Exhibit 2.1
EXECUTION COPY
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
BY AND BETWEEN
BILLITON INVESTMENT 15 B.V.
("SELLER")
AND
HRI-▇▇▇▇ ACQUISITION LLC
("BUYER")
FOR THE SALE AND PURCHASE
OF
THE MEMBERSHIP INTEREST OF
RIO ALGOM MINING LLC
October 12, 2007
Table of Contents
Page
ARTICLE I
DEFINITIONS
1.1 Definitions..........................................................................1
1.2 Construction.........................................................................9
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTEREST; CLOSING
2.1 Purchase and Sale ..................................................................10
2.2 Purchase Price......................................................................10
2.3 Closing.............................................................................10
2.4 Allocation of Purchase Price........................................................10
2.5 Purchase Price Adjustment Based Upon Estimated Closing Working Capital .............10
2.6 Purchase Price Adjustment Based Upon Construction Cost of Erosion Barrier ..........11
2.7 Additional Consideration............................................................12
2.8 Deliveries by SELLER ...............................................................12
2.9 Delivery of Records.................................................................13
2.10 Deliveries by BUYER.................................................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization........................................................................14
3.2 Capitalization......................................................................14
3.3 Authorization ......................................................................15
3.4 Consents and Approvals; No Violations...............................................15
3.5 Financial Statements of ▇▇▇▇ .......................................................15
3.6 Fee Surface and Fee Mineral Lands...................................................16
3.7 Conduct of Business and Absence of Changes..........................................16
3.8 Permits ............................................................................16
3.9 Surface and Mineral Leases..........................................................17
3.10 Mining Claims ......................................................................17
3.11 Water Rights........................................................................17
3.12 Personal Property...................................................................18
3.13 Intellectual Property...............................................................18
3.14 Litigation..........................................................................18
3.15 Compliance with Applicable Law .....................................................18
3.16 Material Contracts..................................................................18
3.17 Employment, Deferred Compensation or Similar Agreements; Collective
Bargaining Agreements; Employee Benefit Plan.....................................19
3.18 Labor Matters.......................................................................22
3.19 Taxes...............................................................................22
3.20 Environmental, Health & Safety Matters..............................................23
3.21 No Liabilities .....................................................................24
3.22 Insurance...........................................................................24
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3.23 No Breach of Tronox PSA.............................................................24
3.24 No Creation of Defenses in Tronox Litigation........................................24
3.25 Bank Accounts and Powers of Attorney................................................24
3.26 Transactions with Affiliated Persons................................................24
3.27 Absence of Certain Business Practices...............................................25
3.28 Restrictions on Business Activities.................................................25
3.29 Payables ...........................................................................25
3.30 Receivables ........................................................................25
3.31 Books and Records ..................................................................26
3.32 Rental Payments.....................................................................26
3.33 Certain Fees .......................................................................26
3.34 Holding Company Act and Investment Company Act Status ..............................26
3.35 Exemption from Registration.........................................................26
3.36 Disclosure .........................................................................26
3.37 No Other Representations or Warranties..............................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Authorization ......................................................................27
4.2 Consents and Approvals; No Violations...............................................27
4.3 Litigation..........................................................................27
4.4 Certain Fees .......................................................................28
4.5 Financial Capability................................................................28
4.6 Knowledge ..........................................................................28
4.7 BUYER Qualifications ...............................................................28
4.8 Independent Review..................................................................28
4.9 Investment Intent ..................................................................28
4.10 Accredited Investor; Investment Representations ....................................29
ARTICLE V
PRE-CLOSING COVENANTS OF THE PARTIES
5.1 Conduct of the Business.............................................................29
5.2 Further Assurances..................................................................32
5.3 Covenant to Satisfy Conditions .....................................................33
5.4 Breach Notice.......................................................................33
5.5 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance .......................................................35
5.6 Exclusivity ........................................................................35
5.7 Termination of Severance Policy.....................................................36
5.8 Duty to Obtain Financing............................................................37
5.9 Interim Financial Statements .......................................................37
5.10 Affiliate Agreements................................................................37
5.11 Drill Logs..........................................................................37
5.12 Remediation Trust Fund Amount and Escrow Fund Amount ...............................37
5.13 KGL Associates, Inc.................................................................37
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ARTICLE VI
POST-CLOSING COVENANTS OF THE PARTIES
6.1 Tax Matters.........................................................................38
6.2 Preservation of Records.............................................................40
6.3 Litigation Support..................................................................40
6.4 SELLER's Insurance .................................................................41
6.5 Environmental Remediation; Remediation Trust .......................................41
6.6 ▇▇▇▇ Employees .....................................................................41
6.7 Amounts Recovered in Tronox Litigation..............................................42
6.8 Service Level Agreements............................................................42
ARTICLE VII
OTHER AGREEMENTS
7.1 Public Announcements ...............................................................42
7.2 Supplemental Disclosure ............................................................42
7.3 No Ongoing or Transition Services ..................................................43
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Conditions to Each Party's Obligations..............................................43
8.2 Conditions to Obligations of SELLER.................................................44
8.3 Conditions to Obligations of BUYER .................................................44
ARTICLE IX
TERMINATION
9.1 Termination.........................................................................45
9.2 Procedure and Effect of Termination.................................................46
9.3 Break-Up Fee........................................................................47
ARTICLE X
INDEMNIFICATION
10.1 Indemnification Obligations of SELLER ..............................................47
10.2 Indemnification Obligations of BUYER ...............................................47
10.3 Indemnification for Fraud and/or Willful Misconduct ................................48
10.4 Indemnification Procedure...........................................................48
10.5 Survival............................................................................49
10.6 Liability Limits ...................................................................49
10.7 Damage Exclusions...................................................................51
10.8 Reasonable Steps to Mitigate........................................................51
10.9 Special Indemnity ..................................................................51
10.10 Exclusive Remedies Following the Closing Date.......................................51
10.11 Environmental Remedies..............................................................51
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses...................................................................52
11.2 Notices.............................................................................52
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11.3 Severability........................................................................53
11.4 Binding Effect;]Assignment..........................................................53
11.5 No Third Party Beneficiaries .......................................................53
11.6 Entire Agreement....................................................................53
11.7 Governing Law ......................................................................54
11.8 Consent to Jurisdiction and Dispute Resolution......................................54
11.9 Counterparts........................................................................54
11.10 Amendment; Modification.............................................................54
11.11 Disclosure Schedules ...............................................................54
Schedules
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Schedule 1.1(a) BUYER's Individuals with Knowledge
Schedule 1.1 (b) SELLER's Individuals with Knowledge
Schedule 2.4 Purchase Price Allocation
Schedule 3.4 Conflicts
Schedule 3.7 Conduct of Business and Absence of Charges
Schedule 3.8 Permits
Schedule 3.11 Water Rights
Schedule 3.12 Personal Property
Schedule 3.13 Intellectual Property
Schedule 3.14 Litigation
Schedule 3.15 Compliance with Applicable Law
Schedule 3.16 Material Contracts
Schedule 3.17 Employee Benefit Plans
Schedule 3.19 Taxes
Schedule 3.20 Environmental, Health & Safety Matters
Schedule 3.21 No Liabilities
Schedule 3.22 Insurance
Schedule 3.23 Tronox PSA
Schedule 3.25 Bank Accounts
Schedule 3.26 Affiliate Transactions
Schedule 3.28 Restrictions on Business Activities
Schedule 3.29 Payables
Schedule 3.30 Receivables
Schedule 3.32 Rental Payments
Schedule 6.5 Closure Requirements
Schedule 8.3(e) Consents, Approvals or Authorizations
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Exhibits
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Exhibit A Guarantee
Exhibit B Release, Indemnity and Assumption of
Environmental Liabilities
Exhibit C Fee Surface and Fee Mineral Lands
Exhibit D Leased Surface and Leased Mineral Lands
Exhibit E Mining Claims
Exhibit F Surface and Mineral Leases
Exhibit G Dispute Resolution Procedures
Exhibit H Remediation Trust
Exhibit I Escrow Agreement
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement"), dated
as of October 12, 2007 (the "Execution Date"), is made and entered into by and
between BILLITON INVESTMENT 15 B.V., registration number 27191276, being a
corporation validly existing under the laws of The Netherlands ("SELLER"), and
HRI-▇▇▇▇ ACQUISITION LLC, a Delaware limited liability company ("BUYER"). SELLER
and BUYER are sometimes individually referred to in this Agreement as a "Party"
and collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, SELLER is the record and beneficial owner of all of the
membership interest (the "Interest") in Rio Algom Mining LLC, a Delaware limited
liability company ("▇▇▇▇"); and
WHEREAS, pursuant to the terms and conditions of this Agreement, SELLER
desires to sell, transfer, convey and assign to BUYER, and BUYER desires to
acquire and accept from SELLER, all of the Interest (the "Acquisition").
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, covenants, agreements and conditions
contained in this Agreement, and intending to be legally bound hereby, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used in this Agreement,
have the following meanings:
"Acknowledgement, Agreement and Release" means the agreement between
▇▇▇▇ and each of its employees to be entered into prior to the Closing, the form
of which has been disclosed to BUYER and agreed to by the Parties.
"Acquisition" has the meaning set forth in the Recitals.
"Acquisition Proposal" has the meaning set forth in Section 5.6(a).
"Alternative Transaction" has the meaning set forth in Section 5.6(b).
"Afiliate" of any specified Person means any other Person directly or
indirectly, through one or more intermediaries, Controlling or Controlled by, or
under common Control with, such specified Person.
"Afiliate Loans" means loans made to any Affiliate of ▇▇▇▇ by ▇▇▇▇.
"Agreement" has the meaning set forth in the Preamble to this
Agreement.
"Ambrosia Lake Closure Requirements" has the meaning set forth in
Section 6.5(a).
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"Ancillary Documents" means the SELLER Ancillary Documents and the
BUYER Ancillary Documents.
"Approval" means an authorization, permit, consent, approval or waiver
of, clearance by, required notice to or registration or filing with, a
Governmental Entity and the expiration or termination of all prescribed waiting
or review periods with respect to any of the foregoing.
"Breach Notice" has the meaning set forth in Section 5.4.
"Break-up Fee" has the meaning set forth in Section 9.3.
"Budget" means ▇▇▇▇'▇ fiscal year 2008 approved budget in the amount of
US$30.3 million, a copy of which was given to BUYER.
"Business Day" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in the City of New York, New
York.
"BUYER" has the meaning set forth in the Preamble to this Agreement.
"BUYER Ancillary Document" means any public instrument, certificate,
agreement, document or other instrument, other than this Agreement, to be
executed and delivered by BUYER or any Affiliate of BUYER in connection with the
Acquisition.
"BUYER Group" means Uranium Resources, Hydro Resources, Inc.,
HRI-Churchrock, Inc., and URI, Inc.
"BUYER Group Guarantee" means the Guarantee, in the form of Exhibit A,
by BUYER Group to SELLER of the due, prompt and faithful performance of and
compliance with, all agreements of BUYER in this Agreement, the Environmental
Release and Indemnity Agreement, and all other BUYER Ancillary Documents.
"BUYER Indemnified Parties" means BUYER, BUYER Group and each of their
respective Affiliates, officers, directors, managers, employees, agents and
representatives and each of the heirs, executors, successors and assigns of any
of the foregoing.
"BUYER Plans" shall mean the employee benefit plans of BUYER that
provide employee benefits and incentives to its employees after the Closing.
"Claim Notice" has the meaning set forth in Section 10.6(c).
"Closing" has the meaning set forth in Section 2.3. "Closing Date" has
the meaning set forth in Section 2.3. "Code" means the Internal Revenue Code of
1986, as amended.
"Commercially Reasonable Eforts" means the reasonable efforts of the
performing Party which do not require the performing Party to expend material
funds or incur material obligations other than expenditures which are customary
and reasonable in transactions of the kind and
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nature contemplated by this Agreement in order for the performing Party to
satisfy its obligations hereunder.
"Confidentiality Agreement" means that certain confidentiality
agreement by and between ▇▇▇▇ and Uranium Resources, dated April 2, 2007.
"Control" when used with respect to any specified Person, means the
power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Data Room" means the electronic data room established by SELLER with
IntraLinks, Inc. to assist Persons interested in acquiring the Interest with an
evaluation of ▇▇▇▇.
"Dispute" has the meaning set forth in Section 11.8. "DOE" means the
U.S. Department of Energy.
"Employee Benefit Plans" means any plan, fund or program (including any
practice, policy, contractual commitment, arrangement, or procedure) sponsored,
maintained by, or contributed to by, ▇▇▇▇, which directly or indirectly
compensates any current or former employee of ▇▇▇▇ or any dependent of any of
the foregoing, other than through the direct and immediate payment of wages or
salary. Such term shall specifically include, without limitation, any severance,
termination pay, deferred compensation, retirement, pension, bonus awards,
performance awards, retention or other change in control awards, incentive
compensation, stock or stock-related awards or fringe benefits, and any
"employee benefit plan" within the meaning of ERISA Section 3(3).
"Environmental, Health & Safety Laws" means any applicable Law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including those relating to the presence, use,
production, generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any Hazardous Materials, substances, or wastes,
as such requirements are enacted and in effect on or prior to the Closing Date.
"Environmental Liabilities" means any and all liabilities arising in
connection with or in any way relating to ▇▇▇▇'▇ business (as currently or
previously conducted by ▇▇▇▇ or any predecessor-in-interest) or any activities
or operations occurring or conducted on, off, above or under the Real Property,
whether accrued, contingent, absolute, determined, determinable or otherwise,
which arise under or relate to any Environmental, Health & Safety Laws.
"Environmental Release and Indemnity Agreement" means the Release,
Indemnity and Assumption of Environmental Liabilities, in the form of Exhibit B.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Afiliate" means any organization or person which, together with
▇▇▇▇, would be treated as a single employer under Code Sections 4 14(b), (c),
(m) and/or (o) and related U.S. Treasury regulations.
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"Escrow Agreement" means the Escrow Agreement, in the form of Exhibit
I.
"Escrow Fund Amount" means the estimated dollar amount determined as of
the Closing Date and agreed to by the Parties of the pension benefits and other
health care obligations of ▇▇▇▇ due ▇▇▇▇'▇ retired employees under the Employee
Benefit Plans.
"Estimated Closing Working Capital" means an estimate of ▇▇▇▇'▇ Working
Capital as of the Closing Date.
"Estimated Closing Working Capital Statement" means a schedule
containing the Estimated Closing Working Capital.
"Execution Date" has the meaning set forth in the Preamble to this
Agreement.
"Fee Surface and Fee Mineral Lands" means the lands described at
Exhibit C attached hereto.
"Financial Statements" means, collectively, the audited balance sheets
of ▇▇▇▇ as of the fiscal years ended June 30, 2005, June 30, 2006 and June 30,
2007, and the related audited statements of income and cash flows for such
fiscal years and accompanying notes.
"Financing Condition" has the meaning set forth in Section 8.3(g)
hereof.
"GAAP" means generally accepted accounting principles as in effect in
the United States as of the date of this Agreement.
"Governmental Entity" means the U.S., any U.S. State or Commonwealth,
and any local or other political subdivision thereof, or any court,
administrative or regulatory agency, department, instrumentality, body or
commission or other governmental authority or agency, domestic or foreign.
"Hazardous Materials" means any waste or other substance that is
listed, defined, designated or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any applicable Law, including any admixture or solution thereof, and
specifically including uranium and all derivatives thereof, petroleum and all
derivatives thereof or synthetic substitutes therefor, and asbestos or asbestos
containing materials.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"IFRS" means the International Financial Reporting Standards in effect
as of the date of this Agreement.
"IRS" means the Internal Revenue Service.
"Indemnification Obligations" means the respective indemnification
obligations of SELLER and BUYER pursuant to ARTICLE X.
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"Indemnified Party" means a BUYER Indemnified Party or SELLER
Indemnified Party, as applicable.
"Indemnifying Party" has the meaning set forth in Section 10.4(a).
"Interest" has the meaning set forth in the Recitals. "KGL" has the
meaning set forth in Section 5.13.
"Knowledge of BUYER" and "BUYER 's Knowledge" mean the extent of the
actual knowledge as of the Execution Date (or, with respect to the certificate
delivered pursuant to Section 2.10(c), the Closing Date) of any of the
individuals listed on Schedule 1.1(a), without independent inquiry.
"Knowledge of SELLER" and "SELLER 's Knowledge" mean the extent of the
actual knowledge as of the Execution Date (or, with respect to the certificate
delivered pursuant to Section 2.8(d), the Closing Date) of any of the
individuals listed on Schedule 1.1(b), after reasonable inquiry of other
officers and employees of ▇▇▇▇ or its Affiliates who have day-to-day operational
responsibility for such matters.
"Law" means any laws, statutes, permits, rules, codes, civil codes,
regulations, ordinances, orders, or decrees, of, or issued by, Governmental
Entities or rules of common law.
"Leased Surface and Leased Mineral Lands" means the lands identified at
Exhibit D attached hereto.
"Liens" means material mortgages, liens, pledges, security interests,
charges, claims, restrictions and other encumbrances, other than Permitted
Liens.
"Lisbon Closure Requirements" has the meaning set forth in Section
6.5(a).
"Loss" has the meaning set forth in Section 10.1.
"Material Adverse Efect" means any event, change, fact or circumstance
that has a material adverse effect on the business, operations, assets
(financial or otherwise), or liabilities of ▇▇▇▇ (taken as a whole); provided,
however, that none of the following shall be taken into account in determining
whether there has been or would be a "Material Adverse Effect": (i) any adverse
change resulting from conditions affecting any nation's economy generally, (ii)
any adverse change resulting from or relating to financial, banking or
securities markets (including any disruption thereof and any decline in the
price of any security or any market index), (iii) any adverse change in
applicable Laws or the interpretation thereof other than (a) a change that
substantially prevents the issuance of new Permits to ▇▇▇▇ or an amendment to
the existing Permits of ▇▇▇▇ that would allow the recommencement of mining or
milling operations on the Real Property or (b) the total loss of ▇▇▇▇'▇ License
No. SUA-1473 issued by the United States Nuclear Regulatory Commission ("NRC"),
(iv) any adverse change arising primarily out of, or resulting primarily from,
actions taken in connection with (but not in breach of) this Agreement and the
transactions contemplated hereunder, or which are primarily attributable to the
announcement of this Agreement and the Acquisition (including any litigation,
employee
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attrition or any loss or postponement of business resulting from termination or
modification of any vendor, customer or other business relationships, delay of
customer order or otherwise and any corresponding change in the margins,
profitability or financial condition of a Party), (v) a decrease in the price of
uranium on any listed or published commodities exchange or trading market, (vi)
war or the outbreak of hostilities, (vii) acts of terrorism, (viii) acts of God,
insurrections, strikes, floods, fires, explosions or other catastrophes beyond
the control and without the fault of a Party, and (ix) any material adverse
change in ▇▇▇▇'▇ business that is cured (including by the payment of money), to
the extent curable, by ▇▇▇▇ or SELLER before the earlier of (a) the Closing
Date, or (b) the date on which this Agreement is terminated pursuant to ARTICLE
IX.
"Material Contracts" has the meaning set forth in Section 3.16(a)
hereof.
"Mining Claims" means the unpatented mining claims described at Exhibit
E.
"Neutral Accountant" means a nationally or regionally recognized firm
of certified public accountants selected jointly by SELLER and BUYER, and,
unless the Parties agree otherwise, not employed by either of them during the
two (2) years prior to the Closing Date.
"Objection Statement" has the meaning set forth in Section 2.5(c)
hereof.
"Organizational Documents" with respect to any Person means (a) the
articles or certificate of incorporation and the bylaws of a corporation; (b)
the articles of organization and the limited liability company or operating
agreement of a limited liability company; (c) the partnership agreement or
statement of partnership of a partnership; (d) any charter, shareholder
agreement, member agreement or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"Outstanding Royalty Interests" means Royalty Interests that are both:
(i) owned by Persons other than ▇▇▇▇, and (ii) identified on Exhibit C, D, E
and/or F.
"Party" and "Parties" have the meaning set forth in the Preamble to
this Agreement.
"PBGC" has the meaning set forth in Section 3.17(k).
"Permits" means any and all permits, licenses, registrations,
qualifications, certifications, and other approvals that a Person is required to
obtain under applicable Laws from a Governmental Entity in connection with that
Person's business or that Person's ownership, use or operation of property.
"Permitted Liens" means (i) Liens for Taxes not yet due and payable or
the validity of which is being contested in good faith by appropriate
proceedings (and as to which appropriate reserves (to the extent required by
GAAP) have been established in the books and records of ▇▇▇▇), (ii) statutory
Liens and Liens of carriers, warehousemen, mechanics, materialmen, repairmen and
similar Persons or the validity of which is being contested in good faith by
appropriate proceedings (and as to which appropriate reserves (to the extent
required by GAAP) have been established in the books and records of ▇▇▇▇), (iii)
matters of public record, (iv) zoning, building or other restrictions,
variances, covenants, rights-of-way, encumbrances,
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easements and other similar irregularities in title and other title defects, all
of which do not or would not materially impair the use or occupancy of any of
the Real Property, (v) all exceptions, restrictions, easements, charges,
rights-of-way and monetary and non-monetary encumbrances which are set forth in
any permit or license applicable to ▇▇▇▇, (vi) purchase money security interests
in respect of personal property arising or incurred in the ordinary course of
business, (vii) Liens with respect to ▇▇▇▇ created by or resulting from the acts
or omissions of BUYER, (viii) pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for
repayment of borrowed money), leases, or surety, appeal, indemnity, performance
or other similar bonds required in the ordinary course of business, (ix) the
Outstanding Royalty Interests, and (x) the Repurchase Rights.
"Person" means any individual, partnership, joint venture, corporation,
trust, limited liability company, unincorporated organization or association or
other entity, trust, trustee, executor, administrator, or other legal or
personal representative, or any Governmental Entity.
"Pre-Closing Tax Period" has the meaning set forth in Section 6.1(a).
"Post-Closing Tax Period" has the meaning set forth in Section 6.1(a).
"Purchase Price" has the meaning set forth in Section 2.2 hereof.
"▇▇▇▇" has the meaning set forth in the Recitals.
"Real Property" means the real property interests described at Exhibits
C, D and/or E.
"Records" shall mean and include all originals and copies (except where
the context indicates that only originals or copies are being referred to) of
minute books, agreements, documents, computer files and tapes, maps, books,
records, accounts and files in the possession or control of ▇▇▇▇ or SELLER and
relating to ▇▇▇▇ or any pending litigation including the Tronox Litigation.
"Reference Rate" means the prime rate of interest (as published in the
"Money Rates" table of The Wall Street Journal on the Closing Date).
"Regulatory Law" has the meaning set forth in Section 5.2(b).
"Remediation Trust" has the meaning set forth in Section 6.5(b).
"Remediation Trust Fund Amount" means the estimated dollar amount
determined as of the Closing Date based upon the Budget and agreed to by the
Parties necessary to complete the outstanding remediation obligations as set
forth in the Budget.
"Repurchase Rights" means the rights set forth on Exhibit C of certain
Persons to repurchase the surface and/or mineral ownership of the Fee Surface
and Fee Mineral Lands.
"Required Approval" has the meaning set forth in Section 5.2(a).
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"Royalty Interest" means any right to take or receive any form of
mineral or to take or receive any part of the proceeds or profits realized
through the sale of any form of mineral, or any right to take or receive any
payment in an amount which is determined, established or measured by reference
to the volume or value of any form of mineral, including, without limitation,
gross production royalties, net smelter royalties, production payments,
overriding royalty interests, net profits interests or net proceeds royalties.
The term "Royalty Interest" shall also include all annual rentals, minimum
annual royalties, production payments, or prepayments of royalties, whether or
not to be recouped out of subsequent production and whether or not based on
volume or value of any form of mineral. No right of any Governmental Entity to
levy Taxes, charges or fees shall constitute a Royalty Interest.
"Securities Act" means the Securities Act of 1933, as amended.
"SELLER" has the meaning set forth in the Preamble to this Agreement.
"SELLER Ancillary Document" means any deed, public instrument,
certificate, agreement, document or other instrument, other than this Agreement,
to be executed and delivered by SELLER or any Affiliate of SELLER in connection
with the Acquisition.
"SELLER Indemnified Parties" means SELLER and its Affiliates (including
parent and sister companies), each of their respective officers, directors,
managers, employees, agents and representatives and each of the heirs,
executors, successors and assigns of any of the foregoing.
"Straddle Period" has the meaning set forth in Section 6.1(b).
"Strathmore" has the meaning set forth in Section 5.11.
"Surface and Mineral Leases" means the surface and mineral leases,
usage rights, and agreements described or referenced at Exhibit F.
"Target Working Capital" shall mean Five Million Dollars
(US$5,000,000.00).
"Tax" or "Taxes" means all taxes, assessments, charges, duties, fees,
levies or other governmental charges (including interest, penalties or additions
associated therewith), including, without limitation, income, franchise,
capital, profits, license, property, tangible, withholding, employment, payroll,
social security, social contribution, unemployment compensation, disability,
transfer taxes, sales, use, ad valorem, excise, severance, gross receipts,
value-added, and all other taxes, customs duties, fees, assessments or charges
of any kind imposed by any Governmental Entity, whether disputed or not, and any
material charges, interest or penalties imposed by any Governmental Entity.
"Tax Return" means any material report, return, declaration or other
information required to be supplied to a Governmental Entity in connection with
Taxes, including material estimated returns and reports with respect to Taxes.
"Third Party" has the meaning set forth in Section 5.6(b).
"Transfer Taxes" has the meaning set forth in Section 6.1(g).
8
"Tronox" has the meaning set forth in Section 6.7.
"Tronox Litigation" means any and all claims, defenses and
counterclaims asserted in the case styled Rio Algom Mining LLC v. Tronox
Worldwide LLC, Case No. CV-06-0052 MCA/WDS pending in the United States District
Court for the District of New Mexico.
"Tronox PSA" means the Purchase and Sale Agreement between Rio Algom
Mining Corp., as Purchaser, and ▇▇▇▇-▇▇▇▇▇ Corporation, as Seller, dated
December 19, 1988 that is the subject of the Tronox Litigation.
"United States" or "U.S." means the United States of America.
"Uranium Resources" shall have the meaning set forth in Section 8.3(g).
"U.S. Dollars" or "US$" means the lawful currency of the U.S.
"Water Rights" has the meaning set forth in Section 3.11.
"Working Capital" means, as of any date, (i) the amount of the current
assets, after deducting cash and any portion of accounts receivable accounted
for as an allowance for a doubtful account under GAAP, of ▇▇▇▇ as of such date
minus (ii) the amount of the current liabilities of ▇▇▇▇ as of such date in each
case determined in accordance with GAAP, consistently applied.
1.2 Construction.
(a) Unless the context of this Agreement otherwise clearly requires,
(i) references to the plural include the singular, and references to the
singular include the plural, (ii) references to one gender include the other
gender, (iii) the words "include," "includes" and "including" do not limit the
preceding terms or words and shall be deemed to be followed by the words
"without limitation", (iv) the terms "hereof", "herein", "hereunder", "hereto"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement, (v) "or" is used in the inclusive
sense of "and/or", (vi) the terms "day" and "days" mean and refer to calendar
day(s), (vii) the terms "year" and "years" mean and refer to calendar year(s),
(viii) the phrases "ordinary course of business" and "ordinary course of
business consistent with past practice" refer to the past business and practice
of ▇▇▇▇ (including with respect to quantity and frequency), and (ix) the table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(b) Unless otherwise set forth in this Agreement, references in this
Agreement to any document, instrument or agreement (including this Agreement)
(i) includes and incorporates all Exhibits, Schedules and other attachments
thereto, (ii) includes all documents, instruments or agreements issued or
executed in replacement thereof and (iii) means such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified or
supplemented from time to time in accordance with its terms and in effect at any
given time. All Article, Section, Exhibit and Schedule
9
references herein are to Articles, Sections, Exhibits and Schedules of
this Agreement, unless otherwise specified.
(c) This Agreement shall not be construed as if prepared by one of the
Parties, but rather according to its fair meaning as a whole, as if all Parties
had prepared it.
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTEREST; CLOSING
2.1 Purchase and Sale. Subject to the terms and conditions set forth
in this Agreement and in consideration of the covenants made, and deliveries to
be made by BUYER and SELLER hereunder, SELLER hereby agrees at the Closing to
sell, transfer, convey and assign to BUYER the Interest and, subject to the
terms and conditions set forth in this Agreement, BUYER hereby agrees at the
Closing to accept the Interest.
2.2 Purchase Price. The aggregate consideration payable by BUYER to
SELLER for the Interest (the "Purchase Price") shall be US$110,000,000.00 cash.
The Purchase Price shall be subject to adjustment pursuant to Sections 2.5 and
2.6 below. The Purchase Price shall be paid and satisfied at Closing via a
payment by BUYER of the Purchase Price by wire transfer of immediately available
U.S. Dollars to those bank account(s) designated by SELLER at least three (3)
Business Days prior to Closing; provided, however, that BUYER may deduct and
withhold from the Purchase Price any amount required by applicable Law.
2.3 Closing. The closing of the Acquisition (the "Closing") shall
occur as promptly as possible, and in any event no later than five (5) Business
Days, following the satisfaction or waiver of the conditions set forth in
ARTICLE VIII that are contemplated to be satisfied prior to the Closing Date, or
on such other date as the Parties may agree. The date of the Closing shall be
referred to herein as the "Closing Date." The Closing shall take place at the
offices of ▇▇▇▇▇ ▇▇▇▇ LLP, Two ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on the Closing Date, or at such other place as the
Parties may agree.
2.4 Allocation of Purchase Price. The Purchase Price and the other
capitalized costs, including without limitation any liabilities of ▇▇▇▇, shall
be allocated to the assets and the liabilities of ▇▇▇▇ agreed to by the Parties
at Closing and set forth on Schedule 2.4. Such allocation will be in accordance
with and comply with Code Section 1060. BUYER and SELLER each agree to report
the transaction under this Agreement on IRS Form 8594 (Asset Acquisition
Statement under Code Section 1060), and on any other applicable Tax Return in
accordance with the allocation set forth on Schedule 2.4. BUYER and SELLER each
agree to provide the other promptly with any cooperation or information required
to complete this allocation.
2.5 Purchase Price Adjustment Based Upon Estimated Closing Working
Capital.
(a) The Purchase Price shall be adjusted downward by the amount that
the Estimated Closing Working Capital is less than the Target Working Capital.
(b) At least three (3) Business Days prior to the Closing Date, SELLER
will provide to BUYER an Estimated Closing Working Capital Statement. Subject to
10
Sections 2.5(c), (d) and (e), to the extent that the Estimated Closing
Working Capital Statement reflects a number less than the Target
Working Capital, the Purchase Price shall be reduced by such amount.
(c) BUYER shall have the right to review the Estimated Closing Working
Capital Statement after the Closing Date, and within sixty (60) days thereof,
provide written notice of its reasonable good faith objection to the Estimated
Closing Working Capital Statement. If BUYER fails to provide written notice of
such objection, which notice shall include the basis of such objection and the
amount disputed (an "Objection Statement"), then the Estimated Closing Working
Capital Statement shall be considered accepted by all Parties and may not be
disputed on any grounds.
(d) If, however, BUYER does provide an Objection Statement, then the
Parties shall endeavor in good faith to settle the objection within the
following thirty (30) days. If settled by agreement, and the agreed upon
Estimated Closing Working Capital is less than the Target Working Capital,
SELLER shall promptly make any payment required by the settlement as a reduction
to the Purchase Price in the amount of any proposed adjustment.
(e) If SELLER and BUYER do not reach a final resolution within thirty
(30) days after the delivery of the Objection Statement, SELLER and BUYER shall
submit the dispute to a Neutral Accountant. If SELLER and BUYER cannot agree on
a Neutral Accountant within five (5) Business Days after the end of the
aforementioned thirty (30) day period, the Neutral Accountant shall be selected
jointly by SELLER's accountants and BUYER's accountants. The resolution of the
objections by the Neutral Accountant shall be final, binding on and
non-appealable by the Parties hereto. The Neutral Accountant shall be instructed
that, in resolving such objections, it must select a position that is exactly
BUYER's position or exactly SELLER's position with respect to the Estimated
Closing Working Capital. The costs and expenses of the Neutral Accountant shall
be paid equally by BUYER and SELLER. Upon resolution by the Neutral Accountant,
and if the final determined Estimated Closing Working Capital is less than the
Target Working Capital, SELLER shall promptly make any required payment to BUYER
as a reduction to the Purchase Price.
2.6 Purchase Price Adjustment Based Upon Construction Cost of Erosion
Barrier. The Purchase Price shall be subject to reduction based upon the
estimated cost agreed to by BUYER and SELLER prior to the Closing Date for the
cost to construct an erosion barrier required by the DOE under the ▇▇▇▇▇▇ del
Puerto Realignment Plan (as disclosed as Item 4 on Schedule 3.7) around the
tailings area located at ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ Lake facility. The agreed upon
construction cost amount that is deducted from the Purchase Price shall be
placed in the Remediation Trust and shall be in addition to the Remediation
Trust Fund Amount. Following the Closing Date, BUYER shall or shall cause ▇▇▇▇
to remit to SELLER any funds recovered from Tronox or the DOE as reimbursement
for the construction cost of the erosion barrier; provided that the amount of
such remitted funds shall not exceed the agreed upon construction cost amount
that is deducted from the Purchase Price.
11
2.7 Additional Consideration. Subject to the conditions set forth
below, BUYER shall make the following additional payments to SELLER post Closing
as additional consideration for the Interest:
(a) To the extent that the Estimated Closing Working Capital Statement
reflects a number greater than the Target Working Capital on the Closing Date
(subject to the provisions of Sections 2.5(c), (d) and (e)), BUYER covenants and
agrees to pay to SELLER the amount of any monies collected by ▇▇▇▇ or BUYER
after the Closing Date on (i) any accounts receivable from the DOE (excluding
any amounts under the DOE accounts receivable that are due to Tronox pursuant to
the terms of the Tronox PSA), and (ii) any accounts receivable from Tronox
(excluding amounts that are disputed in the Tronox Litigation), in each case
arising from expenditures made by ▇▇▇▇ between the Execution Date and the
Closing Date, as such monies are collected by BUYER.
(b) In the event that ▇▇▇▇ obtains an amendment to its existing License
No. SUA-1473 issued by the NRC or a new license from the NRC at any time after
the Closing Date which amendment or new license allows ▇▇▇▇ to construct and
operate a conventional acid ▇▇▇▇▇-SX uranium mill facility and associated
tailings at the Ambrosia Lake site in ▇▇▇▇▇▇▇▇ County, New Mexico, BUYER shall
pay to SELLER an additional cash payment of US$16,500,000 (subject to any tax
withholding required by applicable Law) by wire transfer of immediately
available U.S. Dollars to a bank account designated by SELLER within forty-five
(45) days of the date on which the NRC approves such amendment or new license.
2.8 Deliveries by SELLER. At the Closing, SELLER will deliver or cause
to be delivered to BUYER (unless delivered previously) the following:
(a) a Membership Interest Assignment with respect to the Interest;
(b) resignations, effective as of the Closing Date, of each member of
the board of managers of ▇▇▇▇;
(c) the company record book and minute book of ▇▇▇▇, subject to Section
2.9 hereof;
(d) a certificate dated as of the Closing Date and signed by SELLER's
Executive Director or authorized agent (i) to the effect that the conditions
specified in Sections 8.3(a), 8.3(b) and 8.3(f) have been fulfilled, and (ii)
certifying the accuracy and completeness of the copies of, as well as the
current effectiveness of, the resolutions to be attached thereto of the
Management Board of SELLER authorizing the execution, delivery and performance
of this Agreement and the consummation of the Acquisition, as well as to the
incumbency of the Executive Director or authority of the authorized agent
executing this Agreement on behalf of SELLER and any documents to be executed
and delivered by SELLER at Closing;
(e) the Environmental Release and Indemnity Agreement, duly executed by
SELLER;
12
(f) the Remediation Trust, duly executed by SELLER and ▇▇▇▇;
(g) the BUYER Group Guarantee, duly executed by SELLER;
(h) the Escrow Agreement duly executed by the SELLER; and
(i) such other instruments and documents of the type or nature that are
customarily provided by selling parties in connection with transactions of the
type contemplated hereby and which BUYER reasonably deems to be necessary for
the Closing.
2.9 Delivery of Records. On the Closing Date, SELLER shall deliver or
cause to be delivered to BUYER all Records to the extent the same are not
already in the possession of BUYER and/or ▇▇▇▇, subject to the following
provisions:
(a) SELLER may retain copies of all Records that contain information
relating to ▇▇▇▇; provided, however, that except as and to the extent required
by applicable Law, in which case SELLER will provide BUYER with prompt prior
written notice so that BUYER, at its expense, may seek (with the cooperation of
the SELLER, if so requested by BUYER) a protective order or other appropriate
remedy, SELLER shall not disclose or use, and shall cause its employees, agents
and representatives, as well as its Affiliates and its Affiliates' employees,
agents and representatives not to disclose or use, any Records that contain
confidential information relating to ▇▇▇▇ except as contemplated by this
Agreement or as is reasonably necessary in connection with SELLER concluding its
involvement in ▇▇▇▇'▇ business for the period prior to the Closing Date; and
(b) SELLER may retain all Records prepared in connection with the sale
of the Interest, including offers received from prospective purchasers of the
Interest and any information relating to such offers, and need not deliver to
BUYER or grant BUYER access to any such Records containing information prepared
in connection with the sale of the Interest.
2.10 Deliveries by BUYER. At the Closing, BUYER will deliver or cause
to be delivered (unless previously delivered) the following:
(a) the Purchase Price;
(b) a certificate executed by an authorized representative of BUYER,
certifying and attaching all requisite resolutions or actions of BUYER's board
of directors or managers approving the execution and delivery of this Agreement
and the consummation of the Acquisition;
(c) a certificate dated as of the Closing Date and signed by (i)
BUYER's Chairman, President or any Vice President, to the effect that the
conditions specified in Sections 8.2(a) and 8.2(b) have been fulfilled, and (ii)
BUYER's Secretary or any Assistant Secretary, certifying the accuracy and
completeness of the copies of, as well as the current effectiveness of, the
resolutions to be attached thereto of the board of directors
13
or managers (or any committee thereof) of BUYER authorizing the
execution, delivery and performance of this Agreement and the
consummation of the Acquisition, as well as to the incumbency of the
officers executing this Agreement on behalf of BUYER and any documents
to be executed and delivered by BUYER at the Closing;
(d) the Environmental Release and Indemnity Agreement, duly executed by
BUYER;
(e) the Remediation Trust, duly executed by BUYER;
(f) the BUYER Group Guarantee, duly executed by BUYER Group with proof
of authority of each officer or other representative signing on behalf of each
member of the BUYER Group;
(g) the Escrow Agreement duly executed by BUYER;
(h) subject to Section 5.12, the Remediation Trust Fund Amount;
(i) subject to Section 5.12, the Escrow Fund Amount; and
(j) such other instruments and documents of the type or nature that are
customarily provided by purchasing parties in connection with transactions of
the type contemplated hereby and which SELLER reasonably deems to be necessary
for the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the terms, conditions and limitations set forth in this
Agreement, SELLER hereby represents and warrants to BUYER as follows:
3.1 Organization. ▇▇▇▇ is a limited liability company, duly organized,
validly existing, and in good standing under the Laws of the State of Delaware,
has the requisite power and authority to own, lease and operate the assets that
it owns, and to carry on its business as now being conducted, and is duly
qualified to do business and is in good standing in each jurisdiction where the
conduct of its business or ownership of its properties requires such
qualification, except where the failure to qualify would not have a Material
Adverse Effect. Copies of the Organizational Documents (including, certificate
of formation and operating agreement) of ▇▇▇▇ have been delivered to BUYER and
are true, complete and accurate in all respects. The membership interest records
and minutes of ▇▇▇▇ have been made available to BUYER and are true, complete,
and accurate in all material respects.
3.2 Capitalization. SELLER owns all of the membership interest in ▇▇▇▇
which constitutes all of the issued and outstanding equity interest in ▇▇▇▇.
SELLER holds of record and owns beneficially the Interest, free and clear of all
Liens and has valid and marketable title to the Interest and has the right to
transfer the Interest to BUYER. The Interest has been legally and validly issued
and is fully paid and non-assessable. There exist no options, warrants, purchase
rights, or other contracts or commitments, rights or privileges, that could
require
14
SELLER to sell, transfer, or otherwise dispose of any membership interest of
▇▇▇▇ (other than this Agreement). There are not outstanding any securities
convertible into, exchangeable for, or carrying the right to acquire, equity
securities of ▇▇▇▇. Upon consummation of the Acquisition at the Closing, BUYER
shall receive all of the issued and outstanding membership interest in ▇▇▇▇.
None of the issued and outstanding membership interest of ▇▇▇▇ has been issued
in violation of any rights of any Person or in violation of registration rights
of any applicable securities Laws. ▇▇▇▇ does not own, directly or indirectly,
any capital stock or any other equity or debt securities of any Person.
3.3 Authorization. SELLER is a private limited company validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation, and has the requisite power and authority to execute and deliver
this Agreement and each SELLER Ancillary Document, and to perform its
obligations hereunder and thereunder. This Agreement has been, and the SELLER
Ancillary Documents shall be as of the Closing Date, duly authorized, executed
and delivered by SELLER and do or shall, as the case may be, when duly executed
by all parties and delivered by SELLER, constitute the valid and binding
agreements of SELLER, enforceable against SELLER in accordance with their
respective terms, subject to applicable bankruptcy, insolvency and other similar
Laws affecting the enforceability of creditors' rights generally, general
equitable principles and the discretion of courts in granting equitable
remedies.
3.4 Consents and Approvals; No Violations. Except as set forth on
Schedule 3.4, neither the execution and delivery of this Agreement or the SELLER
Ancillary Documents by SELLER nor the consummation of the transactions
contemplated hereby or thereby, will, with or without notice or lapse of time,
directly or indirectly, (i) conflict with or result in any breach of any
provision of the Organizational Documents of ▇▇▇▇ or SELLER; (ii) require (other
than approval under the HSR Act) the consent or Approval of, or any notice to,
or filing by SELLER or ▇▇▇▇ with any Governmental Entity; (iii) violate,
conflict with or require the consent or approval of, or any notice to, any third
party, result in the breach of any term of, result in the acceleration of
performance of any obligation under, constitute a default (or any event which,
with notice or lapse of time or both, would constitute a default) under, or give
any Person the right to terminate, cancel, or accelerate any of the terms,
conditions or provisions of any note, mortgage, deed of trust, other evidence of
indebtedness, guarantee, license, agreement, lease or other contract, instrument
or obligation to which ▇▇▇▇ or SELLER is a party or by which any of their
respective assets are or may be bound; (iv) violate or conflict with any Law
applicable to ▇▇▇▇ or SELLER; or (v) conflict with or violate any existing
judgment, order, decree, or ruling against ▇▇▇▇ or SELLER; excluding from the
foregoing clauses (ii), (iii), (iv) and (v) such requirements, violations,
conflicts, defaults or rights which become applicable as a result of the
business or activities in which BUYER is or proposes to be engaged or as a
result of any acts or omissions by, or the status of or any facts pertaining to,
BUYER.
3.5 Financial Statements of ▇▇▇▇. SELLER has delivered the Financial
Statements to BUYER. The Financial Statements have been prepared from the books
and records of ▇▇▇▇. The Financial Statements have been prepared in accordance
with GAAP, applied on a consistent basis, and present fairly, in all material
respects, the financial position of ▇▇▇▇ as of their respective dates and the
results of ▇▇▇▇'▇ operations and cash flows for the periods covered thereby,
except for unaudited Financial Statements, which were prepared in accordance
with IFRS and are subject to normal year end adjustments and the absence of
footnote disclosure.
15
3.6 Fee Surface and Fee Mineral Lands. ▇▇▇▇ holds title to the Fee
Surface Lands and the Fee Mineral Lands pursuant to the deed or other conveyance
instrument as set forth on Exhibit C, which to SELLER's Knowledge lists all such
lands owned by ▇▇▇▇. To SELLER's Knowledge and except as otherwise set forth on
Exhibit C, ▇▇▇▇ holds (i) title to the Fee Surface Lands and the Fee Mineral
Lands free and clear of all Liens and adverse claims other than Permitted Liens,
and (ii) good and marketable title to the Fee Surface Lands within the Long-Term
Surveillance and Monitoring area, which area is designated on the land ownership
map disclosed to BUYER by SELLER in item 17.02 of the Data Room, at ▇▇▇▇'▇
▇▇▇▇▇▇▇▇ Lake site in ▇▇▇▇▇▇▇▇ County, New Mexico.
3.7 Conduct of Business and Absence of Changes. Except as disclosed in
Schedule 3.7, since June 30, 2007, ▇▇▇▇ has conducted its operations in the
ordinary course of business and has not (a) suffered any Material Adverse
Effect; (b) declared, set aside, made or paid any cash dividend or distribution
or purchased, issued or sold any membership interest; (c) incurred any
indebtedness in excess of US$50,000; (d) instituted any material increase in the
compensation payable or to become payable to any officers or employees of ▇▇▇▇
or any material changes in personnel policies or employee benefits, except for
increases in employee compensation in the ordinary course of business; (e)
amended or otherwise modified its Organizational Documents or altered, through
merger, liquidation, reorganization, restructuring or in any other fashion its
company structure or ownership; (f) instituted or settled any litigation or any
legal, administrative or arbitration action or proceeding before any court or
Governmental Entity relating to it or any of its properties or assets; (g)
suffered any damage or destruction to, loss of, or condemnation or eminent
domain proceeding relating to any of its tangible properties or assets (whether
or not covered by insurance) which has had or would reasonably be likely to have
a Material Adverse Effect; (h) changed its method of accounting or its
accounting principles or practices, including any policies or practices with
respect to the establishment of reserves for work-in-process and accounts
receivable, utilized in the preparation of the Financial Statements, other than
as required by GAAP or IFRS, as applicable; (i) entered into any agreements,
commitments or contracts, except those made in the ordinary course of business
and in a commercially reasonable manner; (j) entered into any agreements or
commitments to merge or consolidate with, or to purchase a substantial equity
interest in or a substantial portion of the assets of, or to acquire by any
other manner, any business entity or division thereof; (k) made any settlements
or new elections or changed any current elections with respect to Taxes; or (l)
entered into any agreement or commitment to do any of the foregoing.
3.8 Permits. ▇▇▇▇ has duly obtained all Permits required by applicable
Law in connection with its current business and ownership of, and operations at,
the Real Property. Schedule 3.8 sets forth the Permits currently held by ▇▇▇▇.
Except as set forth in Schedule 3.8, those Permits are in full force and effect
in accordance with their respective terms and, since January 1, 2001, ▇▇▇▇ has
complied in all material respects with the terms of those Permits. There is no
proceeding pending or, to SELLER's Knowledge, threatened that could reasonably
be expected to result in the revocation, termination, suspension, cancellation
or modification in any material adverse manner of any of those Permits. To the
Knowledge of SELLER, there exists no state of facts that could cause any
Governmental Entity to limit, suspend, revoke, cancel, modify or fail to renew
any Permit related to or in connection with ▇▇▇▇'▇ business.
16
3.9 Surface and Mineral Leases. Except as provided or referenced at
Exhibit F, (i) the Surface and Mineral Leases are legal, valid and binding and
are in full force and effect in accordance with their respective terms, (ii)
▇▇▇▇ has complied in all material respects with the terms and provisions of the
Surface and Mineral Leases, and (iii) to SELLER'S Knowledge, ▇▇▇▇ has not
received any notification of any unresolved violation or noncompliance with the
terms of the Surface and Mineral Leases. Except as set forth on Exhibit F, to
SELLER's Knowledge, the Surface and Mineral Leases referenced at Exhibit F are
all of such leases held by ▇▇▇▇.
3.10 Mining Claims. Except as provided at Exhibit E, (i) the Mining
Claims are legal, valid and binding and are in full force and effect in
accordance with their respective terms, (ii) ▇▇▇▇ has complied in all material
respects with the terms and provisions of the Mining Claims, (iii) to SELLER's
Knowledge, ▇▇▇▇ has not received any notification of any unresolved violation or
noncompliance with the terms of the Mining Claims, and (iv) ▇▇▇▇ has made all
filings and paid all maintenance fees with the appropriate Governmental Entity
necessary to keep the Mining Claims in full force and effect under applicable
Law. To SELLER's Knowledge, the Mining Claims described at Exhibit E are all of
the Mining Claims held by ▇▇▇▇.
3.11 Water Rights.
(a) ▇▇▇▇ is the sole owner of the water rights set forth in Schedule
3.11(a) (the "Water Rights"), including but not limited to B-993 and B-993-S and
B-994 through B-994-S-6 in the declared amount of 9,673 AFY. The Water Rights
are evidenced by filings in the Office of the State Engineer of the State of New
Mexico as set forth in Schedule 3.11(a), and have not been sold or assigned in
whole or in part. Except as set forth on Schedule 3.11(a), ▇▇▇▇ has good and
marketable title to the Water Rights pursuant to the instruments set forth on
Schedule 3.11(a), free and clear of all Liens other than Permitted Liens. In
connection with ▇▇▇▇'▇ operations at its Ambrosia Lake site, the maximum
beneficial use of the Water Rights was 9,673 AFY.
(b) Except as set forth on Schedule 3.11(b), to SELLER's Knowledge,
▇▇▇▇ is, and has been since January 1, 2004, in material compliance with all
Laws applicable to the Water Rights. ▇▇▇▇ has not received any written notice
that use of the Water Rights violates any Laws of any Governmental Entity having
jurisdiction over the Water Rights.
(c) Except as set forth on Schedule 3.11(c), there is no action or
proceeding pending, or to SELLER's Knowledge, threatened against ▇▇▇▇, or any
part of the Water Rights, which, if determined adversely to ▇▇▇▇, would
materially impact ▇▇▇▇'▇ ownership or use of the Water Rights.
(d) Except as set forth on Schedule 3.11(d), ▇▇▇▇ has not received
notice of and to SELLER's Knowledge, is not aware of any Law applicable to the
Water Rights or of any pending or contemplated change in any such Law, which
would in any material way limit or impede ▇▇▇▇'▇ continued use and ownership of
the Water Rights.
17
(e) To SELLER's Knowledge, ▇▇▇▇ has not undertaken any action to
affirmatively abandon the Water Rights. ▇▇▇▇ has neither abandoned, nor intended
to abandon, nor, to SELLER's Knowledge, forfeited any of the Water Rights.
(f) With respect to the Water Rights described on Schedule 3.11(a),
there have been no unauthorized: (i) changes in points of diversion; (ii)
storage of water; (iii) changes in places of use; or (iv) changes in purpose of
use.
3.12 Personal Property.
(a) Schedule 3.12(a) sets forth a complete and accurate list of all
personal property material to the conduct of ▇▇▇▇'▇ operations as presently
conducted. Except as disclosed in Schedule 3.12(a), (i) ▇▇▇▇ has valid, good and
marketable title to or a valid and enforceable lease, license or other interest
(coupled with a right to use) in all tangible personal property material to the
conduct of ▇▇▇▇'▇ operations as presently conducted, and (ii) the tangible
personal property owned by ▇▇▇▇ is owned free and clear of Liens other than
Permitted Liens.
(b) Except as disclosed in Schedule 3.12(b), the equipment and other
tangible assets material to the conduct of ▇▇▇▇'▇ operations as presently
conducted are in good operating condition and repair, ordinary wear and tear
excepted, and are suitable for their present use by ▇▇▇▇.
3.13 Intellectual Property. Schedule 3.13 lists all trademarks, trade
names, service marks, service names, logos, assumed names, copyrights, patents
or registrations and applications therefor and software and other licenses
(other than "shrink-wrapped" or off-theshelf" software licenses licensed by the
Company) which ▇▇▇▇ owns or has a right to use.
3.14 Litigation. Except as set forth on Schedule 3.14, there is no
lawsuit, governmental investigation or legal, administrative or arbitration
action or proceeding pending or, to the Knowledge of SELLER, threatened against
(i) ▇▇▇▇ or any of its properties or assets, or any director, officer or
employee of ▇▇▇▇, in his or her capacity as such, or (ii) SELLER or of any of
its properties or assets, or any director, officer or employee of SELLER, in his
or her capacity as such, that would prevent or restrict the ability of SELLER to
consummate the Acquisition. Except as set forth on Schedule 3.14, ▇▇▇▇ is not
identified as a party subject to any restrictions or limitations under any
action, suit, proceeding, hearing, judgment, order or decree of any Governmental
Entity.
3.15 Compliance with Applicable Law. Except as disclosed in Schedule
3.15, ▇▇▇▇ is, and has been since January 1, 2003, in material compliance with
all applicable Laws. Except as disclosed in Schedule 3.15, ▇▇▇▇ has received no
notice that the business of ▇▇▇▇ is being conducted in violation of any
applicable Laws and to the Knowledge of SELLER, no such violation is threatened.
This Section 3.15 shall not apply to Water Rights (which is exclusively the
subject to Section 3.11) or to Environmental Health & Safety Laws (which is
exclusively the subject of Section 3.20).
3.16 Material Contracts.
18
(a) Schedule 3.16 lists and describes all written or oral contracts,
agreements or arrangements (collectively, the "Material Contracts") to which
▇▇▇▇ is a party or bound:
(i) for the purchase or sale of services at an annual amount in excess
of US$20,000, or with an unexpired term as of the Closing Date in excess of one
(1) year;
(ii) for the employment of any person as an officer, employee,
consultant or otherwise;
(iii) for borrowing, lending or to make any borrowing or lending of
money;
(iv) for the lease of personal property or other assets by ▇▇▇▇, at an
annual amount in excess of US$20,000;
(v) any partnership or joint venture agreement;
(vi) any other contract which provides for the receipt or expenditure
by ▇▇▇▇ of more than US$25,000, individually, or US$50,000 in the aggregate; or
(vii) any other contract material to the operations, business or assets
of ▇▇▇▇.
(b) The contracts set forth on Schedule 3.16 are all of the Material
Contracts to which ▇▇▇▇ is a party or by which ▇▇▇▇ or any of its assets or
properties are bound. All Material Contracts are legal, valid, and binding and
in full force and effect and are enforceable by ▇▇▇▇ in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, and other similar Laws affecting creditors' rights
generally or by general principles of equity. There does not exist under any
Material Contract any event of default or event or condition that, after notice
or lapse of time or both, would constitute a violation, breach or event of
default thereunder on the part of ▇▇▇▇. Except as set forth on Schedule 3.16, to
the Knowledge of SELLER, no counterparty to any Material Contract is in material
breach or material default under any Material Contract.
3.17 Employment, Deferred Compensation or Similar Agreements;
Collective Bargaining Agreements; Employee Benefit Plan.
(a) ▇▇▇▇ is not a party to any collective bargaining agreement, and at
least since December 31, 2000, has not been a party to any collective bargaining
agreement.
(b) Schedule 3.17(b) contains a complete list of all Employee Benefit
Plans sponsored, maintained, or contributed to by ▇▇▇▇ which would constitute a
binding obligation of ▇▇▇▇ after the Closing. With respect to each such Employee
Benefit Plan being sponsored, maintained or contributed to by ▇▇▇▇ as of the
date of this Agreement, SELLER or ▇▇▇▇ has provided to BUYER a true, correct and
complete
19
copy of: (i) the current plan document and amendments thereto; (ii) the current
trust agreements, insurance contracts and policies, administrative and service
agreements, and administrative policies and procedures which pertain to the
administration of such Employee Benefit Plan; (iii) as applicable, the most
recent IRS Form 5500s (and any financial statements and other schedules attached
thereto); (iv) the summary plan description currently in effect for such
Employee Benefit Plan, together with any and all summaries of material
modifications which have been published since the issuance of such summary plan
description; (v) the most recent IRS determination letter (if such Employee
Benefit Plan is intended to be "qualified" under Code Section 401(a) and related
Code sections); and (vi) the most recent actuarial valuation report for such
Employee Benefit Plan (if such Employee Benefit Plan constitutes a "defined
benefit plan" within the meaning of ERISA Section 3(35)).
(c) With regard to each Employee Benefit Plan sponsored, maintained, or
contributed to by ▇▇▇▇ as of the date of this Agreement, which is intended to be
"qualified" under Code Section 401(a), (i) ▇▇▇▇ either (A) has received a
determination letter from the IRS since December 31, 2004, indicating that such
Employee Benefit Plan is qualified and that any trust related thereto is exempt
from federal income taxes, under Code Sections 401(a) and 501(a), respectively;
or (B) is in possession of a determination letter from the IRS which predates
January 1, 2005, which indicates that such Employee Benefit Plan is qualified
and that any trust related thereto is exempt from federal income taxes, under
Code Sections 401(a) and 501(a), respectively, and the period for obtaining a
more recent determination letter has not yet closed; and (ii) to the Knowledge
of SELLER, no fact or event has occurred which could adversely affect the
qualified status of such Employee Benefit Plan or the exempt status of any
related trust.
(d) With respect to each Employee Benefit Plan currently sponsored,
maintained, or contributed to by ▇▇▇▇ and except as specifically disclosed on
Schedule 3.17(d): (i) all contributions required to be made under the terms of
such Employee Benefit Plan have been timely made or, if not yet due, have been
properly accrued as liabilities on ▇▇▇▇'▇ financial statements; (ii) all
benefits determined to be properly payable from and under such Employee Benefit
Plan have been timely paid; (iii) to the Knowledge of SELLER, ▇▇▇▇ is in
material compliance with, and such Employee Benefit Plan has materially
conformed in form and operation to, and has been administered in material
compliance with, all applicable Laws; (iv) to the Knowledge of SELLER, each
Employee Benefit Plan could be amended, terminated or otherwise discontinued in
accordance with its terms, and without further liability to BUYER or any ERISA
Affiliate of BUYER for benefits accruing after such termination; and (v) no
action or other administrative proceeding is currently pending, or to the
Knowledge of SELLER, has been threatened in the past three years, against or
with respect to any such Employee Benefit Plan, including any audit or inquiry
by any governmental entity (other than routine benefits claims). (e) ▇▇▇▇ has
never contributed to, nor has ever had an obligation to contribute to, any
multi-employer plan (within the meaning of ERISA Section 3(37)), nor has ever
incurred any withdrawal liability under ERISA Sections 4201, 4203 or 4205, nor
20
has assumed any such liability from any prior owner of any of its assets or
properties or business operations.
(f) Except as set forth on Schedule 3.17(f), with respect to each
Employee Benefit Plan currently sponsored, maintained, or contributed to by
▇▇▇▇, which is or was subject to ERISA, to the Knowledge of SELLER, no
"prohibited transaction" (within the meaning of either ERISA Section 406 or Code
Section 4975(c)) has ever occurred.
(g) Except as set forth on Schedule 3.17(g), no Employee Benefit Plan
provides medical, disability, life insurance or other welfare benefits to any
employee of ▇▇▇▇ following the termination (including termination due to
retirement) of such employee's employment by ▇▇▇▇ and all ERISA Affiliates (or
to any beneficiary of any such employee), excluding continuation of health
coverage required to be continued under Code Section 4980B and
similarly-applicable laws.
(h) No payment(s) promised or to be paid to, or expected to be paid to,
any current or former employee in connection with or as a result of the
transactions contemplated under this Agreement could, or would, individually or
in the aggregate, be non-deductible under Code Section 280G and related
regulatory provisions.
(i) Except as set forth on Schedule 3.17(i), there are no sale bonuses,
commissions, severance pay or other compensation or benefits for any current or
former employee of ▇▇▇▇ which will become payable upon and as a result of the
consummation of the transactions contemplated by this Agreement. Without
limiting the generality of the preceding sentence, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
by this Agreement will accelerate the time of payment or vesting of any stock
option or benefit, or increase the amount or value of compensation or benefit
due to any current or former employee of ▇▇▇▇.
(j) Each individual who provides, or in the past has provided, personal
services to ▇▇▇▇ and is not being, or has not been, classified by ▇▇▇▇ as an
employee of ▇▇▇▇ for any purpose (including federal, state and local income and
employment tax withholding purposes, and for purposes of determining eligibility
under any or all of ▇▇▇▇'▇ Employee Benefit Plans), has been properly classified
by ▇▇▇▇.
(k) As of the date of this Agreement and except as set forth on
Schedule 3.17(k), in regard to any Employee Benefit Plan sponsored, maintained,
or contributed to by ▇▇▇▇, which is subject to Code Section 412 and/or Title IV
of ERISA: (i) all applicable Pension Benefit Guaranty Corporation ("PBGC")
premiums, imposed or assessable under Section 4007 of ERISA with respect to such
Employee Benefit Plan have been paid (including any late payment charges or
other assessments); (ii) there have been no "reportable events," within the
meaning of ERISA Section 4043, with respect to such Employee Benefit Plan
(whether or not waived); (iii) such Employee Benefit Plan has no accumulated
funding deficiency, within the meaning of Code Section 4971(c); (iv) no "waiver"
of the minimum funding standard (within the meaning of Code Section 412(d))
presently is in effect, or is pending, with respect to such
21
Employee Benefit Plan; (v) no lien capable of imposition under Section
302(f) of ERISA (as in effect prior to the Pension Protection Act of
2006) has arisen in connection with such Employee Benefit Plan; (vi)
such Employee Benefit Plan is not subject to the "deficit reduction
contribution" rules set forth in Code Section 412(l); and (vii) such
Employee Benefit Plan would not be considered to be an "at risk plan,"
within the meaning of Code Section 43 0(i) (assuming Code Section 43
0(i) presently applied to such Plan, without regard to any
otherwise-applicable transition rule or small plan exception). To
SELLER's Knowledge, ▇▇▇▇ does not have any liability under Title IV of
ERISA by reason of being a controlled group member or under common
control with an ERISA Affiliate.
(l) All Employee Benefit Plans sponsored, maintained or
contributed to by ▇▇▇▇ since December 31, 2004 but not listed in
Schedule 3.17(b) have been previously terminated, have expired or have
otherwise been resolved properly and without additional liability or
claims.
3.18 Labor Matters. ▇▇▇▇ is in material compliance with all currently
applicable Laws respecting employment, wages, hours and occupational safety and
health and employment practices. ▇▇▇▇ has withheld all amounts required by Law
to be withheld from the wages, salaries, and other payments to employees of the
business of ▇▇▇▇; has filed all declarations, returns and reports to be filed
with respect to social security and welfare Laws and paid all relevant social or
welfare charges when due; and is not liable for any arrears of wages or any
Taxes or any penalty for failure to comply with any of the foregoing.
3.19 Taxes. Except as set forth in Schedule 3.19:
(a) ▇▇▇▇ has been since October 31, 2001 and will continue to be
through the Closing Date a "domestic eligible entity" that is disregarded as an
entity separate from its owner under Treasury Reg. ss. 301.7701-3(b)(1) for
federal and state income tax purposes. There are no Liens for Taxes (other than
Permitted Liens) upon any of the assets of ▇▇▇▇. ▇▇▇▇ is not a party to or bound
by any Tax allocation or sharing agreement. All Tax Returns that were required
to be filed with respect to ▇▇▇▇ or its business under applicable Laws have been
duly and timely filed. All such Tax Returns are correct and complete in all
material respects and were prepared in substantial compliance with all
applicable Laws. All Taxes due and owing with respect to ▇▇▇▇ and its business
(whether or not shown on any Tax Return) have been timely paid. No extension of
time within which to file any Tax Return exists. No claim has ever been made by
an authority in a jurisdiction where Tax Returns are not filed with respect to
▇▇▇▇ or its business that ▇▇▇▇ or its business is or may be subject to taxation
by that jurisdiction.
(b) ▇▇▇▇ has withheld and paid all Taxes required to have been withheld
and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
(c) There is no unpaid Tax deficiency, determination or assessment
currently outstanding against any Person with respect to ▇▇▇▇ or its business.
SELLER does not
22
expect, and no director or officer (or employee responsible for Tax matters) of
▇▇▇▇ expects, any authority to assess any additional Taxes for any period for
which Tax Returns have been filed. No foreign, federal, state or local tax
audits or administrative or judicial Tax proceedings are pending or being
conducted with respect to ▇▇▇▇ or its business. ▇▇▇▇ has not received from any
foreign, federal, state or local taxing authority (including jurisdictions where
▇▇▇▇ has not filed Tax Returns) any (i) notice indicating an intent to open an
audit or other review, (ii) request for information related to Tax matters, or
(iii) notice of deficiency or proposed adjustment for any amount of Tax
proposed, asserted or assessed by any taxing authority against ▇▇▇▇ or its
business. Schedule 3.19 lists all federal, state, local and foreign income Tax
Returns filed with respect to ▇▇▇▇ or its business for taxable periods ended on
or after December 31, 2004, indicates those Tax Returns that have been audited,
and indicates those Tax Returns that currently are the subject of audit. SELLER
has made available to BUYER correct and complete copies of all federal income
Tax Returns, examination reports and statements of deficiencies assessed against
or agreed to with respect to ▇▇▇▇ or its business filed or received since
January 1, 2006.
(d) All positions taken that could give rise to a substantial
understatement of federal income Tax within the meaning of Code ss. 6662 with
respect to ▇▇▇▇ or its business have been disclosed on Tax Returns. ▇▇▇▇ (A) has
not been a member of an affiliated group filing a consolidated federal income
Tax Return, or (B) has no liability for the Taxes of any person (other than
▇▇▇▇) under Reg. ss. 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
(e) No statute of limitations in respect of Taxes has been waived and
no extension of time with respect to a Tax assessment or deficiency has been
agreed to.
3.20 Environmental, Health & Safety Matters.
(a) To the Knowledge of SELLER, ▇▇▇▇ is in material compliance with
Environmental, Health & Safety Laws, except for those matters set forth in
Schedule 3.20.
(b) Except for those matters set forth in Schedule 3.20, to the
Knowledge of SELLER, ▇▇▇▇ has not received any written notice, report or other
written information within the past twelve (12) months regarding any actual or
alleged material violation by ▇▇▇▇ of Environmental, Health & Safety Laws, or
any material liabilities in excess of Fifty Thousand Dollars (US$50,000)
individually, including any investigatory, remedial or corrective obligations
relating to the business of ▇▇▇▇ arising under Environmental, Health & Safety
Laws.
(c) Except for those matters set forth in Schedule 3.20, to the
Knowledge of SELLER, there are no writs, injunctions, decrees, orders or
judgments outstanding, or any actions, suits, proceedings or governmental
investigations pending or threatened, relating to compliance with or liability
under any Environmental, Health & Safety Laws affecting the operations of ▇▇▇▇
or the Real Property.
23
(d) Except as set forth in Schedule 3.20, to the Knowledge of SELLER,
none of the Real Property or any property to which ▇▇▇▇ has transported, or
arranged for the disposal of, Hazardous Materials in the last five (5) years is
listed, or proposed for listing, on the National Priorities List, CERCLIS or any
similar federal, state, local or foreign list of sites requiring investigation
or clean-up.
(e) This Section 3.20 contains the sole and exclusive representations
and warranties of SELLER with respect to any environmental, health or safety
matters, including any arising under any Environmental, Health & Safety Laws.
(f) To SELLER's Knowledge, SELLER has disclosed all environmental
liabilities of ▇▇▇▇ on Schedule 3.20.
3.21 No Liabilities. Except as set forth in Schedule 3.21, to the
Knowledge of SELLER, ▇▇▇▇ has no liabilities or obligations in excess of Fifty
Thousand Dollars (US$50,000) in the aggregate (and there is no basis for any
present or future threat against ▇▇▇▇ giving rise to any liability or
obligation), except for the Environmental Liabilities and liabilities that are
reflected or reserved against on the Financial Statements.
3.22 Insurance. Schedule 3.22 hereto contains a list and description of
material insurance policies maintained by ▇▇▇▇ in respect of its operations.
Each such insurance policy is in full force and effect (and to the Knowledge of
SELLER free from any presently exercisable right of termination on the part of
the insurance company issuing such policy prior to the expiration of the term of
such policy) and all premiums due and payable in respect thereof have been paid.
Schedule 3.22 further lists all claims presently pending or, to the Knowledge of
SELLER, threatened which are covered by such policies. Neither ▇▇▇▇ nor SELLER
has received notice of cancellation or non-renewal of any such policy. The
transactions contemplated by this Agreement will not give rise to a right of
termination of any such policy by the insurance company issuing the same prior
to the expiration of such policy.
3.23 No Breach of Tronox PSA. Except as set forth in Schedule 3.23, to
SELLER's Knowledge, ▇▇▇▇ (i) is not in material breach of any of its payment,
performance or other obligations under the Tronox PSA, and (ii) has not received
notice from Tronox Worldwide, LLC, its Affiliates, or any other third party that
▇▇▇▇ is in material breach of any of its payment, performance or other
obligations under the Tronox PSA.
3.24 No Creation of Defenses in Tronox Litigation. To the Knowledge of
SELLER, no terms or conditions of this Agreement will provide a basis for Tronox
Worldwide, LLC to assert new defenses in the Tronox Litigation.
3.25 Bank Accounts and Powers of Attorney. Schedule 3.25 sets forth the
name of each bank in which ▇▇▇▇ has an account, lock box or safe deposit box,
the number of each such account, lock box and safe deposit box, and the names of
all Persons authorized to draw thereon or have access thereto. No Person holds
any power of attorney from ▇▇▇▇.
3.26 Transactions with Affiliated Persons.
24
(a) Except (i) for employment relationships otherwise disclosed
pursuant to this Agreement between employees of ▇▇▇▇ and ▇▇▇▇, (ii) for
remuneration from ▇▇▇▇ for services rendered as a director, officer or employee
of ▇▇▇▇, or (iii) as set forth in Schedule 3.26(a), (A) ▇▇▇▇ does not currently,
in the ordinary course of business or otherwise, directly or indirectly,
purchase, lease or otherwise acquire any services from, and is not required to
sell, lease or otherwise dispose of any property or furnish any services to any
of its Affiliates; (B) ▇▇▇▇ does not owe any amount to any of its Affiliates;
(C) no Affiliates of ▇▇▇▇ owe any amount to ▇▇▇▇; and (D) no part of the
property or assets of any of ▇▇▇▇'▇ Affiliates is used by ▇▇▇▇ in the conduct or
operation of its business.
(b) Except as set forth in Schedule 3.26(b), there are no outstanding
loans from any Affiliate of ▇▇▇▇ to ▇▇▇▇.
3.27 Absence of Certain Business Practices. Neither ▇▇▇▇, nor to the
Knowledge of SELLER, any of its directors, managers, officers, employees or
agents, has directly or indirectly (a) made any contribution or gift which
contribution or gift is in violation of any applicable Law, (b) made any bribe,
rebate, payoff, influence payment, kickback or other payment to any Person,
private or public, regardless of form, whether in money, property or services
(i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions or
for special concessions already obtained for or in respect of ▇▇▇▇ or any of its
Affiliates, or (iv) in violation of any Law, or (c) established or maintained
any fund or asset of ▇▇▇▇ that has not been recorded in the books and records of
▇▇▇▇.
3.28 Restrictions on Business Activities. Except as set forth in
Schedule 3.28 there is no judgment, injunction, order or decree binding upon
▇▇▇▇, or to the Knowledge of SELLER, threatened, that has or could reasonably be
expected to have the effect of prohibiting or impairing (i) the operations of
▇▇▇▇ as currently conducted or the resumption of mining or milling activities on
the Real Property, (ii) the acquisition of property, and (iii) the hiring of
employees, in each case, either individually or in the aggregate.
3.29 Payables. Except as set forth in Schedule 3.29, all accounts
payable of ▇▇▇▇ have arisen in the ordinary course of business. All items which
are required by GAAP to be reflected as payables on the Financial Statements and
on the books and records of ▇▇▇▇ are so reflected and have been recorded in
accordance with GAAP and in a commercially reasonable manner. There has been no
material adverse change since June 30, 2007 in the amount or delinquency of
accounts payable of ▇▇▇▇, either individually or in the aggregate.
3.30 Receivables. Except as set forth in Schedule 3.30 or with respect
to the Tronox Litigation, all accounts receivable of ▇▇▇▇ have arisen in the
ordinary course of business, represent valid obligations to ▇▇▇▇ arising from
bona fide transactions, and are not subject to claims, set-off, or other
defenses or counterclaims. All items which are required by GAAP to be reflected
as receivables on the Financial Statements and on the books and records of ▇▇▇▇
are so reflected and have been recorded in accordance with GAAP and in a
commercially reasonable manner.
25
3.31 Books and Records. For the fiscal years ended June 30, 2005, June
30, 2006 and June 30, 2007, ▇▇▇▇'▇ books and records related to its financial
matters have been kept in conformity with IFRS, including recording and
disclosing related party transactions. There are no material transactions that
have not been properly recorded in the financial books and records during the
relevant periods, and the financial books and records disclose all material
matters.
3.32 Rental Payments. To SELLER's Knowledge, the rental payments set
forth in Schedule 3.32 comprise all the annual payments owing for claim
maintenance fees for the unpatented mining claims and fees due under leases held
by ▇▇▇▇ from the Bureau of Land Management.
3.33 Certain Fees. Other than UBS Securities LLC, the fees and expenses
of which will be paid by SELLER or its Affiliate, SELLER has not employed any
broker, finder, investment banker, or other intermediary or incurred any
liability for any investment banking fees, financial advisory fees, brokerage
fees, finders' fees, or other similar fees in connection with this Agreement or
the Acquisition.
3.34 Holding Company Act and Investment Company Act Status. ▇▇▇▇ is not
a "holding company" or a "public utility company" as such terms are defined in
the Public Utility Company Act of 1935, as amended. ▇▇▇▇ is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
3.35 Exemption from Registration. The offer and sale of the Interest
made pursuant to this Agreement is exempt from the registration requirements of
the Securities Act, assuming the accuracy of BUYER's representations and
warranties set forth in Sections 4.9 and 4.10. Neither ▇▇▇▇ nor SELLER nor any
Person authorized to act on behalf of any of the foregoing has, in connection
with the offering of the Interest, engaged in (i) any form of general
solicitation or general advertising (as those terms are used within the meaning
of Rule 502(c) under the Securities Act), (ii) any action involving a public
offering within the meaning of Section 4(2) of the Securities Act, or (iii) any
action that would require the registration under the Securities Act of the
offering and sale of the Interest pursuant to this Agreement or that would
violate applicable state securities or "blue sky" Laws. Neither ▇▇▇▇ nor SELLER
have made prior to the Closing or will make, directly or indirectly, any offer
or sale of the Interest or of securities of the same or a similar class as the
Interest if as a result the offer and sale of the Interest contemplated hereby
could fail to be entitled to exemption from the registration requirements of the
Securities Act. As used herein, the terms "offer" and "sale" have the meanings
specified in Section 2(3) of the Securities Act.
3.36 Disclosure. To SELLER's Knowledge, no representation or warranty
by SELLER contained in this Agreement or any SELLER Ancillary Document or any
statement or certificate furnished by SELLER to BUYER or its representatives in
connection herewith or therewith or pursuant hereto or thereto contains any
untrue statement of a material fact, or omits to state any material fact
required to make the statements herein or therein contained not misleading.
26
3.37 No Other Representations or Warranties. EXCEPT AS EXPRESSLY SET
FORTH IN THIS ARTICLE III, SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, AT LAW OR IN EQUITY, AND THERE ARE NO IMPLIED CONDITIONS IN RESPECT
OF ▇▇▇▇ OR ANY OF ITS RESPECT IVE ASSETS, LIABILITIES OR OPERATIONS, INCLUDING
WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AND ANY
SUCH OTHER REPRESENTATIONS OR WARRANTIES OR CONDITIONS ARE HEREBY EXPRESSLY
DISCLAIMED.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Subject to the terms, conditions and limitations set forth in this
Agreement, BUYER hereby represents and warrants to SELLER as follows:
4.1 Authorization. BUYER is duly organized, validly existing and in
good standing under the Laws of the State of Delaware, and has the requisite
power and authority to execute and deliver this Agreement and each BUYER
Ancillary Document, and to perform its obligations hereunder and thereunder.
This Agreement has been, and the BUYER Ancillary Documents shall be as of the
Closing Date, duly authorized, executed and delivered by BUYER and do or shall,
as the case may be, when duly executed by all parties and delivered by BUYER,
constitute the valid and binding agreements of BUYER, enforceable against BUYER
in accordance with their respective terms, subject to applicable bankruptcy,
insolvency and other similar Laws affecting the enforceability of creditors'
rights generally, general equitable principles and the discretion of courts in
granting equitable remedies.
4.2 Consents and Approvals; No Violations. Neither the execution and
delivery of this Agreement or the BUYER Ancillary Documents by BUYER, nor the
consummation of the transactions contemplated hereby or thereby, will, with or
without notice or lapse of time, directly or indirectly, (i) conflict with or
result in any breach of any provision of the Organizational Documents or
resolutions adopted by the shareholders or directors of BUYER; (ii) require
(other than approval under the HSR Act) the consent or Approval of or any notice
to or filing by BUYER with any Governmental Entity; (iii) violate, conflict with
or require the consent or approval of or any notice to any third party, result
in the breach of any term of, result in the acceleration of performance of any
obligation under, constitute a default (or any event which, with notice or lapse
of time or both, would constitute a default) under, or give any Person the right
to cancel, terminate, modify or accelerate any of the terms, conditions or
provisions of any note, mortgage, deed of trust, other evidence of indebtedness,
guarantee, license, agreement, lease or other contract, instrument or obligation
to which BUYER or any of it properties or assets are or may be bound; or (iv)
violate or conflict with any Law applicable to BUYER, excluding from the
foregoing clauses (ii), (iii) and (iv) such requirements, violations, conflicts,
defaults or rights (A) which would not adversely affect the ability of BUYER to
consummate the Acquisition or (B) which become applicable as a result of any
acts or omissions by, or the status of or any facts pertaining to, SELLER.
4.3 Litigation. There is no claim, action, suit, proceeding or
governmental investigation pending or, to the Knowledge of BUYER, threatened
against BUYER or the
27
BUYER Group by or before any Governmental Entity or by any third party which
challenges the validity of this Agreement or which would be reasonably likely to
adversely affect or restrict BUYER's ability to consummate the Acquisition or
the performance of BUYER or the BUYER Group's obligations under this Agreement
or any BUYER Ancillary Documents after the Closing.
4.4 Certain Fees. Except for CIBC World Markets Corp., BUYER has not
employed any broker, finder, investment banker, or other intermediary or
incurred any liability for any investment banking fees, financial advisory fees,
brokerage fees, finders' fees, or other similar fees in connection with this
Agreement or the Acquisition.
4.5 Financial Capability. Subject to the Financing Condition, BUYER
will have as of the Closing Date sufficient funds to effect the Closing, the
Acquisition and the performance of BUYER's obligations under the Agreement and
the BUYER Ancillary Documents after the Closing. Separately, upon satisfaction
of the Financing Condition and the consummation of the Acquisition, (i) BUYER
will not be insolvent, (ii) BUYER will not be left with an unreasonably small
capital, (iii) BUYER will not have incurred debts beyond its ability to pay such
debts as they mature, and (iv) the capital of the BUYER will not be impaired.
4.6 Knowledge. BUYER has no knowledge of any breach of, or inaccuracy
in, any of the representations, warranties, covenants or agreements of BUYER set
forth in this Agreement.
4.7 BUYER Qualifications. Subject to the Financing Condition, to
BUYER's Knowledge, BUYER is qualified to obtain all Approvals required hereunder
and there are no conditions in existence (other than conditions affecting
similarly situated companies generally) which could reasonably be expected to
delay, impede or condition the receipt by BUYER of any Approvals.
4.8 Independent Review. BUYER acknowledges and affirms that (i) it has
had full access to the Data Room and the information contained in, or made
available or provided with respect to materials contained in, the Data Room,
(ii) it has had access to the personnel, officers, professional advisors,
operations and Records of ▇▇▇▇, (iii) it has inspected the Real Property, and
(iv) in making the decision to enter into this Agreement and to consummate the
transactions contemplated hereby, it has relied on the express representations,
warranties, covenants and agreements of SELLER set forth in this Agreement and
in the certificate provided for in Section 2.8(d), and other than such reliance,
it has relied solely on the basis of its own independent investigation, analysis
and evaluation of ▇▇▇▇, and its assets.
4.9 Investment Intent. BUYER is acquiring the Interest solely for
investment for its own account and not with the view to, or for resale in
connection with, any distribution thereof. BUYER understands that the Interest
has not been registered under the Securities Act or any state securities or
"blue-sky" Laws by reason of specified exemptions therefrom that depend upon,
among other things, the bona fide nature of its investment intent as expressed
herein and as explicitly acknowledged hereby and that under such Laws and
applicable regulations such securities may not be resold without registration
under the Securities Act or under applicable state Law unless an applicable
exemption from registration is available.
28
4.10 Accredited Investor; Investment Representations. BUYER is an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act. BUYER, by reason of its business and financial experience, has
such knowledge, sophistication and experience as to be capable of evaluating the
merits and risks of the acquisition of the Interest and is able to bear the
economic risk of acquiring the Interest.
ARTICLE V
PRE-CLOSING COVENANTS OF THE PARTIES
5.1 Conduct of the Business. SELLER agrees that, during the period from
the Execution Date to the Closing, except as (i) contemplated by this Agreement,
the Ancillary Documents or the Schedules hereto or thereto, (ii) required by
applicable Law, or (iii) as otherwise consented to by BUYER (which consent shall
not be unreasonably withheld, conditioned or delayed):
(a) SELLER shall, and shall cause ▇▇▇▇ to:
(i) conduct ▇▇▇▇'▇ business in the usual and ordinary course and in a
commercially reasonable manner, without a material change to its operational
policies;
(ii) use Commercially Reasonable Efforts to maintain and preserve
▇▇▇▇'▇ business;
(iii) maintain its existence in good standing;
(iv) maintain in effect all its presently existing insurance coverage
(or substantially equivalent insurance coverage), preserve its business
organization substantially intact, use commercially reasonable efforts to keep
the services of its present principal employees and preserve its present
business relationships with material suppliers;
(v) relative to employing and compensating ▇▇▇▇ employees, (i) refrain
from enhancing, extending, or otherwise amending or modifying, any Employee
Benefit Plan currently in effect, and refrain from establishing any new Employee
Benefit Plans, except in the ordinary course of business or as necessary to
comply with applicable Law; (ii) where necessary, renew or extend, and otherwise
maintain in effect, all insurance policies and contracts in effect as of the
Execution Date, directly or indirectly, relating to any such Employee Benefit
Plan; (iii) refrain from entering into any new employment or personal service or
consulting agreement(s), or extending any agreement(s) currently in effect, or
entering into any separation agreement(s) or implementing any reduction-in-force
program(s), except as is reasonably necessary in the ordinary course of
business; and (iv) except as required under any existing plan or agreement of
▇▇▇▇, refrain from paying any special or extraordinary bonuses, or making any
incentive compensation payments;
29
(vi) shall not make or change any election, change an annual accounting
period, adopt or change any accounting method, file any amended Tax Return,
enter into any closing agreement, settle any Tax claim or assessment relating to
▇▇▇▇ or its business, surrender any right to claim a refund of Taxes, consent to
any extension or waiver of the limitation period applicable to any Tax claim or
assessment relating to ▇▇▇▇ or its business, or take any other similar action
relating to the filing of any Tax Return or the payment of any Tax, if such
election, adoption, change, amendment, agreement, settlement, surrender, consent
or other action would have the effect of increasing the Tax liability of ▇▇▇▇ or
its business for any period ending after the Closing Date or decreasing any Tax
attribute of ▇▇▇▇ or its business existing on the Closing Date;
(vii) in the Tronox Litigation, take all reasonable actions necessary
to (i) meet all case deadlines and (ii) maintain and preserve all claims and
defenses; and
(viii) shall comply with all applicable Laws relating to maintaining
the Water Rights in full force and effect.
(b) In addition, SELLER will cause ▇▇▇▇ not to do any of the following
(either individually or in the aggregate):
(i) amend or otherwise modify its Organizational Documents or alter,
through merger, liquidation, reorganization, restructuring or in any other
fashion, its structure or ownership;
(ii) other than pursuant to Section 2.1, issue or sell, or authorize
for issuance or sale, or grant any options or make other agreements,
arrangements or understandings with respect to any of its membership interests,
or any other of its securities, or alter any term of any of its outstanding
securities or make any change in its outstanding membership interests or its
capitalization, whether by reason of a reclassification, recapitalization, split
or combination, exchange or readjustment of interests, dividend or otherwise;
(iii) mortgage, pledge or grant any security interest in any of its
assets, except (A) Permitted Liens and (B) security interests solely in tangible
personal property granted pursuant to any purchase money agreement, conditional
sales contract or capital lease under which, solely with respect to conditional
sales contracts and capital leases, there exists an aggregate future liability
not in excess of US$25,000.00 per contract or lease (which amount is not more
than the purchase price for such personal property and which security interest
does not extend to any other item or items of personal property);
(iv) declare, set aside, make or pay any dividend or other distribution
to any holder with respect to its membership interests or other securities;
(v) redeem, purchase or otherwise acquire, directly or indirectly, any
of its membership interests or other securities;
30
(vi) increase the compensation of any of its non-executive employees,
except in the ordinary course of business and in a commercially reasonable
manner, or increase the compensation of any of its executive officers except as
otherwise required under any existing agreement or plan;
(vii) extend, terminate or modify any Material Contract or permit any
renewal notice period or option period to lapse with respect to any Material
Contract, except as required in the ordinary course of business, or for
terminations of Material Contracts upon their expiration during such period in
accordance with their terms;
(viii) incur or assume any indebtedness or guarantee any obligation or
the net worth of any Person, except for endorsements of negotiable instruments
for collection in the ordinary course of business;
(ix) incur any liability, debt or obligation (whether absolute,
accrued, contingent or otherwise) to or of any Affiliate of ▇▇▇▇, or make any
Affiliate Loans;
(x) discharge or satisfy any Lien other than those which are required
to be discharged or satisfied during such period in accordance with their
original terms;
(xi) pay any material obligation or liability (absolute, accrued,
contingent or otherwise), whether due or to become due, except for any current
liabilities, and the current portion of any long term liabilities shown on the
Financial Statements or incurred since June 30, 2006 in the ordinary course of
business and in a commercially reasonable manner;
(xii) sell, transfer, lease to others or otherwise dispose of any of
its material properties or assets;
(xiii) cancel, waive or compromise any debt or claim in excess of
US$25,000.00;
(xiv) make any loan or advance to any Person, other than travel and
other similar routine advances to employees in the ordinary course of business
and in a commercially reasonable manner;
(xv) purchase or acquire any capital stock or other securities of any
other corporation or any ownership interest in any other business enterprise or
Person;
(xvi) make any capital expenditures or capital additions or betterments
in amounts which exceed US$25,000.00 in the aggregate (other than in connection
with ▇▇▇▇ remediation obligations);
31
(xvii) change its method of accounting or its accounting principles or
practices, including any policies or practices with respect to the establishment
of reserves for work-in-process, inventory and accounts receivable, utilized in
the preparation of the Financial Statements, other than as required by GAAP;
(xviii) institute, compromise or settle any litigation or any legal,
administrative or arbitration action or proceeding before any court or
Governmental Entity relating to it or any of its properties or assets,
including, without limitation, the Tronox Litigation, that involves a claim in
excess of US$25,000.00;
(xix) except as otherwise required in the ordinary course of business
and in a commercially reasonable manner, (a) enter into any agreements,
commitments or contracts for any real property leases, (b) terminate or close
any facility or operation, or (c) surrender or diminish any leasehold interest
in any real property;
(xx) enter into any transaction with any Affiliate of ▇▇▇▇;
(xxi) enter into any other agreements, commitments or contracts, except
those made in the ordinary course of business and in a commercially reasonable
manner; or
(xxii) enter into any agreement or commitment to do any of the
foregoing.
5.2 Further Assurances.
(a) Subject to the terms and conditions of this Agreement, each Party
will use Commercially Reasonable Efforts to (i) take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate the Acquisition as soon as
practicable after the Execution Date and (ii) obtain and maintain all Approvals
required to be obtained from any third party and/or any Governmental Entity that
are necessary to consummate the Acquisition and the transactions contemplated
hereby (each a "Required Approval"). In addition to the foregoing, BUYER agrees
to provide such assurances as to financial capability, resources and
creditworthiness as may be reasonably requested by any third party whose consent
or approval is sought in connection with the Acquisition.
(b) In furtherance and not in limitation of the covenants of the
Parties contained in Section 5.2(a), if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Regulatory Law (as hereinafter defined), or if any
statute, rule, regulation, executive order, decree, injunction or administrative
order is enacted, entered, promulgated or enforced by a Governmental Entity
which would make the Acquisition illegal or would otherwise prohibit or
materially impair or delay the consummation of the Acquisition or the
transactions contemplated hereby, each of the Parties shall cooperate in all
respects
32
with each other and use its respective Commercially Reasonable Efforts
to contest and resist any such action or proceeding and to have
vacated, lifted, reversed or overturned any decree, judgment,
injunction or other action or order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Acquisition and to have such statute, rule,
regulation, executive order, decree, injunction or administrative order
repealed, rescinded or made inapplicable. For purposes of this
Agreement, "Regulatory Law" means the ▇▇▇▇▇▇▇ Act, as amended, the
▇▇▇▇▇▇▇ Act, as amended, the Federal Trade Commission Act, as amended,
the Atomic Energy Act of 1954, as amended, and the regulations
promulgated thereunder, and all other federal, state and foreign,
statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines and other Laws that are designed or intended to
regulate mergers, acquisitions or other business combinations
applicable to SELLER, ▇▇▇▇, BUYER and/or the Acquisition.
5.3 Covenant to Satisfy Conditions. SELLER will use its Commercially
Reasonable Efforts to ensure that the conditions set forth in ARTICLE VIII of
this Agreement are satisfied, insofar as such matters are within the control of
SELLER. BUYER will use its Commercially Reasonable Efforts to ensure that the
conditions set forth in ARTICLE VIII of this Agreement are satisfied, insofar as
such matters are within the control of BUYER. SELLER and BUYER further covenant
and agree, with respect to a threatened or pending preliminary or permanent
injunction or other order, decree or ruling or statute, rule, regulation or
executive order that would adversely affect the ability of the Parties to
consummate the Acquisition, to use their Commercially Reasonable Efforts to
prevent or lift the entry, enactment or promulgation thereof, as the case may
be.
5.4 Breach Notice.
(a) If, prior to the Closing Date, SELLER obtains knowledge of
the existence of a breach of any of SELLER's representations,
warranties or covenants contained in this Agreement, SELLER shall
notify BUYER in writing of such information (the "Breach Notice")
within the earlier of five (5) Business Days after such discovery or
the day prior to the Closing Date. In the event that BUYER obtains
knowledge of the existence of a breach of any of SELLER's
representations, warranties or covenants contained in this Agreement
(by means other than receipt of a Breach Notice from SELLER), BUYER
shall notify SELLER in writing of such information within the earlier
of five (5) Business Days after such discovery or the day prior to the
Closing Date and such notice shall constitute a Breach Notice for
purposes of this Section. The Breach Notice shall contain reasonable
details regarding the alleged breach and a good faith estimate by the
notifying Party of the potential Losses resulting from such breach.
Notwithstanding anything in this Agreement to the contrary, in
the event (i) BUYER obtains knowledge after the Execution Date but on
or prior to the Closing Date of a breach (by means other than receipt
of a Breach Notice from SELLER) of any of SELLER's representations,
warranties or covenants contained in this Agreement and fails to timely
deliver a Breach Notice, or (ii) BUYER shall have knowledge on or prior
to the Execution Date of any such breach, and the Closing occurs, BUYER
shall not be entitled to assert any right hereunder with respect to, or
to assert any claim against
33
SELLER for Losses attributable to, and hereby waives, such breach and BUYER will
be deemed to fully release and forever discharge the SELLER Indemnified Parties
on account of any and all claims, demands or charges, known or unknown, with
respect to the same.
(b) In the event the breach described in a Breach Notice is of a
magnitude such that Losses resulting from such breach (together with other such
breaches discovered by SELLER or BUYER with respect to which SELLER or BUYER, as
applicable, has delivered the requisite Breach Notice(s)) are agreed by the
Parties to be reasonably likely to be less than Seven Million Five Hundred
Thousand Dollars (US$7,500,000), and SELLER fails to deliver to BUYER a written
undertaking within the earlier of ten (10) Business Days of receipt of such
Breach Notice or the Closing Date, that SELLER intends to cure such breach in a
reasonable and timely manner, BUYER may either (A) deduct the amount of such
estimated Losses from the Purchase Price or (B) proceed with the Closing and
pursue indemnification for such breach, to the extent indemnification is
available pursuant to the applicable provision of ARTICLE X.
(c) In the event the breach described in a Breach Notice is of a
magnitude such that Losses resulting from such breach (together with other such
breaches discovered by SELLER or BUYER with respect to which SELLER or BUYER, as
applicable, has delivered the requisite Breach Notice(s)) are agreed by the
Parties to be between Seven Million Five Hundred Thousand Dollars (US$7,500,000)
and Fifteen Million Dollars (US$15,000,000), and SELLER fails to deliver to
BUYER a written undertaking within the earlier of ten (10) Business Days of
receipt of such Breach Notice or the Closing Date, that SELLER intends to cure
such breach in a reasonable and timely manner, (A) BUYER may terminate this
Agreement upon written notice to SELLER, or (B) BUYER may deduct the amount of
the Losses resulting from such breach from the Purchase Price.
(d) In the event the breach described in a Breach Notice is of a
magnitude such that Losses resulting from such breach (together with other such
breaches discovered by SELLER or BUYER with respect to which SELLER or BUYER, as
applicable, has delivered the requisite Breach Notice(s)) are agreed by the
Parties as likely to exceed Fifteen Million Dollars (US$15,000,000), and SELLER
fails to deliver to BUYER a written undertaking within the earlier of ten (10)
Business Days of receipt of such Breach Notice or the Closing Date, that SELLER
intends to cure such breach in a reasonable and timely manner, (A) BUYER or
SELLER may terminate this Agreement upon written notice to the other Party, or
(B) BUYER and SELLER may mutually agree to deduct the agreed amount of the
Losses resulting from such breach from the Purchase Price.
(e) The Parties agree to use all reasonable endeavors and to act in
good faith to agree on a reasonable estimate of the Losses arising from a Breach
Notice given in accordance with this Section 5.4.
(f) BUYER's sole remedy for any breach by SELLER of SELLER's
representations, warranties or covenants hereunder of which BUYER obtains
knowledge
34
prior to the Closing Date by notice from SELLER, or otherwise obtains
knowledge of such breach, shall be as set forth in subsections (b) -
(e) above and neither Party shall have any further obligation or
liability to the other Party except for any obligations that survive
termination of this Agreement in the event that the Agreement is
terminated pursuant to subsections (c) or (d) above.
5.5 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance. Each Party hereto agrees (i) to make
promptly, or to cause its Affiliates to make promptly, its respective filings,
if necessary, pursuant to the HSR Act with respect to the transactions
contemplated by this Agreement within ten (10) Business Days of the date hereof,
(ii) to supply as promptly as practicable to the appropriate Governmental Entity
any additional information and documentary material that may be requested
pursuant to the HSR Act, and (iii) to the extent agreed upon by the SELLER,
request early termination of the applicable waiting period. The SELLER and BUYER
shall split equally the fees or other payments to any Governmental Entity in
order to obtain any such authorization, consent, order or approval.
5.6 Exclusivity.
(a) After the Execution Date, SELLER shall not, directly or indirectly,
through any officer, director, employee, representative or agent of SELLER or
any of its subsidiaries or Affiliates, solicit or encourage the initiation of
(including by way of furnishing information) any inquiries or proposals
regarding any merger, sale of assets, sale of membership interest or similar
transactions involving ▇▇▇▇ that if consummated would constitute an Alternative
Transaction (as defined below) (any of the foregoing inquiries or proposals
being referred to herein as an "Acquisition Proposal"). Nothing contained in
this Agreement shall prevent SELLER from (i) furnishing information to a third
party which has made a bona fide Acquisition Proposal that SELLER concludes in
good faith after consulting with a nationally recognized investment banking firm
would, if consummated, constitute a Superior Proposal (as defined below) not
solicited in violation of this Agreement, or (ii) subject to compliance with the
other terms of this Section 5.6, including Sections 5.6(c), (d), (e) and (f),
considering and negotiating a bona fide Acquisition Proposal that SELLER
concludes in good faith after consulting with a nationally recognized investment
banking firm would, if consummated, constitute a Superior Proposal not solicited
in violation of this Agreement.
(b) For purposes of this Agreement, "Alternative Transaction" means any
of (i) a transaction pursuant to which any person (or group of persons) other
than BUYER or its Affiliates (a "Third Party") acquires or would acquire more
than 25% of the outstanding shares, interests or units of any class of equity
securities of ▇▇▇▇, whether from SELLER or otherwise, (ii) a merger or other
business combination involving ▇▇▇▇ pursuant to which any Third Party acquires
or would acquire more than 25% of the outstanding equity securities of ▇▇▇▇ or
the entity surviving such merger or business combination, (iii) any transaction
pursuant to which any Third Party acquires or would acquire control of assets
(including for this purpose the outstanding equity securities of subsidiaries of
▇▇▇▇ and securities of the entity surviving any merger or business combination
including any of ▇▇▇▇'▇ subsidiaries) of ▇▇▇▇, or any of its subsidiaries having
a fair market value (as determined by SELLER in good faith) equal to
35
more than 25% of the fair market value of all the assets of ▇▇▇▇ and
its subsidiaries, taken as a whole, immediately prior to such
transaction, or (iv) any other consolidation, business combination,
recapitalization or similar transaction involving ▇▇▇▇ or any of its
subsidiaries, other than the transactions contemplated by this
Agreement.
(c) For purposes of this Agreement, a "Superior Proposal" means any
proposal made by a Third Party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, all of the equity securities
of ▇▇▇▇ or all or substantially all the assets of ▇▇▇▇, on terms which SELLER
reasonably believes (after consultation with a financial advisor of nationally
recognized reputation) to be more favorable from a financial point of view to
SELLER than the transactions contemplated by this Agreement taking into account
at the time of determination any changes to the financial terms of this
Agreement proposed by BUYER.
(d) SELLER shall notify BUYER promptly (but in no event later than two
(2) Business Days) after receipt of any Acquisition Proposal, or any
modification of or amendment to any Acquisition Proposal, or any request for
nonpublic information relating to ▇▇▇▇ in connection with an Acquisition
Proposal or for access to the properties, books or records of ▇▇▇▇ or any
subsidiary by any Person that informs SELLER or ▇▇▇▇ that it is considering
making, or has made, an Acquisition Proposal. Such notice to BUYER shall be made
in writing, and shall indicate the identity of the person making the Acquisition
Proposal or intending to make an Acquisition Proposal or requesting non-public
information or access to the books and records of ▇▇▇▇, the terms of any such
Acquisition Proposal or modification or amendment to an Acquisition Proposal,
and whether SELLER or ▇▇▇▇ is providing or intends to provide the person making
the Acquisition Proposal with access to information concerning ▇▇▇▇ as provided
in Section 5.6(a). SELLER and ▇▇▇▇ shall keep BUYER fully informed, on a current
basis, of any material changes in the status and any material changes or
modifications in the material terms of any such Acquisition Proposal, indication
or request. SELLER shall also promptly notify BUYER in writing, if it enters
into negotiations concerning any Acquisition Proposal.
(e) SELLER shall immediately cease and cause to be terminated any
existing discussions or negotiations with any persons (other than BUYER)
conducted prior to the Execution Date with respect to any of the foregoing.
SELLER agrees not to release any third party from the confidentiality provisions
of any agreement to which SELLER is a party.
(f) SELLER shall ensure that the officers, managers and directors of
SELLER, ▇▇▇▇ and their Affiliates and any investment banker or other advisor or
representative retained by SELLER or ▇▇▇▇ are aware of the restrictions
described in this Section 5.6. It is understood that any violation of the
restrictions set forth in this Section 5.6 by any such officer, manager,
director, investment banker or other advisor or representative shall be deemed
to be a breach of this Section 5.6 by SELLER.
5.7 Termination of Severance Policy. SELLER agrees that, during the
period from the Execution Date to the Closing, SELLER shall cause ▇▇▇▇ to (i)
terminate ▇▇▇▇'▇
36
Separation and Retirement Policy for the benefit of ▇▇▇▇'▇ employees, and (ii)
enter into an Acknowledgement, Agreement and Release with each of its employees,
which agreements shall be in form and substance reasonably satisfactory to
BUYER, providing for the payment of a retention bonus to each employee actively
employed by ▇▇▇▇ as of the six month anniversary of the Closing Date.
5.8 Duty to Obtain Financing. BUYER covenants and agrees to use
Commercially Reasonable Efforts to satisfy the Financing Condition to complete
the Acquisition on terms acceptable to the Uranium Resources Board of Directors.
In the event that Uranium Resources undertakes a registered public offering of
its common stock in connection with the financing necessary to consummate the
transactions contemplated hereby, and in the event that BUYER does not
reasonably expect to satisfy the entire Financing Condition on or before June 1,
2008, SELLER agrees to purchase up to US$10 million in shares of common stock of
Uranium Resources at the same price paid by other investors in the offering made
to achieve the Financing Condition and agrees that such shares purchased by
SELLER shall be subject to a requirement that they not be sold for a period of
six (6) months after the Closing.
5.9 Interim Financial Statements. SELLER agrees that during the period
from the Execution Date to the Closing, it shall prepare and deliver to BUYER,
at such times as it would otherwise do so in the ordinary course of business and
in compliance with IFRS, unaudited monthly financial statements in a form to be
agreed by the Parties, acting reasonably. Upon delivery of such financial
statements to BUYER, they shall be considered "Financial Statements" for
purposes of this Agreement. SELLER further agrees that during the period from
the Execution Date to the Closing, it shall provide Uranium Resources such
financial information as it may reasonably require in connection with its public
reporting requirements.
5.10 Affiliate Agreements. SELLER covenants and agrees that it shall
cause ▇▇▇▇ to terminate the affiliate agreements set forth on Schedule 3.26(a)
other than those service level agreements that shall remain in full force and
effect for a period of two months following the Closing Date pursuant to Section
6.8 hereof.
5.11 Drill Logs. Between the Execution Date and the Closing Date,
SELLER shall cause ▇▇▇▇ to use Commercially Reasonable Efforts to assist BUYER
in its efforts to obtain from Strathmore Resources (US) Ltd. ("Strathmore") the
drill logs and related data specifically related to the Ambrosia Lake site that
▇▇▇▇ sold to Strathmore pursuant to that certain letter agreement between ▇▇▇▇
and Strathmore, dated March 12, 2004.
5.12 Remediation Trust Fund Amount and Escrow Fund Amount. BUYER
covenants and agrees on the Closing Date to deposit the Remediation Trust Fund
Amount with the Trustee pursuant to the terms of the Remediation Trust Agreement
and the Escrow Fund Amount with the Escrow Agent pursuant to the terms of the
Escrow Agreement; provided that the total of the Remediation Trust Fund Amount
and the Escrow Fund Amount shall not exceed US$35,000,000.
5.13 KGL Associates, Inc. SELLER covenants and agrees that prior to the
Closing Date, it will cause ▇▇▇▇ to pay to KGL Associates, Inc ("KGL"):
37
(a) any amount which becomes payable to KGL under the terms of the
Section 4 Clean Up Amendment dated 14 May 2007 as set out in item 3 of Schedule
3.16; and
(b) any amount (if any) which ▇▇▇▇ and KGL agree may be payable to KGL
in respect of KGL's request for reimbursement for additional costs in respect of
the purchase of tires and equipment repairs by way of letter dated August 17,
2007 as set out in item 4 of Schedule 3.16.
In the event there is a dispute between ▇▇▇▇ and KGL regarding any
amounts due KGL under items (a) and/or (b) above prior to the Closing Date,
SELLER covenants and agrees to cause ▇▇▇▇ to use Commercially Reasonable Efforts
to resolve the dispute prior to the Closing Date. In the event that any dispute
with KGL is not resolved prior to the Closing Date, the Purchase Price shall be
reduced by an amount agreed to by BUYER and SELLER that is at issue in the
dispute with KGL.
ARTICLE VI
POST-CLOSING COVENANTS OF THE PARTIES
6.1 Tax Matters. The following provisions shall govern the allocation
of responsibility as between BUYER and SELLER for certain Tax matters following
the Closing Date:
(a) Tax Indemnification. Notwithstanding anything to the
contrary contained in ARTICLE X or anywhere else in this Agreement:
(i) SELLER shall indemnify ▇▇▇▇ and BUYER and hold
them harmless from and against any loss, claim, liability,
expense or other damage attributable to: (A) all Taxes (or the
non-payment thereof) with respect to ▇▇▇▇ or its business for
all taxable periods ending on or before the Closing Date and
the portion through the end of the Closing Date for any
taxable period that includes (but does not end on) the Closing
Date ("Pre-Closing Tax Period"), (B) all Taxes of any member
of an affiliated, consolidated, combined or unitary group of
which ▇▇▇▇ (or any predecessor of any of the foregoing) is or
was a member on or prior to the Closing Date, including
pursuant to Treasury Regulation ss. 1.1502-6 or any analogous
or similar state, local, or foreign law or regulation, and (C)
any and all Taxes of any person (other than ▇▇▇▇) imposed on
▇▇▇▇ as a transferee or successor, by contract or pursuant to
any law, rule or regulation, which Taxes relate to an event or
transaction occurring before the Closing; and
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(ii) BUYER shall indemnify SELLER and hold SELLER harmless
from and against any loss, claim, liability, expense or other damage
attributable to: (A) all Taxes (or the non-payment thereof) with
respect to ▇▇▇▇ or its business for all taxable periods commencing
after the Closing Date and that portion of any taxable period after the
Closing Date that commenced prior to the Closing Date and continued
after the Closing Date ("Post-Closing Tax Period"), (B) all Taxes of
any member of an affiliated, consolidated, combined or unitary group of
which ▇▇▇▇ (or any predecessor of any of the foregoing) is or was a
member after the Closing Date, including pursuant to Treasury
Regulation ss. 1.1502-6 or any analogous or similar state, local, or
foreign law or regulation, and (C) any and all Taxes of any person
(other than ▇▇▇▇) imposed on ▇▇▇▇ as a transferee or successor, by
contract or pursuant to any law, rule or regulation, which Taxes relate
to an event or transaction occurring after the Closing
(b) Straddle Period. In the case of any taxable period that includes
(but does not end on) the Closing Date (a "Straddle Period"), the amount of any
Taxes based on or measured by income or receipts of ▇▇▇▇ or its business for the
Pre-Closing Tax Period shall be determined based on an interim closing of the
books as of the close of business on the Closing Date and the amount of other
Taxes of ▇▇▇▇ or its business for a Straddle Period that relates to the
Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period.
(c) Responsibility for Filing Tax Returns. SELLER shall prepare and
file, or cause to be prepared and filed, when due, all Tax Returns for ▇▇▇▇ or
its businesses that are required to be filed on or before the Closing Date and
all income Tax Returns with respect to periods ending on or before the Closing
Date. BUYER shall prepare and file or cause to be prepared and filed all Tax
Returns for ▇▇▇▇ or its business that are required to be filed after the Closing
Date other than income Tax Returns with respect to periods ending on or before
the Closing Date. To the extent permitted by law, BUYER shall not carry back any
item of income, loss, credit or deduction from any period beginning after the
Closing Date to any period including or ending on the Closing Date.
(d) Code Section 1445 Withholding. Pursuant to Code Section 1445, BUYER
shall withhold Tax on that amount of the Purchase Price attributable to the sale
of the Real Property and shall, within twenty (20) days after the Closing Date,
remit such amount, together with all requisite reports, to the IRS. SELLER
hereby acknowledges the validity of the withholding described in this Section
6.1(d).
(e) Cooperation on Tax Matters.
(i) BUYER, ▇▇▇▇, and SELLER shall cooperate fully, as and to
the extent reasonably requested by the other Party, in connection with
the filing of Tax Returns pursuant to this Section 6.1 and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other Party's request) the
provision of records and information that
39
are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually
convenient basis to provide additional information and
explanation of any material provided hereunder. ▇▇▇▇ and
SELLER agree (A) to retain all books and records with respect
to Tax matters pertinent to ▇▇▇▇ or its business relating to
any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent
notified by BUYER or SELLER, any extensions thereof) of the
respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority,
and (B) to give the other Party reasonable written notice
prior to transferring, destroying or discarding any such books
and records and, if the other Party so requests, ▇▇▇▇ or
SELLER, as the case may be, shall allow the other Party to
take possession of such books and records.
(ii) BUYER and SELLER further agree, upon request, to
use their best efforts to obtain any certificate or other
document from any governmental authority or any other Person
as may be necessary to mitigate, reduce or eliminate any Tax
that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
(f) Tax-Sharing Agreements. All tax-sharing agreements or similar
agreements with respect to or involving ▇▇▇▇ or its business shall be terminated
as of the Closing Date and, after the Closing Date, ▇▇▇▇ shall not be bound
thereby or have any liability thereunder.
(g) Certain Taxes and Fees. All transfer, documentary, sales, use,
stamp, registration and other such Taxes, and all conveyance fees, recording
charges and other fees and charges (including any penalties and interest)
incurred in connection with consummation of the transactions contemplated by
this Agreement ("Transfer Taxes") shall be paid by BUYER when due, and BUYER
will, at its own expense, file all necessary Tax Returns and other documentation
with respect to all such Transfer Taxes, fees and charges, and, if required by
applicable law, SELLER will join in the execution of any such Tax Returns and
other documentation.
6.2 Preservation of Records. Except as otherwise provided in this
Agreement, BUYER and SELLER agree, at their own expense, that each (i) shall
preserve and keep their respective records (including all Tax and accounting
records) of ▇▇▇▇ for a period of five (5) years from the Closing, or for any
longer periods as may be required by any Governmental Entity, Law, or ongoing
litigation, and (ii) shall make such records available to the other Party as may
be reasonably required by the other Party at such other Party's expense. At the
end of such five (5) year period or other applicable time period, either Party
may destroy such records without notice to the other Party.
6.3 Litigation Support. In the event and for so long as a Party or any
of its Affiliates actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction on, prior to, or after the Closing Date involving ▇▇▇▇, the other
Party shall (and in the case that
40
the other Party is the BUYER, shall cause ▇▇▇▇ to), cooperate with such Party or
its counsel in the defense or contest, make available their personnel, and
provide such testimony and access to their books and records as shall be
reasonably necessary in connection with the defense or contest, all at the sole
cost and expense of the Party requesting such cooperation (unless the Party or
its Affiliates are entitled to indemnification therefor under this Agreement).
6.4 SELLER's Insurance. After the Closing, under no circumstances will
BUYER be provided coverage under SELLER's or its Affiliate's insurance policies,
and no claims regarding any matter whatsoever, whether or not arising from
events prior to Closing shall be made by BUYER or its Affiliates against or with
respect to SELLER or its Affiliate's insurance policies regardless of their date
of issuance, provided that BUYER shall be entitled to maintain in effect after
Closing any insurance policies of ▇▇▇▇ specific to ▇▇▇▇ and not covering SELLER
or any of its other Affiliates, and ▇▇▇▇ shall be entitled to make claims under
such policies pursuant to the policies' terms and conditions.
6.5 Environmental Remediation; Remediation Trust.
(a) From and after the Closing, BUYER shall use Commercially Reasonable
Efforts to assure that ▇▇▇▇ will accomplish entry and completion of the
reclamation obligations as set forth in the Budget, including (i) the remaining
reclamation obligations at ▇▇▇▇'▇ Lisbon site pursuant to the Lisbon closure
requirements identified on Schedule 6.5 hereto (the "Lisbon Closure
Requirements"); (ii) the remaining reclamation obligations at ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇
Lake Site pursuant to the Ambrosia Lake closure requirements identified on
Schedule 6.5 hereto (the "Ambrosia Lake Closure Requirements"); and (iii) obtain
approval from the applicable Governmental Entity of completion of such
reclamation obligations.
(b) SELLER, BUYER and ▇▇▇▇ shall establish a Remediation Trust as of
the Closing, funded by BUYER, in the form of Exhibit H (the "Remediation
Trust"). The purpose of the Remediation Trust is to serve as a financial
assurance that the remaining reclamation obligations under subsection (a) above
determined as of the Closing Date are completed in a timely manner.
6.6 ▇▇▇▇ Employees.
(a) Except for item #6 of Schedule 3.17(b) (BHP Billiton Group Global
Employee Cash Plan), following the Closing Date, and for a one (1) year period
thereafter, BUYER shall continue the Employee Benefit Plans of ▇▇▇▇ that are in
effect at Closing.
(b) Following the conclusion of the one (1) year period provided for in
Section 6.6(a), BUYER may include the employees of ▇▇▇▇ under the BUYER'S Plans
on terms no less favorable than those applicable to BUYER's other employees. For
each BUYER Plan providing medical, dental, pharmaceutical and/or vision benefits
to any employee of ▇▇▇▇, BUYER shall use Commercially Reasonable Efforts (not to
include any disproportionate increases in costs) to cause (i) each employee of
▇▇▇▇, as of the conclusion of the one (1) year period set forth in Section
6.6(a), to be eligible, without
41
any waiting period, in each such BUYER Plan to the extent that coverage
under such BUYER Plan replaces coverage under a comparable Employee
Benefit Plan for such employee, and (ii) the pre-existing condition
exclusions of such BUYER Plan to be waived for any such employee or any
of his or her covered dependents with a pre-existing condition to the
extent that such pre-existing condition would have been covered for any
such employee or his or her covered dependents under the comparable
Employee Benefit Plan.
(c) BUYER shall assure that ▇▇▇▇ is responsible for the
continuation of health plan coverage, in accordance with the
requirements of COBRA and Sections 601 through 608 of ERISA, for any
employee of ▇▇▇▇ or qualified beneficiary under a group health plan
covering employees of ▇▇▇▇ and/or their dependents, who, prior to the
Closing, is receiving or is entitled to receive COBRA benefits or who
loses health coverage in connection with the transactions contemplated
in this Agreement.
6.7 Amounts Recovered in Tronox Litigation. With respect to any monies
obtained in settlement or otherwise from Tronox Worldwide LLC ("Tronox") for
future and/or unknown liabilities in connection with the Tronox Litigation,
BUYER covenants and agrees that BUYER shall cause ▇▇▇▇ to use such monies only
for ▇▇▇▇ corporate purposes including historical reclamation and related cleanup
obligations imposed by Governmental Entities or otherwise.
6.8 Service Level Agreements. SELLER covenants and agrees that it
shall cause SELLER's affiliate, Shared Business Services, to continue to provide
employee benefits, payroll and accounts payable services to ▇▇▇▇ for a period of
two (2) months following the Closing Date.
ARTICLE VII
OTHER AGREEMENTS
7.1 Public Announcements. Except as otherwise agreed to by the
Parties, the Parties shall not issue any report, statement or press release or
otherwise make any public statements with respect to this Agreement or the
Acquisition, except as in the reasonable judgment of a Party may be required by
Law or by the rules of a national securities exchange or other regulatory body,
and in any event a Party shall consult with the other Party at a reasonable time
in advance of such required disclosure.
7.2 Supplemental Disclosure. SELLER may, from time to time prior to or
at the Closing, by notice in accordance with the terms of this Agreement,
supplement, amend or create any Schedule in order to add information or correct
previously supplied information. No such amendment shall be evidence, in and of
itself, that the representations and warranties in the corresponding section are
no longer true and correct. It is specifically agreed that such Schedules may be
amended to add immaterial, as well as material, items thereto. No such
supplemental, amended or additional Schedule shall be deemed to cure any breach
for purposes of satisfying the conditions of ARTICLE VIII. In the event that the
supplement or amendment or new Schedule discloses potential Losses, the remedy
of BUYER shall be as follows:
42
(a) if the potential Losses, individually or in the aggregate, are
determined by the Parties on a reasonable basis to be equal to or less than Four
Hundred Thousand Dollars (US$400,000), BUYER shall have no right to terminate
this Agreement, but shall have all rights to pursue indemnification against
SELLER to the extent indemnification is available pursuant to the applicable
provisions of ARTICLE X hereof;
(b) if the potential Losses, individually or in the aggregate, are
determined by the Parties on a reasonable basis to be greater than Four Hundred
Thousand Dollars (US$400,000) and less than Seven Million Five Hundred Thousand
Dollars (US$7,500,000), the amount of the Purchase Price shall be reduced by the
amount of such potential Losses;
(c) if the potential Losses, individually or in the aggregate, are
determined by the Parties on a reasonable basis to be between Seven Million Five
Hundred Thousand Dollars (US$7,500,000) and Fifteen Million Dollars
(US$15,000,000), (A) BUYER may terminate this Agreement on written notice to
SELLER, or (B) BUYER may deduct the amount of the potential Loss from the
Purchase Price; or
(d) if the potential Losses, individually or in the aggregate, are
determined by the Parties on a reasonable basis to exceed Fifteen Million
Dollars (US$15,000,000), (A) BUYER or SELLER may terminate this Agreement upon
written notice to the other Party or (B) BUYER and SELLER may mutually agree to
deduct the amount of the potential Loss from the Purchase Price.
The Parties agree to use all reasonable endeavors and to act in good faith to
agree on a reasonable estimate of Loss arising from a notice of such Loss given
in accordance with this Section.
Other than as set forth above, BUYER shall have no right to terminate this
Agreement or bring an action or other claim against SELLER for any potential
Losses based upon any supplement or amendment to an existing Schedule or the
creation of a new Schedule.
7.3 No Ongoing or Transition Services. At the Closing, all data
processing, accounting, insurance, banking, personnel, legal, communications and
other services provided to ▇▇▇▇ by SELLER or any Affiliate of SELLER, including
any agreements or understandings (written or oral) with respect thereto, will
terminate.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Conditions to Each Party's Obligations. The respective obligation
of each Party to consummate the Acquisition is subject to the satisfaction at or
prior to the Closing of the conditions that there will be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a Governmental Entity of competent jurisdiction to the effect that the
Acquisition may not be consummated as provided in this Agreement, no proceeding
or lawsuit will have been commenced by any Governmental Entity for the purpose
of obtaining any such injunction, writ or preliminary restraining order and no
written notice will have been
43
received from any Governmental Entity indicating an intent to restrain, prevent,
materially delay or restructure the Acquisition.
8.2 Conditions to Obligations of SELLER. The obligation of SELLER to
consummate the Acquisition is further subject to the satisfaction (or waiver) at
or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
of BUYER contained in ARTICLE IV of this Agreement (i) if not qualified by
materiality, shall be true and correct in all material respects as of the
Execution Date and shall be true and correct in all material respects as of the
Closing as if made at and as of such time, and (ii) if qualified by materiality,
shall be true and correct in all respects as of the Execution Date and shall be
true and correct as of the Closing as if made at and as of such time, except for
representations and warranties which are as of a specific date, in which event
they shall be true and correct as of such date;
(b) Performance of Obligations. BUYER shall have performed in all
material respects its obligations under this Agreement required to be performed
by it at or prior to the Closing pursuant to the terms hereof;
(c) BUYER Ancillary Documents. BUYER shall have delivered, or caused to
be delivered, to SELLER the items identified in Section 2.10;
(d) Litigation. Other than the Tronox Litigation, there shall not be
pending any litigation, proceeding or other event that questions or challenges
the validity of this Agreement that will prevent the consummation of the
Acquisition or that is likely to cause a Material Adverse Effect; and
(e) Removal of BHP Billiton Finance B.V. as Guarantor. BHP Billiton
Finance B.V. shall be removed as a guarantor of any of ▇▇▇▇'▇ liabilities,
indebtedness and obligations owed to Canadian Imperial Bank of Commerce pursuant
to the Guarantee dated as of July 25, 2005.
8.3 Conditions to Obligations of BUYER. The obligation of BUYER to
consummate the Acquisition is further subject to the satisfaction (or waiver) at
or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and
warranties of SELLER contained in ARTICLE III of this Agreement (i) if
not qualified by materiality, shall be true and correct in all material
respects as of the Execution Date and shall be true and correct in all
material respects as of the Closing as if made at and as of such time,
and (ii) if qualified by materiality, shall be true and correct in all
respects as of the Execution Date and shall be true and correct as of
the Closing as if made at and as of such time, except for (i) for
changes permitted or contemplated hereby; and (ii) for representations
and warranties which are as of a specific date, which shall be true and
correct in all material respects as of such date; provided that BUYER's
right not to proceed with the Closing as a result of a breach of
SELLER's representations and warranties shall only
44
arise in the event that BUYER has a right to terminate this Agreement
pursuant to Sections 5.4 or 7.2 hereof;
(b) Performance of Obligations. SELLER shall have performed in all
material respects its obligations under this Agreement required to be performed
by it at or prior to the Closing pursuant to the terms hereof;
(c) SELLER Ancillary Documents. SELLER shall have delivered, or caused
to be delivered, to BUYER the items identified in Section 2.8;
(d) Litigation. Other than the Tronox Litigation, there shall not be
pending any litigation, proceeding or other event that questions or challenges
the validity of this Agreement, that will prevent the consummation of the
Acquisition or that is likely to cause a Material Adverse Effect;
(e) Consents. Those consents, approvals, or other authorizations set
forth on Schedule 8.3(e) shall have been obtained and shall be in full force and
effect;
(f) Material Adverse Change. Since June 30, 2007, there shall not have
occurred any circumstance or event, which individually or in the aggregate, has
had or is expected to have a Material Adverse Effect;
(g) Financing. BUYER'S parent company, Uranium Resources, Inc.
("Uranium Resources"), shall have completed the raising of capital sufficient to
permit the payment of the Purchase Price, the funding of the Remediation Trust
and the Escrow Agreement and for commercially reasonable working capital on
terms acceptable to the Board of Directors of Uranium Resources (the "Financing
Condition"); and
(h) Water Report. BUYER shall have received a report prepared by
Hydroscience Associates, Inc., which report shall indicate that the firm yield
of the Water Rights is not less than the amount of water needed to operate a
conventional uranium mill at ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ Lake site that has the capability
of processing 8,000 tons of ore per day (currently estimated to be 5,000 AFY).
The Parties shall split equally the costs incurred in connection with the
preparation of such water report.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time at or
prior to the Closing:
(a) in writing, by mutual consent of the Parties;
(b) by written notice by BUYER or SELLER to the other Party, in
accordance with Section 5.4 or Section 7.2;
45
(c) by written notice from SELLER to BUYER if any of the conditions set
forth in Section 8.2 shall have become incapable of fulfillment and shall not
have been waived by SELLER;
(d) by written notice from BUYER to SELLER if any of the conditions set
forth in Section 8.3 shall have become incapable of fulfillment and shall not
have been waived by BUYER;
(e) by written notice by BUYER or SELLER to the other Party if the
Closing has not occurred on or prior to June 1, 2008;
(f) by SELLER, if (i) SELLER shall have, subject to complying with the
terms of this Agreement, including Section 5.6, entered into a definitive
agreement with respect to a Superior Proposal and SELLER shall have notified
BUYER in writing that it intends to enter into such an agreement, attaching a
summary of the material terms thereof, (ii) BUYER shall not have made, within
two (2) full Business Days (disregarding any partial Business Days) of receipt
of SELLER's written notification of its intention to enter into a definitive
agreement with respect to a Superior Proposal, an offer that SELLER determines,
in good faith after consultation with its financial advisors, is at least as
favorable, from a financial point of view, to SELLER as the Superior Proposal,
and (iii) SELLER, prior to such termination pursuant to this Section 9.1(f),
shall have paid to BUYER in immediately available funds the Break-Up Fee
required to be paid pursuant to Section 9.3 below; or
(g) by BUYER, if the SELLER, whether or not permitted to do so by this
Agreement, shall (i) withdraw, modify or change its approval or adoption of this
Agreement in a manner materially adverse to BUYER or shall have resolved to do
so, or (ii) approve an Acquisition Proposal or Alternative Transaction.
9.2 Procedure and Effect of Termination. In the event of the
termination of this Agreement and the abandonment of the Acquisition pursuant to
Section 9.1 hereof, written notice thereof shall forthwith be given by the Party
so terminating to the other Party, and this Agreement shall terminate and the
Acquisition shall be abandoned without further action by any Party. If this
Agreement is terminated pursuant to Section 9.1 hereof:
(a) each Party shall redeliver all documents, work papers and other
materials of the other Party relating to the Acquisition, whether obtained
before or after the Execution Date, to the Party furnishing the same or, upon
prior written notice to such Party, shall destroy all such documents, work
papers and other materials and deliver notice to the Party seeking destruction
of such documents that such destruction has been completed, and all information
received by any Party with respect to the other Party shall be treated as
confidential in accordance with the Confidentiality Agreement;
(b) all filings, applications and other submissions made pursuant
hereto shall, at the option of SELLER, and to the extent practicable, be
withdrawn from the agency or other Person to which made; and
46
(c) there shall be no liability or obligation hereunder on the part of
SELLER, BUYER or any of their respective directors, officers, employees,
Affiliates, agents, advisors or representatives, except that (i) if the basis of
termination is a willful, material breach by SELLER or BUYER, as the case may
be, of one or more of the provisions of this Agreement, the breaching Party
shall be liable to the non-breaching Party, and (ii) the obligations provided
for in this Section 9.2 and Sections 7.1, 11.1, 11.2, 11.3, 11.7 and 11.8 hereof
and the Confidentiality Agreement shall survive any such termination.
9.3 Break-Up Fee. SELLER shall pay BUYER a fee of Three Million Dollars
(US$3,000,000) (the "Break-Up Fee") upon the first to occur of any of the
following events (a) the termination of this Agreement by SELLER pursuant to
Section 9.1(f); or (b) the termination of this Agreement by BUYER pursuant to
Section 9.1(g).
ARTICLE X
INDEMNIFICATION
10.1 Indemnification Obligations of SELLER. From and after Closing,
SELLER shall indemnify, defend and hold harmless the BUYER Indemnified Parties
from, against and in respect of any actual out of pocket losses, claims, damages
or reasonable expenses (including amounts paid in settlement and reasonable
attorneys' fees and expenses), net of any insurance proceeds and other amounts
as provided in Section 10.6 (any of the foregoing, a "Loss" and collectively,
"Losses") incurred by a BUYER Indemnified Party arising out of or from:
(a) any breach of any representation or warranty made by SELLER in
ARTICLE III of this Agreement, any SELLER Ancillary Document, or any Schedule or
certificate delivered pursuant hereto;
(b) any breach of any covenant, agreement or undertaking made by SELLER
in this Agreement or any SELLER Ancillary Document; or
(c) any fraud of SELLER in connection with this Agreement or the SELLER
Ancillary Documents.
10.2 Indemnification Obligations of BUYER. From and after Closing,
BUYER shall indemnify, defend and hold harmless the SELLER Indemnified Parties
from, against and in respect of any and all Losses incurred by a SELLER
Indemnified Party arising out of or from:
(a) any breach of any representation or warranty made by BUYER in
ARTICLE IV of this Agreement, any BUYER Ancillary Document, or any certificate
delivered pursuant hereto;
(b) any breach of any covenant, agreement or undertaking made by BUYER
in this Agreement or any BUYER Ancillary Document;
(c) any occurrence, event, act or omission of ▇▇▇▇ or any claims made
against ▇▇▇▇, other than an occurrence, event, act, omission or claim, which
provides the basis for a right of BUYER to indemnification under Section 10.1;
47
(d) the termination of employment of any employee of ▇▇▇▇ or any
employee matter on or after the Closing Date; or
(e) any fraud of BUYER in connection with this Agreement or the BUYER
Ancillary Documents.
10.3 Indemnification for Fraud and/or Willful Misconduct.
Notwithstanding anything to the contrary contained in ARTICLE X or anywhere else
in this Agreement, each Party shall indemnify and hold harmless the other Party
and its Affiliates, and their respective officers, directors, managers,
employees, agents, successors and assigns from and against any and all Losses
incurred or suffered by such Person after the Closing Date as a result of or
arising from any fraudulent act or willful or intentional misconduct by the
Party or its officers, directors, managers, employees, agents, and Affiliates,
prior to the Closing Date.
10.4 Indemnification Procedure.
(a) Procedures for Third Party Claims. Promptly after receipt
by an Indemnified Party of notice by a third party of a threatened or
filed complaint or the threatened or actual commencement of any audit,
investigation, action or proceeding with respect to which such
Indemnified Party may be entitled to receive payment from the other
Party for any Loss, such Indemnified Party shall provide a Claim Notice
to BUYER, on the one hand, or SELLER, on the other hand, whoever is the
appropriate indemnifying Party hereunder (the "Indemnifying Party"),
within ten (10) days after the Indemnified Party's knowledge of
threatening or filing of such complaint or knowledge of the threatened
or actual commencement of such audit, investigation, action or
proceeding; provided, however, that the failure to provide a Claim
Notice to the Indemnifying Party shall relieve the Indemnifying Party
from liability under this Agreement with respect to such claim only if,
and only to the extent that, such failure to provide a Claim Notice to
the Indemnifying Party results in (i) the forfeiture by the
Indemnifying Party of rights and defenses otherwise available to the
Indemnifying Party with respect to such claim or (ii) material
prejudice to the Indemnifying Party with respect to such claim. The
Indemnifying Party shall have the right, upon written notice delivered
to the Indemnified Party within thirty (30) days thereafter, to assume
the defense of such complaint, audit, investigation, action or
proceeding, including the employment of counsel reasonably satisfactory
to the Indemnified Party and the payment of the reasonable fees and
disbursements of such counsel. If the Indemnifying Party declines or
fails to assume the defense of the audit, investigation, action or
proceeding on the terms provided above within such thirty (30) day
period, the Indemnified Party may employ counsel to represent or defend
it in any such audit, investigation, action or proceeding and, if the
Indemnifying Party agrees that such audit, investigation, action or
proceeding is a matter with respect to which the Indemnified Party is
entitled to receive payment from the Indemnifying Party for the Loss in
question, the Indemnifying Party will pay the reasonable fees and
disbursements of such counsel as incurred; provided, however, that the
Indemnifying Party will not be required to pay the fees and
disbursements of more than one (1) counsel for all Indemnified Parties
in any jurisdiction in any single audit, investigation, action or
proceeding. In any audit, investigation, action or proceeding with
respect to which indemnification is being sought hereunder, the
48
Indemnified Party or the Indemnifying Party, whichever is not assuming
the defense of such action, shall have the right to participate in such
matter and to retain its own counsel at such Party's own expense. The
Indemnifying Party or the Indemnified Party, as the case may be, shall
at all times use Commercially Reasonable Efforts to keep the
Indemnifying Party or the Indemnified Party, as the case may be,
reasonably apprised of the status of any matter the defense of which
they are maintaining and to cooperate in good faith with each other
with respect to the defense of any such matter. No Indemnified Party
may settle or compromise any claim or consent to the entry of any
judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party.
(b) Procedures for Direct Claims. If an Indemnified Party
claims a right to payment pursuant to this Agreement not involving a
third party claim covered by Section 10.4(a) hereof, such Indemnified
Party shall send a Claim Notice to the appropriate Indemnifying Party.
10.5 Survival. The representations and warranties of the Parties
contained in this Agreement, any schedule or any certificate delivered pursuant
hereto, shall survive the Closing and shall continue in full force and effect
(a) in the case of the representations and warranties of SELLER and
BUYER contained in Sections 3.1 (Organization), 3.2 (Capitalization), 3.3
(Authorization), 3.20 (Environmental, Health & Safety Matters), 3.33 (Certain
Fees), 3.27 (Absence of Certain Business Practices), and 3.35 (Exemption from
Registration), and 4.1 (Authorization), 4.4 (Certain Fees), 4.5 (Financial
Capability), 4.9 (Investment Intent), and 4.10 (Accredited Investor; Investment
Representations) for a period of three (3) years following the Closing Date, (b)
in the case of the representations and warranties of SELLER contained in Section
3.19 (Taxes) for the applicable statutory period of limitations, and (c) in the
case of all other representations and warranties of the Parties contained in
this Agreement, and in any schedule or any certificate delivered pursuant
hereto, until eighteen (18) months after the Closing Date. Notwithstanding the
foregoing, any representation or warranty in respect of which indemnity may be
sought hereunder shall survive the time at which it would otherwise terminate
pursuant to this Section 10.5 if notice of the breach thereof shall have been
given to the Party against whom such indemnity may be sought prior to the
expiration of the applicable survival period. The Parties' covenants and
agreements under this Agreement shall survive the Closing indefinitely unless a
shorter period of performance is specified with respect to such covenant or
agreement.
10.6 Liability Limits. Subject to Sections 6.1(a), 10.3 and 10.9 only,
the Indemnification Obligations hereunder shall be limited as follows:
(a) no Losses shall be payable under Section 10.1 unless and
until, after taking into account the other limitations of this Section
10.6, the applicable Indemnified Party or Parties shall have suffered
indemnifiable Losses in excess of an amount equal to US$400,000.00 in
the aggregate, in which case, the applicable Indemnified Party or
Parties shall be entitled to recover the first dollar of all such
Losses;
49
(b) except for fraud, in no event shall the aggregate amount of Losses
required to be paid by an Indemnifying Party under Section 10.1(a) or 10.2(a)
(as applicable) to all of the applicable Indemnified Parties exceed an amount
equal to US$11,000,000.00;
(c) no Losses shall be payable under Section 10.1 or 10.2 for which a
written notice of a claim specifying in reasonable detail the specific nature of
and specific basis of the Losses and the estimated amount of such Losses ("Claim
Notice") is not delivered to the Indemnifying Party prior to, with respect to
the particular claim, the close of business on the date that such
representation, warranty, covenant, or agreement related to claim would
otherwise expire pursuant to Section 10.5, and the indemnities granted in
Section 10.1 or 10.2 shall terminate on such date; provided, however, that such
indemnities shall survive with respect only to the specific matter that is the
subject of any Claim Notice delivered in good faith in compliance with the
requirements of this Section 10.6(c) prior to the expiration of the applicable
survival period set forth in Section 10.5 until the earlier to occur of (i) the
date on which a final nonappealable resolution of the matter described in such
Claim Notice has been reached, or (ii) the date on which the matter described in
such Claim Notice has otherwise reached final resolution;
(d) for purposes of computing the aggregate amount of claims against an
Indemnifying Party, the amount of each claim by an Indemnified Party shall be
deemed to be an amount equal to, and any payments by an Indemnifying Party under
Section 10.1 or 10.2 (as applicable) shall be limited to, the amount of Losses
that remain after deducting therefrom any third party insurance proceeds and any
indemnity, contributions or other similar payment payable by any third party
with respect thereto;
(e) the amount of indemnity payable under Section 10.1 or 10.2 with
respect to any Loss shall be reduced to the extent appropriate to reflect the
relative contribution to such Loss, if any, caused by actions taken by the
Indemnified Party or its Affiliates after the Closing;
(f) no BUYER Indemnified Party shall be permitted to recover any Losses
under Section 10.1 for any alleged breach of a representation, warranty or
covenant by SELLER of which BUYER had knowledge after the Execution Date but
prior to the Closing Date and, with respect to such breach, BUYER failed to
timely provide a Breach Notice to SELLER in accordance with Section 5.4; and
(g) in any case where an Indemnified Party recovers from third Persons
any amount in respect of a matter with respect to which SELLER or BUYER, as the
case may be, has indemnified it pursuant to this Agreement, such Indemnified
Party shall promptly pay over to SELLER or BUYER (as the case may be) the amount
so recovered (after deducting therefrom the full amount of the expenses incurred
by it in procuring such recovery), but not in excess of the sum of (i) any
amount previously so paid by SELLER or BUYER (as the case may be) to or on
behalf of such Indemnified Party in respect of such matter, and (ii) any amount
expended by SELLER or BUYER in pursuing or defending any claim arising out of
such matter.
50
10.7 Damage Exclusions. In any claim for indemnification under this
Agreement, neither SELLER nor BUYER shall be required to indemnify any Person
for special, exemplary or consequential damages, including loss of profit or
revenue, any multiple of reduced cash flow, interference with operations, or
loss of lenders or investors of BUYER in connection with the Acquisition.
10.8 Reasonable Steps to Mitigate. The Indemnified Party will take all
reasonable steps to mitigate all Losses, including availing itself of any
defenses, limitations, rights of contribution, claims against third Persons and
other rights at Law or equity, and will provide such evidence and documentation
of the nature and extent of the Loss as may be reasonably requested by the
Indemnifying Party. The Indemnified Party's reasonable steps include the
reasonable expenditure of money to mitigate or otherwise reduce or eliminate any
Loss for which indemnification would otherwise be due under this ARTICLE X, and
the Indemnifying Party will reimburse the Indemnified Party for the Indemnified
Party's reasonable expenditures in undertaking the mitigation.
10.9 Special Indemnity. SELLER agrees to indemnify, defend and hold
harmless ▇▇▇▇ and the BUYER Indemnified Parties from any and all Losses related
to or arising out of (i) the option to purchase up to 1,000,000 pounds of U3O8
from the ▇▇▇▇▇ Ranch Project, which option was granted to Solution Mining
Corporation pursuant to an Agreement dated June 23, 1993, and (ii) the
requirement to deliver 649,691 pounds of U3O8 pursuant to Uranium Inventory
Purchase Agreement dated June 18, 2002 between ▇▇▇▇ and Cameco Europe S.A. The
special indemnity provided for in this Section 10.9 shall not be subject to any
of the liability limits set forth in Section 10.6.
10.10 Exclusive Remedies Following the Closing Date. Following the
Closing Date, the provisions of this ARTICLE X and Section 11.8 hereof set forth
the exclusive rights and remedies of BUYER and SELLER to seek or obtain damages
or any other remedy or relief whatsoever from any Party with respect to matters
arising under or in connection with this Agreement and the Acquisition from and
after the Closing Date.
10.11 Environmental Remedies. Without limiting the generality of
Section 10.10, BUYER understands and agrees that its right to indemnification
under Section 10.1 for breach of the representations and warranties contained in
Section 3.20 shall constitute its sole and exclusive remedy against SELLER and
its Affiliates with respect to any environmental, health, or safety matter
relating to the past, current or future facilities, properties or operations,
acts or omissions of ▇▇▇▇, including without limitation any such matter arising
under any Environmental, Health & Safety Laws and any Environmental Liabilities.
Further, the BUYER Indemnified Parties shall not be entitled to indemnification
to the extent that BUYER's or ▇▇▇▇'▇ actions or omissions following the Closing
Date cause, contribute to, continue or exacerbate (i) any breach of the
representations and warranties contained in Section 3.20 or (ii) any
Environmental Liability.
51
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses. Each of BUYER and SELLER will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the Acquisition. Without limiting the generality of the
foregoing, all Transfer Taxes and conveyance fees, recording charges and other
fees and charges (including any penalties and interest) incurred in connection
with the Acquisition, shall be paid by BUYER when due.
11.2 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be given by any of the following methods: (a) personal
delivery; (b) registered or certified mail, postage prepaid, return receipt
requested; (c) facsimile, receipt confirmed; or (d) by a nationally recognized
overnight courier service. Notices shall be sent to the appropriate Party at its
address given below (or at such other address for such Party as shall be
specified by notice given hereunder):
If to BUYER, to: HRI-▇▇▇▇ Acquisition LLC ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇ Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
If to SELLER, to: Billiton Investment 15 B.V. c/o BHP
Billiton
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇ BE
Netherlands
Attention: Company Secretary Fax:
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
with a copy to: BHP Billiton Plc
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
52
▇▇▇▇▇ ▇▇▇▇ LLP
Two ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice or communication shall be effective (i) if delivered personally
by registered or certified mail, return receipt requested, or by nationally
recognized overnight courier service, when delivered at the address specified in
this Section 11.2 (or in accordance with the latest unrevoked direction from
such Party), and (ii) if given by facsimile, when such facsimile is transmitted
to the facsimile number specified in this Section 11.2 (or in accordance with
the latest unrevoked direction from such Party), and confirmation is received.
11.3 Severability. If any term or other provision of this Agreement or
any Ancillary Document is invalid, illegal or incapable of being enforced by any
rule of Law or public policy, all other terms, conditions and provisions of this
Agreement or the applicable Ancillary Document shall nevertheless remain in full
force and effect so long as the economic or legal substance of the Acquisition
is not affected in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement or the applicable Ancillary Document so as to effect the original
intent of the Parties as closely as possible in a mutually acceptable manner in
order that the Acquisition be consummated as originally contemplated to the
fullest extent possible.
11.4 Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
Parties and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, directly or indirectly, including by operation of Law, by either Party
without the prior written consent of the other Party, which consent will not be
unreasonably withheld.
11.5 No Third Party Beneficiaries. This Agreement is exclusively for
the benefit of SELLER, and its successors and permitted assigns, with respect to
the obligations of BUYER under this Agreement, and for the benefit of BUYER, and
its respective successors and permitted assigns, with respect to the obligations
of SELLER, under this Agreement, and this Agreement shall not be deemed to
confer upon or give to any other third party any remedy, claim, liability,
reimbursement, cause of action or other right, except for the Indemnified
Parties under ARTICLE X.
11.6 Entire Agreement. This Agreement (including the Schedules and
Exhibits attached hereto), the Confidentiality Agreement and the Ancillary
Documents constitute the entire agreement among the Parties with respect to the
subject matter of this Agreement and supersede all other prior agreements and
understandings, both written and oral, between the Parties with respect to the
subject matter of this Agreement.
53
11.7 Governing Law. This Agreement and the Ancillary Documents shall be
governed by and construed in accordance with the Laws of the State of New York,
U.S. (regardless of the Laws that might otherwise govern under applicable
principles of conflicts of laws thereof) as to all matters, including matters of
validity, construction, effect, performance and remedies.
11.8 Consent to Jurisdiction and Dispute Resolution. With respect to
any dispute, controversy, conflict or difference arising between BUYER and
SELLER in connection with the interpretation, application, execution,
compliance, breach or termination of this Agreement (a "Dispute"), the Parties
shall settle such Dispute in accordance with the provisions of Exhibit G. BUYER
and SELLER agree that the sole recourse for any claim arising in any way under
this Agreement or any Ancillary Document is under the provisions of Exhibit G.
Further, BUYER and SELLER agree that any award under the provisions of Exhibit G
may be enforced in any country or jurisdiction under applicable Law or treaty.
11.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the Parties and delivered (including by
facsimile) to the other Party.
11.10 Amendment; Modification. This Agreement may be amended, modified
or supplemented at any time by written agreement of the Parties.
11.11 Disclosure Schedules. Certain agreements and other matters are
listed in the Schedules and Exhibits for informational purposes only,
notwithstanding the fact that, because they do not rise above applicable
materiality thresholds or otherwise, they are not required to be listed herein
by the terms of this Agreement. In no event shall the listing of such agreements
or other matters in the Schedules or Exhibits be deemed or interpreted to
broaden or otherwise amplify SELLER's representations and warranties, covenants
or agreements contained in this Agreement or in any Ancillary Document. The
headings contained in the Schedules and Exhibits are for convenience of
reference only and shall not be deemed to modify or influence the interpretation
of the information contained in the Schedules, the Exhibits or the Agreement.
Furthermore, the disclosure of a particular item of information in the Schedules
or Exhibits shall not be taken as an admission by SELLER that such disclosure is
required to be made under the terms of any of such representations and
warranties. Disclosure of any fact or item in any Schedule or Exhibit hereto
referenced by a particular section in this Agreement shall be deemed to have
been disclosed with respect to every other section in this Agreement if such
disclosure would permit a reasonable person to find such disclosure relevant to
such other sections. The specification of any dollar amount in the
representations or warranties contained in this Agreement or the inclusion of
any specific item in any Schedules or Exhibits hereto is not intended to imply
that such amounts, or higher or lower amounts or the items so included or other
items, are or are not material, and no Party shall use the fact of the setting
of such amounts or the inclusion of any such item in any dispute or controversy
as to whether any obligation, items or matter not described herein or included
in a Schedule or Exhibit is or is not material for purposes of this Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE.]
54
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first above written.
SELLER:
BILLITON INVESTMENT 15 B.V.
By:______________________________________
Name:_________________________________
Title:________________________________
BUYER:
HRI-▇▇▇▇ ACQUISITION LLC
By: URI, Inc.
Its: Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇, Executive Vice
President and Chief Operating
Officer
Signature Page to Membership Interest Purchase Agreement
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first above written.
SELLER:
BILLITON INVESTMENT 15 B.V.
By: /s/ ▇▇▇▇▇▇▇▇ Soilele By:/s/ A.A. van Jaarsveld
---------------------------- --------------------------------------
Name: ▇▇▇▇▇▇▇▇ Soilele Name: A.A. van Jaarsveld
-------------------------------- --------------------------------
Title: Authorized Signatory Title: Director
--------------------------------
BUYER:
HRI-▇▇▇▇ ACQUISITION LLC
By: URI, Inc.
Its: Manager
By:
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇, Executive Vice
President and Chief Operating
Officer
Signature Page to Membership Interest Purchase Agreement
AGREED AND ACCEPTED
BILLITON INVESTMENT 15 B.V.
By:/s/ A.A. van Jaarsveld
--------------------------------------
Name: A.A. van Jaarsveld
--------------------------------
Title: Director
--------------------------------