
to obtain such funds and the receipt by Sellers of immediately available funds in an account
designated by ASARCO in an amount equal to $50,000,000.00 pursuant to such draw (or any draws
pursuant to Section 4.2(h)) shall satisfy Purchaser’s payment obligation in clause (x))
and (z) as promptly as practicable, and in any event within 10 Business Days, return the Second
L/C and (if posted) the Third L/C to the issuer thereof for cancellation (or any cash
29
drawn (and
received) pursuant to Section 4.2(h) in excess of $50,000,000.00; provided, that if (and
only if) a Release Condition occurs following the termination of this Agreement, as promptly as
practicable, and in any event within 10 Business Days, following the occurrence of such Release
Condition, ASARCO shall either (1) return the First L/C to the issuer thereof for cancellation or
(2) if Sellers have already drawn on the First L/C, including pursuant to Section 4.2(h),
(and received $50,000,000.00 in respect of such draw), Sellers shall deliver the amount of
$50,000,000.00 to Purchaser and such payment shall be made by wire transfer of immediately
available funds to an account designated by Purchaser.
(g) As promptly as practicable, and in any event within 10 Business Days, following the
termination of this Agreement by Purchaser pursuant to Section 13.1(j) due to a
Manipulative Breach, ASARCO shall return the Letters of Credit to the issuer thereof for
cancellation (or any cash drawn and received pursuant to Section 4.2(h)).
(h) At all times the remaining period until the stated expiry of each Letter of Credit shall
be at least 30 days. From time to time, Purchaser shall cause the Letters of Credit to be amended
to extend the expiry dates thereunder (without any other modifications thereto) in order to comply
with the immediately preceding sentence. If at any time the remaining period until the stated
expiry of any Letter of Credit is less than 30 days, ASARCO shall be entitled to draw upon such
Letter of Credit at anytime thereafter; provided, however, that if the parties mutually agree that
the Closing is reasonably likely to occur during such 30 day period, then ASARCO shall not draw
upon such Letter of Credit until the remaining period until the stated expiry of such Letter of
Credit is 20 days or less and all cash received by ASARCO (in immediately available funds in an
account designated by ASARCO) prior to or on the Closing Date pursuant to such draw shall be
credited against the Closing Payment at Closing and retained by Sellers as a component of the
Purchase Price; provided, further, that, notwithstanding anything to the contrary contained herein,
any cash drawn and received pursuant to this Section 4.2(h) that is to be returned to
Purchaser pursuant to any other provision of this Section 4.2 shall be returned to
Purchaser immediately.
(i) Notwithstanding anything to the contrary contained herein, except pursuant to Section
4.2(d), any draw upon any of the Letters of Credit shall be approved by the Bankruptcy Court as
an act outside the ordinary course of business under 11 U.S.C. § 363(b)(1). For clarification,
Sellers’ right to draw upon a Letter of Credit is not conditioned upon any other finding by the
Bankruptcy Court; provided, however, that
such Bankruptcy Court approval shall not be required for any draw upon the First L/C prior to
the entry of the Sterlite Agreed Order by the Bankruptcy Court.
30
4.3 Purchase Price Adjustment.
(a) No later than 45 days after the Closing Date, Sellers shall deliver to Purchaser a
statement (the “Closing Accounts Statement”) prepared in accordance with the illustration set forth
in Exhibit E setting forth (i) the Included Receivables, the Included Payables and the
Inventory Amount, each calculated as of the Closing Date, and (ii) a calculation of the Closing
Accounts Amount.
(b) From and after the Closing Date until the delivery of the Closing Accounts Statement,
Purchaser shall give Sellers reasonable access during normal business hours and upon reasonable
notice to the Books and Records, the accounting and other appropriate personnel and the independent
accountants of the Business in order to enable Sellers to prepare the Closing Accounts Statement
and to calculate the Closing Accounts Amount.
(c) On the date that a binding determination of the Closing Accounts Amount has been made in
accordance with Section 4.4, the aggregate principal amount of the Purchaser Promissory
Note shall automatically be (i) increased by the Adjustment Amount if the Closing Accounts Amount
is greater than the Agreed Working Capital or (ii) decreased by the Adjustment Amount if the
Closing Accounts Amount is less than the Agreed Working Capital, in each case without any action on
the part of Purchaser or Sellers.
4.4 Dispute Resolution.
(a) Purchaser shall be entitled to dispute the calculation of the Closing Accounts Amount set
forth in the Closing Accounts Statement if, but only if, Purchaser delivers a written notice (an
“Objection Notice”) to Sellers within 30 days after receipt of the Closing Accounts Statement in
which Purchaser objects to the calculation by Sellers of the Closing Accounts Amount and provides a
reasonably detailed description of each item to which Purchaser objects, the amount Purchaser
believes is correct with respect to each such item and the basis therefor (the date upon which
Purchaser delivers an Objection Notice to Sellers being hereinafter referred to as the “Objection
Date”). If no Objection Notice is delivered within the time required in this Section
4.4(a), the Closing Accounts Statement delivered by Sellers and the calculation of the Closing
Accounts Amount set forth therein shall be final and binding on each of the parties.
(b) If Purchaser delivers an Objection Notice to Sellers within the time period specified in
paragraph (a) above, Purchaser and Sellers shall attempt in good faith to agree upon the
Closing Accounts Amount during the period commencing on the Objection Date and ending 10 days
thereafter (the “Negotiation Period”).
(c) If Purchaser and Sellers agree in writing prior to the expiration of the Negotiation
Period on the Closing Accounts Amount, whether such amount is the same as or different from the
amount calculated based upon the Closing Accounts
Statement, the amount agreed to in writing shall be the Closing Accounts Amount for all
purposes hereunder.
(d) If Purchaser and Sellers do not agree in writing prior to the expiration of the
Negotiation Period on the Closing Accounts Amount, the items in dispute (but no other
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matters) shall be submitted to KPMG LLP or such other firm of independent public accountants as may be
mutually agreed between Purchaser and Sellers (in either case, the “Final Arbiter”). The Final
Arbiter shall make a final and binding determination as to all matters in dispute relating to the
calculation of the Closing Accounts Amount as promptly as practicable after its appointment (but no
later than 45 days after the date of its appointment). The determination by the Final Arbiter of
the amounts in dispute shall be based solely on presentations by Purchaser and Sellers, and shall
not involve the Final Arbiter’s independent review. Any determination by the Final Arbiter shall
not be outside the range defined by the respective amounts proposed by Purchaser and Sellers. The
Final Arbiter shall send its written determination of the Included Payables, Included Receivables
and Inventory Amount, each calculated as of the Closing Date, to Purchaser and Sellers, together
with a calculation of the Closing Accounts Amount that results from such determination, and such
determination of the Final Arbiter, and the resulting calculation of the Closing Accounts Amount,
shall be binding on the parties, absent fraud or manifest error. The fees and expenses of the
Final Arbiter shall be borne equally by Purchaser and Sellers.
4.5 Allocation of Purchase Price. Purchaser and Sellers shall use good faith efforts to attempt to
reach agreement on the allocation of the Purchase Price and other relevant items (including, for
example, the amount of Assumed Liabilities, adjustments to the Purchase Price and other
consideration for Tax purposes) among the Purchased Assets, including goodwill and other assets, by
the earlier of (x) six (6) months following the Closing Date, and (y) 60 days prior to the extended
due date of the federal income tax return which includes the transactions contemplated herein, in
accordance with Section 1060 of the Code and the Treasury regulations promulgated thereunder and
any comparable provision of state, local or foreign Law, as appropriate (the “Allocation”). If
Purchaser and Sellers reach a timely agreement regarding the Allocation, (a) such Allocation shall
be binding on the parties, (b) the parties shall prepare and timely file all applicable federal and
state income Tax forms (including Internal Revenue Service Form 8594) in a manner consistent with
the Allocation, cooperate with each other in the preparation of such forms, and furnish each other
with a copy of the final version of Form 8594 within a reasonable period before the filing date
thereof, and (c) except as otherwise required pursuant to a “determination” within the meaning of
Section 1313(a) of the Code (or any comparable provision of any state, local or foreign law), none
of the parties shall take a position inconsistent with the Allocation on any Tax Return (including
any forms required to be filed pursuant to Section 1060 of the Code), or otherwise. The parties
recognize that the Allocation will not include Purchaser’s acquisition expenses or Sellers’ selling
expenses, and Purchaser and Sellers will unilaterally allocate such expenses appropriately. If the
parties are unable to reach a timely agreement regarding the Allocation, each party shall be
entitled to adopt its own position regarding the Allocation.
ARTICLE V
CLOSING
CLOSING
5.1 Time and Place of Closing. The closing of the sale and purchase of the Purchased Assets and the
assumption of the Assumed Liabilities provided for in Article III (the “Closing”) shall
take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇, at 10:00 a.m. local time, on the second Business Day after the conditions to
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Closing set forth in Article XI (excluding conditions that, by their terms, cannot be satisfied until
the Closing) have been satisfied (or waived by the party entitled to waive such condition), or at
such other place, date and time as the parties may agree.
5.2 Items to Be Delivered by Sellers. At the Closing, Sellers shall deliver, or cause to be delivered,
to Purchaser the following:
(a) the ▇▇▇▇ of Sale duly executed by Sellers;
(b) the Assignment and Assumption Agreement duly executed by Sellers;
(c) for each parcel of Purchased Real Property, a recordable quit-claim deed (collectively,
the “Deeds”) substantially in the forms of Exhibit F-1 through Exhibit F-4 as
applicable, executed by the appropriate Seller, with all appropriate notarizations and
certifications as required by the applicable Governmental Authority;
(d) for each parcel of Leasehold Property, a (i) recordable quit-claim deed conveying title to
all improvements located on the Leasehold Property (collectively, the “Leasehold Deeds”)
substantially in the form of Exhibit G and (ii) an assignment and assumption agreement for
any applicable ground lease agreement relating to such parcel of Leasehold Property substantially
in the form of Exhibit H (the “Assignment and Assumption of Ground Lease Agreement”),
executed by the appropriate Seller, with all appropriate notarizations and certifications as
required by the applicable Governmental Authority;
(e) certificates of title for all motor vehicles identified in Section 3.1(g) of the
Seller Disclosure Schedule, each executed by the appropriate Seller and in a form reasonably
satisfactory to the appropriate state agencies where such motor vehicles are titled;
(f) the Transition Services Agreement duly executed by ASARCO;
(g) a non-foreign affidavit of each Non-Debtor Seller dated as of the Closing Date in form and
substance as required under the Treasury regulations issued pursuant to Section 1445 of the Code;
(h) a certificate signed by a duly authorized representative of each Seller certifying that
the closing conditions set forth in Sections 11.2(a) and 11.2(b) have been
satisfied;
(i) certificates of an authorized officer of each Seller to which is attached: (i) true and
correct copies of the Organizational Documents of such Seller; (ii) true and correct copies of the
resolutions of the Board of Directors for such Seller respecting the transactions contemplated by
this Agreement and the Ancillary Agreements; (iii) a certificate respecting the incumbency and true
signatures of the officers of such Seller who execute this Agreement and other transaction
documents on behalf of such Seller; and (iv) a certificate from the Secretary of State or other
applicable Governmental Authority of the State of formation or incorporation, as applicable, dated
within 10 days of the Closing Date, with respect to the existence and good standing of such Seller.
The certificates required pursuant to this Section 5.2(i) shall certify that the documents
referred to in (i) and (ii) above and attached thereto are true and correct copies,
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have been duly
and validly adopted and have not been amended or altered except as reflected therein;
(j) the Patent Assignment, dated as of the Closing Date, in the form attached hereto as
Exhibit I (the “Patent Assignment”), duly executed by ASARCO;
(k) the Trademark Assignment, dated as of the Closing Date, in the form attached hereto as
Exhibit J (the “Trademark Assignment”), duly executed by ASARCO;
(l) a certified copy of the Plan Confirmation Order authorizing and ratifying the execution
and delivery of this Agreement by Sellers, and the consummation by Sellers of the transactions
contemplated hereby;
(m) for each Arizona water right, claim, Permit, Certificate of Water Right, Statement of
Claim, Statement of Claimant, and grandfathered groundwater withdrawal right associated with the
Real Property a recordable quit-claim deed conveying title to such rights, permits, certificates,
and claims substantially in the form of Exhibit F-3, executed by the appropriate Seller,
with all appropriate notarizations and certifications as required by the applicable Governmental
Authority;
(n) a recordable quitclaim deed substantially in the form of Exhibit F-4 with respect
to the unpatented mining claims listed in Section 3.1(o) of the Seller Disclosure Schedule,
executed by the appropriate Seller with all appropriate notarizations and certifications as
required by the applicable Governmental Authorities;
(o) the Security Agreement duly executed by ASARCO Administration LLC; and
(p) a receipt for the Closing Payment.
5.3 Items to Be Delivered by Purchaser. At the Closing, Purchaser shall deliver (or shall cause the
delivery) to Sellers of the following:
(a) the Closing Payment by wire transfer of immediately available funds (to such account or
accounts as Sellers shall have specified to Purchaser at least 24 hours prior to the Closing);
(b) the Purchaser Promissory Note duly executed by Purchaser;
(c) the Assignment and Assumption Agreement duly executed by Purchaser;
(d) the Transition Services Agreement duly executed by Purchaser;
(e) the Patent Assignment duly executed by Purchaser;
(f) the Trademark Assignment duly executed by Purchaser;
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(g) the Assignment and Assumption of Ground Lease Agreement executed by Purchaser, with all
appropriate notarizations and certifications as required by the applicable Governmental Authority;
(h) a certificate signed by a duly authorized representative of Purchaser and Guarantor
certifying that the closing conditions set forth in Sections 11.3(a) and 11.3(b)
have been satisfied;
(i) certificates of an authorized officer of each of Purchaser and Guarantor to which is
attached: (i) true and correct copies of the Organizational Documents of Purchaser or Guarantor, as
applicable; (ii) true and correct copies of the resolutions of the board of directors of Purchaser
or Guarantor, as applicable, respecting the transactions contemplated by this Agreement and the
Ancillary Agreements; (iii) a certificate respecting the incumbency and true signatures of the
officers of Purchaser or Guarantor, as applicable, who execute this Agreement and other transaction
documents on behalf of Purchaser or Guarantor; and (iv) a certificate from the Secretary of State
of the State (or jurisdiction) of formation or incorporation, as applicable, dated within 10 days
of the Closing Date, with respect to the existence and good standing of Purchaser or Guarantor, as
applicable. The certificates required pursuant to this Section 5.3(i) shall certify that
the documents referred to in (i) and (ii) above and attached thereto are true and correct copies,
have been duly and validly adopted and have not been amended or altered except as reflected
therein;
(j) the Security Agreement duly executed by Purchaser;
(k) a mortgage substantially in the form of either Exhibit N-1 or Exhibit N-2,
as applicable, hereto with respect to each parcel of Purchased Real Property (collectively, the
“Mortgages”);
(l) all documents required to perfect the security interest in the Collateral (as defined in
the Security Agreement) pursuant to the Security Agreement, each in form and substance reasonably
acceptable to ASARCO, including documents required to perfect the pledge of the Silver ▇▇▇▇
Interests and the security interest in the Patents and Trademarks; and
(m) evidence reasonably satisfactory to Sellers that Purchaser has complied with its
obligations set forth in Section 8.9.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, hereby represent and warrant to Purchaser that, on and as of
the date of this Agreement, except as set forth in the Seller Disclosure Schedule:
6.1 Organization and Good Standing. Each Seller is a limited liability company or corporation duly
formed or incorporated, validly existing and in good standing under the laws of the jurisdiction of
its formation or incorporation and Sellers have the requisite power and authority to own the Purchased Assets, subject to, in the case of
ASARCO, the limitations imposed on ASARCO as a result of having filed a petition for relief under
the Bankruptcy Code.
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Sellers are duly licensed or qualified to transact business and are in good
standing in each jurisdiction in which their ownership or leasing of the Purchased Assets or the
operation of its respective business makes such qualification necessary, except where the failure
to be so qualified would not reasonably be expected to have, individually or in the aggregate, a
Seller Material Adverse Effect.
6.2 Authorization of Agreement. Subject to the entry of the Plan Confirmation Order, each Seller has
the requisite limited liability company or corporate power and authority to execute this Agreement
and each of the Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and each of the Ancillary Agreements by
Sellers and the consummation by Sellers of the transactions contemplated hereby and thereby have
been duly authorized by the Board of Directors of each Seller and no other limited liability
company or corporate proceedings on the part of Sellers are necessary to authorize this Agreement
or the Ancillary Agreements or to consummate the transactions contemplated hereby and thereby.
This Agreement has been, and at the Closing each of the Ancillary Agreements will be, duly executed
and delivered by each Seller and, assuming due execution and delivery by Purchaser and Guarantor of
this Agreement, the Ancillary Agreements and entry of the Plan Confirmation Order, this Agreement
constitutes, and at Closing, each of the Ancillary Agreements will constitute, a valid and binding
obligation of each Seller, enforceable against each Seller in accordance with its terms subject to
the Enforceability Exceptions.
6.3 No Violation; Consents.
(a) Assuming the receipt of the consents or waivers referred to in Section 6.3(a) and
Section 6.3(b) of the Seller Disclosure Schedule and in Section 6.3(b), the
execution and delivery by Sellers of this Agreement and each of the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby do not and will not (i) violate
any provision of the Organizational Documents of any Seller, (ii) violate any Order of any
Governmental Authority existing after the filing of the Bankruptcy Cases to which any Seller is
bound or subject, (iii) violate any Applicable Law or (iv) except as provided for herein, result in
the imposition or creation of any Lien (other than Permitted Liens) upon the Purchased Assets other
than, in the case of clauses (ii), (iii) and (iv), any conflict, violation, breach, default,
requirement for consents, rights of acceleration, cancellation or termination that would not
reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.
(b) Assuming entry of the Plan Confirmation Order, no Order or Permit issued by, or
declaration or filing with, or notification to, or waiver from any Governmental Authority is
required on the part of any Seller in connection with the execution and delivery of this Agreement
or any Ancillary Agreement, or the compliance with or performance by any Seller with any provision
contained in this Agreement or any Ancillary Agreement, except for (i) in the event the Closing
fails to occur prior to the first anniversary of the expiration of the “waiting period” under the
previously filed notification under the HSR Act, the filing by or on behalf of ASARCO or its “ultimate parent
entity” of notification with the Federal Trade Commission and Antitrust Division of the United
States Department of Justice under the HSR Act and the expiration or termination of the applicable
“waiting period” thereunder and (ii) any such
36
requirements, the failure of which to be obtained or
made would not reasonably be expected to have, individually or in the aggregate, a Seller Material
Adverse Effect.
6.4 Financial Information. The Seller Data Room contains the unaudited consolidated balance sheet of
ASARCO at December 31, 2008 and the unaudited consolidated statements of income and cash flows of
ASARCO for the twelve months ended thereon (collectively, the “Financial Statements”). The
Financial Statements, in each case, only to the extent relating to the Purchased Assets and Assumed
Liabilities, (a) present fairly in all material respects the consolidated financial position of
ASARCO as of the respective dates thereof, and the consolidated results of operations of ASARCO for
the periods covered thereby and (b) have been prepared in all material respects in accordance with
GAAP applied on a basis consistent with the past practices of Sellers during the pendency of the
Bankruptcy Cases, in each case, subject to (i) the absence of footnotes thereto and (ii) audit
adjustments resulting from the Sellers’ Accountants’ audit, review and finalization of ASARCO’s
financial statements for the years ended December 31, 2005, 2006, 2007 and 2008, which would not
individually or in the aggregate reasonably be expected to result in a Seller Material Adverse
Effect.
6.5 Compliance with Laws; Permits.
(a) Since August 9, 2005, Sellers have conducted their operations of the Business that are
situated on the Purchased Real Property in compliance with all Applicable Laws except where the
failure to comply with such laws would not reasonably be expected to have a Seller Material Adverse
Effect.
(b) Sellers hold (or are in the process of renewing) all Permits that are required to conduct
the operations of the Business that are situated on the Purchased Real Property as they are
currently conducted except for any such Permits the absence of which would not reasonably be
expected to have a Seller Material Adverse Effect. No Legal Proceeding by any Governmental
Authority is pending nor, to Sellers’ Knowledge, has been threatened in writing since August 9,
2005, to cancel, modify or fail to renew any such Permit except for any such cancellation,
modification or failure that would not reasonably be expected to result in a Seller Material
Adverse Effect.
(c) The representations and warranties in this Section 6.5 do not address
Environmental Laws or labor, employment and benefit plan matters.
6.6 Sufficiency of Purchased Assets. The Purchased Assets constitute all of the assets material to
Sellers’ conduct of the Business as it is currently conducted as of the date of this Agreement.
6.7 Purchased Real Property. With respect to each parcel of Purchased Real Property, there are no
pending, or to Sellers’ Knowledge, threatened condemnation
proceedings or other Legal Proceedings that materially and adversely affect the current use or
occupancy thereof.
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6.8 Material Contracts.
(a) Section 6.8(a) of the Seller Disclosure Schedule identifies the following
Contracts in effect as of the date of this Agreement and to which any Seller is a party and
relating to the Business and identifies whether such Contracts are Assumed Pre-Petition Contracts,
Assumption-Pending Pre-Petition Contracts, Post-Petition Contracts or Non-Debtor Contracts, as
applicable (collectively, the “Material Contracts”):
(i) all leases, subleases, licenses or other Contracts relating to the
occupancy of the Leasehold Property that are necessary to the operation of the
Business;
(ii) all leases, subleases, licenses or other Contracts relating to the
Purchased Real Property under which any Seller is a lessor and (A) during the
twelve months ended December 31, 2008, received rental payments in excess of
$200,000, or (B) that have a non-cancelable term in excess of 12 months;
(iii) all leases of equipment or other tangible personal property that are
necessary to the operation of the Business;
(iv) all Contracts with Suppliers;
(v) all Contracts included in the Purchased Assets pursuant to which any
Seller retains the right to receive a royalty for production from a parcel of real
property;
(vi) all settlement agreements for the settlement of any Environmental Claims
to the extent related to the Real Property;
(vii) all agreements with trade vendors providing services material to the
operation of the Business to which any Seller paid more than $3,000,000 during the
twelve month period ended December 31, 2008; and
(viii) all Contracts granting a third party an option or right of first
refusal to purchase any Purchased Real Property.
(b) Each Material Contract (other than any Assumption-Pending Pre-Petition Contract) is in
full force and effect, enforceable against Seller that is a party thereto in accordance with its
terms, subject to the Enforceability Exceptions, other than Material Contracts that (i) have
expired or terminated pursuant to their terms, (ii) have been terminated by the Seller party
thereto in the Ordinary Course of Business or (iii) have been terminated by a counterparty in
connection with or attributable to economic
and industry conditions, but not as a result of a material breach of such Material Contract by
the Seller party thereto.
(c) No Seller has received written notice that it is in violation, breach of or default in any
material respect under any Material Contract (other than any Assumption-Pending Pre-Petition
Contract) (or with notice or lapse of time or both, would be in violation or breach of or default
under any such Contract).
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6.9 Suppliers. Section 6.9 of the Seller Disclosure Schedule lists the ten most significant
suppliers (by payable) of raw materials, supplies, merchandise and other goods for the Business for
the twelve-month period ended December 31, 2008 and the amount for which each such supplier
invoiced Sellers during such period (“Suppliers”). Since January 1, 2009, no Supplier has
delivered a written notice to any Seller that it intends to terminate its relationship with Sellers
or materially reduce its business with Sellers from the levels achieved during the twelve months
ended December 31, 2008 other than terminations or reductions made in connection with or
attributable to economic and industry conditions.
6.10 Employee Benefit Matters.
(a) All Seller Employee Benefit Plans are listed in Section 6.10(a) of the Seller
Disclosure Schedule. True and complete copies of all Seller Employee Benefit Plans, including, but
not limited to, any trust instruments and insurance contracts forming a part of any such Seller
Employee Benefit Plans, and all amendments thereto, have been made available to Purchaser.
(b) Each Seller Employee Benefit Plan which is an “employee pension benefit plan” within the
meaning of Section 3(2) of ERISA (a “Pension Plan”) and which is intended to be qualified under
Section 401(a) of the Code, has received a favorable determination letter from the Internal Revenue
Service, and to Sellers’ Knowledge there are no circumstances likely to result in revocation of any
such favorable determination letter or the loss of the qualification of such Pension Plan under
Section 401(a) of the Code.
(c) To Sellers’ Knowledge, there has not been any prohibited transaction (within the meaning
of Section 406 of ERISA or Section 4975 of the Code) with respect to any Seller Employee Benefit
Plan. None of the Sellers has incurred any material liability under, arising out of or by
operation of Title IV of ERISA, and, to Seller’s Knowledge, no fact or event exists which would
reasonably be expected to give rise to any such material liability.
(d) Each of the Seller Employee Benefit Plans has been operated and administered in all
material respects in accordance with its terms and with Applicable Law, including ERISA and the
Code, to the extent required by such Applicable Law. There is no material Legal Proceeding pending
or, to the Seller’s Knowledge, threatened in writing against any Seller relating to any Seller
Employee Benefit Plans.
6.11 Environmental Matters.
(a) Except (i) for matters that do not constitute Assumed Liabilities and (ii) for matters
that individually or in the aggregate would not reasonably be expected to have a Seller Material
Adverse Effect: (w) since August 9, 2005, Sellers operate and have operated the Business on and in
connection with the Real Property in compliance with all applicable Environmental Laws, (x) Sellers
hold all Environmental Permits necessary to operate the Business on the Real Property as it is
currently conducted and, except for matters that have been resolved, since August 9, 2005, have
been in compliance with such Environmental Permits, (y) to Sellers’ Knowledge, there has been no
migration or Release of Hazardous Materials at or from the Real Property that, as of the Closing
Date, requires any Remedial Action pursuant to
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Environmental Law, except with respect to any such
migration or Release specifically identified in any document included in Section 14 of the Seller
Data Room, as of the date of this Agreement and (z) there are no Environmental Claims pending or,
to the Sellers’ Knowledge, threatened as of the date of this Agreement against Sellers arising out
of or relating to the Real Property or the operation of the Business on the Real Property.
(b) Purchaser acknowledges that, except with respect to Sections 6.3(a)(ii),
(iii) and (iv), 6.3(b), 6.8(a)(vi), 6.8(b), 6.8(c)
and 6.14, this Section 6.11 shall be deemed to be the only representation and
warranty in the Agreement with respect to environmental matters.
6.12 Labor Matters.
(a) Sellers are in compliance, in respect of the operation of the Business as currently
conducted at any Real Property, with the requirements of Applicable Laws relating to the employment
of labor (including the proper classification of employees), the payment of wages, the payment and
withholding of taxes, overtime and other compensation and benefits, employment standards or
retaliation, except for such non-compliance as would not reasonably be expected to have a Seller
Material Adverse Effect. There is no claim with respect to the foregoing pending, or, to Sellers’
Knowledge, threatened against any Seller before any Governmental Authority which, if adversely
decided would reasonably be expected to have a Seller Material Adverse Effect. Sellers have not
received written notice of the intent of any Governmental Authority responsible for the enforcement
of labor or employment laws to conduct an investigation with respect to or relating to the Business
and, to Sellers’ Knowledge, no such investigation is in progress.
(b) Sellers are not a party to, or otherwise bound by, any unsatisfied or pending conciliation
agreement, settlement agreement, arbitration award or consent decree with, or a citation by, any
Governmental Authority in each case relating to claims of unfair labor practices, employment
discrimination or other claims with respect to employment practices and policies in respect of the
operation of the Business (other than claims attributable to or arising out of decisions, practices
and policies made in the Ordinary Course of Business, including layoffs and reductions in force),
the failure to comply with which would reasonably be expected to have, individually or in the
aggregate, a Seller Material Adverse Effect.
(c) There are no unfair labor or employment practice charges or complaints, charges or
complaints alleging breach by Sellers of any express or implied contract of employment, charges or
complaints alleging discriminatory, wrongful or tortious conduct in connection with the employment
relationship, or other employee-related charges or complaints, pending against Sellers before any
Governmental Authority or, to Sellers’ Knowledge, threatened against Sellers before any
Governmental Authority, in each case relating to the Business (other than charges or complaints
attributable to or arising out of decisions, practices and policies made in the Ordinary Course of
Business, including layoffs and reductions in force), which, if adversely decided, would reasonably
be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.
(d) There are no grievances, or requests or demands for arbitration pending, or, to Sellers’
Knowledge, threatened in writing against Sellers, or arbitration awards or Orders
40
outstanding against Sellers under the Collective Bargaining Agreements (other than grievances, requests or
demands attributable to or arising out of decisions, practices and policies made in the Ordinary
Course of Business, including layoffs and reductions in force) that would reasonably be expected to
have, individually or in the aggregate, a Seller Material Adverse Effect.
(e) No employment contracts or severance agreements exist with any current employee of
Sellers.
(f) As of the Effective Date, since January 1, 2006, (i) Sellers have not effectuated a “plant
closing” (as defined in the WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment or facility of the Business and (ii) there has not
occurred a “mass layoff’ (as defined in the WARN Act) affecting any site of employment or facility
of Sellers; nor have Sellers been affected by any transaction or engaged in layoffs or employment
terminations sufficient in number to trigger application of any similar Law.
(g) Except for the current Local Supplemental Agreements between Sellers and the Unions that
were negotiated pursuant to the Letter of Understanding on Local Supplemental Agreements after
January 6, 2007 (set forth on page 124 of the master collective bargaining agreement between
Sellers and the Unions that expires by its terms on June 30, 2011), there are no other local
agreements that may affect, impact or govern in any material respect wages, benefits, and/or terms
and conditions of employment of any Transferred Employees, or operations at any of the facilities
covered by the Collective Bargaining Agreements.
6.13 Taxes. All material Tax Returns relating to the Business or the Purchased Assets (including Tax
Returns of Silver ▇▇▇▇) required to be filed have been timely filed (taking into account validly
obtained extensions) and all material Taxes relating to the Business or the Purchased Assets
(including Taxes of Silver ▇▇▇▇) required to be paid have been timely paid. There are no current
or pending audits or other administrative or court proceedings for the assessment, adjustment or
collection of material Taxes relating to the Business or the Purchased Assets and no Seller has
received, within the past three years, any written notice of any claims, actions, suits, proceedings or investigations for the
assessment, adjustment or collection of material Taxes relating to the Business or the Purchased
Assets including, any written notice or inquiry from any jurisdiction in which Tax Returns have not
been filed with respect to the Business or the Purchased Assets to the effect that the filing of
Tax Returns may be required. There are no liens for Taxes against any of the Purchased Assets.
6.14 Insurance. Section 6.14 of the Seller Disclosure Schedule lists the insurance policies
maintained by Sellers that provide casualty, property damage and general liability coverage for the
Purchased Assets. As of the Effective Date, all of such policies are in full force and effect. At
Closing, all of such policies shall either be in full force and effect or Seller shall have
complied with Section 8.2(c).
6.15 Financial Advisors. Neither Purchaser nor Guarantor is or will become obligated to pay any fee or
commission or like payment to any broker, finder or financial advisor as a
41
result of the
consummation of the transactions contemplated by this Agreement based upon any arrangement made by
or on behalf of any Seller.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND GUARANTOR
REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND GUARANTOR
Each of Purchaser and Guarantor, jointly and severally, hereby represents and warrants to
Sellers:
7.1 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of India.
7.2 Authorization of Agreement. Each of Purchaser and Guarantor has the requisite limited liability
company or corporate power and authority to execute this Agreement and each of the Ancillary
Agreements and to consummate the transactions contemplated hereby and thereby. The execution and
delivery of each of this Agreement and each of the Ancillary Agreements by Purchaser and Guarantor
and the consummation by Purchaser and Guarantor of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of each of Purchaser and Guarantor and no other
corporate proceedings on the part of Purchaser or any Guarantor are necessary to authorize this
Agreement or the Ancillary Agreements or to consummate the transactions contemplated hereby and
thereby. This Agreement has been, and at the Closing each of the Ancillary Agreements will be,
duly executed and delivered by Purchaser and Guarantor and, assuming due execution and delivery by
each Seller of this Agreement and the Ancillary Agreements, this Agreement constitutes, and at the
Closing each of the Ancillary Agreements will constitute, a valid and binding obligation of each of
Purchaser and Guarantor, enforceable against each of Purchaser and Guarantor in accordance with its
terms subject to the Enforceability Exceptions.
7.3 No Violation; Consents.
(a) The execution and delivery by Purchaser and Guarantor of this Agreement and each of the
Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby do
not and will not (i) violate any provision of the Organizational Documents of Purchaser or
Guarantor, (ii) violate any Order of any Governmental Authority to which Purchaser or Guarantor is
bound or subject, or (iii) violate any Applicable Law, other than, in the case of clauses (ii) and
(iii), any conflict, violation, breach, default, requirement for consents, rights of acceleration,
cancellation, termination or Lien that would not reasonably be expected to prevent, impede or
materially delay or otherwise affect in any material respect the transactions contemplated by this
Agreement.
(b) No Order or Permit issued by, or declaration or filing with, or notification to, or waiver
from any Governmental Authority is required on the part of Purchaser or Guarantor in connection
with the execution and delivery of this Agreement or any Ancillary Agreement, or the compliance or
performance by Purchaser or Guarantor with any provision contained in this Agreement or any
Ancillary Agreement, except for (i) in the event the Closing fails to occur
42
prior to the first
anniversary of the expiration of the “waiting period” under the previously filed notification under
the HSR Act, the filing by or on behalf of Purchaser or its “ultimate parent entity” of
notification with the Federal Trade Commission and Antitrust Division of the United States
Department of Justice under the HSR Act and the expiration or termination of the applicable
“waiting period” thereunder and (ii) any such requirements, the failure of which to be obtained or
made would not reasonably be expected to prevent, impede or materially delay or otherwise affect in
any material respect the transactions contemplated by this Agreement.
7.4 Litigation. Other than (i) matters before the Bankruptcy Court involving Sellers or their
Affiliates or (ii) matters that will otherwise be resolved by the Plan Confirmation Order, there
are no Legal Proceedings pending, or to knowledge of Purchaser or Guarantor, threatened in writing
against or affecting Purchaser or Guarantor, at law or in equity, before or by any Governmental
Authority, and neither Purchaser nor Guarantor is subject to any Order rendered specifically
against any of them which would or seeks to enjoin, rescind or materially delay the transactions
contemplated in this Agreement or any Ancillary Agreement or otherwise hinder any of them from
timely complying with the terms and provisions of this Agreement or any Ancillary Agreement.
7.5 Investment Intention. Purchaser is acquiring the Silver ▇▇▇▇ Interests for its own account, for
investment purposes only and not with a view to the distribution (as such term is used in Section
2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”)) thereof. Purchaser
understands that such securities have not been registered under the Securities Act and may not be
sold unless subsequently registered under the Securities Act or an exemption from such registration
is available.
7.6 Financial Capability. Guarantor has on the date hereof, and Purchaser will have on the Closing
Date, sufficient cash available (and has provided Sellers with
evidence thereof) to purchase the Purchased Assets and to consummate the transactions contemplated
by this Agreement and each Ancillary Agreement, including, without limitation, payments of fees and
expenses contemplated hereunder.
7.7 Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending against,
being contemplated by, or to the knowledge of Purchaser or Guarantor, threatened against Purchaser
or Guarantor.
7.8 Financial Advisors. Sellers are not and will not become obligated to pay any fee or commission or
like payment to any broker, finder or financial advisor as a result of the consummation of the
transactions contemplated by this Agreement based upon any arrangement made by or on behalf of
Purchaser or Guarantor.
7.9 Subsequent Sales. Other than this Agreement and the Ancillary Agreements, no agreements or
understandings exist between any of Purchaser or Guarantor and any other Person with respect to a
possible transaction involving any of the Purchased Assets (other than transactions of the Business
made in the Ordinary Course of Business).
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ARTICLE VIII
COVENANTS
COVENANTS
8.1 Access to Information. Prior to Closing, Sellers shall permit Purchaser and its representatives
(including its legal advisors and accountants) to have reasonable access, during normal business
hours and upon reasonable advance notice, to the Books and Records and senior management personnel
of Sellers pertaining to the Purchased Assets, including access to conduct any Phase I
environmental site assessments that accord with the American Society for Testing and Materials
05-1527 standard and any mining, real property or water resources assessments (including property
condition evaluations, visual inspections, soil tests, dam safety evaluations and water resource
evaluations) so long as no such assessments include any sampling and analysis of any environmental
media for the presence or absence of Hazardous Materials; provided, that in no event shall Sellers
be obligated to provide (i) access or information in violation of Applicable Law or (ii) any
information, the disclosure of which would jeopardize any privilege available to Sellers or any of
its Affiliates relating to such information or would cause Sellers or any of its Affiliates to
breach a confidentiality obligation to which they are bound. In connection with such access,
Purchaser’s representatives shall cooperate with Sellers’ representatives (one or more of whom may
be present during any such inspection by Purchaser and Purchaser’s representatives) and shall use
their reasonable best efforts to minimize any disruption of the Business. Purchaser agrees to
abide by the terms of the Confidentiality Agreement and any safety rules or rules of conduct
reasonably imposed by Sellers with respect to such access and any information furnished to it or
its representatives pursuant to this Section 8.1. Purchaser shall indemnify, defend and
hold harmless Sellers, their officers, directors, employees and agents from and against any and all
Liabilities asserted against or suffered by them relating to, resulting from, or arising out of,
examinations or inspections made by Purchaser or its representatives pursuant to this Section
8.1. The indemnity provided for in this Section 8.1 shall expressly survive any
termination of this Agreement or the Closing of the transactions contemplated hereby.
8.2 Conduct of the Business Pending the Closing. Except as otherwise expressly contemplated by this
Agreement, the Ancillary Agreements and Section 8.2 of the Seller Disclosure Schedule
attached hereto or with the prior written consent of Purchaser (which consent shall not be
unreasonably withheld, delayed or conditioned), and except for any violations that would not
reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect,
during the period from and after the date hereof until the Closing Date, Sellers:
(a) shall use commercially reasonable efforts to conduct the Business in the Ordinary Course
of Business;
(b) will maintain levels of material inventories of consumables and parts and supplies as
ASARCO determines are reasonably adequate for operations in the Ordinary Course of Business and it
is acknowledged by Purchaser and Guarantor that ASARCO anticipates reducing levels of material
inventories of consumables and parts and supplies in the Ordinary Course of Business in response to
economic and industry conditions;
44
(c) will maintain in full force and effect policies of insurance that provide casualty,
property damage and general liability coverage for the Purchased Assets comparable in all material
respects in amount and scope of coverage to that now maintained by or on behalf of Seller;
(d) will not sell, lease or otherwise transfer or dispose of any Purchased Assets used or held
in the Ordinary Course of Business, or any interest therein, other than transfers and dispositions
in the Ordinary Course of Business or de minimus sales approved by the Bankruptcy Court;
(e) will not grant or announce any material increase in the salaries, bonuses or other
benefits payable by Sellers to any of the employees to be offered employment by Purchaser pursuant
to Article IX, other than (i) as may be required by any Governmental Authority, Applicable
Law, Collective Bargaining Agreement, Seller Employee Benefit Plan or employment Contract with any
such employee, (ii) in the Ordinary Course of Business, or (iii) in accordance with Sellers’ annual
performance, promotion and salary reviews;
(f) will not change any method of accounting or accounting practice or policy used by Sellers
(as it relates to the Business), other than such changes required by Sellers’ Accountants or GAAP;
(g) will use commercially reasonable efforts to maintain in all material respects the
relationships and goodwill of the Business with its Employees, suppliers and customers;
(h) will not fail to exercise any rights of renewal with respect to any lease listed in
Section 6.8(a)(i) of the Seller Disclosure Schedule that by its terms would otherwise
expire;
(i) will not hire any new employees or transfer employees from any other operations of
Sellers, if any such employees are to be offered employment by Purchaser pursuant to Article
IX, except (i) as may be required to replace any employees who terminate voluntarily or who
were terminated involuntarily in the Ordinary Course of Business, (ii) in the Ordinary Course of
Business or (iii) as set forth under Section 8.2 of the Seller Disclosure Schedule;
(j) will make capital expenditures or commitments for capital expenditures as necessary to
maintain the material Purchased Assets, in each case, in the Ordinary Course of Business and it is
acknowledged by Purchaser and Guarantor that ASARCO anticipates a reduction in capital expenditures
and commitments for capital expenditures in the Ordinary Course of Business; and
(k) will not agree to take any of the actions specified in this Section 8.2, except as
contemplated by this Agreement and the Ancillary Agreements.
For the avoidance of doubt, the foregoing shall not require Sellers to make any payments, incur any
costs, or enter into or amend any Contracts or understandings, unless such payment,
45
incurrence or
other action is required by Applicable Law, by Contract with a third party or to operate in the
Ordinary Course of Business.
8.3 Cooperation; Consents and Filings.
(a) From and after the date hereof until the Closing Date, Sellers, Purchaser and Guarantor
will each cooperate with each other and use (and will cause their respective representatives to
use) commercially reasonable efforts (subject, solely to the extent required by Applicable Law, to
entry of the Plan Confirmation Order) (i) to take, or to cause to be taken, all actions, and to do,
or to cause to be done, all things reasonably necessary, proper or advisable on its part under this
Agreement, the Ancillary Agreements, Applicable Law or otherwise to consummate and make effective
the transactions contemplated by this Agreement as promptly as practicable; (ii) to obtain promptly
from any Person or Governmental Authority any consent, Order or Permit required to be obtained by
Sellers, Purchaser or Guarantor or any of their respective Affiliates in connection with the
authorization, execution, delivery and performance of this Agreement, the Ancillary Agreements and
the consummation of the transactions contemplated hereby and thereby; (iii) to promptly make all
necessary filings and thereafter make any other required submissions with respect to this Agreement
and the Ancillary Agreements and prompt consummation of the transactions contemplated hereby and
thereby required under any Applicable Law; and (iv) to provide prompt notification to the other
parties hereto of any actions pursuant to clauses (i) — (iii) of this Section
8.3(a). In addition, no party shall take any action after the date hereof (other than any
action required to be taken under this Agreement or to which the other parties shall have granted
their consent) that could reasonably be expected to materially delay the obtaining of, or result in
not obtaining, any consent, Order, Permit, qualification, exemption or waiver from any Governmental
Authority or other Person required to be obtained prior to Closing; provided, however, that nothing
in this Section 8.3 shall be construed as altering the rights and obligations of the
parties under Section 3.5 or Section 8.10. To the extent any consideration is
required to be paid to a third party in order to obtain any consents from third parties that may be
necessary, proper or advisable to consummate the transactions contemplated by this Agreement and
the Ancillary Agreements, such cost will be borne equally by Sellers and Purchaser.
(b) To the extent permitted by Applicable Law and subject to any limitations on access to
information provided for in Section 8.1, each party shall consult with the other parties
with respect to, and provide any information reasonably requested by the other party in connection
with, all material filings made with any Governmental Authority in connection with this Agreement
and the transactions contemplated hereby. If any party or any of its Affiliates receives a request
for information or documentary material from any Governmental Authority with respect to this
Agreement or any of the transactions contemplated hereby, then such party shall endeavor in good
faith to make, or cause to be made, as soon as reasonably practicable and, to the extent permitted
by Applicable Law, after consultation with the other parties, an appropriate response in compliance
with such request.
(c) In connection with the Original PSA, the parties made the required filing under the HSR
Act with the Federal Trade Commission and Antitrust Division of the United States Department of
Justice and the applicable “waiting period” thereunder expired on October 22, 2008 and the filing
remains effective for a period of twelve months from the date of such
46
expiration. In addition to
and without limiting any of the other covenants of the parties contained in this Section
8.3, the parties shall, in connection with the transactions contemplated hereby, (i) comply, at
the earliest practicable date, with any request for additional information or documentary material received by them, or any of their respective Affiliates from the Federal
Trade Commission or Antitrust Division of the United States Department of Justice pursuant to the
HSR Act or from any state attorney general or other Governmental Authority in connection with
antitrust matters, (ii) cooperate with each other in connection with any filing under the HSR Act
and in connection with resolving any investigation or other inquiry concerning the transactions
contemplated hereby commenced by the Federal Trade Commission, Antitrust Division of the United
States Department of Justice, any state attorney general or any other Governmental Authority, (iii)
use commercially reasonable efforts to resolve such objections, if any, as may be asserted with
respect to the transactions contemplated hereby under any antitrust Law, (iv) advise the other
parties promptly of any material communication received by such party from the Federal Trade
Commission, Antitrust Division of the United States Department of Justice, any state attorney
general or any other Governmental Authority regarding any of the transactions contemplated hereby,
and of any understandings, undertakings or agreements (oral or written) such party proposes to make
or enter into with the Federal Trade Commission, Antitrust Division of the United States Department
of Justice, any state attorney general or any other Governmental Authority in connection with the
transactions contemplated hereby, and (v) in the event this Agreement fails to close prior to
October 22, 2009, take promptly all actions necessary to make the filings required of them or their
“ultimate parent entities” under the HSR Act and concurrently with the filing of notifications
under the HSR Act or as soon thereafter as practicable, Purchaser and Sellers shall each request
early termination of the applicable “waiting period” under the HSR Act.
(d) In connection with the Original PSA, Purchaser and Sellers prepared and filed a joint
notice under Section 721 of Title VII of the Defense Production Act of 1950, as amended (50 U.S.C.
App. § 2170 et seq.) (the “Exon-▇▇▇▇▇▇ Provision”) with the Committee on Foreign Investment in the
United States (“CFIUS”) with respect to the transactions contemplated by the Original PSA (the
“CFIUS Notice”). The Purchaser and Sellers shall use commercially reasonable efforts to provide
any additional information required by CFIUS in connection with this Agreement to obtain
confirmation from CFIUS that the transactions contemplated by this Agreement do not fall within the
scope of transactions requiring investigation under the Exon-▇▇▇▇▇▇ Provision. If requested by
CFIUS in connection with its consideration of the transactions contemplated by this Agreement, the
Purchaser and Sellers shall use commercially reasonable efforts to mitigate any concerns raised by
CFIUS.
(e) Before and after the Closing Date, Sellers will use commercially reasonable efforts to
cooperate with Purchaser in the conduct of the Arizona water rights adjudication cases to preserve
Seller’s existing rights in the adjudication for Purchaser’s benefit after the Closing Date;
provided, however, that Sellers shall have no obligation to continue such efforts upon the
dissolution and winding up of ASARCO.
8.4 Preservation of Records. Subject to the other provisions of this Agreement, Purchaser and
Guarantor shall, and shall cause their respective Affiliates to, preserve and keep in their
possession all records held by them on and after the date hereof relating to the Purchased
47
Assets,
for a period of seven years or such longer period as may be required by Applicable Law and shall
make such records and personnel available to Sellers, or their Affiliates, as may reasonably be
required by such party in connection with, among other things, any insurance claims, Legal
Proceedings, collective bargaining or governmental investigations of Sellers or any of their
Affiliates or in order to enable Sellers or any of their Affiliates to comply with their
obligations under this Agreement, the Ancillary Agreements and each other agreement, document or
instrument contemplated hereby or thereby. After the expiration of any applicable retention
period, before Purchaser or any Guarantor shall dispose of any of such records, at least 90 days’
prior notice to such effect shall be given by Purchaser or Guarantor to Sellers (or a Person
designated by Sellers) and Sellers shall have the opportunity (but not the obligation), at their
sole cost and expense, to remove and retain all or any part of such records as they may in their
sole discretion select.
8.5 Confidentiality. The parties acknowledge that Guarantor and ASARCO previously executed a
confidentiality agreement, dated July 6, 2007, (the “Confidentiality Agreement”), which
Confidentiality Agreement shall continue in full force and effect in accordance with its terms and
shall survive the execution and delivery of (and any termination of) this Agreement. Purchaser and
Guarantor agree that this Agreement, the Ancillary Agreements and the terms and conditions of the
transactions contemplated hereby and thereby shall be considered Evaluation Material as defined in,
and subject to the terms of, the Confidentiality Agreement.
8.6 Public Announcements. Prior to the Closing Date, neither Sellers, nor Purchaser or Guarantor, or
any of their respective Affiliates, agents or representatives, shall issue any press release or
public statement concerning this Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other parties hereto, unless such disclosure is
required by Applicable Law, an Order of the Bankruptcy Court or by obligations pursuant to any
agreement with any national securities exchange; provided, that the party intending to make such
release shall give the other parties prior notice and shall use its commercially reasonable efforts
consistent with such Applicable Law, Order or obligation to consult with the other party with
respect to the text thereof.
8.7 Bankruptcy Matters.
(a) ASARCO shall use its reasonable best efforts to obtain prompt entry of the Plan
Confirmation Order.
(b) ASARCO shall provide Purchaser with final drafts (promptly after such final drafts are
prepared) of all documents, motions, orders, filings or pleadings that Sellers propose to file with
the Bankruptcy Court which relate to (i) this Agreement or the transactions contemplated hereunder,
(ii) the Sterlite Settlement Motion and the Sterlite Agreed Order, (iii) the Disclosure Statement,
(iv) the Plan Confirmation Order and (v) the acquisition by Purchaser of the Purchased Assets, and
will provide Purchaser with a reasonable opportunity to review such documents in advance of their
service and filing to the extent reasonably practicable. Sellers shall consult and cooperate with
Purchaser, and consider in good faith the views of Purchaser, with respect to all such filings.
Except as permitted by Section 8.10, without the prior written consent of Purchaser (which
consent shall not be unreasonably delayed or denied), once
48
filed with the Bankruptcy Court, Seller
shall not seek to amend or modify any provision in the Sterlite Agreed Order, Disclosure Statement,
the Plan or the Plan Confirmation Order to effect a change in the terms and conditions of the
transactions contemplated by the Agreement which would reasonably be expected to have a material
adverse effect on Purchaser (or Guarantor) or on the ability of Sellers and Purchaser (and
Guarantor) to consummate the transactions contemplated hereby on or before the Termination Date; except that, Sellers may seek to amend
or modify any provision in the Disclosure Statement, the Plan or the Plan Confirmation Order in
connection with an Acquisition Proposal or Stand-Alone Plan in accordance with Section
8.10.
(c) Sellers, Purchaser and Guarantor shall each use commercially reasonable efforts to
cooperate, assist and consult with each other to secure the entry of the Plan Confirmation Order
following the date hereof, and to consummate the transactions contemplated by this Agreement
(including (i) the assignment to and assumption by Purchaser of any Contract that is intended to be
an Assumed Contracts in accordance with this Agreement, (ii) obtaining any consents required in
connection therewith, and (iii) identifying any Contracts to allow Purchaser to furnish affidavits
or other documents or information for filing with the Bankruptcy Court for the purposes, among
others, of providing necessary assurances of performance by Purchaser and Guarantor under
Section 3.5(a) of this Agreement). In the event that any Orders of the Bankruptcy Court
relating to this Agreement shall be appealed by any Person (or a petition for certiorari or motion
for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or
reargument shall be filed with respect to any such Order), subject to Section 13.1,
Sellers, Purchaser and Guarantor will each cooperate in taking such steps to diligently defend
against such appeal, petition or motion and Sellers and Purchaser shall use their commercially
reasonable efforts to obtain an expedited resolution of any such appeal, petition or motion.
Neither Purchaser nor Guarantor shall, without the prior written consent of Sellers, file, join in,
or otherwise support in any manner whatsoever any motion or other pleading relating to the sale of
the Purchased Assets. Nothing in this Section 8.7 shall be construed as altering the
rights and obligations of Sellers under Section 8.10.
(d) By Order entered on January 14, 2009, ASARCO’s exclusive periods to file a chapter 11 plan
and to obtain acceptances of such chapter 11 plan were extended to March 17, 2009 and May 18, 2009,
respectively. From time to time, ASARCO will timely file a motion(s) as required to extend (i)
ASARCO’s exclusive period to file a chapter 11 plan and (ii) ASARCO’s exclusive period to obtain
acceptances of such chapter 11 plan. Purchaser acknowledges that the Bankruptcy Court terminated
exclusivity under Section 1121(d) of the Bankruptcy Code to allow ASARCO Incorporated and Americas
Mining Corporation, ASARCO’s direct and indirect parent companies, to file a chapter 11 plan and
thus ASARCO’s motion to extend its exclusive periods as provided in this paragraph does not apply
to ASARCO Incorporated and Americas Mining Corporation.
8.8 Title Insurance. Purchaser, at its own expense and at its option, may obtain commitments (each, a
“Title Report”) for owner’s policies of title insurance with extended coverage, each in the
aggregate amount of the Purchase Price allocable to the applicable Purchased Real Property, and
leasehold policies of title insurance in the aggregate amount of the Purchase Price allocable to
the applicable Leasehold Property (each such policy, a “Title Policy”) from a title company
acceptable to Purchaser in its sole discretion (the “Title
49
Company”), and, at Purchaser’s election
and sole cost and expense, a survey of each parcel of Real Property (each, a “Survey”). Sellers
have delivered to Purchaser or shall promptly deliver to Purchaser after the date hereof, any
existing Surveys of any parcel of Real Property any Seller may have in its possession. Seller
shall have no obligation to obtain any new Surveys or updates to any existing Surveys. Purchaser
shall provide to Sellers, to the extent obtained by Purchaser, a copy of each Title Report, each Title Policy and each Survey and all supplemental reports amending such Title Reports,
Title Policies or revisions amending such Surveys.
8.9 Bonds and Assurances. Prior to Closing, Purchaser shall (i) cause Sellers to be fully,
unconditionally and irrevocably released and discharged from the bonds, financial assurance
obligations and guaranty obligations identified in Section 8.9 of the Seller Disclosure
Schedule outstanding on the Closing Date and all such other bonds, financial assurance obligations
and similar obligations incurred in the Ordinary Course of Business on or after the date of this
Agreement and prior to the Closing (the “Bonds and Assurances”) and (ii) replace the Bonds and
Assurances or act as a substituted obligor, guarantor or other counterparty to the Bonds and
Assurances as required for the continued operation of the Business.
8.10 Solicitation Provisions; Matching Right; Back-Up Bid Option.
(a) Prior to entry of the Sterlite Agreed Order by the Bankruptcy Court:
| (i) | Purchaser, Guarantor and Sellers acknowledge that Sellers may take any action deemed necessary by Sellers to demonstrate that (i) they have sought to obtain the highest and best value for the Purchased Assets and that (ii) consummation of the transactions contemplated by this Agreement will in fact yield the highest and best value for the Purchased Assets, including giving notice thereof to Sellers’ creditors, other bidders for the Purchased Assets and other interested parties, providing information about the Business to prospective bidders, entertaining and negotiating offers from such prospective bidders, and, if necessary, conducting an auction. | ||
| (ii) | Without limiting the generality of Section 8.10(a)(i), each Seller and any director, officer, employee, investment banker, financial advisor, attorney, accountant or other advisor, agent or representative (collectively “Representatives”) of any Seller shall have the right (but not the obligation), acting under the direction of the Board of Directors of ASARCO or any committee thereof, to, directly or indirectly: (i) solicit, initiate, facilitate or encourage any Acquisition Proposal or proposal for a Stand-Alone Plan, including by way of providing access to third parties to non-public information pursuant to one or more confidentiality agreements; and (ii) enter into and maintain discussions or negotiations with respect to one or more Acquisition Proposals or any Stand-Alone Plan proposal or otherwise cooperate with or assist or participate in, or facilitate, any such discussions or negotiations. |
50
| (iii) | Purchaser and Guarantor agree that none of them nor any of their respective Affiliates or Subsidiaries shall, and that each of them shall use their reasonable best efforts to cause each of their respective Representatives not to, directly or indirectly, discourage or interfere with any Acquisition Proposal or Stand-Alone Plan, or contact or participate in discussions with any Person regarding an Acquisition Proposal or proposal for a Stand-Alone Plan that, to Purchaser or Guarantor’s knowledge, has made, or is considering or participating in discussions or negotiations with any Seller or any Representative of any Seller regarding an Acquisition Proposal or proposal for a Stand-Alone Plan. | ||
| (iv) | No Seller, nor any of its Representatives, shall have any liability to Purchaser or Guarantor, either under or relating to this Agreement, the Ancillary Agreements or any Applicable Law, by virtue of entering into or seeking Bankruptcy Court approval of an Acquisition Proposal or Stand-Alone Plan or the definitive agreement for any such Acquisition Proposal or Stand-Alone Plan. Any Seller may in its sole discretion enter into a definitive agreement with respect to such Acquisition Proposal or Stand-Alone Plan and Sellers may terminate this Agreement prior to or after entry into such a definitive agreement. | ||
| (v) | Any action taken by any Seller or any Representative of any Seller in accordance with the provisions of this Section 8.10(a) are expressly acknowledged and agreed to be not in breach or violation of any covenant contained in this Agreement or that could be implied in this Agreement (including a covenant of good faith and/or fair dealing). |
(b) Following the entry of the Sterlite Agreed Order by the Bankruptcy Court, ASARCO agrees
that neither it nor any of its wholly-owned Subsidiaries shall, and that it shall direct its
Representatives and its wholly-owned Subsidiaries’ Representatives not to, directly or indirectly,
solicit any Acquisition Proposal; provided, however, that, nothing shall prevent ASARCO, its Board
of Directors or any of its Representatives from taking any of the following actions:
(i) complying with its obligations under Applicable Law with regard to an
Acquisition Proposal; or
(ii) (A) engaging in any negotiations or discussions with any Person who has
made an unsolicited bona fide written Acquisition Proposal or (B) recommending an
unsolicited Acquisition Proposal to the Creditor Constituents, if in the case of
each of clause (A) and (B) above, the Board of Directors of ASARCO determines in
good faith (after consultation with its legal and financial advisors and the
Creditor Constituents) that (1) such action would be reasonably likely to be
required in order to comply with its fiduciary duties under Applicable
51
Law and (2)
such Acquisition Proposal is a Superior Proposal or is likely to lead to a Superior
Proposal; or
(iii) communicating or engaging in discussions with any of the Creditor
Constituents or their respective advisors or Representatives regarding any matter,
whether Acquisition Proposal, proposal relating to a Stand-Alone Plan or
otherwise.
(c) Notwithstanding anything herein to the contrary, Sellers and their Subsidiaries and their
respective officers, directors, employees, attorneys, investment bankers, accountants and other
agents and Representatives shall be permitted to (i) maintain and continue to provide access to the
Seller Data Room to Persons that have executed a confidentiality agreement with ASARCO prior to the
entry of the Sterlite Agreed Order and (ii) respond to any inquiries from and provide access to the
Seller Data Room to Persons that have submitted a written bona fide (and unsolicited) Acquisition
Proposal that ASARCO determines in good faith is a Superior Proposal (or is reasonably likely to
lead to a Superior Proposal) and that have executed a confidentiality agreement with ASARCO. No
Seller, nor any of its Affiliates shall have any liability to Purchaser or Purchaser Parent, either
under or relating to this Agreement, the Ancillary Agreements or any Applicable Law, by virtue of
entering into or seeking Bankruptcy Court approval of a Superior Proposal or the definitive
agreement for such Superior Proposal, in each case, in accordance with the terms of this
Section 8.10, following the receipt of any Superior Proposal, except as provided in
Section 13.2(b)(v) upon termination of this Agreement.
(d) Sellers shall, as soon as practicable, provide Purchaser with the material terms and
conditions of any Acquisition Proposal, and identity of the Person making such Acquisition
Proposal, received by Sellers after the entry of the Sterlite Agreed Order by the Bankruptcy Court
that the Board of Directors of ASARCO determines in accordance with Section 8.10(b)(ii)
above to take any affirmative action to approve, or authorize negotiations of, a definitive
agreement in respect of.
(e) Purchaser shall have the right (a “Matching/Topping Right”), within four Business Days
after Purchaser receives a copy of the material terms and conditions of any Acquisition Proposal,
and identity of the Person making such Acquisition Proposal, pursuant to Section 8.10(d),
to deliver to Sellers an unconditional written offer to improve the terms and conditions contained
in this Agreement so long as the Deemed Value of such improved offer (which Deemed Value will
include the value of the amounts that would be owed to Purchaser under Section 13.2(b)(v)
if such Acquisition Proposal were accepted and consummated) is at least equal to the Deemed Value
of such pending Acquisition Proposal. Purchaser shall be under no obligation to exercise its
Matching/Topping Right or to participate in any proceedings designed to elicit from Purchaser an
equal or higher and better offer.
(f) If ASARCO terminates this Agreement pursuant to Section 13.1(d) or (e),
and such Superior Proposal or Stand-Alone Plan, as applicable, that prompted such termination is
definitively terminated prior to consummation thereof, then ASARCO shall offer Purchaser the right
(the “Back-Up Bid Option”) to consummate the purchase and sale of the Purchased Assets and the
assumption of the Assumed Liabilities in a transaction on substantially the same
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terms and
conditions as this Agreement; provided, however, the Back-Up Bid Option will expire with no further
obligation to Purchaser at 5:00 p.m., Dallas, Texas time, on the tenth Business Day following the
date on which the Back-Up Bid Option was offered to Purchaser unless prior to such time (A) ASARCO
receives a definitive purchase and sale agreement executed by Purchaser and Guarantor in the form
of this Agreement (including Article II) with only such modifications as are described in this Section 8.10(f) (the “Back-Up Bid Agreement”)
and (B) ASARCO shall have received an originally executed letter of credit, enforceable against the
issuer thereof, in the amount of $125,000,000.00 issued in favor of ASARCO by a Qualified Bank;
provided, however, that if ASARCO has retained or drawn on the First L/C pursuant to Section
4.2(f), then the letter of credit shall be issued in the amount of $75,000,000.00. The Back-Up
Bid Agreement shall contain the following modifications to this Agreement:
| (i) | all dates and deadlines shall be extended to such dates following execution of the Back-Up Bid Agreement as are consistent with the respective time periods between the Effective Date and the dates or deadlines contained in this Agreement; | ||
| (ii) | the covenants contained in the subsections of Section 8.2 shall be reasonably revised as appropriate to reflect ASARCO’s operations at such time; provided, however, that Purchaser, Guarantor and Sellers, each acting reasonably, are able to agree in writing on such revisions prior to expiration of the Back-Up Bid Option; and | ||
| (iii) | such other non-substantive changes as may be reasonably required under the circumstances and as may be agreed in writing among Purchaser, Guarantor and Sellers, each acting reasonably, prior to expiration of the Back-Up Bid Option. |
Purchaser shall be entitled to seek specific performance to enforce its right to receive the offer
of the Back-Up Bid Option from Sellers in accordance with this Section 8.10(f) without the
necessity of proving actual damages or of posting any bond.
8.11 Risk of Loss; Casualty Loss. All risk of loss or damage to or destruction of the Purchased Assets,
in whole or in part, shall be and remain with Sellers until Closing and upon Closing, the risk of
loss or damages to or destruction of the Purchased Assets in whole or in part shall be and remain
with Purchaser. If, between the date of this Agreement and the Closing, any of the Purchased
Assets shall be destroyed or damaged in whole or in part by fire, earthquake, flood, other casualty
or any other cause (the “Casualty”), then Purchaser shall acquire such Purchased Assets on an “as
is” basis and take an assignment from Sellers of any insurance proceeds payable to Sellers in
respect of the Casualty.
8.12 Further Assurances. Sellers, Purchaser and Guarantor agree that from and after the Closing Date,
each of them will, and will cause their respective Affiliates to, execute and deliver such further
instruments of conveyance and transfer and take such other action as may reasonably be requested by
any party hereto to carry out the purposes and intents hereof.
8.13 Payments and Proceeds.
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(a) If, at any time on or after Closing, any Seller receives any asset or any proceeds in
respect of any Purchased Asset, whether or not in payment of any sum due to Purchaser, or otherwise
comes into possession of any Purchased Asset or product or proceed thereof, such Seller shall turn
over such asset or proceed to Purchaser and pending such turn over, such Seller shall hold such
asset or proceed in trust for Purchaser’s benefit. This Section 8.13(a) shall not apply to
transactions contemplated by, or Purchased Assets, proceeds or products received pursuant to, the
Purchaser Promissory Note or Security Agreement.
(b) If, at any time on or after Closing, Purchaser receives any asset or any proceeds in
respect of any Excluded Asset, whether or not in payment of any sum due to any Seller, or otherwise
comes into possession of any Excluded Asset or product or proceed thereof, Purchaser shall turn
over such asset or proceed to Sellers and pending such turn over, Purchaser shall hold such asset
or proceed in trust for Sellers’ benefit.
8.14 Transition Services Agreement. The parties shall negotiate in good faith as promptly as
practicable following the date of this Agreement a form of Transition Services Agreement whereby
from and after the Closing until the completion by ASARCO and its subsidiaries (and any successor
entities to ASARCO in the Bankruptcy Cases) of the wind down of its operations and the
implementation of the Plan, Purchaser will provide to ASARCO the litigation support services,
closing accounts statement services, and access to Real Property and Books and Records as set forth
in Exhibit K and will make available the Transferred Employees or other personnel to
provide to ASARCO the other wind down services described in Exhibit K in order to wind down
operations, implement the Plan and otherwise administer the Bankruptcy Cases.
ARTICLE IX
EMPLOYEES AND EMPLOYEE BENEFITS
EMPLOYEES AND EMPLOYEE BENEFITS
9.1 Employment.
(a) All of the employees of Sellers who are not union-represented and who are employed on the
Closing Date, including those actively at work or on vacation, leave of absence or other approved
absence from work and individuals who have received offers of employment but have not reported to
work (“Non-Union Employees”), shall be offered employment with Purchaser on or before the Closing
Date, subject to completion of all applications and forms for employment and benefits required by
Applicable Law or required of similarly-situated employees of Guarantor, on the terms which, in
the aggregate, are substantially equivalent to those provided to such Non-Union Employees prior to
Closing. All union-represented employees of Sellers who are employed on the Closing Date,
including those actively at work or on vacation, leave of absence or other approved absence from
work and individuals who have received offers of employment but have not reported to work (“Union
Employees”, and together with the Non-Union Employees, the “Employees”) shall be offered employment
with Purchaser on or before the Closing Date, subject to completion of all applications and forms
for employment and benefits required by Applicable Law or required of similarly-situated employees
of Guarantor, in accordance with the terms of the labor agreement negotiated between Purchaser and
the respective Union. Such persons who accept such offer on or before the
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Closing Date shall be referred to as “Transferred Employees.” Notwithstanding the foregoing, this
Section 9.1(a) shall not apply to those employees of Sellers whose principal services
relate to litigation and bankruptcy administration (which employees Sellers agree to identify to
Purchaser at least 30 days prior to Closing), and Purchaser will be under no obligation to offer
employment to such employees of Sellers.
(b) Any liability or obligation that Sellers shall incur with respect to severance, benefits
or termination of Employees as a result of Purchaser’s failure to provide Employees with pay,
benefits and other terms and conditions of employment comparable in the aggregate to those provided
to Employees as of the Closing or, where Purchaser’s provision of a comparable, in the aggregate,
benefit is impracticable or impossible, Purchaser’s failure to provide a compensation and benefits
package of comparable value at least sufficient to provide Purchaser and Sellers with a good faith
defense to any allegation or claim that such Transferred Employees might make for severance or
termination, will be an Assumed Liability.
(c) Purchaser and Sellers shall comply with the requirements of Applicable Law in respect of
the Transferred Employees.
9.2 Terms of Continued Employment.
(a) Purchaser agrees to provide to those Transferred Employees who were Non-Union Employees,
for a period of at least 24 months following the Closing Date (i) levels of total compensation
(including salary) and participation in Seller Employee Benefit Plans which, in the aggregate, are
substantially equivalent to the levels of total compensation (including salary) and Seller Employee
Benefit Plan participation, in the aggregate, of such Employees as in effect as of the Closing Date
and (ii) at a work location no more than 50 miles from the individual’s work location as of the
Closing Date; provided, however, that this shall not be construed to grant to any Transferred
Employee a right to employment by Purchaser for any particular length of time. Nothing in this
Section 9.2(a) shall in any way restrict the right of Purchaser to terminate any
Transferred Employee who was a Non-Union Employee at any time for any reason not in violation of
Contract or Applicable Law.
(b) Notwithstanding Section 9.2(a), if at any time during the 24-month period
following the Closing Date the employment of any Transferred Employee is terminated other than for
cause or is constructively terminated under the severance plan set forth in Section 9.2(b)
of the Seller Disclosure Schedule, Purchaser shall provide the terminated Transferred Employee with
severance benefits which are comparable, in the aggregate, to the severance benefits described in
Section 9.2(b) of the Seller Disclosure Schedule.
9.3 Assumption of Plans. As of the Closing Date, Purchaser shall adopt and become the sponsor and
employer for purposes of each and every Seller Employee Benefit Plan set forth in Section
9.3 of the Seller Disclosure Schedule and shall be substituted for Seller or its Subsidiaries
who had theretofore been the sponsor of any such Seller Employee Benefit Plan. Effective as of the
Closing, Purchaser shall be responsible for all benefits and liabilities with respect to such
Seller Employee Benefit Plans, as such Seller Employee Benefit Plans may be amended or modified
from time to time by written agreement between Purchaser and the Unions after the Closing Date.
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9.4 Service Credit. Except as may otherwise be agreed in writing after the Closing Date between
Purchaser and the Unions with respect to the applicable unionized employees, Purchaser shall cause
to be provided to each Transferred Employee credit for prior service with Sellers or their
Subsidiaries since their last day of hire for all purposes (including vesting, eligibility, benefit
accrual and/or level of benefits) in all Purchaser employee benefit plans, programs, practices or
arrangements, including fringe benefit plans, vacation and sick leave policies, severance plans or
policies, retiree medical plans, defined benefit plans, matching contributions under defined
contribution plans (including defined contribution retiree medical plans) maintained or provided by
Purchaser or its Subsidiaries or Affiliates in which such Transferred Employees are eligible to
participate after the Closing Date, to the extent such prior service credit would be extended under
each applicable Seller Employee Benefit Plan; provided, however, that no such past service credit
shall be granted to the extent that it would result in the duplication of benefits for the same
period of service.
9.5 Vacation and Leave. Except for amounts of vacation and other accrued time off paid to
Transferred Employees by Sellers at or promptly after the Closing Date, Purchaser shall provide
each Transferred Employee credit for all of the Transferred Employee’s earned but unused vacation
and sick leave and other time-off as of the Closing Date as determined under Seller’s time-off
policies and Purchaser shall thereafter be responsible for providing commensurate vacation pay or
pay in lieu of vacation as well as sick leave with respect to such employees for the credited
vacation and sick leave. At least three days prior to Closing, Sellers shall provide Purchaser
with a calculation of all of the Transferred Employee’s earned but unused vacation and sick leave
and other accrued time-off.
9.6 Welfare Benefit Plans; Workers’ Compensation; Other Benefits.
(a) With respect to each Transferred Employee (including any beneficiary or the dependent
thereof), Purchaser shall assume all liabilities and obligations for workers’ compensation benefits
even if such liability or obligation relates to claims incurred (whether or not reported or paid)
prior to the Closing Date. For purposes of this Section 9.6, a claim shall be deemed to be
incurred when (i) with respect to medical, dental, health related benefits, accident and disability
(including worker’s compensation benefits but not including wage continuation/replacement type
benefits), the medical, dental, health related, accident or disability services with respect to
such claim are performed and (ii) with respect to life insurance, when the death occurs.
(b) Effective as of the Closing Date, Purchaser shall be responsible for providing coverage
under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) to any Employee, his or her
spouse or dependent person as to whom a “qualifying event” as defined in Section 4890B of the Code
has occurred (i) prior to the Closing Date in the case of a “qualifying event” other than a
termination of employment and (ii) in the case of a termination of employment “qualifying event” on
or prior to the Closing Date. Purchaser shall also be responsible for providing COBRA coverage to
any Employee, his or her spouse or dependent person as to whom a “qualifying event” occurs on or
after the Closing Date including for a “qualifying event” that is a termination of employment on
the Closing Date.
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(c) Purchaser acknowledges that ASARCO has obligations under the Coal Act, including the
obligations (i) to provide retiree health benefits to eligible beneficiaries and their dependents
pursuant to Section 9711 of the ▇▇▇▇ ▇▇▇, ▇▇ ▇.▇.▇. § ▇▇▇▇, (▇▇) to pay the annual prefunding
premium and the monthly per beneficiary premium required pursuant to Section 9712(d)(1)(A) and (B)
of the Coal Act, 26 U.S.C. § 9712(d)(1)(A) and (B), and (iii) to provide security to the UMWA 1992
Benefit Plan pursuant to Section 9712(d)(1)(C) of the Coal Act, 26 U.S.C. § 9712(d)(1)(C).
Accordingly, Purchaser assumes and is responsible for all of the Coal Act obligations of ASARCO,
including the obligations set forth in this paragraph.
(d) In addition to the obligations assumed pursuant to the other sections of Article
IX and not in limitation thereof, Purchaser shall assume and be responsible for all of ASARCO’s
obligations under the Collective Bargaining Agreement, as amended by that certain letter agreement
entered into between the United Steelworkers of America and the Purchaser, dated June 23, 2008,
which shall become effective on the Closing Date, and the retiree class action settlement agreement
approved by the Bankruptcy Court by order dated March 15, 2007 (Docket No. 4178), which settled the
cause of action captioned Asarco Incorporated et al. v. United Steelworkers of America,
AFL-CIO/CLC, et al., No. CV-03-1297.
9.7 OSHA Medical Records; Other Records; Payroll Deductions. Purchaser shall accept delivery from
Sellers of all OSHA exposure and other records with respect to the Business, and shall maintain
such records and provide copies thereof to current and former employees engaged primarily in the
conduct of the Business in compliance with OSHA. Purchaser shall obtain from Transferred
Employees, as part of its hiring process or otherwise, their consents to the transfer of their
medical and other records and all payroll deduction authorizations from Sellers to Purchaser.
Notwithstanding anything to the contrary contained in Section 9.1, receipt of the consent
contemplated by the immediately preceding sentence shall be considered a condition to the offer of
employment required in Section 9.1, and any Employee who fails to provide such consent
promptly shall cease to be a Transferred Employee, effective (retroactively, if applicable) as of
the Closing Date.
9.8 Announcement. On or prior to the date hereof, Sellers and Purchaser have agreed (after
consultation with the Unions) upon a form of joint announcement to employees concerning this
Agreement and the transactions contemplated hereby and a communication plan concerning the method
and timing of the delivery of such announcement. Contemporaneously with the execution and delivery
of this Agreement (or promptly thereafter), the parties will deliver such announcement to employees
in accordance with such communication plan.
9.9 Warn Act. Before the Closing Date, Sellers shall be responsible with respect to all current
and former employees of Sellers for compliance with the Worker Adjustment and Retraining
Notification Act of 1988 (the “WARN Act”) and any similar state or local law for an “employment
loss” (as defined in the WARN Act) and occurring before the Closing Date as a result of actions
take by Sellers. After the Closing Date, Purchaser shall be responsible with respect to all
Transferred Employees for compliance with the WARN Act and any similar state or local Laws for an
“employment loss” (as defined in the WARN Act) or temporary layoff (with no reasonable expectation
of recall) occurring on or after the Closing Date as a result of actions taken by Purchaser.
Section 9.9 of the Seller Disclosure Schedule lists the names and the sites of employment
or facilities of those individuals who suffered an “employment loss” (as defined in
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the WARN Act) or who have been placed on temporary layoff (with no reasonable expectation of
recall) at any site of employment or facility of Sellers or any of its Subsidiaries during the
90-day period prior to the date hereof, together with the date of each such employment loss or
temporary layoff (with no reasonable expectation of recall), which schedule shall be updated with
respect to the period between the date hereof and the Closing Date. Seller represents that with
respect to each such “employment loss,” it complied in all material respects with the notice
requirements contained in the WARN Act.
ARTICLE X
TAX MATTERS
TAX MATTERS
10.1 Transaction Taxes. Purchaser shall bear and be responsible for paying any sales, use, value
added, goods and services, gross receipts, stamp, duty, stamp duty, transfer, documentary,
registration, business and occupation, severance (to the extent imposed on the transfer of the
Inventory) and other similar Taxes (including related penalties (civil or criminal), additions to
Tax and interest) imposed by any Governmental Authority with respect to the transfer of the
Purchased Assets under this Agreement (“Transaction Taxes”), regardless of whether any Tax
authority seeks to collect such taxes from Sellers or Purchaser; provided, however, that Purchaser
shall in no event bear or be responsible for Transaction Taxes in excess of $1,000,000. Purchaser
shall also be responsible for (i) administering the payment of such Transaction Taxes required to
be paid by Purchaser hereunder; (ii) defending or pursuing any proceedings related thereto; and
(iii) paying any expenses, interest and penalties related thereto. Sellers shall cooperate with
Purchaser and take actions reasonably requested by Purchaser to permit Transaction Taxes, if any,
to be paid on a timely basis. Sellers shall give prompt written notice to Purchaser of any
proposed adjustment or assessment of any Transaction Taxes with respect to the transactions
contemplated hereby. In any proceedings, whether formal or informal, Sellers shall permit
Purchaser to participate and control the defense of such proceeding with respect to such
Transaction Taxes, and shall take all actions and execute all documents required to allow such
participation.
10.2 Tax Prorations. As to any Purchased Assets acquired by Purchaser, Sellers and Purchaser shall
apportion the liability for real and personal property taxes, ad valorem taxes and other similar
Taxes imposed on a periodic basis and measured by the level of any item (“Periodic Taxes”) for all
Tax periods including but not beginning or ending on the Closing Date (the “Proration Periods”).
The Periodic Taxes described in this Section 10.2 shall be apportioned between Sellers and
Purchaser as of the Closing Date, with Purchaser liable for that portion of the Periodic Taxes
equal to the Periodic Tax for the Proration Period multiplied by a fraction, the numerator of which
is the number of days remaining in the Proration Period after the Closing Date, and the denominator
of which is the total number of days covered by such Proration Period. Sellers shall be liable for
that portion of the Periodic Taxes for the Proration Period for which Purchaser is not liable under
the preceding sentence. Purchaser and Sellers shall pay or be reimbursed for Periodic Taxes
(including instances in which such Taxes have been paid before the Closing Date) on this prorated
basis. If a payment on a tax ▇▇▇▇ is due after the Closing, the party that is legally required to
make such payment shall make such payment and promptly forward an invoice to the other party for
its pro rata share, if any. If the other party does not pay the invoice within 30 calendar days of
receipt, the amount of such payment shall
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bear interest at the rate of 6% per annum. The party
responsible for paying a tax described in this Section 10.2 shall be responsible for administering the payment of (and any
reimbursement for) such Tax. For purposes of this Section 10.2, the Proration Period for
Periodic Taxes shall be the fiscal period for which such Taxes were assessed by the relevant Tax
jurisdiction. Notwithstanding anything to the contrary contained herein, Purchaser shall be solely
responsible for, promptly pay, and indemnify Sellers from and against, any and all assessments of
taxes for the year in which Closing occurs, for all subsequent years and for prior years, in each
case, due to change in land usage.
10.3 Tax Refunds. Any Tax refunds (including any interest related thereto) for which claims were
filed prior to the Closing Date and which are received by Purchaser, its Affiliates or successors
relating to Taxes attributable to the ownership or operation of the Purchased Assets during Tax
periods or portions thereof ending on or before the Closing Date shall be for the account of
Sellers, and Purchaser shall pay over to Sellers any such amount within five business days of
receipt thereof. Any Tax refunds (including any interest related thereto) received by any Seller
or its Affiliates or successors relating to Taxes attributable to the ownership or operation of the
Purchased Assets during Tax periods or portions thereof beginning after the Closing Date shall be
for the account of Purchaser, and Sellers shall pay over to Purchaser any such amount within five
Business Days of receipt thereof. Each party shall, if the other party so requests and at such
other party’s direction and expense, file or cause its Affiliates to file for and obtain any Tax
refunds relating to Taxes attributable to the ownership or operations of the Purchased Assets that
such other party is entitled to under this Section 10.3, and each party shall pay over to
such other party any such amount within five Business Days of receipt thereof.
ARTICLE XI
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
11.1 Conditions Precedent to Obligations of Each Party. The respective obligations of Sellers,
Purchaser and Guarantor to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, on or prior to the Closing Date, of each of the following conditions:
(a) The Bankruptcy Court or the United States District Court that has jurisdiction over the
Bankruptcy Cases shall have approved and entered the Plan Confirmation Order, and the Plan
Confirmation Order shall have become an Effective Order;
(b) The United States District Court that has jurisdiction over the Bankruptcy Cases shall
have issued or affirmed the Plan Confirmation Order in accordance with Section 524(g)(3)(A) of the
Bankruptcy Code;
(c) If this Agreement is not consummated prior to October 22, 2009, any waiting period
(including any extension thereof) applicable to the sale to and purchase by Purchaser of the
Purchased Assets under the HSR Act or under the regulations of any other applicable governmental
antitrust or competition authority, where failure to comply with such regulations would prohibit
the consummation of the transactions contemplated by this Agreement, shall have been terminated or
expired;
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(d) No Order issued by any court of competent jurisdiction preventing the consummation of the
transactions contemplated hereby shall be in effect; and
(e) All conditions precedent to the effectiveness of the Plan (other than the Closing) shall
have been satisfied or waived by the relevant parties.
11.2 Conditions Precedent to Obligations of Purchaser and Guarantor. The obligations of Purchaser
and Guarantor to consummate the transactions contemplated by this Agreement are subject to the
fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all of
which may be waived by Purchaser or Guarantor, in whole or in part, subject to Applicable Law):
(a) All of the representations and warranties of Sellers contained herein shall be true and
correct on and as of the Closing Date, except those representations and warranties of Sellers that
speak of a certain date, which representations and warranties shall have been true and correct as
of such date; provided, however, that this condition shall be deemed to have been satisfied so long
as any failure of such representations and warranties to be true and correct, individually or in
the aggregate, would not reasonably be expected to result in a Seller Material Adverse Effect,
ignoring solely for purposes of the satisfaction of this Section 11.2(a) any reference to
Seller Material Adverse Effect or other materiality qualifiers contained in such representations
and warranties;
(b) Sellers shall have performed, in all material respects, all obligations required by this
Agreement to be performed by Sellers on or prior to the Closing Date; and
(c) Purchaser shall have been furnished with the deliveries referred to in Section
5.2.
11.3 Conditions Precedent to Obligations of Sellers. The obligations of Sellers to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, prior to or on the
Closing Date, of each of the following conditions (any or all of which may be waived by Sellers, in
whole or in part, subject to Applicable Law):
(a) All of the representations and warranties of Purchaser and Guarantor contained herein
shall be true and correct on and as of the Closing Date, except those representations and
warranties of Purchaser and Guarantor that speak of a certain date, which representations and
warranties shall have been true and correct as of such date; provided, however, that this condition
shall be deemed to have been satisfied so long as any failure of such representations and
warranties to be true and correct, individually or in the aggregate, would not reasonably be
expected to prevent, impede or materially delay or otherwise affect in any material respect the
transactions contemplated by this Agreement ignoring solely for purposes of the satisfaction of
this Section 11.3(a) any materiality qualifiers contained in such representations and
warranties;
(b) Purchaser and Guarantor shall have performed, in all material respects, all obligations
required by this Agreement to be performed by them on or prior to the Closing Date;
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(c) Sellers shall have been furnished with the deliveries referred to in Section 5.3;
and
(d) The consents and waivers set forth in Sections 6.3(a) and 6.3(b) of the
Seller Disclosure Schedule shall have been obtained.
ARTICLE XII
LIMITATIONS
LIMITATIONS
12.1 Purchaser’s Review.
(a) Disclaimer Regarding Projections. In connection with Purchaser’s and Guarantor’s
investigation of Sellers, Purchaser and/or Guarantor has received from Sellers and their Affiliates
and agents certain projections and other forecasts, including projected financial statements, cash
flow items, certain business plan information and other data of Sellers. Purchaser and Guarantor
acknowledge that (i) there are uncertainties inherent in attempting to make such projections,
forecasts and plans and, accordingly, is not relying on them, (ii) Purchaser and Guarantor is
familiar with such uncertainties and is taking full responsibility for making its own evaluation of
the adequacy and accuracy of all projections, forecasts and plans so furnished to it and (iii)
neither Purchaser nor Guarantor shall have any claim against anyone with respect to any of the
foregoing nor any termination right hereunder as a result of any inaccuracy thereof. Accordingly,
each of Purchaser and Guarantor acknowledges that notwithstanding anything to the contrary in this
Agreement, Sellers have made no representation or warranty with respect to such projections and
other forecasts and plans.
(b) Limited Duties. Any and all duties and obligations which any party hereto may have to any
other party hereto with respect to or in connection with the Purchased Assets, this Agreement or
the transactions contemplated hereby are limited to those specifically set forth in this Agreement.
Neither the duties nor obligations of any party hereto, nor the rights of any party hereto, shall
be expanded beyond the terms of this Agreement on the basis of any legal or equitable principle or
on any other basis whatsoever. Neither any equitable nor legal principle nor any implied
obligation of good faith or fair dealing nor any other matter requires any party hereto to incur,
suffer or perform any act, condition or obligation contrary to the terms of this Agreement, whether
or not existing and whether foreseeable or unforeseeable. Each of the parties hereto acknowledges
that it would be unfair, and that it does not intend, to increase any of the obligations of any
other party under this Agreement on the basis of any implied obligation or otherwise.
12.2 “As-Is”; Sale. AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, SELLERS,
PURCHASER AND GUARANTOR EACH AGREE THAT PURCHASER IS TAKING THE PURCHASED ASSETS “AS IS”, “WHERE
IS” AND “WITH ALL FAULTS” AND WITH ANY AND ALL LATENT AND PATENT DEFECTS AND THAT THERE IS NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE (INCLUDING, WITHOUT
LIMITATION, WARRANTIES WITH RESPECT TO HABITABILITY, MARKETABILITY, MERCHANTABILITY, OR FITNESS FOR
A PARTICULAR PURPOSE, TITLE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL
CONDITION, UTILITIES, VALUATION,
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GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PURCHASED ASSETS WITH LAWS, THE TRUTH, ACCURACY
OR COMPLETENESS OF THE DOCUMENTS OR ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLERS TO OR
FOR THE BENEFIT OF PURCHASER OR GUARANTOR OR ANY OTHER MATTER OR THING REGARDING THE REAL PROPERTY)
MADE BY SELLERS WITH RESPECT TO THE REAL PROPERTY (EXCEPT FOR THE REPRESENTATIONS OF SELLERS
EXPRESSLY SET FORTH IN SECTIONS 6.1 THROUGH 6.15 AND LIMITED BY SECTIONS
15.1 AND 15.2 OF THIS AGREEMENT), ALL OTHER REPRESENTATIONS AND WARRANTIES, BOTH
EXPRESS AND IMPLIED, ARE HEREBY EXPRESSLY DISCLAIMED AND DENIED. EACH OF PURCHASER AND GUARANTOR
ACKNOWLEDGE THAT IT HAS BEEN OR WILL BE GIVEN ADEQUATE TIME TO CONDUCT WHATEVER EXAMINATION,
EVALUATIONS, INSPECTIONS, REVIEWS, STUDIES OR TESTS OF THE PURCHASED ASSETS AND ITS CONDITION AS
PURCHASER AND GUARANTOR MAY DESIRE OR DETERMINE WARRANTED, AND THAT NEITHER PURCHASER NOR GUARANTOR
ARE RELYING ON, AND SELLERS SHALL NOT BE LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED
REPRESENTATION, GUARANTY, WARRANTY, STATEMENT OR OTHER ASSERTION WITH RESPECT TO THE REAL PROPERTY
OR ITS CONDITION MADE BY OR FURNISHED BY OR ON BEHALF OF ANY SELLER, OR ANY REAL ESTATE BROKER OR
AGENT REPRESENTING OR PURPORTING TO REPRESENT ANY SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR
INDIRECTLY, ORALLY OR IN WRITING (EXCEPT FOR THE REPRESENTATIONS OF SELLERS EXPRESSLY SET FORTH IN
SECTIONS 6.1 THROUGH 6.15 AND LIMITED BY SECTIONS 15.1 AND 15.2 OF
THIS AGREEMENT).
PURCHASER IS AWARE OF THE REAL PROPERTY’S HISTORIC MINING AND SMELTING OPERATIONS AND THE USE,
STORAGE AND HANDLING OF HAZARDOUS MATERIALS ON THE REAL PROPERTY IN CONNECTION WITH SUCH
OPERATIONS. PURCHASER AND GUARANTOR REPRESENT THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND
SOPHISTICATED PURCHASER OF MINING, COMMERCIAL AND INDUSTRIAL ASSETS, SECURITIES, REAL ESTATE AND
THE OTHER TYPES OF ASSETS AND INTERESTS CONTEMPLATED TO BE SOLD AS PART OF THE PURCHASED ASSETS
HEREUNDER AND IN DECIDING TO ENTER INTO THIS AGREEMENT, AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY, PURCHASER AND GUARANTOR HAVE RELIED SOLELY UPON THEIR OWN KNOWLEDGE,
INVESTIGATION, AND ANALYSIS (AND THAT OF THEIR ATTORNEYS, ACCOUNTANTS, CONSULTANTS AND
REPRESENTATIVES) AND NOT ON ANY DISCLOSURE OR REPRESENTATION MADE BY, OR ANY DUTY TO DISCLOSE ON
THE PART OF, SELLERS OR THEIR AFFILIATES OR ANY OF THEIR REPRESENTATIVES, OTHER THAN THE EXPRESS
REPRESENTATIONS AND WARRANTIES OF SELLERS SET FORTH IN ARTICLE VI.
12.3 Waivers and Releases. PURCHASER AND GUARANTOR ACKNOWLEDGE THAT PURCHASER HAS, OR BY THE
CLOSING DATE SHALL HAVE, CONDUCTED SUCH INVESTIGATIONS OF THE PURCHASED ASSETS, INCLUDING THE PAST
AND PRESENT PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, THE STATUS AND REQUIREMENTS OF PERMITS
APPLICABLE THERETO AND THE SCOPE AND
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EXTENT OF MINING OPERATION ACTIVITIES AND RECLAMATION
ACTIVITIES AND REQUIREMENTS ON THE REAL PROPERTY, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE
CONDITION OF THE PURCHASED ASSETS AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN
WITH RESPECT TO ANY HAZARDOUS MATERIALS ON, IN, UNDER OR DISCHARGED FROM OR POTENTIALLY MIGRATING
UPON THE REAL PROPERTY AND SHALL RELY SOLELY UPON THE SAME AND NOT UPON ANY INFORMATION PROVIDED BY
OR ON BEHALF OF SELLERS OR THEIR AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN THE
REPRESENTATIONS AND WARRANTIES OF SELLERS SET FORTH IN SECTIONS 6.1 THROUGH 6.15
AND LIMITED BY SECTIONS 15.1 AND 15.2 OF THIS AGREEMENT. EXCEPT AS EXPRESSLY SET
FORTH IN SECTIONS 6.1 THROUGH 6.15 AND LIMITED BY SECTIONS 15.1 AND
15.2 OF THIS AGREEMENT, UPON CLOSING, PURCHASER AND GUARANTOR SHALL ASSUME THE RISK THAT
ADVERSE MATTERS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS (INCLUDING ALL RESPONSIBILITY,
LIABILITY, OBLIGATIONS, AND CLAIMS THAT HAVE ARISEN OR MAY ARISE UNDER LAWS (INCLUDING, WITHOUT
LIMITATION, ENVIRONMENTAL LAWS) MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND
PURCHASER AND GUARANTOR AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, UPON CLOSING, SHALL BE DEEMED
TO HAVE WAIVED, RELINQUISHED, AND RELEASED SELLERS (AND SELLERS’ OFFICERS, PARTNERS, MEMBERS,
MANAGERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES,
COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER,
KNOWN OR UNKNOWN, INCLUDING COST RECOVERY, CONTRIBUTION OR OTHER CLAIMS PURCHASER AND/OR GUARANTOR
MIGHT HAVE UNDER LAWS (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LAWS) AND CLAIMS BASED ON THE
NEGLIGENCE OR STRICT LIABILITY OF SELLERS (OR ANY OF SELLERS’ OFFICERS, PARTNERS, MEMBERS,
MANAGERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AND AGENTS), WHICH PURCHASER AND/OR GUARANTOR MIGHT
HAVE ASSERTED OR ALLEGED AGAINST SELLERS (AND ANY OF SELLERS’ OFFICERS, PARTNERS, MEMBERS,
MANAGERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT
OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE
LAWS OR PERMITS (INCLUDING ANY ENVIRONMENTAL LAWS), SUITS OF ANY KIND, INCLUDING SUITS UNDER
ENVIRONMENTAL LAWS BROUGHT BY ANY THIRD PARTY, INCLUDING GOVERNMENTAL AUTHORITIES, RELATING TO THE
PURCHASED ASSETS, AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES, OR MATTERS
REGARDING THE PURCHASED ASSETS. NOTWITHSTANDING THE FOREGOING, THE WAIVERS AND RELEASES CONTAINED
IN THIS SECTION 12.3 SHALL NOT APPLY TO THE EXTENT ANY CLAIM ARISES OUT OF OR RESULTS FROM
SELLERS’ FRAUD.
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12.4 Acceptance and Discharge. The acceptance of the Deeds, the Leasehold Deeds, the ▇▇▇▇ of Sale, the
Assignment and Assumption Agreement and the Assignment and Assumption of Ground Lease Agreement by
Purchaser, and the entry of the Plan Confirmation Order by the Bankruptcy Court, shall be deemed an
acknowledgement by Purchaser and Guarantor that Sellers have fully performed, discharged and
complied with all of Sellers’ obligations, representations and warranties, covenants and agreements
hereunder, that Sellers are discharged therefrom and that Sellers shall have no further liability
with respect thereto, except for those, if any, which are specifically stated herein to survive the
Closing.
12.5 No Consequential or Punitive Damages. NO PARTY HERETO (OR ITS AFFILIATES) SHALL, UNDER ANY
CIRCUMSTANCE, BE LIABLE TO ANY OTHER PARTY (OR ITS AFFILIATES), BY STATUTE, IN TORT OR CONTRACT OR
OTHERWISE, FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES
CLAIMED BY SUCH OTHER PARTY UNDER THE TERMS OF OR DUE TO ANY BREACH OF THIS AGREEMENT, INCLUDING,
BUT NOT LIMITED TO, LOSS OF REVENUE OR INCOME, COST OF CAPITAL, OR LOSS OF BUSINESS REPUTATION,
OTHER THAN IN RESPECT OF A BREACH OF SECTIONS 8.5, 8.6 OR ARTICLE XIV.
ARTICLE XIII
TERMINATION
TERMINATION
13.1 Termination of Agreement. This Agreement may be terminated prior to the Closing Date as follows:
(a) By the mutual written consent of Sellers and Purchaser;
(b) By Sellers if the Plan Confirmation Order has not been entered on or before August 31,
2009 (or such later date, which in no event will be later than September 30, 2009, if requested by
Sellers and consented to by Purchaser, which consent may not be unreasonably delayed or denied )
(the “Confirmation Deadline”); provided, however, that Sellers shall not be permitted to terminate
this Agreement under this Section 13.1(b) if (i) the failure by Sellers to fulfill any
obligation under this Agreement has been the primary cause of the Plan Confirmation Order not
having been entered on or before the Confirmation Deadline or (ii) the Plan Confirmation Order not
having been entered is caused primarily by a breach by Sellers of any covenant or obligation in
this Agreement required to be performed by Sellers or the inaccuracy of any representation or
warranty of Sellers made herein;
(c) By Sellers if the Closing has not occurred on or before November 30, 2009 (or such later
date, which in no event will be later than December 31, 2009, if requested by Sellers and consented
to by Purchaser, which consent may not be unreasonably delayed or denied; provided, that if the
Plan Confirmation Order has been entered by the Bankruptcy Court (rather than the United States
District Court having jurisdiction over the Bankruptcy Cases), such date shall automatically be
extended to December 31, 2009) (the “Termination Date”); provided, however, that Sellers shall not
be permitted to terminate this Agreement under this Section 13.1(c) if (i) the failure
by Sellers to fulfill any obligation under this Agreement has been the primary cause of the failure
of such consummation to occur on or before the Termination Date or
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(ii) the failure of the Closing
to occur is caused primarily by a breach by Sellers of any covenant or obligation in this Agreement
required to be performed by Sellers or the inaccuracy of any representation or warranty of Sellers
made herein;
(d) By either Sellers or Purchaser, at any time after the Bankruptcy Court approves a Superior
Proposal to be consummated between ASARCO and a Person other than Purchaser, Guarantor or any of
their respective Affiliates;
(e) By either Sellers or Purchaser at any time after the Bankruptcy Court approves a
Stand-Alone Plan and such plan has been approved by the Board of Directors of ASARCO and is
supported by ASARCO;
(f) By Purchaser if the Plan Confirmation Order has not been entered on or before the
Confirmation Deadline; provided, however, that Purchaser shall not be permitted to terminate this
Agreement under this Section 13.1(f) if (i) the failure by Purchaser or Guarantor to
fulfill any obligation under this Agreement has been the primary cause of the Plan Confirmation
Order not having been entered on or before the Confirmation Deadline or (ii) the Plan Confirmation
Order not having been entered is caused primarily by a breach by Purchaser or Guarantor of any
covenant or obligation in this Agreement required to be performed by Purchaser or the inaccuracy of
any representation or warranty of Purchaser or Guarantor made herein;
(g) By Purchaser if the Closing has not occurred on or before the Termination Date; provided,
however, that Purchaser shall not be permitted to terminate this Agreement under this Section
13.1(g) if (i) the failure by Purchaser or Guarantor to fulfill any obligation under this
Agreement has been the primary cause of the failure of such consummation to occur on or before the
Termination Date or (ii) the failure of the Closing to occur is caused primarily by a breach by
Purchaser or Guarantor of any covenant or obligation in this Agreement required to be performed by
Purchaser or Guarantor, or the inaccuracy of any representation or warranty of Purchaser or
Guarantor made herein;
(h) By Purchaser (provided that neither Purchaser nor Guarantor is in material breach of any
representation, warranty or covenant or other agreement contained herein) if: (i) the Bankruptcy
Court shall not have entered the Sterlite Agreed Order on or prior to April 15, 2009 or
(ii) the Bankruptcy Court shall not have entered an order approving the Disclosure Statement on or
prior to May 31, 2009 (or such later date, which in no event will be later than July 1, 2009, if
requested by Sellers and consented to by Purchaser, which consent may not be unreasonably delayed
or denied);
(i) By Purchaser upon the conversion of ASARCO’s Bankruptcy Case to a case under chapter 7 of
the Bankruptcy Code;
(j) By Purchaser if there shall be a breach by Sellers of any representation, warranty
or covenant contained in this Agreement which would result in a failure of a condition to
Purchaser’s or Guarantor’s obligation to close set forth in Sections 11.2(a) or
(b) to be satisfied, which breach has not been cured by the earlier of (i) 60
days after the giving of written notice by Purchaser to Sellers of such breach and (ii) the
Termination Date;
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(k) By Sellers if there shall be a breach by Purchaser or Guarantor of any
representation, warranty or covenant contained in this Agreement which would result in a failure of
a condition to Sellers’ obligation to close set forth in Sections 11.3(a) or
(b) to be satisfied, which breach has not been cured by the earlier of (i) 60
days after the giving of written notice by Sellers to Purchaser of such breach and (ii) the
Termination Date;
(l) By either Sellers or Purchaser, if there shall be any final non-appealable Order
entered by a Governmental Authority of competent jurisdiction permanently restraining, prohibiting
or enjoining Sellers or Purchaser from consummating the transactions contemplated hereby;
(m) By Sellers if the Plan (i) fails to satisfy the voting requirements under 11 U.S.C. §
524(g)(2)(B)(ii)(IV)(bb) and § 1126 for any class of claimants seeking recovery for damages
allegedly caused by the presence of, or exposure to, asbestos or asbestos-containing products or
(ii) is rejected by Persons listed in Exhibit P that hold at least one-half in number
and/or one-third in amount of the environmental claims set forth in Exhibit P;
(n) By either Sellers or Purchaser if the Bankruptcy Court denies confirmation of the Plan; or
(o) By Sellers pursuant to Section 8.10(a)(iv); provided, that the termination right
contained in this Section 13.1(o) may be exercised only prior to the entry of the Sterlite
Agreed Order.
13.2 Effect of Termination.
(a) No termination of this Agreement pursuant to Section 13.1 shall be effective until
written notice thereof is given to the non-terminating party specifying the provision hereof
pursuant to which such termination is made.
(b) In the event of termination of this Agreement by either or both of the parties pursuant to
Section 13.1, this Agreement shall terminate and the transactions contemplated hereby shall
be abandoned, without further action by any of the parties hereto. If this Agreement is
terminated:
(i) Except as otherwise provided in Section 13.2(b)(v) and in
Section 4.2, such termination shall be the sole and exclusive remedy of
Purchaser and Guarantor with respect to breaches by any Seller of any covenant,
representation or warranty contained in this Agreement and
none of the Sellers nor any of their respective past, present or future
trustees, directors, officers, employees, members, shareholders, incorporators,
partners and/or Affiliates, as the case may be, shall have any liability or further
obligation to Purchaser or Guarantor or any of their respective past, present or
future trustees, directors, officers, employees, members, shareholders,
incorporators, partners and/or Affiliates, as the case may be, and each Seller (and
their respective past, present or future trustees, directors, officers, employees,
members, shareholders, incorporators, partners and/or Affiliates, as the case may
be) shall be fully released and discharged from any
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liability or obligation under
or resulting from this Agreement and neither Purchaser nor Guarantor shall have any
other remedy, right, claim or cause of action under or relating to this Agreement
or any Applicable Law, including for reimbursement of expenses;
(ii) Sellers shall have all rights and remedies existing at law or in equity
and shall have the right to pursue all legal and equitable remedies that may be
available to Sellers, at law or in equity; and in any successful action for
damages, Sellers shall be entitled to recover its demonstrated legal damages, which
shall not be limited to out of pocket costs in pursuing the transaction
contemplated by this Agreement;
(iii) All filings, applications and other submissions made pursuant to this
Agreement, to the extent practicable, shall be withdrawn from the agency or other
Person to which they were made;
(iv) All Evaluation Material (as defined in the Confidentiality Agreement)
shall be returned to ASARCO;
(v) If, following the entry of the Sterlite Agreed Order by the Bankruptcy
Court, this Agreement is terminated pursuant to (A) Section 13.1(d) due to
the Bankruptcy Court’s approval of a Superior Proposal and such Superior Proposal
is consummated between ASARCO and a Person other than Purchaser, Guarantor or any
of their respective Affiliates or (B) Section 13.1(e) due to the Bankruptcy
Court’s approval of a Stand-Alone Plan approved by the Board of Directors of ASARCO
and supported by ASARCO and such Stand-Alone Plan is consummated, Sellers shall
pay to Purchaser as soon as practicable (but no later than three Business Days)
following the consummation of such Superior Proposal or Stand-Alone Plan, as
applicable, a fee in the amount of $26,000,000.00. If, following the entry of the
Sterlite Agreed Order by the Bankruptcy Court, this Agreement is terminated
pursuant to Section 13.1(j), Sellers shall reimburse Purchaser
within two Business Days following such termination for actual and documented
expenses of Purchaser not to exceed the sum of $10,000,000.00. Such payment shall
be made by wire transfer of immediately available funds to an account designated by
Purchaser. Purchaser’s claim in connection with the amounts due hereunder shall
constitute a first priority administrative expense claim under section
507(a)(1) of the Bankruptcy Code; and
(vi) Payment of funds shall be made to Sellers and/or one or more of the
Letters of Credit may be drawn or returned for cancellation, in each case, in
accordance with Section 4.2.
(c) Notwithstanding the foregoing, no fee pursuant to Section 13.2(b)(v) shall be due
and payable if (i) Purchaser or Guarantor has materially breached this Agreement, (ii) Purchaser or
Guarantor has engaged in bad faith conduct with respect to the transactions contemplated by this
Agreement or (iii) Purchaser or Guarantor has violated in any material respect the provisions of
the Bankruptcy Code, other Applicable Law or an Order of the
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in each case
relating to the transactions contemplated by this Agreement (any one of the foregoing is referred
to herein as a “Purchaser Bad Faith Event”).
(d) Notwithstanding Section 13.2(b), the obligations of Purchaser and Guarantor under
the Confidentiality Agreement and the obligations of the parties under this Section 13.2
and Sections 4.2, 8.5, 8.6, 8.10(f), 15.4, 15.6,
15.7, 15.8, 15.11, 15.13, and 15.14, the last two sentences
of Section 8.1, and Articles II, XII, and XIV of this Agreement
shall survive any termination of this Agreement and shall remain in full force and effect.
ARTICLE XIV
GUARANTEE
GUARANTEE
14.1 Guarantee.
(a) Guarantor hereby irrevocably, unconditionally and absolutely guarantees as a primary
obligor and not as a surety, to Sellers the full and timely payment and due and punctual
performance and discharge of all of Purchaser’s obligations under this Agreement and the Ancillary
Agreements existing on the date hereof or hereafter of any kind or nature whatsoever, including the
due and punctual payment of the Purchase Price and any other amount that Purchaser is or may become
obligated to pay pursuant to this Agreement or the Ancillary Agreements (collectively, the
“Obligations”). The guarantee under this Section 14.1 is an unconditional, irrevocable and
absolute guaranty of timely payment and performance of the Obligations and not merely of
collection. If for any reason whatsoever the Obligations shall not be fully and timely paid or
performed, Guarantor shall promptly honor and perform its obligations to Sellers hereunder upon
demand.
(b) To the fullest extent permitted by Applicable Law, the obligations of Guarantor hereunder
shall remain in full force and effect without regard to, and shall not be affected or impaired by,
(i) any change in the structure or ownership of Purchaser or Guarantor or the bankruptcy,
insolvency, reorganization, dissolution, liquidation, or other similar proceeding relating to
Purchaser, Guarantor or any Affiliate of either Purchaser or Guarantor; (ii) any neglect, delay,
omission, failure or refusal of Purchaser
or Sellers to take or prosecute any action in connection with this Agreement, the Ancillary
Agreements or any other agreement, delivered in connection herewith or therewith; (iii) any
extension, compromise, settlement, renewal or waiver of the time for any performance of or
compliance with any of the Obligations; (iv) the existence of any claim, set-off or other right
which Guarantor may have against Purchaser, Sellers or any other Person, whether in connection
herewith or any unrelated transaction; (v) any invalidity or unenforceability of the Obligations;
or (vi) any other act (other than prior full and indefeasible payment in cash and timely
performance of the Obligations) or omission or delay by Purchaser or Sellers or any other Person
that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of
Guarantor hereunder.
(c) In connection with this Section 14.1, Guarantor unconditionally waives: (i) any
right to receive demands, protests, or other notices of any kind or character whatsoever, as the
same may pertain to Purchaser; (ii) any right to require Sellers to proceed first against Purchaser
or to exhaust any security held by Sellers or to pursue any other remedy; (iii) any defense based
upon an election of remedies by Sellers; (iv) any duty of Sellers to advise
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Guarantor of any information known to Sellers regarding Purchaser or its ability to perform under this Agreement or
any Ancillary Agreement; (v) all suretyship and other defenses of every kind and nature; (vi) all
rights to and benefits under any defense based on or arising out of the voluntary or involuntary
bankruptcy, insolvency, liquidation, dissolution, receivership, or other similar proceeding
affecting Purchaser, or lack of capacity of Purchaser, which Purchaser or Guarantor may have to
performance of any of the Obligations; (vii) notice of the creation of any Obligation or any notice
of or proof of reliance by Sellers upon this Section 14.1 (the Obligations shall
conclusively be deemed to have been created, contracted, incurred or renewed, extended, amended or
waived in reliance upon this Section 14.1 and all dealings between Purchaser or Guarantor
and Sellers shall be conclusively presumed to have been had or consummated in reliance upon this
Section 14.1) or any notice of any other facts that may come to the attention of Sellers or
Guarantor regarding the financial position of Purchaser; (viii) requirements of promptness or
diligence on the part of Sellers; (ix) requirements on the part of Sellers to mitigate the damages
resulting from any default hereunder or under the Obligations; (x) notice of acceptance hereof, of
any action taken or omitted in reliance hereon, of any defaults by Purchaser in the payment or
performance of the Obligations; (xi) all notices which may be required by Law or otherwise to
preserve any of the rights of Sellers against Guarantor; and (xii) any other act or omission or
thing or delay to do any other act or thing, which might in any manner or to any extent vary or
limit Guarantor’s obligations hereunder or which might otherwise operate as a discharge of
Guarantor.
(d) The obligations of Guarantor hereunder are primary, absolute, unconditional and
irrevocable and will not be discharged by, and this Section 14.1 shall remain in full force
and effect notwithstanding: (a) the assignment, conveyance or other transfer by Purchaser of any or
all of its Obligations; (b) any insolvency, bankruptcy, reorganization, arrangement, composition,
liquidation, dissolution or similar proceedings with respect to Purchaser; (c) any other occurrence
whatsoever, except timely full and indefeasible payment and timely performance in full of all
Obligations; or (d) any other circumstances whatsoever which might otherwise constitute a legal or equitable discharge,
release or defense of a guarantor or surety, or which might otherwise limit recourse against
Guarantor.
(e) The obligations of Guarantor under this Section 14.1 shall be automatically
reinstated if and to the extent that for any reason any payment or other performance by or on
behalf of Purchaser in respect of the Obligations is rescinded or must be otherwise restored, and
Guarantor agrees that it will indemnify Sellers on demand for all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by Sellers in connection with such rescission or
restoration. If in connection with the foregoing, Sellers are required to refund part or all of
any payment of Purchaser, such payment by Sellers shall not constitute a release of Guarantor from
any liability hereunder, and Guarantor’s liability hereunder shall be reinstated to the fullest
extent allowed under Applicable Law and shall not be construed to be diminished in any manner.
(f) Guarantor shall not be entitled to be subrogated to any of the rights of Sellers against
Purchaser or any collateral, security or guarantee or right of set-off held by Sellers for the
payment or performance of the Obligations, nor shall Guarantor seek or be entitled to
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seek any reimbursement from Purchaser in respect of performance made by Guarantor hereunder, until the
Obligations are indefeasibly paid and performed in full.
(g) If any claim arising under or related to this Agreement or the Ancillary Agreements is
reduced to judgment denominated in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this Agreement
(collectively the “Obligations Currency”), the judgment shall be for the equivalent in the Judgment
Currency of the amount of the claim denominated in the Obligations Currency included in the
judgment, determined as of the date of judgment. The equivalent of any Obligations Currency amount
in any Judgment Currency shall be calculated at the spot rate for the purchase of the Obligations
Currency with the Judgment Currency based on the daily noon day rate quoted by JPMorgan Chase Bank,
N.A. (any costs of exchange payable in connection with such purchase shall be paid by Guarantor).
Guarantor shall indemnify Sellers and hold Sellers harmless from and against all loss or damage
resulting from any change in exchange rates between the date any claim is reduced to judgment and
the date of payment thereof by Guarantor.
(h) All payments whatsoever made by the Guarantor under this Agreement and the Ancillary
Agreement will be in lawful currency of the United States of America free and clear of, and without
liability for withholding or deduction for or on account of, any present or future Taxes of
whatever nature imposed or levied by or on behalf of any jurisdiction other than the United States
(or any political subdivision or Taxing Authority of or in such jurisdiction) (hereinafter a
“Non-US Taxing Jurisdiction”), unless the withholding or deduction of such Tax is compelled by law.
If any deduction or withholding for any Tax of a Non-US Taxing Jurisdiction shall at any time be
required in respect of any amounts to be paid by Guarantor under this Agreement or the Ancillary
Agreements, Guarantor will pay to the relevant Non-US Taxing Jurisdiction the full amount required
to be withheld, deducted or otherwise paid before
penalties attach thereto or interest accrues thereon and pay to the Sellers such additional
amounts as may be necessary in order that the net amounts paid to the Sellers pursuant to the terms
of this Agreement or the Ancillary Agreements after such deduction, withholding or payment
(including any required deduction or withholding of Tax on or with respect to such additional
amount), shall be not less than the amounts then due and payable to such holder under the terms of
this Agreement or the Ancillary Agreements before the assessment of such Tax.
(i) This Section 14.1 shall survive the Closing and shall remain in full force and
effect. Guarantor agrees to indemnify and hold Sellers harmless from and against and to pay on
demand all out-of-pocket costs and expenses (including reasonable legal fees and expenses) incurred
by or on behalf of Sellers in any way relating to the collection and/or enforcement of Guarantor’s
obligations under this Section 14.1.
14.2 Limitation. Each of the Sellers hereby acknowledges and agrees that, notwithstanding
anything to the contrary contained herein, Guarantor is not a guarantor or surety of, and does not
guarantee, any of the obligations of Purchaser under the Purchaser Promissory Note.
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ARTICLE XV
MISCELLANEOUS
MISCELLANEOUS
15.1 Nonsurvival of Representations, Warranties and Covenants. None of the representations, warranties,
covenants or other agreements of the parties made herein, in the Seller Disclosure Schedule with
respect to Sellers, in any Ancillary Agreement or any other agreement or instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of such representations,
warranties, covenants or other agreements, shall survive the Closing except for those covenants and
agreements contained herein and therein, which, by their terms, contemplate performance in whole or
in part after the Closing, which shall survive in accordance with their terms (including, for the
avoidance of doubt, Sections 8.1, 8.5, 8.6, and 8.10(f) and
Articles IX, X, XII and XIV).
15.2 Remedies. Purchaser and Guarantor acknowledge and agree that the only remedy for breach of any
representation or warranty made by Sellers, or any covenant required to be performed by Sellers
prior to the Closing, shall be Purchaser’s option to terminate this Agreement pursuant to and to
the extent permitted by Section 13.1, to receive the Deposit to the extent permitted by
Section 4.2, to receive the expense reimbursement to the extent permitted by Section
13.2(b)(v) and to receive a release to the extent permitted by Section 2.1.
Notwithstanding the foregoing, each party acknowledges and agrees that the other parties would be
irreparably damaged if any provision of this Agreement is not performed in accordance with its
specific terms and that any breach of this Agreement could not be adequately compensated in all
cases by monetary damages alone. Accordingly, prior to the termination of this Agreement pursuant
to Section 13.1 or otherwise, in addition to any other right or remedy to which each party
may be entitled, at law or in equity, it shall be entitled to enforce any provision of this
Agreement by a decree of specific performance and to temporary, preliminary and
permanent injunctive relief to prevent breaches or threatened breaches of any provision of this
Agreement, without posting any bond or other undertaking. In any successful action for damages,
Sellers shall be entitled to recover their demonstrated legal damages, which shall not be limited
to out of pocket costs in pursuing the transaction contemplated by this Agreement.
15.3 Bankruptcy Court Approval. The obligations of Sellers under this Agreement are subject to approval
of the Bankruptcy Court to the extent (and only to the extent) required by Law.
15.4 Expenses. Except as otherwise set forth in this Agreement, Sellers, Purchaser and Guarantor shall
each bear their own expenses (including attorneys’ fees) incurred in connection with the
negotiation and execution of this Agreement and the Ancillary Agreements and each other agreement,
document and instrument contemplated hereby and thereby and the consummation of the transactions
contemplated hereby and thereby. In addition, Purchaser shall pay at Closing (i) all premiums and
other costs associated with each Title Report and each Title Policy and any endorsements thereto,
including any search and exam fees, (ii) all premiums and other costs for any mortgagee policy of
title insurance, including any endorsements or deletions, (iii) the cost to obtain each Survey and
the costs associated with any modifications, updates or recertifications of an existing Survey, to
the extent one is available, (iv) all of the Title Company’s escrow and closing fees, if any, (v)
all recording fees, (vi) the documentary fee payable at the time of recording the Deeds, the
Leasehold Deeds and the Assignment and
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Assumption of Ground Lease Agreement and (vii) any transfer
tax imposed by the City, County or State in which the Real Property is located to the extent the
Bankruptcy Court requires such transfer taxes to be paid. Any other costs and expenses of Closing
not provided for in this Section 15.4 or in other provisions of this Agreement shall be
allocated between Purchaser and Seller in accordance with the custom in the county in which the
Real Property is located.
15.5 Disclosure Schedules. For purposes of the representations and warranties of Sellers contained
herein, disclosure in any section of the Seller Disclosure Schedule of any facts or circumstances
shall be deemed to be adequate disclosure of such facts or circumstances with respect to the
representations or warranties made by Sellers in the corresponding section of Article VI of
this Agreement, unless it is readily apparent on the face of the disclosure contained in such
section of the Seller Disclosure Schedule that such disclosure is applicable to another section of
Article VI of this Agreement. Any information provided in the Seller Disclosure Schedule
is solely for informational purposes, and the inclusion of such information shall not be deemed to
enlarge or enhance any of the representations or warranties of Sellers. The inclusion of any
information in any section of the Seller Disclosure Schedule or other document delivered by the
parties pursuant to this Agreement shall not be deemed to be an admission or evidence of the
materiality of such item, nor shall it establish a standard of materiality for any purpose
whatsoever.
15.6 Governing Law. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND
ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY),
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED
BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE WITH, THE APPLICABLE PROVISIONS OF THE
BANKRUPTCY CODE AND THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF
LAW PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
15.7 Submission to Jurisdiction; Consent to Service of Process.
(a) Without limiting any party’s right to appeal any Order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Agreement and to
decide any claims or disputes which may arise or result from, or be connected with, this Agreement,
any breach or default hereunder, or the transactions contemplated hereby, and (ii) any and all
Legal Proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy
Court, and the parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy
Court and shall receive notices at such locations as indicated in Section 15.13; provided,
however, that if the Bankruptcy Cases have been closed, the parties agree to file any such claim or
dispute in the United States District Court for the Northern District of Texas and any appellate
court thereof.
(b) The parties hereby unconditionally and irrevocably waive, to the fullest extent permitted
by Applicable Law, any objection which they may now or hereafter have to the
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laying of venue of any
dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby
brought in any court specified in paragraph (a) above, or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute
may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
Law.
(c) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by the mailing of a copy thereof in accordance with the
provisions of Section 15.13. Each of the Purchaser and Guarantor has appointed Corporation
Service Company to receive for it, and on its behalf, service of process in the United States.
15.8 Waiver of Jury Trial. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT,
OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
15.9 No Right of Set-Off. Each of Purchaser and Guarantor for itself and for its Subsidiaries,
Affiliates, successors and assigns hereby unconditionally and irrevocably waives any rights of
set-off, netting, offset, recoupment, or similar rights that Purchaser, Guarantor or any of their
respective Subsidiaries, Affiliates, successors and assigns has or may have with respect to the
payment of the Purchase Price or any other payments to be made by Purchaser or Guarantor pursuant
to this Agreement, any Ancillary Agreement or any other document or instrument delivered by
Purchaser or Guarantor in connection herewith.
15.10 Time of Essence. With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
15.11 Entire Agreement; Amendments and Waivers. This Agreement (including the Seller Disclosure Schedule
and exhibits hereto), the Confidentiality Agreement and the Ancillary Agreements represent the
entire understanding and agreement between the parties hereto with respect to the subject matter
hereof and can be amended, supplemented or changed, and any provision hereof can be waived, only by
written instrument making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement
73
shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on
the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The parties acknowledge that all parties, through their legal counsel,
played an equal role in drafting and/or had an equal opportunity to review and/or modify the
provisions set forth in this Agreement. Thus, in the event of any misunderstanding, ambiguity, or
dispute concerning this Agreement’s provisions, or interpretations, no rule of construction shall
be applied that would result in having this Agreement interpreted against any party.
15.12 Table of Contents and Headings. The table of contents and section headings of this Agreement are
for reference purposes only and are to be given no effect in the construction or interpretation of
this Agreement.
15.13 Notices. All notices and other communications under this Agreement shall be in writing and shall
be deemed duly given (i) when delivered personally or by prepaid overnight courier, with a record
of receipt or (ii) the day of transmission, if sent by facsimile during regular business hours, or
the day after transmission, if sent after regular business hours (with a copy promptly sent by
prepaid overnight courier with record of receipt or by certified mail, return receipt requested),
to the parties at the following addresses or facsimile numbers (or to such other address or
facsimile number as a party may have specified by notice given to the other party pursuant to this
provision):
If to Sellers, to:
ASARCO LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Purchaser or Guarantor, to:
Sterlite (USA), Inc.
c/o Sterlite Industries (India) Ltd
Vedanta, ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇)
▇▇▇▇▇▇ — 400 099
India
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
c/o Sterlite Industries (India) Ltd
Vedanta, ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇)
▇▇▇▇▇▇ — 400 099
India
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
With a copy (which shall not constitute notice) to:
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser or Guarantor for service of process (which may be made by registered mail):
Corporation Service Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Sterlite (USA), Inc. or Sterlite Industries (India) Ltd. (as applicable)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Sterlite (USA), Inc. or Sterlite Industries (India) Ltd. (as applicable)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
15.14 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application thereof to any Person or
any circumstance, is found to be invalid or unenforceable in any jurisdiction, (i) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far as may be valid or
enforceable, such provision and (ii) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application thereof, in any other jurisdiction.
15.15 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. No assignment of this Agreement or
of any rights or obligations hereunder may be made by any of Sellers, Purchaser or Guarantor (by
operation of Law or otherwise) without the prior written consent of each of the other parties
hereto (which consent shall not be unreasonably withheld, delayed or conditioned) and any attempted
assignment without the required consents shall be void;
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provided, however, that any Seller may assign, in whole or in part, all or any rights that it may
have under this Agreement to any Person without the prior consent of Purchaser or Guarantor.
15.16 No Third-Party Beneficiaries. Nothing in this Agreement shall create or be deemed to create any
third-party beneficiary rights in any Person not a party to this Agreement, except for the
indemnitees identified in Section 3.3.
15.17 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same instrument. Any
counterpart may be executed by facsimile signature and such facsimile signature shall be deemed an
original.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first written above.
| SELLERS: |
||||
| ASARCO LLC, a Delaware limited liability company |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | Chief Executive Officer and President | |||
| AR SILVER ▇▇▇▇, INC., a Delaware corporation |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇▇▇ | |||
| Title: | President | |||
| COPPER BASIN RAILWAY, INC., a Delaware corporation |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇▇▇ | |||
| Title: | Vice President | |||
| ASARCO SANTA ▇▇▇▇, INC., a Delaware corporation |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇▇▇ | |||
| Title: | President | |||
| PURCHASER: STERLITE (USA), INC. |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | President | |||
| GUARANTOR: STERLITE INDUSTRIES (INDIA) LTD. |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | Managing Director (Power) | |||