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 May 30, 2008
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Exhibit 4.42
EXECUTION VERSION
AMONG
ASARCO LLC,
AR SILVER ▇▇▇▇, INC.,
COPPER BASIN RAILWAY, INC.,
ASARCO SANTA ▇▇▇▇, INC.,
STERLITE (USA), INC.
AND
Dated as of May 30, 2008
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Exhibits |
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Exhibit A
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Form of Assignment and Assumption Agreement | |
Exhibit B
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Form of ▇▇▇▇ of Sale | |
Exhibit C-1
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Form of Purchaser Opinion | |
Exhibit C-2
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Form of Purchaser Parent Opinion | |
Exhibit D
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Form of Letter of Credit | |
Exhibit E
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Closing Accounts Statement Principles and Illustration | |
Exhibit F-1 through |
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Exhibit F-4
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Forms of Deeds | |
Exhibit G
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Form of Leasehold Deed | |
Exhibit H
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Form of Assignment and Assumption of Ground Lease Agreement | |
Exhibit I
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Form of Patent Assignment | |
Exhibit J
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Form of Trademark Assignment | |
Exhibit K
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Services to be Included in Transition Services Agreement | |
| Seller Disclosure Schedule | ||
Section 1.1A
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Permitted Liens | |
Section 1.1B
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Sellers’ Knowledge | |
Section 2.1(b)
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Machinery and Equipment | |
Section 2.1(c)
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Purchased Real Property | |
Section 2.1(e)(i)
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Leases of Real Property (ASARCO as Lessee) | |
Section 2.1(e)(ii)
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Leases of Personal Property | |
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Section 2.1(e)(viii)
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Insurance Policies | |
Section 2.1(e)(xiii)
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Real Property Leases (ASARCO as Lessor) | |
Section 2.1(e)(xiv)
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Royalty Agreements | |
Section 2.1(e)(xv)
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Other Contracts | |
Section 2.1(g)
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Motor Vehicles | |
Section 2.1(j)
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Patents | |
Section 2.1(k)
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Trademarks | |
Section 2.1(m)
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Permits | |
Section 2.1(o)
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Patented and Unpatented Mining Claims | |
Section 2.1(p)
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Adversary Proceedings | |
Section 2.2(c)
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Equity Securities | |
Section 2.2(e)
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Retained Proceedings | |
Section 2.2(g)
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Retained Real Property | |
Section 2.2(j)
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Retained Contracts | |
Section 2.2(n)
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Retained Adversary Proceedings | |
Section 2.5(a)
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Assumed Contracts | |
Section 5.3(a)
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Sellers Consents | |
Section 5.3(b)
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Governmental Approvals | |
Section 5.4
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Financial Information | |
Section 5.5
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Compliance with Laws | |
Section 5.7
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Purchased Real Property | |
Section 5.8(a)
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Material Contracts | |
Section 5.9
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Customers and Suppliers | |
Section 5.10(a)
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Employee Benefit Plans | |
Section 5.10(b)
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Employee Benefit Plans | |
Section 5.10(d)
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Litigation Regarding Employee Benefit Plans | |
Section 5.11
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Environmental Matters | |
Section 5.12(a)
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Labor Matters | |
Section 5.12(b)
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Labor Matters | |
Section 5.12(c)
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Labor Matters | |
Section 5.12(d)
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Labor Matters | |
Section 5.12(e)
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Labor Matters | |
Section 5.12 (f)
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Labor Matters | |
Section 5.13
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Taxes | |
Section 5.14
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Insurance | |
Section 7.2
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Conduct of Business | |
Section 7.9
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Bonds and Assurances | |
Section 8.2(b)
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Severance Benefits | |
Section 8.3
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Assumed Benefit Plans | |
Section 8.9
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WARN Act | |
Section 10.3
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Unions |
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This PURCHASE AND SALE AGREEMENT (the “Agreement”), dated as of May 30, 2008 (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
(“Purchaser Parent”).
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, 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 and Purchaser
Parent have delivered to Sellers the Purchaser Opinion and the Purchaser Parent Opinion.
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:
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:
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“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.
“Adjustment Payment” shall have the meaning set forth in Section 3.3(c).
“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).
“Agreement” shall have the meaning set forth in the preamble hereto.
“Allocation” shall have the meaning set forth in Section 3.5.
“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 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.
“Asbestos FCR” means Judge ▇▇▇▇▇▇ ▇. ▇▇▇▇, the future claims representative 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.
“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 4.2(d).
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“Assumed Contracts” shall have the meaning set forth in Section 2.1(e).
“Assumed Environmental Liabilities” shall have the meaning set forth in Section
2.3(e).
“Assumed Liabilities” shall have the meaning set forth in Section 2.3.
“Assumption Notice” shall have the meaning set forth in Section 2.5(a).
“Assumed Pre-Petition Contracts” shall have the meaning set forth in Section 2.1(e).
“Assumption-Pending Pre-Petition Contracts” shall have the meaning set forth in Section
2.5(a).
“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.
“Bid Protections Order” shall have the meaning set forth in Section 7.7(a).
“▇▇▇▇ 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 7.9.
“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
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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 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 2.2(a).
“Casualty” shall have the meaning set forth in Section 7.11.
“CBRI” shall have the meaning set forth in the preamble hereto.
“CFIUS” shall have the meaning set forth in Section 7.3(e)
“CFIUS Notice” shall have the meaning set forth in Section 7.3(e)
“Closing” shall have the meaning set forth in Section 4.1.
“Closing Accounts Amount” shall have the meaning set forth in Exhibit E hereto.
“Closing Accounts Statement” shall have the meaning set forth in Section 3.3(a).
“Closing Date” means the date on which the Closing occurs.
“Closing Payment” shall have the meaning set forth in Section 3.1.
“Coal Act” means the Coal Industry Retiree Health Benefit Act of 1992, as amended.
“COBRA” shall have the meaning set forth in Section 8.6(b).
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“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 7.5.
“Confirmation Deadline” shall have the meaning set forth in Section 12.1(b).
“Contract” means any written contract, indenture, note, bond, loan, instrument, lease,
commitment or other agreement.
“Creditor Constituents” means the Committee, the Subsidiary Committee, the Asbestos FCR, the
United States Department of Justice, the United Steel Workers Union and the State of Washington.
“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 Contract that is the subject of an Assumption Notice.
“Customers” shall have the meaning set forth in Section 5.9.
“Deeds” shall have the meaning set forth in Section 4.2(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.
“Deposit” shall have the meaning set forth in Section 3.2.
“Disclosure Statement” means the disclosure statement relating to the Plan to be filed 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 Purchaser Parent) and the
transactions contemplated hereby, is in form and substance reasonably satisfactory to Purchaser.
“Effective Date” shall have the meaning set forth in the preamble hereto.
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“Effective Order” means a Plan Confirmation Order entered by the Bankruptcy Court: (a) which
has not been reversed, stayed, modified, amended or revoked, and as to which (i) any right to
appeal or seek certiorari, review, reargument, stay or rehearing has been waived or (ii) the time
to appeal or seek certiorari, review, reargument, stay or rehearing has expired and no appeal or
petition for certiorari, review, reargument, stay or rehearing is pending; or (b) as to which an
appeal has been taken or petition for certiorari, review, reargument, stay or rehearing has been
filed and (i) such appeal or petition for certiorari, review, reargument, stay or rehearing has
been resolved by the highest court to which the order or judgment was appealed or from which
certiorari, review, reargument, stay or rehearing was sought and (ii) the time to appeal further or
seek certiorari, further review, reargument, stay or rehearing has expired and no such further
appeal or petition for certiorari, further review, reargument, stay or rehearing 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; provided further that notwithstanding the
pendency of any appeal with respect to such Plan Confirmation Order, such Plan Confirmation Order
shall be deemed to be an “Effective Order” if such appeal was (x) filed or otherwise initiated,
directly or indirectly, by Grupo or Harbinger Capital Partners Master Fund I, Ltd., Harbinger
Capital Partners Special Situations Fund, L.P. or any of their Affiliates; or (y) filed by any
other Person, so long as such Person’s appeal would not reasonably be likely to result in a
material adverse effect on Purchaser (or Purchaser Parent) or on the ability of Sellers and
Purchaser (and Purchaser Parent) to consummate the transactions contemplated hereby and, in the
case of each of (x) and (y), no stay pending such appeal has been granted (and no request for such
stay is pending).
“Employees” shall have the meaning set forth in Section 8.1(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 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.
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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.
“Excluded Assets” shall have the meaning set forth in Section 2.2.
“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 2.2(l).
“Exon-▇▇▇▇▇▇ Provision” shall have the meaning set forth in Section 7.3(e).
“Final Arbiter” shall have the meaning set forth in Section 3.4(d).
“Financial Statements” shall have the meaning set forth in Section 5.4.
“FINSA” shall have the meaning set forth in Section 7.3(e)
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“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.
“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, but not limited to, asbestos or asbestos-containing material,
petroleum or petroleum additive substances, polychlorinated biphenyls or sewage.
“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.
“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 4.2(d).
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“Leasehold Property” shall have the meaning set forth in Section 2.1(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.
“Letter of Credit” shall have the meaning set forth in Section 3.2.
“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.
“March Accounts Amount” shall have the meaning set forth in Exhibit E hereto.
“Matching/Topping Right” shall have the meaning set forth in Section 7.10(d).
“Material Contracts” shall have the meaning set forth in Section 5.8(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.
“Negotiation Period” shall have the meaning set forth in Section 3.4(b).
“New CBA” shall have the meaning set forth in Section 7.3(d).
“Non-Debtor Contracts” shall have the meaning set forth in Section 2.1(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 8.1(a).
“Objection Date” shall have the meaning set forth in Section 3.4(a).
“Objection Notice” shall have the meaning set forth in Section 3.4(a).
“Obligations” shall have the meaning set forth in Section 13.1(a).
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“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, consistent with past practice during the pendency of and, as
applicable, taking into account the Bankruptcy Cases.
“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.
“OSHA” means the Occupational Safety and Health Act of 1970, as amended.
“Patent Assignment” shall have the meaning set forth in Section 4.2(j).
“Patents” means issued United States and foreign patents and pending patent applications.
“Pension Plan” shall have the meaning set forth in Section 5.10(b).
“Periodic Taxes” shall have the meaning set forth in Section 9.2.
“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
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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, 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 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, Purchaser Parent and the transactions
contemplated hereunder, are reasonably satisfactory to Purchaser.
“Plan Confirmation Order” means an order of the Bankruptcy Court, that, to the extent the
order relates to this Agreement, Purchaser (and Purchaser Parent) 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, without limitation, 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, Purchaser Parent and the Purchased Assets (and against any officer, director, Affiliate
or assets of Purchaser or Purchaser Parent) 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 2.1(e).
“Post-Petition Contracts” shall have the meaning set forth in Section 2.1(e).
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“Proprietary Software” shall have the meaning set forth in Section 2.1(i).
“Proration Periods” shall have the meaning set forth in Section 9.2.
“Purchase Price” shall have the meaning set forth in Section 3.1.
“Purchased Assets” shall have the meaning set forth in Section 2.1.
“Purchased Real Property” shall have the meaning set forth in Section 2.1(c).
“Purchaser” shall have the meaning set forth in the preamble hereto.
“Purchaser Breach” shall have the meaning set forth in Section 3.2(a)(ii).
“Purchaser Opinion” means an opinion of counsel to Purchaser delivered to Sellers in
connection with the execution and delivery of this Agreement in the form of Exhibit C-1
hereto.
“Purchaser Parent” shall have the meaning set forth in the preamble hereto.
“Purchaser Parent Opinion” means an opinion of counsel to Purchaser Parent delivered to
Sellers in connection with the execution and delivery of this Agreement in the form of Exhibit
C-2 hereto.
“Real Property” shall have the meaning set forth in Section 2.1(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.
“Remedial Action” means all action to (i) investigate, clean up, remove, treat or handle in
any other way Hazardous Materials in the environment; (ii) restore or reclaim the environment or
natural resources; (iii) prevent the Release of Hazardous Materials so that they do not migrate,
endanger or threaten to endanger public health or the environment; or (iv) 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.
“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 2.4.
“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.
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“Securities Act” shall have the meaning set forth in Section 6.5.
“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 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.
“Sellers” shall have the meaning set forth in the preamble hereto.
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“Sellers’ Accountants” means ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
“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 2.1(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 Purchaser Parent 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 contemplated by this Agreement.
“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.
“Subsidiary 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.
“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 12.2(b)(v) and 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
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ASARCO and its bankruptcy estate that exceeds, by the Superior Proposal Threshold, the Deemed
Value of this Agreement and the transactions contemplated hereby.
“Superior Proposal Threshold” means $25,000,000 plus the amount that would be owed to
Purchaser under Section 12.2(b)(v) upon termination of this Agreement pursuant to
Section 12.1(d).
“Suppliers” shall have the meaning set forth in Section 5.9.
“Survey” shall have the meaning set forth in Section 7.8.
“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,
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 12.1(c).
“Title Company” shall have the meaning set forth in Section 7.8.
“Title Policy” shall have the meaning set forth in Section 7.8.
“Title Report” shall have the meaning set forth in Section 7.8.
“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 4.2(k).
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“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 9.1.
“Transferred Employees” shall have the meaning set forth in Section 8.1.
“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
7.14, 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 8.1(a).
“Unions” means those unions listed in Section 10.3 of the Seller Disclosure Schedule.
“Unpaid Cure Claims Amount” means, with respect to any Contract that is the subject of an
Assumption Notice, 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 8.9.
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
SALE AND PURCHASE OF THE PURCHASED ASSETS
SALE AND PURCHASE OF THE PURCHASED ASSETS
2.1 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
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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 2.1(b) of the Seller Disclosure
Schedule;
(c) the real property identified in Section 2.1(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 2.2(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 2.5 (Contracts referred to in (i) and (ii) collectively 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 2.1(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
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for
use in the Business and identified in Section 2.1(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 2.1(e)(viii) of the
Seller Disclosure Schedule;
(ix) certain Seller Employee Benefit Plans as and to the extent provided in
Article VIII, 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 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 2.1(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 2.1(e)(xiv) of the
Seller Disclosure Schedule;
(xv) the other Contracts identified in Section 2.1(e)(xv) of the Seller
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Disclosure Schedule;
(xvi) Santa ▇▇▇▇ ▇▇ Agreement and, subject to Section 2.7, Silver ▇▇▇▇
LLC Agreement.
(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 2.1(g) of the Seller Disclosure Schedule;
(h) subject to Section 2.7, 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 2.1(j) of the Seller Disclosure Schedule,
including all goodwill associated with such Patents 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;
(k) all Trademarks identified in Section 2.1(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 2.1(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 9.1 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 9.1;
(o) all patented and unpatented mining claims identified in Section 2.1(o) of the
Seller Disclosure Schedule; and
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(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 2.1(p) of the Seller Disclosure Schedule.
2.2 Excluded Assets. Notwithstanding the provisions of Section 2.1 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 the portion of Transaction Taxes paid
by Purchaser pursuant to Section 9.1 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 9.1;
(c) all Equity Securities (i) representing ownership in Sellers and (ii) listed in Section
2.2(c) of the Seller Disclosure Schedule and, in the case of each of the entities listed in
Section 2.2(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 2.1(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 2.2(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 2.2(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;
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(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 VIII;
(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 2.2(j) of the Seller Disclosure
Schedule;
(k) the deposits and prepaid expenses related to the Contracts described in Section
2.2(j) or any other asset described in this Section 2.2;
(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 2.2 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 2.1(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 2.2(e) or clauses
(ii) and (iii) of this Section 2.2(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 2.2(n) of the Seller Disclosure Schedule, or (iv)
against Grupo.
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2.3 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 VIII) or (ii) that are allocated to Purchaser
pursuant to Article VIII;
(d) all Liabilities with respect to Taxes that are assumed by, or allocated to, Purchaser
pursuant to Article IX, including, without limitation, the portion of Transaction Taxes and
Periodic Taxes for which Purchaser is liable under Sections 9.1 and 9.2;
(e) except as provided in Sections 2.4(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 2.4(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.
2.4 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;
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(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 2.3(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 VIII;
(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;
(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.
2.5 Contract Designation Rights.
(a) From time to time from and after the date hereof until 30 days prior to the hearing on
confirmation of the Plan, Purchaser shall have the right to make designations as to the assumption
and assignment of any 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
(the “Assumption-Pending Pre-Petition Contracts”) by delivering to Sellers a notice (an “Assumption
Notice”) of Purchaser’s election to require Sellers to seek approval from the Bankruptcy Court to
assume and assign one or more of such Contracts to Purchaser; provided, however, that each
Assumption-Pending Pre-Petition Contract identified in Section 2.5(a) of the Seller
Disclosure Schedule shall be assumed and assigned hereunder. Each Assumption Notice shall be
accompanied by such information or documentation relating to
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“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 Contracts which are the subject of an Assumption Notice;
provided that any Unpaid Cure Claims Amounts shall be subject to Section 2.5(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 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 2.5(d),
Sellers shall, within 10 days of receipt of notice from Purchaser delivered in accordance with this
Section 2.5(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 2.5(d).
2.6 Ventura. 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,” shall be a Purchased Asset hereunder unless
Purchaser delivers, at any time prior to the filing of the
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Disclosure Statement, written notice to
Sellers designating such Contract as an Excluded Asset, in which case such Contract shall be an
Excluded Asset hereunder.
2.7 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 6.5 to Silver ▇▇▇▇ Interests will be deemed to refer to the capital stock of
ARSB.
ARTICLE III
PURCHASE PRICE AND PAYMENT
PURCHASE PRICE AND PAYMENT
3.1 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) $2,600,000,000.00 (the “Closing Payment”) plus or minus, as the case may be (B) the Adjustment
Payment (collectively, the “Purchase Price”) and (ii) the assumption by Purchaser of the Assumed
Liabilities.
3.2 Deposit. Simultaneously with the execution of this Agreement, Purchaser has posted a letter of
credit (the “Letter of Credit”) in the form of Exhibit D hereto issued by ABN AMRO Bank
N.V. for the amount of $50,000,000 (such amount made available under the terms of the Letter of
Credit, the “Deposit”).
(a) The Deposit shall be paid to Sellers and the Letter of Credit shall be drawn
upon as
follows:
(i) paid to Sellers at Closing pursuant to Section 4.3(a) as a
component of the Purchase Price; or
(ii) paid to Sellers within 10 days following the termination of this
Agreement
due to a material breach by Purchaser of any of its representations, warranties or
covenants or other agreements hereunder (a “Purchaser Breach”); or
(b) The Letter of Credit shall be cancelled without payment to Sellers within 10 days
following the termination of this Agreement for any reason other than a Purchaser Breach.
3.3 Closing 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.
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(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) No later than five days after a binding determination of the Closing Accounts Amount has
been made in accordance with Section 3.4, a payment shall be made by Purchaser or Seller
(as the case may be) (the “Adjustment Payment”) as follows:
(i) if the Closing Accounts Amount is greater than the March Accounts Amount,
then Purchaser shall make a payment to Sellers in the amount of such excess; and
(ii) if the Closing Accounts Amount is less than the March Accounts Amount,
then Sellers shall make a payment to Purchaser in the amount of such difference.
Any payment made pursuant to this Section 3.3(c) shall be made by wire transfer in
immediately available funds in accordance with the written instructions from the party or parties
to receive the payment to be made delivered to the party or parties obligated to pay such payment.
3.4 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
3.4(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 accounts 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.
3.5 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 IV
CLOSING
CLOSING
4.1 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 II (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 Closing set forth in Article X
(excluding conditions that, by their terms, cannot be satisfied until
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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.
4.2 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-2 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 2.1(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 10.2(a) and 10.2(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 4.2(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;
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(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 2.1(o) of the Seller Disclosure Schedule,
executed by the appropriate Seller with all appropriate notarizations and certifications as
required by the applicable Governmental Authorities; and
(o) a receipt for the Closing Payment.
4.3 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 Assignment and Assumption Agreement duly executed by Purchaser;
(c) the Transition Services Agreement duly executed by Purchaser;
(d) the Patent Assignment duly executed by Purchaser;
(e) the Trademark Assignment duly executed by Purchaser;
(f) the Assignment and Assumption of Ground Lease Agreement executed by Purchaser, with all
appropriate notarizations and certifications as required by the applicable Governmental Authority;
(g) a certificate signed by a duly authorized representative of each of Purchaser and
Purchaser Parent certifying that the closing conditions set forth in Sections 10.3(a) and
10.3(b) have been satisfied;
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(h) certificates of an authorized officer of each of Purchaser and Purchaser Parent to which
is attached: (i) true and correct copies of the Organizational Documents of each Purchaser or
Purchaser Parent, as applicable; (ii) true and correct copies of the resolutions of each of the
board of directors of Purchaser or Purchaser Parent, 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 Purchaser Parent, as applicable, who
execute this Agreement and other transaction documents on behalf of Purchaser or Purchaser Parent;
and (iv) a certificate from the Secretary of State 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 Purchaser or Purchaser Parent, as applicable. The certificates required pursuant to
this Section 4.3(h) 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; and
(i) evidence reasonably satisfactory to Sellers that Purchaser has complied with its
obligations set forth in Section 7.9.
ARTICLE V
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:
5.1 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. 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.
5.2 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 Purchaser Parent
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
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of each Seller, enforceable against each Seller in accordance with its terms
subject to the Enforceability Exceptions.
5.3 No Violation; Consents.
(a) Assuming the receipt of the consents or waivers referred to in Section 5.3(a) and
Section 5.3(b) of the Seller Disclosure Schedule and in Section 5.3(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) 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 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.
5.4 Financial Information.
(a) The Seller Data Room contains (i) the unaudited consolidated balance sheet of ASARCO at
February 28, 2008 and the unaudited consolidated statements of income
and cash flows of ASARCO for the two months ended thereon and (ii) the unaudited consolidated
balance sheet of ASARCO at December 31, 2007 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, (ii) in the case of the Interim Financial Statements, the absence of normal year-end
adjustments, which would not individually or in the aggregate reasonably be expected to result in a
Seller Material Adverse Effect and (iii) audit adjustments resulting from the Independent
Accountants’ audit, review and finalization of the ASARCO’s financial statements for the years
ended December 31, 2005, 2006 and 2007, which would not
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individually or in the aggregate reasonably
be expected to result in a Seller Material Adverse Effect.
5.5 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 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 5.5 do not address
Environmental Laws or labor, employment and benefit plan matters.
5.6 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.
5.7 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.
5.8 Material Contracts.
(a) Section 5.8(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, 2007, 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;
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(iv) all material Tolling Arrangements;
(v) all material Exchange Arrangements;
(vi) all Contracts with Customers;
(vii) all Contracts with Suppliers;
(viii) 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;
(ix) all settlement agreements for the settlement of any Environmental Claims
to the extent related to the Real Property;
(x) 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, 2007; and
(xi) 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.
(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).
5.9 Customers and Suppliers. Section 5.9 of the Seller Disclosure Schedule lists the names and
addresses of the ten most significant customers (by revenue) of the Business for the twelve-month
period ended December 31, 2007 and the amount for which each such customer was invoiced during such
period (“Customers”) and 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, 2007 and the amount for which each such supplier invoiced Sellers during such period
(“Suppliers”). Since January 1, 2008, no Customer or 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, 2007.
5.10 Employee Benefit Matters.
(a) All Seller Employee Benefit Plans are listed in Section 5.10(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
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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.
5.11 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 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 5.3(a)(ii),
(iii) and (iv), 5.3(b), 5.8(a)(ix), 5.8(b), 5.8(c)
and 5.14, this Section 5.11 shall be deemed to be the only representation and
warranty in the Agreement with respect to environmental matters.
5.12 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
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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 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 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
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 outstanding
against Sellers under the Collective Bargaining Agreements that would reasonably be expected to
have, individually or in the aggregate, a Seller Material Adverse Effect.
(e) There are no strikes, disputes, controversies, slowdowns, stoppages, boycotts or picketing
in progress or pending, or, to Sellers’ Knowledge, threatened against or affecting the Business.
(f) No employment contracts or severance agreements exist with any current employee of
Sellers.
(g) 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.
(h) Except for the current Local Supplemental Agreements between Sellers and the Unions that
were negotiated pursuant to the Letter of Understanding on Local
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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.
5.13 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.
5.14 Insurance. Section 5.14 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. All of such policies are in full force and effect.
5.15 Financial Advisors. Neither Purchaser nor Purchaser Parent is or will 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 any Seller.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND PURCHASER PARENT
REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND PURCHASER PARENT
Each of Purchaser and Purchaser Parent, jointly and severally, hereby represents and warrants
to Sellers:
6.1 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Purchaser Parent is a corporation duly
organized, validly existing and in good standing under the laws of India.
6.2 Authorization of Agreement. Each of Purchaser and Purchaser Parent 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 Purchaser Parent and the consummation by Purchaser and Purchaser Parent of the transactions
contemplated hereby and thereby have been duly authorized by the Board of Directors of Purchaser
and Purchaser Parent and no other corporate proceedings
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on the part of Purchaser or Purchaser
Parent 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 Purchaser Parent
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 Purchaser and Purchaser Parent, enforceable against
Purchaser and Purchaser Parent in accordance with its terms subject to the Enforceability
Exceptions.
6.3 No Violation; Consents.
(a) The execution and delivery by Purchaser and Purchaser Parent 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
Purchaser Parent, (ii) violate any Order of any Governmental Authority to which Purchaser or
Purchaser Parent 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 Purchaser Parent in
connection with the execution and delivery of this Agreement or any Ancillary Agreement, or the
compliance or performance by Purchaser or Purchaser Parent with any provision contained in this
Agreement or any Ancillary Agreement, except for (i) 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.
6.4 Litigation. Other than (i) matters before the Bankruptcy Court involving Sellers or their
Affiliates or (ii) matters that will otherwise by resolved by the Plan Confirmation Order, there
are no Legal Proceedings pending, or to knowledge of Purchaser or Purchaser Parent, threatened in
writing against or affecting Purchaser or Purchaser Parent, at law or in equity, before or by any
Governmental Authority, and neither Purchaser nor Purchaser Parent is subject to any Order rendered
specifically against either 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 either
of them from timely complying with the terms and provisions of this Agreement or any Ancillary
Agreement.
6.5 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
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may not be
sold unless subsequently registered under the Securities Act or an exemption from such registration
is available.
6.6 Financial Capability. Purchaser Parent 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.
6.7 Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending against,
being contemplated by, or to the knowledge of Purchaser or Purchaser Parent, threatened against
Purchaser or Purchaser Parent.
6.8 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 Purchaser Parent.
6.9 Subsequent Sales. Other than this Agreement and the Ancillary Agreements, no agreements or
understandings exist between either Purchaser or Purchaser Parent 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).
ARTICLE VII
COVENANTS
COVENANTS
7.1 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 7.1. 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
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them relating to,
resulting from, or arising out of, examinations or inspections made by Purchaser or its
representatives pursuant to this Section 7.1. The indemnity provided for in this
Section 7.1 shall expressly survive any termination of this Agreement or the Closing of the
transactions contemplated hereby.
7.2 Conduct of the Business Pending the Closing. Except as otherwise expressly contemplated by this
Agreement, the Ancillary Agreements and Section 7.2 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 all material inventories of consumables and parts and supplies in the
Ordinary Course of Business;
(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;
(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 VIII, 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 material Leasehold
Property 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
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to Article
VIII, 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 7.2(i) of the Seller Disclosure Schedules;
(j) will not effect any involuntary termination of its employees who otherwise were to be
offered employment by Purchaser pursuant to Article VIII, without providing Purchaser with
reasonable notice of the same and a reasonable opportunity to consult with Sellers on the
identification of the terminated employees, except in the Ordinary Course of Business;
(k) will make capital expenditures or commitments for capital expenditures, in each case, in
the Ordinary Course of Business;
(l) will not agree to take any of the actions specified in this Section 7.2, except as
contemplated by this Agreement and the Ancillary Agreements; and
(m) will not withdraw objections to the Gila River Indian Community settlement agreement or
take any other action that would reasonably be likely to result in a material adverse effect on a
successor’s interest in the Arizona water adjudication cases either prior to or after the Closing
Date.
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, incurrence or
other action is required by Applicable Law, by Contract with a third party or to operate in the
Ordinary Course of Business.
7.3 Cooperation; Consents and Filings.
(a) From and after the date hereof until the Closing Date, Sellers, Purchaser and Purchaser
Parent 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 Purchaser Parent 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 7.3.
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,
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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 7.3 shall be construed as altering the rights and obligations of the parties under
Section 2.5 or Section 7.10. 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 7.1, 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 addition to and without limiting any of the other covenants of the parties contained in
this Section 7.3, the parties shall, in connection with the transactions contemplated
hereby, (i) take promptly all actions necessary to make the filings required of them or their
“ultimate parent entities” under the HSR Act, (ii) 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, (iii) 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, (iv) 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 and (v) 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. 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) To the extent Purchaser elects to enter into collective bargaining agreements with the
Unions regarding the current employees of ASARCO and its Subsidiaries (the “New CBA”), Sellers
will take all actions reasonably necessary to cooperate with Purchaser in its negotiation of the
New CBA including using commercially reasonable efforts to participate
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in negotiations and
providing Purchaser with all information and documents relevant to the negotiations in Seller’s
possession unless access to such information or documents (i) would violate Applicable Law, (ii)
would jeopardize any privilege available to Sellers or any of its Affiliates relating to such
information or (iii) would cause Sellers or any of its Affiliates to breach a confidentiality
obligation to which they are bound.
(e) The Purchaser and the Sellers shall prepare and file promptly following the date hereof
(but no later than 30 days following the date hereof) 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 this Agreement (the “CFIUS Notice”). The Purchaser and Sellers
shall use commercially reasonable efforts 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.
(f) Sellers will use commercially reasonably efforts to cooperate with Purchaser and take all
reasonable actions necessary to assist Purchaser in obtaining the Gila River Indian Community’s and
Secretary of Interior’s written consent to an assignment of the Water Rights Settlement and
Exchange Agreement dated January 1, 1977 between the Gila River Indian Community and ASARCO
Incorporated; provided, however, that Sellers shall have no obligation to continue such efforts
upon the dissolution and winding up of ASARCO.
(g) 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.
7.4 Preservation of Records. Subject to the other provisions of this Agreement, Purchaser and
Purchaser Parent 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 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 Purchaser
Parent shall dispose of any of such records, at least 90 days’ prior notice to such effect shall be
given by Purchaser or Purchaser Parent 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.
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7.5 Confidentiality. The parties acknowledge that Purchaser Parent 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
Purchaser Parent 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.
7.6 Public Announcements. Prior to the Closing Date, neither Sellers, nor Purchaser or Purchaser
Parent, or any of their Affiliates or any of their 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.
7.7 Bankruptcy Matters.
(a) ASARCO shall file with the Bankruptcy Court, as soon as practicable following the
execution of this Agreement but in no event later than five days following the Effective Date, a
motion and supporting papers seeking the entry of an order of the Bankruptcy Court approving the
amount of the Superior Proposal Threshold, and the terms of Section 7.10 and Section
12.2(b)(v) (the “Bid Protections Order”). Sellers shall use their commercially reasonable
efforts to have the Bid Protections Order entered as soon as practicable following the filing of
the motion therefor.
(b) ASARCO shall use its reasonable best efforts to obtain prompt entry of the Plan
Confirmation Order.
(c) ASARCO shall promptly provide Purchaser with final drafts 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 Bid
Protections Order, (iii) the Disclosure Statement, (iv) the Plan Confirmation Order and (v)
the acquisition 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. Without the prior written consent of
Purchaser, Seller shall not seek to amend or modify any provision in the Bid Protections Order, the
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 Purchaser Parent) or on the ability of Sellers and
Purchaser (and Purchaser Parent) to consummate the transactions contemplated hereby within the time
periods set forth in Sections 7.7(a) and 12.1.
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(d) Sellers, Purchaser and Purchaser Parent shall 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 the extent not included in
Section 5.8(a) of the Seller Disclosure Schedule) to allow Purchaser to meaningfully
consider and exercise its rights under Section 2.5(a), and furnishing 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 Purchaser Parent under 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 12.1(b), Sellers, Purchaser and Purchaser Parent will
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 Purchaser Parent 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 7.7 shall be construed as altering the rights and obligations of Sellers under
Section 7.10.
7.8 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 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.
7.9 Bonds and Assurances. Prior to Closing, Purchaser shall (i) cause Sellers to be fully,
unconditionally and irrevocably released and discharged from the bonds and financial assurance
obligations and guaranty obligations identified in Section 7.9 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.
7.10 Non-Solicitation.
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(a) ASARCO agrees that neither it nor any of its wholly-owned Subsidiaries nor any of their
respective directors or officers shall, and that it shall direct its wholly-owned Subsidiaries’
respective employees and representatives (including any investment banker, attorney or accountant
retained by it or any of its wholly-owned Subsidiaries) not to, directly or indirectly, solicit any
Acquisition Proposal; provided, however, that nothing shall prevent ASARCO or its Board of
Directors 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 Law and (2)
such Acquisition Proposal is a Superior Proposal or is likely to lead to a Superior
Proposal.
(b) 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
date hereof 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 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 7.10, following the receipt of any
Superior Proposal or except as provided in Section 12.2 upon termination of this Agreement.
(c) Sellers shall, as soon as practicable, provide Purchaser with the material terms and
conditions of any Acquisition Proposal received by Sellers after the date hereof that the Board of
Directors of ASARCO determines, in accordance with paragraph (a) above, to take any affirmative
action to approve, or authorize negotiations of, a definitive agreement in respect of.
(d) 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
pursuant to Section 7.10(c), 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 12.2(b)(v) if such Acquisition Proposal were accepted
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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.
7.11 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.
7.12 Further Assurances. Sellers, Purchaser and Purchaser Parent 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.
7.13 Payments and Proceeds.
(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.
(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.
7.14 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.
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ARTICLE VIII
EMPLOYEES AND EMPLOYEE BENEFITS
EMPLOYEES AND EMPLOYEE BENEFITS
8.1 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 Purchaser Parent, 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 Purchaser Parent, 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 Closing
Date shall be referred to as “Transferred Employees.” Notwithstanding the foregoing, this
Section 8.1(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.
8.2 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
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particular length of time. Nothing in this Section 8.2(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 8.2(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 8.2(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 8.2(b) of the Seller Disclosure Schedule.
8.3 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
8.3 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.
8.4 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.
8.5 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.
8.6 Welfare Benefit Plans; Workers’ Compensation; Other Benefits.
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(a) With respect to each Transferred Employee (including any beneficiary or the dependent
thereof), Purchaser shall assume all liabilities and obligations arising under any Seller Employee
Benefit Plans and 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 8.6, 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.
(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.
8.7 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 8.1, receipt of the consent
contemplated by the immediately preceding sentence shall be considered a condition to the offer of
employment required in Section 8.1, 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.
8.8 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, the parties will deliver such announcement to employees in accordance with such
communication plan.
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8.9 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
8.9 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 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 IX
TAX MATTERS
TAX MATTERS
9.1 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.
9.2 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 9.2 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
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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 bear interest at the rate of 6% per annum. The party
responsible for paying a tax described in this Section 9.2 shall be responsible for
administering the payment of (and any reimbursement for) such Tax. For purposes of this
Section 9.2, 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.
9.3 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
9.3, and each party shall pay over to such other party any such amount within five business
days of receipt thereof.
ARTICLE X
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
10.1 Conditions Precedent to Obligations of Each Party. The respective obligations of Sellers,
Purchaser and Purchaser Parent 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 shall have approved and entered the Plan Confirmation Order, and the
Plan Confirmation Order shall have become an Effective Order;
(b) 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
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to comply with such
regulations would prohibit the consummation of the transactions contemplated by this Agreement,
shall have been terminated or expired;
(c) No Order issued by any court of competent jurisdiction preventing the consummation of the
transactions contemplated hereby shall be in effect; and
(d) All conditions precedent to the effectiveness of the Plan (other than the Closing) shall
have been satisfied or waived by the relevant parties.
10.2 Conditions Precedent to Obligations of Purchaser and Purchaser Parent. The obligations of
Purchaser and Purchaser Parent 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 Purchaser Parent, 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 10.2(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 and Purchaser Parent shall have been furnished with the deliveries referred to
in Section 4.2.
10.3 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 Purchaser Parent contained
herein shall be true and correct on and as of the Closing Date, except those representations and
warranties of Purchaser and Purchaser Parent 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 10.3(a) any materiality qualifiers contained in such representations and
warranties;
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(b) Purchaser and Purchaser Parent 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;
(c) Sellers shall have been furnished with the deliveries referred to in Section 4.3;
and
(d) The consents and waivers set forth in Sections 5.3(a) and 5.3(b) of the
Seller Disclosure Schedule shall have been obtained.
ARTICLE XI
LIMITATIONS
LIMITATIONS
11.1 Purchaser’s Review.
(a) Disclaimer Regarding Projections. In connection with Purchaser’s and Purchaser Parent’s
investigation of Sellers, Purchaser and/or Purchaser Parent 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 Purchaser Parent each acknowledges that (i) there are uncertainties inherent in
attempting to make such projections, forecasts and plans and, accordingly, is not relying on them,
(ii) each of Purchaser and Purchaser Parent 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) Purchaser and Purchaser Parent shall have no 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 Purchaser Parent
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.
11.2 “As-Is”; Sale. AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, SELLERS, PURCHASER
AND PURCHASER PARENT 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
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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, 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 AND PURCHASER PARENT 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 5.1 THROUGH
5.15 AND LIMITED BY SECTIONS 14.1 AND 14.2 OF THIS AGREEMENT), ALL OTHER
REPRESENTATIONS AND WARRANTIES, BOTH EXPRESS AND IMPLIED, ARE HEREBY EXPRESSLY DISCLAIMED AND
DENIED. EACH OF PURCHASER AND PURCHASER PARENT 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 PURCHASER PARENT MAY DESIRE OR DETERMINE
WARRANTED, AND THAT PURCHASER AND PURCHASER PARENT ARE NOT 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 SELLERS, OR ANY REAL ESTATE BROKER OR
AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLERS, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR
INDIRECTLY, ORALLY OR IN WRITING (EXCEPT FOR THE REPRESENTATIONS OF SELLERS EXPRESSLY SET FORTH IN
SECTIONS 5.1 THROUGH 5.15 AND LIMITED BY SECTIONS 14.1 AND 14.2 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 PURCHASER PARENT REPRESENT THAT PURCHASER 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 PURCHASER PARENT HAVE RELIED SOLELY UPON THEIR OWN
KNOWLEDGE, INVESTIGATION, AND ANALYSIS (AND THAT OF ITS 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 V.
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11.3 Waivers and Releases. PURCHASER AND PURCHASER PARENT 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 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 5.1 THROUGH
5.15 AND LIMITED BY SECTIONS 14.1 AND 14.2 OF THIS AGREEMENT. EXCEPT AS
EXPRESSLY SET FORTH IN SECTIONS 5.1 THROUGH 5.15 AND LIMITED BY SECTIONS
14.1 AND 14.2 OF THIS AGREEMENT, UPON CLOSING, PURCHASER AND PURCHASER PARENT 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
PURCHASER PARENT 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 PURCHASER PARENT
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 PURCHASER PARENT
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,
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OMISSIONS, EVENTS, CIRCUMSTANCES, OR MATTERS
REGARDING THE PURCHASED ASSETS. NOTWITHSTANDING THE FOREGOING, THE WAIVERS AND RELEASES CONTAINED
IN THIS SECTION 11.3 SHALL NOT APPLY TO THE EXTENT ANY CLAIM ARISES OUT OF OR RESULTS FROM
SELLERS’ FRAUD.
11.4 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 7.5, 7.6 AND ARTICLE XIII.
11.5 No Recourse.
(a) No past, present or future director, officer, employee, member, shareholder, incorporator,
partner, advisor and/or Affiliate of Sellers or any Affiliate thereof shall have any liability for
any obligations of Sellers under this Agreement or for any claim based on, in respect of or by
reason of such obligations or their creation.
(b) Except in respect of the obligations set forth in Article XIII of this Agreement,
no past, present or future director, officer, employee, member, shareholder, incorporator, partner,
advisor and/or Affiliate of Purchaser or any Affiliate thereof shall have any liability for any
obligations of Purchaser under this Agreement or for any claim based on, in respect of or by reason
of such obligations or their creation.
11.6 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 Purchaser Parent 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.
ARTICLE XII
TERMINATION
TERMINATION
12.1 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 December 15,
2008 (or such later date, which in no event will be later than January 17, 2009, if requested by
Sellers and consented to by Purchaser, which consent may not be
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unreasonably delayed or denied)
(the “Confirmation Deadline”); provided, however, that Sellers shall not be permitted to terminate
this Agreement under this Section 12.1(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 December 31, 2008 (or such later
date, which in no event will be later than January 28, 2009, if, notwithstanding ASARCO’s exercise
of good faith best efforts, the failure of Closing to occur on or prior to December 31, 2008 is due
to circumstances or events beyond ASARCO’s control, including any delays or failures caused by
actions or omissions by Purchaser or its Affiliates or any third party not under ASARCO’s control
or responsibility (the “Termination Date”); provided, however, that Sellers shall not be permitted
to terminate this Agreement under this Section 12.1(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 (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 Sellers, at any time after the Bankruptcy Court approves a Superior Proposal, or by
Purchaser, upon filing with the Bankruptcy Court by ASARCO of a motion, disclosure statement or any
other document that announces that the Board of Directors of ASARCO has decided to pursue, or
otherwise seeks approval of, an Acquisition Proposal to be consummated between ASARCO and a Person
other than Purchaser or its Affiliates;
(e) By Sellers, at any time after the Bankruptcy Court approves a Stand-Alone Plan, or by
Purchaser, upon (i) the filing with the Bankruptcy Court of a Stand-Alone Plan by ASARCO or (ii)
the filing with the Bankruptcy Court of a Stand-Alone Plan by a third-party 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 12.1(f) if (i) the failure by Purchaser or Purchaser Parent 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 Purchaser Parent of
any covenant or obligation in this Agreement required to be performed by Purchaser or Purchaser
Parent or the inaccuracy of any representation or warranty of Purchaser or Purchaser Parent 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
12.1(g) if (i) the failure by Purchaser or Purchaser Parent to fulfill any obligation under
this Agreement has been the primary cause of the failure of such consummation to occur
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on or before
the Termination Date or (ii) the failure of the Closing to occur is caused primarily by a breach
by Purchaser or Purchaser Parent of any covenant or obligation in this Agreement required to be
performed by Purchaser or Purchaser Parent or the inaccuracy of any representation or warranty of
Purchaser or Purchaser Parent made herein;
(h) By Purchaser (provided that neither Purchaser nor Purchaser Parent is in material breach
of any representation, warranty or covenant or other agreement contained herein) if: (a) the Bid
Protections Order shall not have been entered on or prior to the 30th day following the date on
which the motion seeking entry of the Bid Protections Order was filed with the Bankruptcy Court;
(b) ASARCO shall not have filed with the Bankruptcy Court the Plan and Disclosure Statement on or
prior to August 1, 2008; or (c) the Bankruptcy Court shall not have entered an order approving the
Disclosure Statement on or prior to October 15, 2008 (or such later date, which in no event will be
later than October 30, 2008, 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) (x) 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
and Purchaser Parent’s obligation to close set forth in Sections 10.2(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; or (y) by
Sellers if there shall be a breach by Purchasers 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 10.3(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; and
(k) By either Sellers or Purchaser, if there shall be any final non-appealable Order entered
by a Governmental Authority of competent jurisdiction having valid enforcement authority
permanently restraining, prohibiting or enjoining Sellers or Purchaser from consummating the
transactions contemplated hereby.
12.2 Effect of Termination.
(a) No termination of this Agreement pursuant to Section 12.1 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 and abandonment of the transactions
contemplated hereby by either or both of the parties pursuant to Section 12.1, 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 pursuant to
Section 12.1 as provided herein:
(i) Except as otherwise provided in Section 12.2(b)(v) and in
Section 3.2, such termination shall be the sole and exclusive remedy of
Purchaser and
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Purchaser Parent 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 trustees, directors, officers or Affiliates, as
the case may be, shall have any liability or further obligation to Purchaser or
Purchaser Parent or any of their respective trustees, officers or Affiliates, as the
case may be, and each Seller (and their respective trustees, directors, officers or
Affiliates, as the case may be) shall be fully released and discharged from any
liability or obligation under or resulting from this Agreement and neither Purchaser
nor Purchaser Parent shall have any other remedy or cause of action under or
relating to this Agreement or any Applicable Law, including, without limitation, 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; and
(v) In the event that this Agreement is terminated pursuant to Sections
12.1(d) or (e), Sellers shall pay to Purchaser, simultaneously with and
as a condition to such termination, a fee in an amount equal to 2% of the Closing
Payment. In the event that this Agreement is terminated pursuant to Section
12.1(j)(x) following Sellers’ breach of covenant, willful or intentional breach
of representations or fraud, Sellers shall reimburse Purchaser within two (2)
business days of such termination for actual and documented expenses of Purchaser
not to exceed the sum of $10 million. 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.
(c) Notwithstanding the foregoing, no fee pursuant to Section 12.2(b)(v) shall be due
and payable if (i) Purchaser or Purchaser Parent has materially breached this Agreement, (ii)
Purchaser or Purchaser Parent has engaged in bad faith conduct with respect to the transactions
contemplated by this Agreement or (iii) Purchaser or Purchaser Parent has violated in any material
respect the provisions of the Bankruptcy Code, other Applicable Law or an Order of the Bankruptcy
Court, in each case relating to the transactions contemplated by this Agreement.
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(d) Notwithstanding Section 12.2(b), the obligations of Purchaser and Purchaser Parent
under the Confidentiality Agreement and the obligations of the parties under this Section
12.2 and Sections 3.2, 7.5, 7.6, 14.4, 14.6,
14.7, 14.8, 14.11, 14.13, and 14.14, the last two sentences
of Section 7.1, and Articles XI and XIII of this Agreement shall remain in
full force and effect.
ARTICLE XIII
PURCHASER PARENT GUARANTEE
PURCHASER PARENT GUARANTEE
13.1 Purchaser Parent Guarantee.
(a) Purchaser Parent 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, without limitation, 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 13.1 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, Purchaser Parent shall promptly honor
and perform its obligations to Sellers hereunder upon demand.
(b) To the fullest extent permitted by Applicable Law, the obligations of Purchaser Parent
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 Purchaser Parent or the
bankruptcy, insolvency, reorganization, dissolution, liquidation, or other similar proceeding
relating to Purchaser, Purchaser Parent or any Affiliate of either Purchaser or Purchaser Parent;
(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 Purchaser Parent 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 Purchaser Parent hereunder.
(c) In connection with this Section 13.1, Purchaser Parent 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 Purchaser
Parent 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
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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 Purchaser
Parent 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 13.1 (the
Obligations shall conclusively be deemed to have been created, contracted, incurred or renewed,
extended, amended or waived in reliance upon this Section 13.1 and all dealings between
Purchaser or Purchaser Parent and Sellers shall be conclusively presumed to have been had or
consummated in reliance upon this Section 13.1) or any notice of any other facts that may
come to the attention of Sellers or Purchaser Parent 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 Purchaser
Parent; 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 Purchaser Parent’s obligations hereunder or
which might otherwise operate as a discharge of Purchaser Parent.
(d) The obligations of Purchaser Parent hereunder are primary, absolute, unconditional and
irrevocable and will not be discharged by, and this Section 13.1 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 Purchaser Parent.
(e) The obligations of Purchaser Parent under this Section 13.1 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
Purchaser Parent 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
Purchaser Parent from any liability hereunder, and Purchaser Parent’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) Purchaser Parent 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 Purchaser Parent seek or be entitled to
seek any reimbursement from Purchaser in respect of performance made by Purchaser Parent hereunder,
until the Obligations are indefeasibly paid and performed in full.
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(g) This Section 13.1 shall survive the Closing and shall remain in full force and
effect. Purchaser Parent agrees to indemnify and hold Sellers harmless from and against and to pay
all out-of-pocket costs and expenses (including, without limitation, reasonable legal fees and
expenses) incurred by or on behalf of Sellers in connection with the collection and/or enforcement
of Purchaser Parent’s obligations under this Section 13.1.
ARTICLE XIV
MISCELLANEOUS
MISCELLANEOUS
14.1 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
7.1, 7.5 and 7.6, and Articles VIII, IX, XI and
XIII).
14.2 Remedies. Purchaser and Purchaser Parent 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 12.1, to receive the Deposit to the extent permitted by
Section 3.2 and to receive the expense reimbursement to the extent permitted by Section
12.2(b)(v). 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 12.1, 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.
14.3 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.
14.4 Expenses. Except as otherwise set forth in this Agreement, Sellers, Purchaser and Purchaser Parent
shall each bear their own expenses (including, without limitation, 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, but not limited to,
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any search and exam fees, (ii) all premiums
and other costs for any mortgagee policy of title insurance, including but not limited to 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 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 14.4 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.
14.5 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 V 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 V 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, or otherwise alter in any
way the terms of this Agreement. 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.
14.6 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).
14.7 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
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14.13; 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 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 14.13.
14.8 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.
14.9 No Right of Set-Off. Each of Purchaser and Purchaser Parent 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, Purchaser Parent 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 Purchaser Parent
pursuant to this Agreement, any Ancillary Agreement or any other document or instrument delivered
by Purchaser or Purchaser Parent in connection herewith.
14.10 Time of Essence. With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
14.11 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,
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modification or waiver is sought. No action taken pursuant to
this Agreement, including without limitation, 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 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.
14.12 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.
14.13 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 to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Purchaser or Purchaser Parent, to:
Sterlite Industries (India) Ltd
Vedanta, ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇)
▇▇▇▇▇▇ — 400 099
India
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Vedanta, ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇)
▇▇▇▇▇▇ — 400 099
India
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
With a copy to:
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14.14 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.
14.15 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 Purchaser Parent
(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; 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 Purchaser Parent.
14.16 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
2.3.
14.17 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
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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 | |||
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| PURCHASER: STERLITE (USA), INC. |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | President | |||
| PURCHASER PARENT: STERLITE INDUSTRIES (INDIA) LTD. |
||||
| By: | /s/ ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇.▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | Managing Director (Power) | |||