Exhibit
10.1


Execution Version


 


 


PURCHASE AND SALE
AGREEMENT



Entered into as of September 25, 2006



among



APEX SILVER MINES LIMITED,



APEX LUXEMBOURG S.À R.L.,



APEX SILVER MINES SWEDEN AB,



and



SUMITOMO CORPORATION















 


 


TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE AND SALE; CLOSING

  	
   

  	
  19

  
	
  Section 2.1

  	
   

  	
  Purchase and Sale

  	
   

  	
  19

  
	
  Section 2.2

  	
   

  	
  Purchase Price

  	
   

  	
  19

  
	
  Section 2.3

  	
   

  	
  Allocation of Purchase Price

  	
   

  	
  19

  
	
  Section 2.4

  	
   

  	
  Closing

  	
   

  	
  20

  
	
  Section 2.5

  	
   

  	
  Closing Deliveries

  	
   

  	
  20

  
	
  Section 2.6

  	
   

  	
  MOU

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III TRANSACTION REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  23

  
	
  Section 3.1

  	
   

  	
  Apex’s Representations and Warranties

  	
   

  	
  23

  
	
  Section 3.2

  	
   

  	
  Sumitomo’s Representations and Warranties

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV
  REPRESENTATIONS AND WARRANTIES REGARDING ACQUIRED ENTITIES, MSC, OLD METALS,
  NEW METALS, AND NEW CAYMAN

  	
   

  	
  31

  
	
  Section 4.1

  	
   

  	
  Organization, Good Standing, Authority, Governing
  Documents, Books and Records

  	
   

  	
  31

  
	
  Section 4.2

  	
   

  	
  Consents; No Conflicts

  	
   

  	
  32

  
	
  Section 4.3

  	
   

  	
  Consents and Approvals for the Project

  	
   

  	
  33

  
	
  Section 4.4

  	
   

  	
  Subsidiaries

  	
   

  	
  33

  
	
  Section 4.5

  	
   

  	
  Financial Statements; No Undisclosed Liabilities; No
  Material Adverse Effect

  	
   

  	
  34

  
	
  Section 4.6

  	
   

  	
  Title to Properties

  	
   

  	
  35

  
	
  Section 4.7

  	
   

  	
  Material Contracts

  	
   

  	
  35

  
	
  Section 4.8

  	
   

  	
  Employees; Employee Benefits

  	
   

  	
  36

  
	
  Section 4.9

  	
   

  	
  Legal Compliance

  	
   

  	
  37

  
	
  Section 4.10

  	
   

  	
  Taxes

  	
   

  	
  37

  
	
  Section 4.11

  	
   

  	
  Legal Proceedings

  	
   

  	
  37

  
	
  Section 4.12

  	
   

  	
  Environmental Matters

  	
   

  	
  38

  
	
  Section 4.13

  	
   

  	
  Interested Party Transactions

  	
   

  	
  38

  
	
  Section 4.14

  	
   

  	
  Insurance

  	
   

  	
  38

  
	
  Section 4.15

  	
   

  	
  Financing Documents

  	
   

  	
  38

  
	
  Section 4.16

  	
   

  	
  No Default

  	
   

  	
  38

  
	
  Section 4.17

  	
   

  	
  Performance Security

  	
   

  	
  39

  
	
  Section 4.18

  	
   

  	
  Acquired Entities

  	
   

  	
  39

  
	
  Section 4.19

  	
   

  	
  No Liquidation; Intent

  	
   

  	
  39

  
	
  Section 4.20

  	
   

  	
  Notices

  	
   

  	
  39

  
	
  Section 4.21

  	
   

  	
  Project Information and Other Information Furnished

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V OTHER COVENANTS

  	
   

  	
  40

  
	
  Section 5.1

  	
   

  	
  Confidentiality

  	
   

  	
  40

  
	
  Section 5.2

  	
   

  	
  Expenses; Transfer Taxes; Tax Cooperation

  	
   

  	
  40

  
						



 



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  Section 5.3

  	
   

  	
  Further Assurances

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS TO CLOSING

  	
   

  	
  42

  
	
  Section 6.1

  	
   

  	
  Authorizations and Government Approvals

  	
   

  	
  42

  
	
  Section 6.2

  	
   

  	
  Closing Deliveries to Sumitomo

  	
   

  	
  42

  
	
  Section 6.3

  	
   

  	
  Closing Deliveries to Apex, Apex Sweden, and Apex
  Luxembourg

  	
   

  	
  46

  
	
  Section 6.4

  	
   

  	
  Board Approvals

  	
   

  	
  46

  
	
  Section 6.5

  	
   

  	
  Restructuring

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII INDEMNIFICATION

  	
   

  	
  47

  
	
  Section 7.1

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  47

  
	
  Section 7.2

  	
   

  	
  Indemnification

  	
   

  	
  47

  
	
  Section 7.3

  	
   

  	
  Procedures

  	
   

  	
  48

  
	
  Section 7.4

  	
   

  	
  Insurance Proceeds

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS

  	
   

  	
  50

  
	
  Section 8.1

  	
   

  	
  Entire Agreement

  	
   

  	
  50

  
	
  Section 8.2

  	
   

  	
  Governing Law; Language

  	
   

  	
  50

  
	
  Section 8.3

  	
   

  	
  Dispute Resolution

  	
   

  	
  50

  
	
  Section 8.4

  	
   

  	
  Headings

  	
   

  	
  50

  
	
  Section 8.5

  	
   

  	
  Notices

  	
   

  	
  50

  
	
  Section 8.6

  	
   

  	
  Severability

  	
   

  	
  51

  
	
  Section 8.7

  	
   

  	
  Amendment; Waiver

  	
   

  	
  52

  
	
  Section 8.8

  	
   

  	
  Assignment and Binding Effect

  	
   

  	
  52

  
	
  Section 8.9

  	
   

  	
  No Benefit to Others

  	
   

  	
  52

  
	
  Section 8.10

  	
   

  	
  Counterparts

  	
   

  	
  52

  
	
  Section 8.11

  	
   

  	
  Interpretation

  	
   

  	
  52

  
	
  Section 8.12

  	
   

  	
  Rules of Construction

  	
   

  	
  54

  
	
  Section 8.13

  	
   

  	
  No Partnership

  	
   

  	
  54

  



 



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TABLE OF SCHEDULES AND EXHIBITS


	
  Schedule A-1

  	
   

  	
  Ownership of Shares of New Sweden 1, New
  Sweden 2, and New Cayman

  	
   

  	
   

  
	
  Schedule A-2

  	
   

  	
  Ownership of Shares of MSC and Quotas of New Metals

  	
   

  	
   

  
	
  Schedule B

  	
   

  	
  Material Project Documents

  	
   

  	
   

  
	
  Schedule C

  	
   

  	
  Apex Disclosure Schedule

  	
   

  	
   

  
	
  Schedule D

  	
   

  	
  Sumitomo Disclosure Schedule

  	
   

  	
   

  
	
  Schedule E

  	
   

  	
  Purchase Price Allocation

  	
   

  	
   

  
	
  Schedule F

  	
   

  	
  New and Amended Financing Documents

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of MSC Shareholders Agreement

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Metals Quotaholders Agreement

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of New Cayman Shareholders Agreement

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Apex Guaranty

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  Form of Sumitomo Guaranty

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of Deferred Payments Agreement

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of Dispute Resolution Agreement

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  Form of Option Agreement

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of Reimbursement Agreement

  	
   

  	
   

  



 



 iii















 


PURCHASE AND SALE AGREEMENT


This Purchase and Sale Agreement is entered into as of
September 25, 2006, by and among:


APEX SILVER MINES LIMITED, an
exempted company limited by shares duly organized and validly existing under
the Laws of the Cayman Islands, British West Indies (“Apex”), with its
registered office at Walker House, Mary Street, George Town, Grand Cayman,
Cayman Islands, British West Indies;


APEX LUXEMBOURG S.À R.L., a société à responsabilité limitée duly organized and validly
existing under the Laws of the Grand Duchy of Luxembourg (“Apex Luxembourg”),
with its registered office at 73, Côte d’Eich, L-1450 Luxembourg,
registered with the Luxembourg Register of Commerce (Registre de
Commerce et des Sociétés du Grand-Duché de Luxembourg) under
number B 110 956;


APEX SILVER MINES SWEDEN AB, a privat aktiebolag duly organized and validly existing under
the Laws of the Kingdom of Sweden (“Apex Sweden”), with its registered
office at c/o Accurate Accounting AB, Drakegatan 7, SE-412 50 Göteborg,
Sweden; and


SUMITOMO CORPORATION, a
corporation duly organized and validly existing under the Laws of Japan (“Sumitomo”),
with its headquarters at 8-11, Harumi, Chuo-ku, Tokyo 104-8610,
Japan.


Apex, Apex Luxembourg, Apex Sweden, and Sumitomo are
sometimes referred to herein individually as a “Party” and collectively
as the “Parties.”  Capitalized
terms used and not otherwise defined in this Agreement have the respective
meanings ascribed thereto in ARTICLE I.


RECITALS


A.            Apex Sweden owns, beneficially and of record,
(1) shares representing 100% of the issued and outstanding share
capital of means Gotlex Lageraktiebolag nr 451, organization number 556702-1083,
a privat aktiebolag duly organized and
validly existing under the Laws of the Kingdom of Sweden (“New Sweden 1”),
with its registered office at c/o Wistrand Advokatbyrå, Lilla Bommen 1, 411 04
Göteborg, Sweden; and (2) shares representing 100% of the issued and
outstanding share capital of Comercial Metales Blancos AB, a privat aktiebolag duly organized and validly existing under
the Laws of the Kingdom of Sweden (“New Sweden 2”), with its
registered office at c/o Anders Sköldberg, Ernst & Young AB, 401 82
Göteborg, Sweden.


B.            Each of Apex Sweden and Apex Luxembourg own, beneficially
and of record, shares, which together represent 65% of the issued and
outstanding share capital of Minera San Cristóbal S.A., a sociedad
anónima organized under the Laws of Bolivia (“MSC”), with
domicile at the city of Potosi, Bolivia, with register of commerce
number 13681.  New Sweden 1
owns, beneficially and of record, shares representing 35% of the issued and
outstanding share capital of MSC.









 



 


C.            Apex Sweden owns, beneficially and of record, a quota
representing 65% of the issued and outstanding capital of Apex Metals Marketing
GmbH, a Gesellschaft mit beschränkter Haftung
organized under the Laws of Switzerland (“New Metals”), with its seat in
Zug, Canton of Zug, Switzerland and with a registered address of c/o Juris
Treuhand AG, Industriestrasse 47, 6304 Zug, Switzerland.  New Sweden 2 owns, beneficially and of
record, a quota representing 35% of the issued and outstanding capital of New
Metals.


D.            Apex Sweden is the holder of that certain Subordinated
Promissory Note, dated as of the date hereof, made by MSC in favor of Apex Sweden
in the original principal amount of US$27,495,378.00 of which US$27,495,378.00
is outstanding on the date hereof (the “Apex Sweden MSC Subordinated Debt”).  New Sweden 1 is the holder of that
certain Subordinated Promissory Note, dated as of the date hereof, made by MSC
in favor of New Sweden 1 in the original principal amount of
US$14,805,204.00 of which US$14,805,204.00 is outstanding on the date hereof
(the “New Sweden 1 MSC Subordinated Debt”).


E.             Apex Luxembourg owns, beneficially and of record, shares,
which represent 100% of the issued and outstanding share capital of Apex
Silver Finance Ltd., an exempted company limited by shares organized under the
Laws of the Cayman Islands, British West Indies (“New Cayman”), with its
registered office at Walker House, Mary Street, George Town, Grand Cayman,
Cayman Islands, British West Indies.


F.             MSC owns and is developing the San Cristóbal silver,
zinc, and lead mine in Bolivia.


G.            Concurrently with the execution and delivery of this
Agreement, New Metals and MSC are entering into the New Concentrate Sales
Agreement and the Concentrate Sales Agreement, dated as of
December 1, 2005, between MSC and Old Metals is being
terminated.  Under the New Concentrate
Sales Agreement, New Metals has the exclusive right to acquire and market the
lead, zinc, and bulk concentrates produced by the Project.


H.            The New and Amended Financing Documents are being
executed and delivered by the parties thereto concurrently with the execution
and delivery of this Agreement.


I.              Apex Sweden desires to sell to Sumitomo, and Sumitomo
desires to purchase from Apex Sweden, all of the shares of New Sweden 1
and New Sweden 2, in consideration for, among other things, a portion of
the Purchase Price.


J.             Apex Luxembourg desires to sell to Sumitomo, and
Sumitomo desires to purchase from Apex Luxembourg, the New Cayman Acquired
Shares, in consideration for a portion of the Purchase Price.


AGREEMENT


In consideration of the mutual promises, covenants,
and agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:



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ARTICLE I

DEFINITIONS


For purposes of this Agreement, the following terms
have the following meanings:


“Acquired Entity” means New Sweden 1 or
New Sweden 2, as the context requires.


“Acquired Entities” means New Sweden 1 and
New Sweden 2.


“Action” has the meaning specified in Section
7.3(b).


“Affiliate” means, with respect to any Person,
any other Person that directly, or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with,
the Person in question.


“Agreement” means this Purchase and Sale
Agreement (including the Exhibits, Disclosure Schedules (but not the Apex
Disclosure Bundle), and other Schedules attached hereto).


“Apex” has the meaning specified in the
preamble.


“Apex Disclosure Bundle” means the collection
of documents listed so named, dated the date hereof, delivered by Apex to
Sumitomo.


“Apex Disclosure Schedule” means the schedule
so named attached hereto as Schedule C.


“Apex Guaranty” means the Guaranty in the form
attached hereto as Exhibit D, being entered into by Apex in favor of New
Sweden 1, New Sweden 2, and Sumitomo.


“Apex Luxembourg” has the meaning specified in
the preamble.


“Apex Management Agreements Guarantee” means
that certain Guarantee Agreement, dated as of December 1, 2005, by Apex in
favor of MSC and Old Metals, as amended by the Omnibus Amendment Agreement,
concerning, among other things, the MSC Management Agreement and the New Metals
Management Agreement, and rights and obligations in respect of which were
assigned to New Metals pursuant to the Assignment and Assumption of Contract.


“Apex Parent Guarantees” means the Apex
Management Agreements Guarantee and the Apex Guaranty.


“Apex Sweden” has the meaning specified in the
preamble.


“Apex Sweden MSC Subordinated Debt” has the
meaning specified in the recitals.


“ASC Bolivia” means ASC Bolivia LDC (Sucursal
Bolivia), the branch, existing under the Laws of Bolivia, with domicile at
Calle Campos N° 265, La Paz, Bolivia and with register of



 3
 






 



 


commerce
number 13961, of ASC Bolivia LDC, an exempted limited duration company
organized under the Laws of the Cayman Islands, British West Indies, with its
registered office at Walker House, Mary Street, George Town, Grand Cayman,
Cayman Islands, British West Indies.


“ASC Bolivia Acquired Assets” has the meaning
specified in Section 5.3(b).


“Assignment and Assumption of Contract” means
that certain Assignment and Assumption of Contract, dated on or about the date
hereof, between Old Metals and New Metals.


“Audited Balance Sheets” has the meaning
specified in Section 4.5(a).


“Authorizations” means resolutions, approvals,
or consents of third parties, creditors, shareholders, partners, and members,
excluding any resolution, approval, or consent of any Governmental Authority.


“Basket Amount” has the meaning specified in
Section 7.2(b).


“Bolivia” means the Republic of Bolivia.


“Bolivian Corporations Law” means the Bolivian
Code of Commerce enacted by Decree Law No. 14379 of
February 25, 1997.


“Bolivianos” or “Bs.” means Bolivianos,
the lawful currency of Bolivia.


“Business Day” means any day other than
Saturday, Sunday, and a day on which banks in New York, New York, U.S.A. or Tokyo,
Japan are required or permitted to close.


“CHF” means Swiss francs, the lawful currency
of Switzerland.


“Closing” has the meaning specified in Section
2.4.


“Closing Date” has the meaning specified in
Section 2.4.


“Common Security Agreement” means that certain
Common Security Agreement, dated as of December 1, 2005, among MSC,
Apex Sweden, Apex Luxembourg, Old Metals, BNP Paribas, Barclays Capital,
Corporación Andina de Fomento, JPMorgan Chase Bank, N.A., the senior lenders
party thereto, and the hedge banks party thereto, as amended by the Omnibus
Amendment Agreement.


“Confidential Information” has the meaning
specified in Section 5.1.


“Confidentiality Agreement” means that certain
Confidentiality Agreement, dated as of September 8, 2005, between Apex and
Sumitomo.



 4
 






 



 


“Contract” means any note, bond, indenture,
debenture, security agreement, trust agreement, mortgage, lease, contract,
license, franchise, permit, guaranty, joint venture agreement, or other
agreement, instrument, commitment, or obligation, whether oral or written.


“Control” means the ability to direct or cause
the direction (whether through the ownership of voting securities, by contract,
or otherwise) of the management and policies of a Person or to control (whether
affirmatively or negatively and whether through the ownership of voting
securities, by contract, or otherwise) the decision of such Person to engage in
the particular conduct at issue.  A
Person shall be rebuttably presumed to control an Entity if such Person owns,
directly or indirectly through one or more intermediaries, (a) sufficient
shares of stock or other equity interests of such Entity to allow such Person,
under ordinary circumstances, to elect or direct the election of a majority of
the members of the board of directors or other governing body of such Entity or
(b) shares of stock or other equity interests of such Entity representing,
in the aggregate, more than 50% of the aggregate outstanding economic interests
in such Entity.  The term “Controlled”
has a meaning correlative to that of Control.


“Default” has the meaning specified in the
Common Security Agreement.


“Deferred Payments” has the meaning specified
in Section 2.2.


“Deferred Payments Agreement” means the
Deferred Payments Agreement in the form attached hereto as Exhibit F, being
entered into by Apex Sweden and Sumitomo.


“Development Plan” means that certain San
Cristóbal Development Plan, dated November 2004, prepared by MSC and
concerning the construction and operation of the Project, as amended or
otherwise modified by (a) those certain San Cristóbal Project Monthly
Project Reports prepared by Aver Kvaerner through the date hereof,
(b) that certain First Amendment to EPCM Services Supply Agreement,
effective as of April 11, 2005, together with that certain First
Change Order to EPCM Services Supply Agreement, dated as of June 8, 2005,
that certain Second Change Order to EPCM Services Supply Agreement, dated as of
July 21, 2005, that certain Third Change Order to EPCM Services
Supply Agreement, dated as of December 2, 2005, that certain Fourth
Change Order to EPCM Services Supply Agreement, and that certain Fifth Change
Order to EPCM Services Supply Agreement, dated as of June 14, 2006,
(c) the “Definitive Estimate” set forth in that certain Banks
Reconciliation Template, dated August 2006, and (d) the memorandum
and Table 1-Comparison of the Development Plan Production Plan and
the July 2006 Revised Production Plan thereto, sent by email to Sumitomo
on August 9, 2006.


“Disclosure Schedules” means either the Apex Disclosure
Schedule or the Sumitomo Disclosure Schedule, as applicable.


“Dispute Resolution Agreement” has the meaning
specified in Section 2.5(a)(vii).


“Dollars” means the lawful currency of the U.S.


“Employee Benefit Plan” means any “employee
benefit plans” (within the meaning of Section 3(1) of ERISA), and any
other material employee benefit plan, program, or arrangement



 5
 






 



 


for any current or former
employee, director, consultant or independent contractor, or any dependent,
survivor or beneficiary (in each case, whether or not resident in the United
States), with respect to any of the foregoing, which is maintained,
administered or contributed to (directly or indirectly) of MSC, Old Metals, New
Metals, or any ERISA Affiliate.


“Entity” means any sociedad
anónima, sociedad de responsabilidad limitada, Aktiengesellshchaft,
Gesellschaft mit beschränkter Haftung, privat aktiebolag, société à
responsabilité limitée, corporation, exempted company limited by
shares, general or limited partnership, limited liability company, joint
venture, trust, association, unincorporated entity of any kind, or Governmental
Authority.


“Environmental Guidelines” means the following
guidelines as in effect on the date hereof applicable to the Project (referred
to in the Equator Principles framework): (a) World Bank Environmental,
Health and Safety Guidelines (i) Mining and Milling - Open Pit dated
August 11, 1995, (ii) Pollution Abatement and Prevention
Handbook 1998:  General
Environmental Guidelines, (iii) Operational Policy 4.01 (Environmental
Assessment), (iv) Operation Policy 4.04 (Natural Habitats),
(v) Operational Policy 4.11 (Cultural Property), (vi) Pollution
Abatement and Prevention Handbook 1998: Part III Project Guidelines,
Monitoring and Base Metal and Iron Ore Mining, and (vii) the Reclamation
and Closure Plan Section in the Knight-Piesold Environmental Assessment
of the Project (Closure Plan) and (b) IFC Safeguard Policies dated
September 1998.


“Environmental Laws” means any and all Bolivian
Laws relating to the regulation or protection of the environment or human
health or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or toxic or hazardous substances or wastes
into the indoor or outdoor environment, including ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
toxic or hazardous substances or wastes.


“ERISA” means the U.S. Employee Retirement
Income Security Act of 1974, as amended.


“ERISA Affiliate” means any Entity that would
be considered a single employer with MSC, Old Metals, or New Metals pursuant to
Section 414(b), (c), (m) or (o) of the U.S. Internal Revenue Code of 1986,
as amended, and the regulations promulgated under those sections or pursuant to
Section 4001(b) of ERISA and the regulations promulgated thereunder.


“Event of Default” has the meaning specified in
the Common Security Agreement.


“Filing” means any written registration,
declaration, application, or filing.


“Financial Statements” has the meaning
specified in Section 4.5(a).



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“Financing Documents” means:


(a)           that certain Loan Agreement, dated December 1, 2005,
among MSC, certain lenders named therein, and BNP Paribas, as administrative
agent;


(b)           that certain Loan Agreement, dated
December 1, 2005, between MSC and Corporación Andina de Fomento;


(c)           the Common Security Agreement;


(d)           that certain Sponsor Pledge and
Agreement, dated as of December 1, 2005, between Apex and JPMorgan Chase
Bank, N.A., as collateral agent (as amended by the Omnibus Amendment
Agreement);


(e)           that certain Transfer Restrictions
Agreement, dated as of December 1, 2005, among Apex, Apex Luxembourg, Apex
Sweden, Old Metals, BNP Paribas, as administrative agent, and JPMorgan Chase
Bank, N.A., as collateral agent (as amended by Amendment No. 1 to the
Transfer Restrictions Agreement, dated as of May 2, 2006 and as further
amended by the Omnibus Amendment Agreement);


(f)            that certain Completion Agreement,
dated as of December 1, 2005, among Apex, Barclays Capital, BNP Paribas,
and JPMorgan Chase Bank, N.A. (as amended by the Omnibus Amendment Agreement);


(g)           that certain ISDA Master Agreement
(together with the Amended and Restated Schedule to the ISDA Master Agreement
and the Credit Support Annex thereto), dated as of March 16, 2005 (as amended
by that certain Amendment No. 1 to Master Agreement, dated as of
June 16, 2005, and as further amended by that certain Amendment and
Restatement of the Schedule to Master Agreement, dated as of December 1,
2005), between BNP Paribas and Old Metals, as
novated by the Metals Hedge Novation Agreements related thereto and as further
amended by that certain Schedule to Master Agreement, dated on or about the
date hereof, between BNP Paribas and New Cayman;


(h)           that certain ISDA Master Agreement
(together with the Amended and Restated Schedule to the ISDA Master Agreement
and the Credit Support Annex thereto), dated as of September 4,1998 (as amended
by that certain Amendment, dated February 18, 2005, as further amended by
that certain Amendment No. 2, dated as of June 16, 2005, and as further
amended by that certain Amendment and Restatement of the Schedule to Master
Agreement, dated as of December 1, 2005), between Barclays Bank PLC and
Old Metals, as novated by the
Metals Hedge Novation Agreements related thereto and as further amended by that
certain Schedule to Master Agreement, dated on or about the date hereof,
between Barclays Bank PLC and New Cayman;


(i)            the Security Documents, including
the Bolivian Security Documents (in each case, as defined in the Common
Security Agreement);



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(j)            the Omnibus Amendment Agreement;


(k)           that certain Pledge Agreement, dated
on or about the date hereof, by Apex Luxembourg in favor of JPMorgan Chase
Bank, N.A. (regarding shares of New Cayman);


(l)            that certain Pledge Agreement, dated
on or about the date hereof, by Apex Sweden in favor of JPMorgan Chase Bank,
N.A. (New York law pledge regarding quotas of New Metals);


(m)          that certain Pledge Agreement, dated
on or about the date hereof, by Apex Sweden in favor of JPMorgan Chase Bank,
N.A. (Swiss law pledge regarding quotas of New Metals);


(n)           that certain Pledge Agreement, dated
on or about the date hereof, by New Sweden 2 in favor of JPMorgan Chase
Bank, N.A. (Swiss law pledge regarding quotas of New Metals);


(o)           that certain Pledge Agreement, dated
on or about the date hereof, by New Sweden 2 in favor of JPMorgan Chase
Bank, N.A. (New York law pledge regarding quotas of New Metals);


(p)           that certain Pledge Agreement, dated
on or about the date hereof, by Apex Sweden in favor of JPMorgan Chase Bank,
N.A. (New York law pledge regarding shares of New Sweden 2);


(q)           that certain Pledge Agreement, dated
on or about the date hereof, by Apex Sweden in favor of JPMorgan Chase Bank,
N.A. (New York law pledge regarding quotas of New Sweden 1);


(r)            that certain Apex Silver Finance
Cross-Guarantee and Security Agreement, dated on or about the date
hereof, between New Cayman and JPMorgan Chase Bank, N.A.; and


(s)           any related notes, guarantees,
collateral documents, instruments, and agreements executed in connection
therewith (other than any such notes, guarantees, collateral documents, instruments,
and agreements to which Sumitomo is a party);


in each case of clauses (a) through (s) of
this definition, as such may be amended, novated, or otherwise modified through
the date hereof.


“GAAP” means, in respect of MSC, generally
accepted accounting principles as used in Bolivia and, in respect of Old
Metals, New Metals, and New Cayman, generally accepted accounting principles as
used in the U.S., in each case as in effect on the date hereof.


“Governing Documents” means the estatutos sociales, escritura de constitución social,
articles or certificate of incorporation or formation or association, general
or limited partnership



 8
 






 



 


agreement, limited
liability company or operating agreement, bylaws, or other incorporation or
governing documents of any Entity.


“Government Approvals” means any authorization,
consent, approval, License, lease, ruling, permit, tariff, rate, certification,
exemption, Filing, variance, claim, Judgment, decree, sanction, or publication
of, by or with, any notice to, any declaration of or with, or any registration
by or with, or any other action or deemed action by or on behalf of, any
Governmental Authority.


“Governmental Authority” means any domestic or
foreign national, regional, or local, court, governmental department, commission,
authority, central bank, board, bureau, agency, official, or other
instrumentality exercising executive, legislative, judicial, taxing,
regulatory, or administrative powers or functions of or pertaining to
government.


“Hedge Instrument” means (a) any currency
swap agreement, option contract, future contract, option on futures contract,
spot or forward contract, or other agreements to purchase or sell currency or
any other arrangement entered into by a Person to hedge such Person’s exposure
or to speculate on movements in rates of exchange of currencies; (b) any
interest rate swap, option contract, futures contract, options on futures
contract, cap, floor, collar, or any other similar hedging arrangements entered
into by a Person to hedge such Person’s exposure to or to speculate on
movements in interest rates; (c) any forward purchase, forward sale, put
option, synthetic put option, call option, collar, or any other arrangement
relating to commodities entered into by a Person to hedge such Person’s exposure
to or to speculate on commodity prices; and (d) any other derivative
transaction or hedging arrangement of any type or nature whatsoever that is the
subject at any time of trading in the over-the-counter derivatives
market.


“Indebtedness” means, without duplication,
(a) all obligations created, issued, or incurred for borrowed money
(whether by loan, the issuance and sale of debt securities, or the sale of
property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such property from such other Person); (b) all
obligations to pay the deferred purchase price or acquisition price of property
or services (other than accrued expenses and trade accounts payable incurred in
the ordinary course of business that are not more than 90 days past due);
(c) all obligations to pay money evidenced by a note, bond, debenture, or
similar instrument; (d) the principal amount of all obligations under or
in respect of leases capitalized in accordance with generally accepted accounting
principles as used in the U.S.; (e) all reimbursement obligations in
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions; (f) all payment obligations under any
Hedge Instrument to the extent constituting a liability under generally
accepted accounting principles as used in the U.S.; and (g) all
obligations of another Person of the type listed in
clauses (a) through (f) of this definition, payment of which is
guaranteed by or secured by Liens on the property of such Person (with respect
to Liens, to the extent of the value of property pledged pursuant to such Liens
if less than the amount of such obligations).


“Indemnified Party” has the meaning specified
in Section 7.2(a).


“Indemnifying Party” has the meaning specified
in Section 7.2(a).



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“Intellectual Property Rights” means all
permits, licenses, trademarks, patents, or agreements with respect to the usage
of technology or other intellectual property (other than those constituting
Government Approvals and off-the-shelf, commercially available
software).


“Judgment” means any judgment, writ, order,
decree, injunction, award, restraining order, or ruling of or by any court,
judge, justice, arbitrator, or magistrate, including any bankruptcy court or
judge, and any writ, order, decree, or ruling of or by any Governmental
Authority.


“KYD” means Cayman Islands dollars, the lawful
currency of the Cayman Islands, British West Indies.


“Law” or “Laws” means any national,
regional, or local, or any foreign, statute, law, code, ordinance, rule,
regulation, resolution, Judgment, regulatory agreement with a Governmental
Authority, or general principle of common or civil law or equity.


“Legal Proceeding” means any private or
governmental action, suit, complaint, arbitration, legal, or judicial or
administrative proceeding or investigation, whether civil, criminal, or of any
other nature.


“Licenses” means all franchises, concessions,
licenses, permits, authorizations, certificates, variances, exemptions, consents,
leases, rights of way, easements, instruments, orders, and approvals issued by
any Governmental Authority.


“Lien” means any (a) security agreement,
conditional sale agreement, or other title retention agreement; (b) lease,
consignment, or bailment given for security purposes; and (c) lien,
charge, restrictive agreement, prohibition against transfer, mortgage, pledge,
legal privilege, option, encumbrance, adverse interest, security interest,
claim, attachment, exception to or defect in title, or other ownership interest
(including reservations, rights of entry, possibilities of reverter,
encroachments, easements, rights of way, restrictive covenants, leases, and
Licenses granted to other Persons) of any kind, but excluding any of the
foregoing created or imposed by or pursuant to this Agreement or any other
Transaction Document.


“Losses” means losses, liabilities, damages,
dues, deficiencies, assessments, Liens, fines, interest, penalties, including
with respect to Taxes, costs, expenses, and obligations, including amounts
reasonably paid in settlement, prosecuting, defending, or otherwise, and
reasonable legal, accounting, experts, and other fees, costs, and expenses, in
connection with claims, actions, suits, proceedings, hearings, investigations,
charges, complaints, demands, injunctions, and Judgments.


“Mandatory Metals Hedge Agreements” has the
meaning specified in the Common Security Agreement.


“Material Adverse Effect” means


(a)           with respect to MSC, Old Metals, New
Cayman, and/or New Metals, (i) a material adverse effect on or change to
the condition (financial or otherwise), business,



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performance,
operations, or properties of MSC, Old Metals, New Cayman, and New Metals, and
the Project, taken together, except to the extent that such effect or change is
attributable to or results from (A) changes affecting generally the
securities or capital markets or economic conditions in the country or
countries in which any such Entity conducts its businesses or the Project is
conducted, (B) changes affecting generally the industries in which any
such Entity operates (as opposed to changes affecting any such Entity or group
of Entities specifically, predominantly or disproportionately),
(C) changes in the country or countries in which the Project is being
conducted or any such Entity conducts its businesses affecting generally the
industries in which any such Entity operates (as opposed to changes affecting
any such Entity or group of Entities specifically, predominantly or
disproportionately), (D) the effect of the public announcement of this
Agreement or the pendency of the transactions contemplated hereby and by the
other Transaction Documents, (E) changes in generally accepted accounting
principles in the U.S. or elsewhere, or (F) the Mandatory Metals Hedge Agreements,
or (ii) any event, change, or circumstance that has a material adverse
effect on the ability of such Entity to perform its obligations under, and to
consummate the transactions contemplated by, the Transaction Documents to which
it is a party;


(b)           with respect to New Sweden 1
and/or New Sweden 2, (i) a material adverse effect on or change to
the condition (financial or otherwise), business, performance, operations, or
properties of New Sweden 1 and New Sweden 2, taken together, except
to the extent that such effect or change is attributable to or results from
(A) changes affecting generally the securities or capital markets or
economic conditions in the country or countries in which any such Entity
conducts its businesses or the Project is conducted, (B) changes affecting
generally the industries in which any such Entity operates (as opposed to
changes affecting any such Entity or group of Entities specifically,
predominantly or disproportionately), (C) changes in the country or
countries in which the Project is being conducted or any such Entity conducts
its businesses affecting generally the industries in which any such Entity
operates (as opposed to changes affecting any such Entity or group of Entities
specifically, predominantly or disproportionately), (D) the effect of the
public announcement of this Agreement or the pendency of the transactions
contemplated hereby and by the other Transaction Documents, or (E) changes
in generally accepted accounting principles in the U.S. or elsewhere, or (ii) any
event, change, or circumstance that has a material adverse effect on the
ability of such Entity to perform its obligations under, and to consummate the
transactions contemplated by, the Transaction Documents to which it is a party;
or


(c)           with respect to Apex, Apex Sweden,
Apex Luxembourg, and/or Service Company (i) a material adverse effect on
or change to the condition (financial or otherwise), business, performance,
operations, or properties of Apex and its Subsidiaries, taken as a whole, except
to the extent that such effect or change is attributable to or results from
(A) changes affecting generally the securities or capital markets or
economic conditions in the country or countries in which any such Entity
conducts its businesses or the Project is conducted, (B) changes affecting
generally the industries in which any such Entity operates (as opposed to
changes affecting any such Entity or group of Entities specifically,
predominantly or disproportionately), (C) changes in the country or



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countries in
which the Project is being conducted or any such Entity conducts its businesses
affecting generally the industries in which any such Entity operates (as
opposed to changes affecting any such Entity or group of Entities specifically,
predominantly or disproportionately), (D) the effect of the public
announcement of this Agreement or the pendency of the transactions contemplated
hereby and by the other Transaction Documents, or (E) changes in generally
accepted accounting principles in the U.S. or elsewhere, or (ii) any
event, change, or circumstance that has a material adverse effect on the
ability of such Entity to perform its obligations under, and to consummate the
transactions contemplated by, the Transaction Documents to which it is a party.


“Material Project Documents” means the
Contracts listed on Schedule B and each other Contract to which MSC is a party
or by which MSC’s assets are bound, which is in effect on the date hereof, and
has payments due to or from MSC thereunder in excess of US$10,000,000.00.


“Metals Hedge Novation Agreements” means


(a)           that certain Novation Agreement, dated on or about the
date hereof, among BNP Paribas, Old Metals, as transferor, and Apex Luxembourg,
as transferee, concerning that certain ISDA Master Agreement (together with the
Schedule and the Credit Support Annex thereto), dated as of
March 16, 2005 (as amended by that certain Amendment No. 1 to
Master Agreement, dated as of June 16, 2005, and as further amended
by that certain Amendment and Restatement of the Schedule to the Master
Agreement, dated as of December 1, 2005), between BNP Paribas and Old
Metals;


(b)           that certain Novation Agreement,
dated on or about the date hereof, among BNP Paribas, Apex Luxembourg, as
transferor, and New Cayman, as transferee, concerning that certain ISDA Master
Agreement (together with the Schedule and the Credit Support Annex thereto),
dated as of March 16, 2005 (as amended by that certain Amendment
No. 1 to Master Agreement, dated as of June 16, 2005, and as
further amended by that certain Amendment and Restatement of the Schedule to
Master Agreement, dated as of December 1, 2005), between BNP Paribas
and Old Metals, as novated by the Novation Agreement specified in
clause (a) of this definition and as further amended by that certain
Schedule to Master Agreement, dated on or about the date hereof, between BNP
Paribas and New Cayman;


(c)           that certain Novation Agreement,
dated on or about the date hereof, among Barclays Bank PLC, Old Metals, as
transferor, and Apex Luxembourg, as transferee, concerning that certain ISDA
Master Agreement (together with the Schedule and the Credit Support Annex
thereto), dated as of September 4, 1998 (as amended by that certain
Amendment, dated February 18, 2005, as further amended by that
certain Amendment No. 2, dated as of June 16, 2005, and as
further amended by that certain Amendment and Restatement of the Schedule to
Master Agreement, dated as of December 1, 2005), between Barclays
Bank PLC and Old Metals; and


(d)           that certain Novation Agreement, dated
on or about the date hereof, among Barclays Bank PLC, Apex Luxembourg, as
transferor, and New Cayman, as



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transferee,
concerning that certain ISDA Master Agreement (together with the Schedule and
the Credit Support Annex thereto), dated as of September 4, 1998 (as
amended by that certain Amendment, dated February 18, 2005, as
further amended by that certain Amendment No. 2, dated as of
June 16, 2005, and as further amended by that certain Amendment and
Restatement of the Schedule to Master Agreement, dated as of
December 1, 2005), between Barclays Bank PLC and Old Metals, as
novated by the Novation Agreement specified in clause (c) of this
definition and as further amended by that certain Schedule to Master Agreement,
dated on or about the date hereof, between Barclays Bank PLC and New Cayman.


“Metals Quotaholders Agreement” has the meaning
specified in Section 2.5(a)(v).


“Mining Concessions” means, collectively, the
mining concessions listed on Section 4.3(a) of the Apex Disclosure Schedule.


“Minute Books” has the meaning specified in
Section 4.1(d).


“MOU” means that certain Non-Binding
Memorandum of Understanding, dated June 29, 2006, between Apex and
Sumitomo.


“MSC” has the meaning specified in the
recitals.


“MSC Management Agreement” means that certain
Amended and Restated Management and Services Agreement, dated on or about the
date hereof, between MSC and Service Company.


“MSC Shareholders Agreement” has the meaning
specified in Section 2.5(a)(iv).


“MSC Subordinated Debt” means the Apex Sweden
MSC Subordinated Debt, the New Sweden 1 MSC Subordinated Debt, and the New
Cayman MSC Subordinated Debt.


“New and Amended Financing Documents” means the
agreements, documents, and instruments listed on Schedule F.


“New Cayman” has the meaning specified in the
recitals.


“New Cayman Acquired Shares” means shares of
New Cayman representing 35% of the issued and outstanding shares of New Cayman
as of the Closing.


“New Cayman Shareholders Agreement” has the
meaning specified in Section 2.5(a)(vi).


“New Concentrate Sales Agreement” means that
certain Concentrate Sales Agreement, dated on or about the date hereof, between
MSC and New Metals.


“New Metals” has the meaning specified in the
recitals.



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“New Metals Management Agreement” means that
certain Management and Services Agreement, dated on or about the date hereof,
among New Metals, New Cayman, and Service Company.


“New Sweden 1” has the meaning specified
in the recitals.


“New Sweden 1 Acquired Shares” means
shares of New Sweden 1 representing 100% of the issued and outstanding
shares of New Sweden 1 as of the Closing.


“New Sweden 1 MSC Subordinated Debt” has
the meaning specified in the recitals.


“New Sweden 2” has the meaning specified
in the recitals.


“New Sweden 2 Acquired Shares” means
shares of New Sweden 2 representing 100% of the issued and
outstanding shares of New Sweden 2 as of the Closing.


“Old Metals” means Apex Metals GmbH, a Gesellschaft mit beschränkter Haftung organized under the
Laws of Switzerland, with its seat in Zug, Canton of Zug, Switzerland and with
a registered address of c/o Juris Treuhand AG, Industriestrasse 47, 6304 Zug,
Switzerland.


“Old Metals Concentrate Sales Agreement Termination”
means that certain Termination Agreement, dated as of the date hereof, between
MSC and Old Metals, concerning that certain Concentrate Sales Agreement, dated
as of December 1, 2005, between MSC and Old Metals.


“Omnibus Amendment Agreement” means that
certain Omnibus Amendment Agreement, dated as of September 20, 2006, among
MSC, Apex, Apex Sweden, Apex Luxembourg, Old Metals, New Cayman, New Metals,
New Sweden 1, New Sweden 2, BNP Paribas, Barclays Capital,
Corporación Andina de Fomento, JPMorgan Chase Bank, N.A., the senior lenders
party thereto, and the hedge banks party thereto.


“Operational Agreements” means all Contracts to
which Old Metals is a party or by which its assets are bound requiring payments
in excess of US$25,000.00 on an annual basis or that are otherwise material to
Old Metals.


“Option Agreement” means the Option Agreement
in the form attached hereto as Exhibit H, being entered into by Apex and
Sumitomo.


“Other Property Rights” means, collectively,
easements, leases, mining and civil usufructs, rights of way, surface rights,
real estate other than mining concessions, and other property rights.


“Party” or “Parties” has the meaning
specified in the preamble.


“Performance Security” has the meaning
specified in Section 4.17.


“Permitted Liens” means, with respect to any
Person, the following: (a) Liens for Taxes, assessments, or other
governmental charges or levies not yet due and payable or that are being



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contested in good faith
through appropriate proceedings diligently conducted and for which adequate
reserves (as determined on the basis of generally accepted accounting
principles as used in the U.S.) have been established; (b) Liens of
carriers, warehousemen, mechanics, materialmen, and landlords incurred in the
ordinary course of business for sums not yet due or that are being contested in
good faith through appropriate proceedings diligently conducted and for which
adequate reserves (as determined on the basis of generally accepted accounting
principles as used in the U.S.) have been established; (c) Liens incurred
in the ordinary course of business in connection with workmen’s compensation,
unemployment insurance, or other forms of governmental insurance or benefits,
or to secure performance of tenders, statutory obligations, legal privileges,
leases, bank guarantees, letters of credit, and Contracts (other than for
borrowed money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds; (d) purchase money security
interests or Liens on property acquired or held by the applicable Person in the
ordinary course of business to secure the purchase price of such property or to
secure indebtedness incurred solely for the purpose of financing the
acquisition of such property; (e) easements, restrictions, and other minor
defects of title that are not, in the aggregate, material or which do not,
individually or in the aggregate, materially and adversely affect the value of
the property affected thereby or the use thereof for its intended purpose; and
(f) Liens incurred under the Financing Documents.


“Person” means any natural person or Entity.


“Port Agreement” means that certain
Construction and Port Services Agreement, dated as of
September 1, 2003 (as amended by First Amendment to the Construction
and Port Services Agreement, dated as of March 31, 2005, and as further
amended by Second Amendment to Construction and Port Services Agreement, dated
as of December 16, 2005) by and between MSC and Puerto de Mejillones
S.A.


“Preemptive Rights” means (a) the
preferred rights that the shareholders of a sociedad anónima
have, pursuant to Article 255 of the Bolivian Corporations Law, entitling
them to purchase newly issued shares of such sociedad anónima in accordance
with their pro rata shareholding; (b) the
preferred rights that the quotaholders of a Gesellschaft mit
beschränkter Haftung have, pursuant to Article 787 of the Swiss Code
of Obligations, entitling them to acquire a proportional increase of their
quotas; and (c) the preferred rights that the shareholders of a Swedish privat aktiebolag have entitling them to purchase newly
issued shares of such privat aktiebolag
in accordance with their pro rata shareholding.


“Project” means the development, establishment,
construction, and operation by MSC of the San Cristóbal open pit silver, zinc,
and lead mine and processing facilities located in the Potosi Department,
Bolivia, the processing of silver, zinc, and lead ores to recover silver
bearing zinc, and lead concentrates, and related infrastructure (including rail
transportation, power transmission, and port facilities), and the marketing and
sale of the products thereof and other activities reasonably ancillary thereto.


“Project Information” means all the information
related to the Project contained in the Apex Disclosure Bundle taken as a
whole.



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“Purchase Price” has the meaning specified in
Section 2.2.


“Rail Transportation Agreement” means that
certain Transportation Agreement, dated as of March 15, 2005, between
MSC and Antofagasta Railway Company PLC.


“Reimbursement Agreement” means a reimbursement
agreement in the form attached hereto as Exhibit I, being entered into by
Sumitomo in favor of Apex.


“Reference Exchange Rate” has the meaning
specified in Section 8.11(d).


“Restriction” means, with respect to any share
capital, partnership interest, membership right or membership interest in a
limited liability company, or other equity interest or security, any voting or
other trust or agreement, option, warrant, preemptive right (other than
Preemptive Rights), right of first offer, right of first refusal, escrow
arrangement, proxy, buy-sell agreement, power of attorney, or other
Contract (but excluding this Agreement and the other Transaction Documents), or
any License that, conditionally or unconditionally, (a) grants to any
Person the right to purchase or otherwise acquire, or obligates any Person to
sell or otherwise dispose of or issue, or otherwise gives or, whether upon the
occurrence of any event or with notice or lapse of time or both or otherwise,
may give any Person the right to acquire (i) any such share capital,
partnership interest, membership right or membership interest in a limited
liability company, or other equity interest or security; (ii) any proceeds
of, or any distributions paid or that are or may become payable with respect
to, any such share capital, partnership interest, membership right or membership
interest in a limited liability company, or other equity interest or security;
or (iii) any interest in such share capital, partnership interest,
membership right or membership interest in a limited liability company, or
other equity interest or security or any such proceeds or distributions;
(b) restricts or, whether upon the occurrence of any event or with notice
or lapse of time or both or otherwise, is reasonably likely to restrict the
transfer or voting of, or the exercise of any rights or the enjoyment of any
benefits arising by reason of ownership of, any such share capital, partnership
interest, membership right or membership interest in a limited liability
company, or other equity interest or security or any such proceeds or
distributions; or (c) creates or, whether upon the occurrence of any event
or with notice or lapse of time or both or otherwise, is reasonably likely to
create a Lien or purported Lien affecting such share capital, partnership
interest, membership right or membership interest in a limited liability
company, or other equity interest or security, proceeds or distributions.


“Scheduled Contracts” has the meaning specified
in Section 4.7(a).


“SEK” means Swedish kronas, the lawful currency
of Sweden.


“Service Company” means Apex Silver Mines
Corporation, a corporation organized under the Laws of Delaware, U.S.A.


“Subsidiary” means, with respect to any Person:


(a)           a corporation a majority in voting
power of whose share capital with voting power, under ordinary circumstances,
to elect directors is, at the date of determination thereof, directly or
indirectly, owned by such Person, by a Subsidiary of



 16
 






 



 


such Person,
or by such Person and one or more Subsidiaries of such Person, without regard
to whether the voting of such share capital is subject to a voting agreement or
similar Restriction,


(b)           a partnership or limited liability
company in which such Person or a Subsidiary of such Person is, at the date of
determination thereof, (i) in the case of a partnership, a general partner
of such partnership with the power affirmatively to direct the policies and
management of such partnership or (ii) in the case of a limited liability
company, the managing member or, in the absence of a managing member, a member
with the power affirmatively to direct the policies and management of such
limited liability company, or


(c)           any Entity (other than a corporation,
partnership, or limited liability company) in which such Person, a Subsidiary
of such Person, or such Person and one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof, has (i) the
power to elect or direct the election of a majority of the members of the
governing body of such Person (whether or not such power is subject to a voting
agreement or similar Restriction) or (ii) in the absence of such a
governing body, at least a majority ownership interest.


“Sumitomo” has the meaning specified in the
preamble.


“Sumitomo Completion Agreement” means that
certain Sumitomo Completion Agreement, dated on or about the date hereof, among
Sumitomo, Barclays Capital, BNP Paribas, and JPMorgan Chase Bank, N.A.


“Sumitomo Disclosure Schedule” means the
schedule so named attached hereto as Schedule D.


“Sumitomo Guaranty” means the Guaranty in the
form attached hereto as Exhibit E, being entered into by Sumitomo in favor
of Apex Sweden, Apex Luxembourg, and Apex.


“Sweden” means the Kingdom of Sweden.


“Swiss Company Law” means Articles 620 to 926
of the Swiss Code of Obligations.


“Switzerland” means the Swiss Confederation.


“Tax Authority” means any Governmental
Authority of any kind with the power to impose any Tax.


“Tax” or “Taxes” means all taxes,
however denominated, foreign or domestic, including any monetary adjustments,
interest, penalties or other additions to tax that may become payable in
respect thereof, imposed by any Tax Authority, which taxes include all income
or profits taxes, payroll and employee withholding taxes, unemployment
insurance, social security taxes, income withholding taxes, sales and use
taxes, value added taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business or municipal license (patente
municipal) taxes,



 17
 






 



 


occupation taxes, real
and personal property taxes, stamp taxes, environmental taxes, severance taxes,
production taxes, transfer taxes, workers’ compensation, governmental charges,
and other obligations of the same or of a similar nature to any of the
foregoing.


“Tax Returns” means all returns, declarations,
reports, forms, claims for refund, estimates, information returns, and
statements and other documentation, including amendments, required to be
maintained or filed with or supplied to any Tax Authority in connection with
any Taxes.


“Third Party Concentrate Sales Agreement” has
the meaning specified in the Common Security Agreement.


“Transaction Documents” means this Agreement,
the MSC Shareholders Agreement, the Metal Quotaholders Agreement, the New
Cayman Shareholders Agreement, the Deferred Payments Agreement, the Dispute
Resolution Agreement, the MSC Management Agreement, the New Metals Management
Agreement, the Option Agreement, the New and Amended Financing Documents, the
Metals Hedge Novation Agreements, the Old Metals Concentrate Sales Agreement
Termination, the New Concentrate Sales Agreement, the Apex Parent Guarantees,
the Sumitomo Guaranty, the Reimbursement Agreement, and any and all other
documents, instruments, and agreements being or to be executed and delivered in
connection with the transactions contemplated hereby (including in connection
with the satisfaction of each Party’s conditions hereunder) or thereby.


“Transmission Line Loan Documents” means
(a) that certain Power Line Construction and Transmission Agreement, dated
as of January 14, 2005 (as amended by the First Amendment to Power
Line Construction and Transmission Agreement, dated as of
March 14, 2005, and as further amended by the Second Amendment to
Power Line Construction and Transmission Agreement, dated as of
August 29, 2005), among MSC, Ingelec S.A., Ingelec Transportadora de
Electricidad S.A., Ingelec Electricity Transportation Investments, Corp., and
San Cristóbal Transportadora de Electricidad, S.A.; (b) that certain Loan
Agreement, dated as of April 15, 2005, between ASC Bolivia and San
Cristóbal Transportadora de Electricidad, S.A.; (c) that certain
Promissory Note, dated as of April 15, 2005, made by San Cristóbal
Transportadora de Electricidad, S.A. in favor of ASC Bolivia; (d) that
certain Escrow Agreement and Account Pledge and Security Agreement, dated as of
April 15, 2005, among San Cristóbal Transportadora de Electricidad,
S.A., ASC Bolivia, and Atlantic Security Bank, Cayman Islands; (e) that
certain Pledge Agreement, dated as of April 15, 2005, made by Ingelec
Electricity Transportation Investments, Corp., Raúl Quiroga, and Rene Fernández
in favor of ASC Bolivia; (f) that certain Pledge Agreement, dated as of
April 15, 2005, made by Ingelec Transportadora de Electricidad S.A.
in favor of ASC Bolivia; (g) that certain Guaranty, dated as of
April 15, 2005, made by Ingelec S.A., Ingelec Transportadora de
Electricidad S.A., and Ingelec Electricity Transportation Investments, Corp. in
favor of ASC Bolivia; and (h) a moveables pledge agreement to be entered
into pursuant to the agreement referred to in clause (b) of this definition.


“Unaudited Balance Sheet Date” has the meaning
specified in Section 4.5(a).


“Unaudited Separate Balance Sheet Date” has the
meaning specified in Section 4.5(a).



 18
 






 



 


“U.S.” or “U.S.A.” means the United
States of America.


“US$” means Dollars.


ARTICLE
II

PURCHASE AND SALE; CLOSING


Section 2.1             Purchase
and Sale.  On and subject to the
terms and conditions of this Agreement, simultaneously with the execution
and delivery of this Agreement by the Parties and for the consideration
specified in Section 2.2:


(a)           Sumitomo is purchasing from Apex
Sweden, and Apex Sweden is selling, transferring, assigning, conveying, and
delivering to Sumitomo, all the right, title, and interest of Apex Sweden in
and to the New Sweden 1 Acquired Shares, free and clear of all Liens and
Restrictions, other than Liens or Restrictions (i) created by this
Agreement or any of the other Transaction Documents, (ii) imposed by
applicable Law or the Governing Documents of New Sweden 1 generally on all
shares of New Sweden 1, or (iii) existing under the Financing
Documents;


(b)           Sumitomo is purchasing from Apex
Sweden, and Apex Sweden is selling, transferring, assigning, conveying, and
delivering to Sumitomo, all the right, title, and interest of Apex Sweden in
and to the New Sweden 2 Acquired Shares, free and clear of all Liens and
Restrictions, other than Liens or Restrictions (i) created by this
Agreement or any of the other Transaction Documents, (ii) imposed by
applicable Law or the Governing Documents of New Sweden 2 generally on all
shares of New Sweden 2, or (iii) existing under the Financing
Documents; and


(c)           Sumitomo is purchasing from Apex
Luxembourg, and Apex Luxembourg is selling, transferring, assigning, conveying,
and delivering to Sumitomo, all the right, title, and interest of Apex Luxembourg
in and to the New Cayman Acquired Shares, free and clear of all Liens and
Restrictions, other than Liens or Restrictions (i) created by this
Agreement or any of the other Transaction Documents, (ii) imposed by
applicable Law or the Governing Documents of New Cayman generally on all shares
of New Cayman, or (iii) existing under the Financing Documents.


Section 2.2             Purchase
Price  Simultaneously with execution
and delivery of this Agreement, Sumitomo is (a) paying or causing to be
paid to Apex Sweden and Apex Luxembourg US$224,000,000.00 (the “Purchase
Price”) by wire transfer of immediately available Dollar funds to such
account or accounts of Apex , as Apex Sweden and/or Apex Luxembourg has
specified to Sumitomo prior to the date hereof and (b) agreeing to make
payments to Apex Sweden at the times, in the amounts, and otherwise in
accordance with and on the terms set forth in the Deferred Payments Agreement
(the “Deferred Payments”).


Section 2.3             Allocation
of Purchase Price.  The Parties shall
allocate the Purchase Price among the New Sweden 1 Acquired Shares, the
New Sweden 2 Acquired Shares, the New Cayman Acquired Shares, and the ASC
Bolivia Acquired Assets as specified on Schedule E for



 19
 






 



 


all purposes; provided that such allocations are
consistent with Law (including financial reporting and Tax Law).  The Parties covenant and agree that
(a) such allocation was determined in an arm’s length negotiation and none
of the Parties shall take a position on any Tax Return before any Tax Authority
or in any judicial proceeding that is in any way inconsistent with such
allocation without the prior written consent of the other Parties or unless
specifically required pursuant to a determination by an applicable Tax
Authority; (b) they shall cooperate with each other in connection with the
preparation, execution, and filing of all Tax Returns related to such
allocation; and (c) they shall promptly advise each other regarding the
existence of any tax audit, controversy, or litigation related to such allocation.  The parties agree to treat any amounts
payable pursuant ARTICLE VII, as an adjustment to the Purchase Price for Tax
purposes, unless the Law, pursuant to a determination by an applicable Tax
Authority, causes such a payment not to be treated as an adjustment to the
Purchase Price for Tax purposes.


Section 2.4             Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) commenced at 9:00 a.m., George
Town, Grand Cayman, Cayman Islands, British West Indies time in George Town,
Grand Cayman, Cayman Islands, British West Indies, on date hereof (the “Closing
Date”).


Section 2.5             Closing
Deliveries.


(a)           Apex Closing Deliveries.  At the Closing, Apex, Apex Sweden, and Apex
Luxembourg are delivering or causing to be delivered to Sumitomo:


(i)                                     one
or more certificates evidencing the New Sweden 1 Acquired Shares, duly
endorsed by Apex Sweden to Sumitomo, together with a copy of the shareholders’
register of New Sweden 1 evidencing that Sumitomo has been entered therein
as holder of the New Sweden 1 Acquired Shares;


(ii)                               one
or more certificates evidencing the New Sweden 2 Acquired Shares, duly
endorsed by Apex Sweden to Sumitomo, together with a copy of the shareholders’
register of New Sweden 2 evidencing that Sumitomo has been entered therein
as holder of the New Sweden 2 Acquired Shares;


(iii)                            one
or more certificates evidencing the New Cayman Acquired Shares, duly endorsed
by Apex Luxembourg to Sumitomo, together with a copy of the shareholders’
register of New Cayman evidencing that Sumitomo has been entered therein as
holder of the New Cayman Acquired Shares;


(iv)                           counterparts
of the MSC Shareholders Agreement in the form attached hereto as Exhibit A
(the “MSC Shareholders Agreement”), duly executed by Apex Luxembourg,
Apex Sweden, Old Metals, New Sweden 1, and MSC;



 20














 


 


(v)                                 counterparts
of the Metals Quotaholders Agreement in the form attached hereto as
Exhibit B (the “Metals Quotaholders Agreement”), duly executed by
Apex Sweden, New Sweden 2, and New Metals;


(vi)                              counterparts
of the Apex Silver Finance Shareholders Agreement in the form attached hereto
as Exhibit C (the “New Cayman Shareholders Agreement”), duly
executed by Apex Luxembourg and New Cayman;


(vii)                        counterparts of the Dispute
Resolution Agreement in the form attached hereto as Exhibit G (the “Dispute
Resolution Agreement”), duly executed by Apex, Apex Luxembourg, Apex
Sweden, New Metals, Service Company, New Sweden 1, New Sweden 2, MSC,
New Metals, and New Cayman;


(viii)                     counterparts of the MSC Management
Agreement, duly executed by MSC and Service Company;


(ix)                             counterparts of the New
Metals Management Agreement, duly executed by New Metals, New Cayman, and
Service Company;


(x)                                counterparts of the
Deferred Payments Agreement, duly executed by Apex Sweden;


(xi)                             counterparts of the Option
Agreement, duly executed by Apex;


(xii)                          a copy of the Apex Disclosure
Bundle, which copy has been reviewed and initialed by representatives of Apex
in order to ensure that it is identical to the copies being retained by Apex
and Sumitomo;


(xiii)                       the various certificates, instruments,
and documents referred to in Section 6.2;


(xiv)                      counterparts of the New and
Amended Financing Documents, duly executed by Apex and its Subsidiaries that
are parties thereto;


(xv)                         written letters of resignation
from each of the current officers, if any, and members of the boards of
directors of New Sweden 1 and New Sweden 2 to be effective
immediately following the Closing;


(xvi)                      counterparts of the Metals Hedge
Novation Agreements, duly executed by Old Metals and New Cayman;


(xvii)                   counterparts of the Old Metals
Concentrate Sales Agreement Termination, duly executed by Old Metals and MSC;



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(xviii)                counterparts of the New Concentrate
Sales Agreement, duly executed by New Metals and MSC;


(xix)                        a written letter of resignation
from one director of MSC;


(xx)                           a copy of Articles of
Association of New Metals in the form of the German language version attached
as Exhibit A to the Metals Quotaholders Agreement;


(xxi)                        a copy of Articles of
Association of New Cayman in the form attached as Exhibit A to the New Cayman
Shareholders Agreement;


(xxii)                     counterparts of the Reimbursement
Agreement, duly executed by Apex;


(xxiii)                  US$50,000.00 to Sumitomo by wire
transfer of immediately available Dollar funds to such account of Sumitomo as
Sumitomo has specified to Apex prior to the date hereof in respect of a fee
being paid by Apex to Sumitomo in connection with Sumitomo’s execution and
delivery of the Sumitomo Completion Agreement; 


(xxiv)                 the Apex Parent Guarantees, duly
executed by Apex; and


(xxv)                    such other documents and
instruments as Sumitomo has reasonably requested.


(b)           Sumitomo
Closing Deliveries.  At the Closing,
Sumitomo is delivering or causing to be delivered to Apex, Apex Sweden, and
Apex Luxembourg:


(i)            the Purchase Price;


(ii)           counterparts of the New
Cayman Shareholders Agreement, duly executed by Sumitomo;


(iii)         the
Sumitomo Guaranty, duly executed by Sumitomo;


(iv)         counterparts
of the Dispute Resolution Agreement, duly executed by Sumitomo;


(v)          counterparts
of the Deferred Payments Agreement, duly executed by Sumitomo;


(vi)         counterparts
of the Option Agreement, duly executed by Sumitomo;



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(vii)                        counterparts of the
Reimbursement Agreement, duly executed by Sumitomo;


(viii)                     a copy of the Apex Disclosure
Bundle, which copy has been reviewed and initialed by representatives of
Sumitomo in order to ensure that it is identical to the copies being retained
by Apex and Sumitomo;


(ix)                             the various certificates,
instruments, and documents referred to in Section 6.3;


(x)                                counterparts of the New
and Amended Financing Documents, duly executed by Sumitomo; and


(xi)                             such other documents and
instruments as Apex has reasonably requested.


Section 2.6             MOU.  Sumitomo and Apex hereby agree that upon the
execution and delivery of this Agreement by the Parties, the MOU is hereby terminated,
and this Agreement and the other Transaction Documents contain, and are
intended as, a complete statement of all of the terms of the agreements between
the Parties and the other parties thereto with respect to the matters provided
for in the MOU, and supersede and discharge the MOU.


ARTICLE
III

TRANSACTION REPRESENTATIONS AND WARRANTIES


Section 3.1             Apex’s Representations and
Warranties.  Apex represents and
warrants with respect to itself, Apex Sweden, Apex Luxembourg, Old Metals, and
Service Company to Sumitomo that the statements contained in this Section 3.1
are true, correct, and complete as of the date of this Agreement (except to the
extent such representation and warranty specifically speaks as of a different
date).


(a)           Organization.  It is duly
organized, validly existing, and, to the extent applicable in its jurisdiction
of organization, in good standing, under the Laws of its jurisdiction of
organization.


(b)           Power
and Authority.  (i) It has all
requisite corporate or other Entity power and authority to enter into, and to
perform its obligations under, this Agreement and each Transaction Document
being or to be executed and delivered by it pursuant to this Agreement; and
(ii) the execution and delivery by it of this Agreement and each Transaction
Document to which it is or shall be a party, and the performance by it of its
obligations under this Agreement and each Transaction Document to which it is
or shall be a party, have been duly authorized by all requisite corporate or
other Entity action.


(c)           Validity.  Each of this Agreement and the other
Transaction Documents being or to be executed and delivered by it has been duly
executed and delivered by it, and assuming the due execution and delivery by
each other party hereto and thereto, this



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Agreement constitutes, and when executed and delivered by it pursuant
to this Agreement, each Transaction Document being or to be executed and
delivered by it shall constitute, its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, except as such
enforceability may be affected by applicable bankruptcy, reorganization,
insolvency, moratorium, or similar Laws affecting creditors’ rights generally.


(d)           Consents.  Except for any required Authorizations and
Government Approvals set forth in Section 3.1(d) of the Apex Disclosure
Schedule or that have been obtained or made, no Authorization or Government
Approval is required, on behalf of it in connection with the execution,
delivery, or performance by it of this Agreement or any of the other
Transaction Documents being or to be executed and delivered by it, or the
consummation of the transactions contemplated hereby and thereby.


(e)           No
Conflicts.  Assuming the
Authorizations and Government Approvals set forth in Section 3.1(d) of the
Apex Disclosure Schedule will be obtained or made, the execution and delivery
by it of this Agreement and the other Transaction Documents being or to be
executed and delivered by it do not, and the performance by it of its
obligations under this Agreement and the other Transaction Documents being or
to be executed and delivered by it and the consummation of the transactions
contemplated hereby and thereby do not and shall not, (i) violate or
conflict with any provision of its Governing Documents; (ii) violate any
of the terms, conditions, or provisions of any Law or Government Approval to
which it is subject or by which it or any of its assets is bound;
(iii) result in a violation or breach of, or (with or without the giving
of notice or lapse of time or both) constitute a default (or give rise to any
right of termination or cancellation) under, or give rise to or accelerate any
material obligation under, or pursuant to, any material Contract to which it is
a party or by which it or any of its assets is bound; or (iv) result in a
Lien or Restriction (other than any Lien or Restriction of the type referred to
in the first sentences of Section 3.1(l) 
and Section 3.1(o)) on any of the New Sweden 1 Acquired
Shares, the New Sweden 2 Acquired Shares, or the New Cayman Acquired
Shares.


(f)            Brokers’
and Finders’ Fees.  There is no
broker, finder, investment banker, or similar intermediary that has been
retained by, or is authorized to act on behalf of, it or any of its Affiliates
or any of their respective officers or directors who shall be entitled to any
fee or commission in connection with this Agreement or any other Transaction
Document or upon consummation of the transactions contemplated hereby or
thereby and which fee or commission could be or become a liability of Sumitomo,
any of Sumitomo’s Affiliates, MSC, Old Metals, New Metals, New Cayman, or
either Acquired Entity.


(g)           Capitalization
of New Sweden 1.  (i) New
Sweden 1 has an issued and registered share capital of SEK 100,000
divided into 1,000 issued and outstanding shares, all in a single series,
with no preference; (ii) the issued and outstanding shares of New
Sweden 1 are as set forth on Schedule A-1, and the information set
forth therein is true, correct, and complete; (iii) all of such issued and
outstanding shares are duly authorized, validly issued, fully paid, and
nonassessable and not issued in violation of any



 24
 






 



 


Preemptive Rights; (iv) there are no other issued or outstanding
capital, subscriptions, options, warrants, puts, calls, trusts (voting or
otherwise), rights, exchangeable or convertible securities, or other
commitments or agreements of any nature relating to the capital or other
securities of or ownership interests in New Sweden 1 or obligating New
Sweden 1, at any time or upon the happening of any event, to issue,
transfer, deliver, sell, repurchase, redeem, or otherwise acquire, or cause to
be issued, transferred, delivered, sold, repurchased, redeemed, or otherwise
acquired, any of its share capital, other securities, or ownership interests or
any phantom shares, phantom equity interests, or stock or equity appreciation
rights, or other ownership interests in New Sweden 1 or obligating New
Sweden 1 to grant, extend, or enter into any such subscription, option,
warrant, put, call, trust, right, exchangeable or convertible security,
commitment, or agreement.


(h)           Capitalization
of New Sweden 2.  (i) New
Sweden 2 has an issued and registered share capital of SEK 100,000
divided into 1,000 issued and outstanding shares, all in a single series,
with no preference; (ii) the issued and outstanding shares of New
Sweden 2 are as set forth on Schedule A-1, and the information set
forth therein is true, correct, and complete; (iii) all of such issued and
outstanding shares are duly authorized, validly issued, fully paid, and
nonassessable and not issued in violation of any Preemptive Rights;
(iv) there are no other issued or outstanding capital, subscriptions,
options, warrants, puts, calls, trusts (voting or otherwise), rights, exchangeable
or convertible securities, or other commitments or agreements of any nature
relating to the capital or other securities of or ownership interests in New
Sweden 2 or obligating New Sweden 2, at any time or upon the
happening of any event, to issue, transfer, deliver, sell, repurchase, redeem,
or otherwise acquire, or cause to be issued, transferred, delivered, sold,
repurchased, redeemed, or otherwise acquired, any of its share capital, other
securities, or ownership interests or any phantom shares, phantom equity
interests, or stock or equity appreciation rights, or other ownership interests
in New Sweden 2 or obligating New Sweden 2 to grant, extend, or enter
into any such subscription, option, warrant, put, call, trust, right,
exchangeable or convertible security, commitment, or agreement.


(i)            Capitalization
of MSC.  The share capital of MSC is
Bs.2,151,361,000.00, divided into 21,513,610 registered shares, all in a
single series, with no preference, all of which are issued and
outstanding.  The issued and outstanding
shares of MSC are set forth on Schedule A-2, and the information set
forth therein is true, correct, and complete. 
All of such issued and outstanding shares are duly authorized, validly
issued, fully paid, and nonassessable, and not issued in violation of any
Preemptive Rights.  Except as provided in
the Financing Documents and the New and Amended Financing Documents, there are
no other issued or outstanding share capital, subscriptions, options, warrants,
puts, calls, trusts (voting or otherwise), rights, exchangeable or convertible
securities, or other commitments or agreements of any nature relating to the
share capital or other securities of or ownership interests in MSC or
obligating MSC, at any time or upon the happening of any event, to issue,
transfer, deliver, sell, repurchase, redeem, or otherwise acquire, or cause to
be issued, transferred, delivered, sold, repurchased, redeemed, or otherwise
acquired, any of its share capital, other securities, or ownership interests or
any



 25
 






 



 


phantom shares, phantom equity interests, or stock or equity
appreciation rights, or other ownership interests in MSC or obligating MSC to
grant, extend, or enter into any such subscription, option, warrant, put, call,
trust, right, exchangeable or convertible security, commitment, or agreement.


(j)            Capitalization
of New Metals.  (i) The capital
of New Metals is CHF 20,000, divided into two issued and outstanding
quotas of a single series and with no preference; (ii) the issued and
outstanding quotas of New Metals are as set forth on Schedule A-2, and
the information set forth therein is true, correct, and complete;
(iii) such issued and outstanding quotas are duly authorized, validly
issued, fully paid, and nonassessable, and not issued in violation of any
Preemptive Rights; and (iv) except as provided in the Financing Documents
and the New and Amended Financing Documents, there are no other issued or
outstanding capital, subscriptions, options, warrants, puts, calls, trusts
(voting or otherwise), rights, exchangeable or convertible securities, or other
commitments or agreements of any nature relating to the capital or other
securities of or ownership interests in New Metals or obligating New Metals, at
any time or upon the happening of any event, to issue, transfer, deliver, sell,
repurchase, redeem, or otherwise acquire, or cause to be issued, transferred,
delivered, sold, repurchased, redeemed, or otherwise acquired, any of its share
capital, other securities, or ownership interests or any phantom shares,
phantom equity interests, or stock or equity appreciation rights, or other
ownership interests in New Metals or obligating New Metals to grant, extend, or
enter into any such subscription, option, warrant, put, call, trust, right,
exchangeable or convertible security, commitment, or agreement.


(k)           Capitalization
of New Cayman.  (i) New Cayman
has an issued and registered share capital of US$100 divided into 100 issued
and outstanding shares, all in a single series, with no preference;
(ii) the issued and outstanding shares of New Cayman are as set forth on
Schedule A-1, and the information set forth therein is true, correct, and
complete; (iii) all of such issued and outstanding shares are duly
authorized, validly issued, fully paid, and nonassessable; (iv) there are
no other issued or outstanding capital, subscriptions, options, warrants, puts,
calls, trusts (voting or otherwise), rights, exchangeable or convertible
securities, or other commitments or agreements of any nature relating to the
capital or other securities of or ownership interests in New Cayman or
obligating New Cayman, at any time or upon the happening of any event, to
issue, transfer, deliver, sell, repurchase, redeem, or otherwise acquire, or
cause to be issued, transferred, delivered, sold, repurchased, redeemed, or
otherwise acquired, any of its share capital, other securities, or ownership
interests or any phantom shares, phantom equity interests, or stock or equity
appreciation rights, or other ownership interests in New Cayman or obligating
New Cayman to grant, extend, or enter into any such subscription, option,
warrant, put, call, trust, right, exchangeable or convertible security,
commitment, or agreement.


(l)            Ownership
of Shares of New Sweden 1 and New Sweden 2.  Immediately prior to the Closing, Apex Sweden
was the sole owner, beneficially and of record, of, and had good and valid
title to, all of the issued and outstanding shares of New Sweden 1 and New
Sweden 2 as set forth on Schedule A-1, free and clear of all Liens and
Restrictions,



 26
 






 



 


other than Liens or Restrictions (i) created by this Agreement or
any of the other Transaction Documents, (ii) imposed by applicable Law or
by the Governing Documents of New Sweden 1 or New Sweden 2 generally
on all shares of New Sweden 1 and New Sweden 2, or (iii) existing
under the Financing Documents.  Such
shares of New Sweden 1 and New Sweden 2 include all voting and
dividend rights and interests in respect of capital, and corporate funds of any
kind, purpose, or denomination, such as reserve, revaluation, credit, profit,
and dividend funds, whether accumulated or not, that have not been distributed,
even if agreements are pending with regard to their distribution or to which
Apex Sweden is otherwise entitled as the owner thereof as of the Closing Date,
whether originating in the current fiscal year or any previous fiscal
year.  There are no voting trusts,
proxies, powers of attorney, or other agreements or understandings with respect
to the voting of such shares of New Sweden 1 or New Sweden 2, other
than the Contracts listed in Section 3.1(1) Section 3.1(l)of the Apex
Disclosure Schedule, true, correct, and complete copies of which have been
provided to Sumitomo, the Financing Documents, and the Transaction Documents.


(m)          Ownership
of Shares of MSC.  Apex Sweden is the
owner, beneficially and of record, of, and has good and valid title
to, 13,983,846 registered shares of the issued and outstanding shares of
MSC, Apex Luxembourg is the owner, beneficially and of record, of and has good
and valid title to, one registered share of the issued and outstanding shares
of MSC, and New Sweden 1 is the owner, beneficially and of record, of, and
has good and valid title to, 7,529,763 registered shares of the issued and
outstanding shares of MSC as set forth on Schedule A-2, in each case free
and clear of all Liens and Restrictions, other than Liens or Restrictions
(i) created by this Agreement or any of the other Transaction Documents,
(ii) imposed by applicable Law or by the Governing Documents of MSC
generally on all shares of MSC, or (iii) existing under the Financing
Documents.  Such shares of MSC include
all voting and dividend rights and interests in respect of capital, and
corporate funds and patrimonial rights and account of any kind, purpose, or
denomination, such as special or legal reserve, revaluation, patrimonial
adjustment, credit, profit, and dividend funds, whether accumulated or not,
that have not been distributed, even if agreements are pending with regard to
their distribution or to which Apex Sweden, Apex Luxembourg, or New
Sweden 1, as applicable, is otherwise entitled as the owner thereof as of
the Closing Date, whether originating in the current business year or any
previous business year.  There are no
voting trusts, proxies, powers of attorney, or other agreements or
understandings with respect to the voting of such shares of MSC, other than the
Contracts listed in Section 3.1(m) of the Apex Disclosure Schedule, true,
correct, and complete copies of which have been provided to Sumitomo, the Financing
Documents, and the Transaction Documents.


(n)           Ownership
of Quotas of New Metals.  Apex Sweden
is the owner, beneficially and of record, of, and has good and valid title to,
one quota representing 65% of the issued and outstanding capital of New Metals
and New Sweden 2 is the owner, beneficially and of record, of, and has
good and valid title to, one quota representing 35% of the issued and
outstanding capital of New Metals as set forth on Schedule A-2, in each
case free and clear of all Liens and Restrictions, other than Liens or
Restrictions



 27
 






 



 


(i) created by this Agreement or any of the other Transaction
Documents, (ii) imposed by applicable Law or by the Governing Documents of
New Metals generally on all quotas of New Metals, or (iii) existing under
the Financing Documents.  No other quotas
of New Metals are outstanding.  Such
quotas of New Metals include all voting and dividend rights and interests in
respect of capital, and corporate funds of any kind, purpose, or denomination,
such as reserve, revaluation, credit, profit, and dividend funds, whether
accumulated or not, that have not been distributed, even if agreements are
pending with regard to their distribution or to which Apex Sweden or New
Sweden 2, as applicable, is otherwise entitled as the owner thereof as of
the Closing Date, whether originating in the current fiscal year or any
previous fiscal year.  There are no voting trusts, proxies, powers of
attorney, or other agreements or understandings with respect to the voting of
such quotas of New Metals, other than the Contracts listed in
Section 3.1(n) of the Apex Disclosure Schedule, true, correct, and
complete copies of which have been provided to Sumitomo, the Financing
Documents, and the Transaction Documents.


(o)           Ownership
of Shares of New Cayman.  Immediately
prior to the Closing, Apex Luxembourg was the sole owner, beneficially and of
record, of, and had good and valid title to, all of the issued and outstanding
shares of New Cayman as set forth on Schedule A-1, free and clear of all
Liens and Restrictions, other than Liens or Restrictions (i) created by
this Agreement or any of the other Transaction Documents, (ii) imposed by
applicable Law or by the Governing Documents of New Cayman generally on all
shares of New Cayman, or (iii) existing under the Financing
Documents.  Such shares of New Cayman
include all voting and dividend rights and interests in respect of capital, and
corporate funds of any kind, purpose, or denomination, such as reserve,
revaluation, credit, profit, and dividend funds, whether accumulated or not,
that have not been distributed, even if agreements are pending with regard to
their distribution or to which Apex Luxembourg is otherwise entitled as the
owner thereof as of the Closing Date, whether originating in the current fiscal
year or any previous fiscal year.  There
are no voting trusts, proxies, powers of attorney, or other agreements or
understandings with respect to the voting of such shares of New Cayman, other
than the Contracts listed in Section 3.1(o) of the Apex Disclosure
Schedule, true, correct, and complete copies of which have been provided to
Sumitomo, the Financing Documents, and the Transaction Documents.


(p)           Ownership
of MSC Subordinated Debt and ASC Bolivia Acquired Assets.  Apex Sweden is the holder of, and has good
and valid title to, the Apex Sweden MSC Subordinated Debt representing 65% of
the aggregate outstanding principal amount of, and accrued and unpaid interest,
if any, on, the Apex Sweden MSC Subordinated Debt and New Sweden 1 MSC
Subordinated Debt, free and clear of all Liens and Restrictions, other than
Liens or Restrictions (i) created by this Agreement or any of the other
Transaction Documents, (ii) imposed by applicable Law generally on all the
MSC Subordinated Debt, or (iii) existing under the Financing
Documents.  New Sweden 1 is the
holder of, and has good and valid title to, the New Sweden 1 MSC
Subordinated Debt representing 35% of the aggregate outstanding principal
amount of, and accrued and unpaid interest, if any, on, the Apex Sweden MSC
Subordinated Debt and the New Sweden 1 MSC Subordinated Debt, free and
clear of all Liens and Restrictions, other



 28
 






 



 


than Liens or Restrictions (i) created by this Agreement or any of
the other Transaction Documents, (ii) imposed by applicable Law generally
on all the MSC Subordinated Debt, or (iii) existing under the Financing
Documents.  ASC Bolivia is the owner of,
and has good and valid title to, the ASC Bolivia Acquired Assets, free and
clear of all Liens and Restrictions, other than (i) Liens and Restrictions
created by this Agreement or any of the other Transaction Documents,
(ii) imposed by applicable Law generally on the type of assets
constituting the Transmission Line Loan Documents and (iii) existing under
the Financing Documents.


(q)           Legal
Proceedings.  There is no Legal
Proceeding pending, or to Apex’s, knowledge, threatened against Apex, Apex
Sweden, Apex Luxembourg, Old Metals, or Service Company that (i) questions
the validity of the Transaction Documents or the right of Apex, Apex Sweden, Apex
Luxembourg, Old Metals, or Service Company to enter into them or to consummate
the transactions contemplated thereby or, (ii) except as disclosed in the
periodic reports and filings by Apex with the U.S. Securities and Exchange
Commission made on or before the date of this Agreement, if adversely
determined, would reasonably be expected to have a Material Adverse Effect on
Apex, Apex Sweden, Apex Luxembourg, Old Metals, or Service Company.


Section 3.2             Sumitomo’s Representations and
Warranties.  Sumitomo represents and
warrants with respect to itself to Apex, Apex Sweden, and Apex Luxembourg that
the statements contained in this Section 3.2 are true, correct, and complete as
of the date of this Agreement (except to the extent such representation and
warranty specifically speaks as of a different date).


(a)           Organization.  It is duly organized, validly existing, and,
to the extent applicable in its jurisdiction of organization, in good standing,
under the Laws of its jurisdiction of organization.


(b)           Power
and Authority.  (i) It has all
requisite corporate or other Entity power and authority to enter into, and to
perform its obligations under, this Agreement and each Transaction Document
being or to be executed and delivered by it pursuant to this Agreement; and
(ii) the execution and delivery by it of this Agreement and each
Transaction Document to which it is or shall be a party, and the performance by
it of its obligations under this Agreement and each Transaction Document to
which it is or shall be a party, have been duly authorized by all requisite
corporate or other Entity action.


(c)           Validity.  Each of this Agreement and the other
Transaction Documents being or to be executed and delivered by it has been, or
shall be, duly executed and delivered by it, and assuming the due execution and
delivery by each other party hereto and thereto, this Agreement constitutes,
and when executed and delivered by it pursuant to this Agreement, each
Transaction Document being or to be executed and delivered by it shall constitute,
its legal, valid, and binding obligation, enforceable against it in accordance
with its terms, except as such enforceability may be affected by applicable
bankruptcy, reorganization, insolvency, moratorium, or similar Laws affecting
creditors’ rights generally.



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(d)           Consents.  Except for any required Authorizations and
Government Approvals set forth in Section 3.2(d) of the Sumitomo
Disclosure Schedule or that have been obtained or made, no Authorization or
Government Approval is required, on behalf of it in connection with the
execution, delivery, or performance by it of this Agreement or the other
Transaction Documents being or to be executed and delivered by it, or the
consummation of the transactions contemplated hereby and thereby.


(e)           No
Conflicts.  Assuming the
Authorizations and Government Approvals set forth in Section 3.2(d) of the
Sumitomo Disclosure Schedule will be obtained or made, the execution and
delivery by it of this Agreement and the other Transaction Documents being or
to be executed and delivered by it do not, and the performance by it of its
obligations under this Agreement and the other Transaction Documents being or
to be executed and delivered by it and the consummation of the transactions
contemplated hereby and thereby do not and shall not, (i) violate or
conflict with any provision of its Governing Documents; (ii) violate any
of the terms, conditions, or provisions of any Law or Government Approval to
which it is subject or by which it or any of its assets is bound; or (iii) result
in a violation or breach of, or (with or without the giving of notice or lapse
of time or both) constitute a default (or give rise to any right of termination
or cancellation) under, or give rise to or accelerate any material obligation
under, or pursuant to, any material Contract to which it is a party or by which
it or any of its assets is bound.


(f)            Brokers’
and Finders’ Fees.  There is no
broker, finder, investment banker, or similar intermediary that has been
retained by, or is authorized to act on behalf of, it or any of its Affiliates
or any of their respective officers or directors who shall be entitled to any
fee or commission in connection with this Agreement or any other Transaction
Document or upon consummation of the transactions contemplated hereby or
thereby and which fee or commission could be or become a liability of Apex or
any of its Affiliates, including MSC, New Metals, and New Cayman.


(g)           No
External Financing.  Sumitomo does
not require any third-party financing to complete the transactions
contemplated by this Agreement, including the payment of the Purchase Price to
Apex, or perform its obligations under the other Transaction Documents,
including the funding of additional share capital or loans to MSC, New Metals,
or New Cayman in connection with the Project or otherwise under the MSC
Shareholders Agreement, Metals Quotaholders Agreement, or the New Cayman
Shareholders Agreement, as applicable.


(h)           Investment
Intent.  Sumitomo is not acquiring
the New Sweden 1 Acquired Shares, the New Sweden 2 Acquired Shares,
or the New Cayman Acquired Shares with a view to or for sale in connection with
any distributions thereof within the meaning of the U.S. Securities Act
of 1933, as amended.


(i)            Legal
Proceedings.  There is no Legal
Proceeding pending, or to Sumitomo’s knowledge, threatened against it that
(i) questions the validity of the Transaction Documents or the right of it
to enter into them or to consummate the



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transactions contemplated thereby or (ii) if adversely determined,
would reasonably be expected to (A) have a material adverse effect on or
change to the condition (financial or otherwise), business, performance,
operations, or properties of Sumitomo and its Subsidiaries, taken as a whole,
except to the extent that such effect or change is attributable to or results
from (1) changes affecting generally the securities or capital markets or
economic conditions in the country or countries in which it conducts its
business, (2) changes affecting generally the industries in which it
operates (as opposed to changes affecting any such Entity or group of Entities
specifically, predominantly, or disproportionately), (3) changes in the
country or countries in which it conducts its business affecting generally the
industries in which it operates (as opposed to changes affecting any such
Entity or group of Entities specifically, predominantly, or
disproportionately), (4) the effect of the public announcement of this
Agreement or the pendency of the transactions contemplated hereby and by the
other Transaction Documents, or (5) changes in generally accepted
accounting principles in the U.S. or elsewhere or (B) have a material
adverse effect on its ability to perform its obligations under, and to
consummate the transactions contemplated by, the Transaction Documents.


ARTICLE
IV

REPRESENTATIONS AND WARRANTIES

REGARDING ACQUIRED ENTITIES, MSC, OLD METALS, NEW METALS, AND

NEW CAYMAN


Apex represents and warrants to Sumitomo that the
statements contained in this ARTICLE IV are true, correct, and complete as of
the date of this Agreement (except to the extent such representation and
warranty specifically speaks as of a different date).


Section 4.1             Organization, Good Standing,
Authority, Governing Documents, Books and Records.  


(a)           Each
Acquired Entity is a privat aktiebolag.  MSC is a sociedad anónima.  New Metals is a Gesellschaft
mit beschränkter Haftung.  New
Cayman is an exempted company limited by shares.


(b)           MSC
(i) is duly organized, validly existing, and, to the extent applicable
under the Laws of its jurisdiction of organization, in good standing under the
Laws of its jurisdiction of organization, (ii) has all requisite corporate
or other Entity power and authority to own its properties and to carry on its
business as now being conducted, including to construct, develop, and operate
the Project as contemplated in the Development Plan, and (iii) is duly
qualified and in good standing to do business in each jurisdiction where
necessary in light of the business it conducts and the property it owns, except
where the failure to be so qualified and in good standing would not reasonably
be expected to have a Material Adverse Effect on it.


(c)           Each
of New Metals, New Cayman, and the Acquired Entities (i) is duly
organized, validly existing, and, to the extent applicable under the Laws of
its jurisdiction of organization, in good standing under the Laws of its
jurisdiction of organization,



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(ii) has all requisite corporate or other Entity power and
authority to own its properties and to carry on its business as then being
conducted, and (iii) is duly qualified and in good standing to do business
in each jurisdiction where necessary in light of the business it conducts and
the property it owns, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a Material Adverse Effect on
it.


(d)           Apex
has made available to Sumitomo true, correct, and complete copies of
(i) the Governing Documents of each of MSC, Old Metals, New Metals, New
Cayman, and the Acquired Entities, including all amendments thereto, as
presently in effect; (ii) all share or equity interest records of each of
MSC, Old Metals, New Metals, New Cayman, and the Acquired Entities, including
MSC’s share ledger and copies of any share certificates (front and back) issued
by MSC, Old Metals’ quota ledger, New Metals’ quota ledger, New Cayman’s share
ledger and copies of any share certificates issued by New Cayman, and each
Acquired Entity’s share ledger and copies of any share certificates issued by
each Acquired Entity; and (iii) all minutes and other records of all
meetings or actions taken by written consent or otherwise without a meeting of
(A) the shareholders of each of MSC, New Cayman, and the Acquired
Entities, (B) the quotaholders of each of Old Metals and New Metals,
(C) the boards of directors of each of MSC, New Cayman, and the Acquired
Entities, (D) the management board of each of Old Metals and New Metals,
and (E) all committees of each such board of directors or management board
(collectively, the “Minute Books”). 
The Minute Books contain a true, correct, and complete record, in all
material respects, of all material actions taken at all meetings and by all
written consent or otherwise without a meeting of such Entity’s shareholders or
quotaholders, as applicable, such Entity’s board of directors or management
board, as applicable, and any committees of such Entity’s board of directors or
management board, as applicable and such actions were taken in accordance with
such Entity’s Governing Documents in effect at the time of such action.


Section 4.2             Consents; No Conflicts.


(a)           Except
for any required Authorizations and Government Approvals set forth in Section
4.2(a) of the Apex Disclosure Schedule or that have been obtained or made, no
Authorization or Government Approval is required on behalf of MSC, New Metals,
or New Cayman in connection with any of the Transaction Documents being or to
be executed and delivered by MSC, New Metals, or New Cayman, or the
consummation of the transactions contemplated hereby and thereby.


(b)           The
execution and delivery of the Transaction Documents being or to be executed and
delivered by MSC, New Metals, or New Cayman do not, and the consummation of the
transactions contemplated thereby do not and shall not, (i) violate or
conflict with any provision of the Governing Documents of MSC, New Metals, or
New Cayman; (ii) violate any of the terms, conditions, or provisions of
any Law or Government Approval to which MSC, New Metals, or New Cayman is
subject or by which MSC, New Metals, or New Cayman, or any of their respective
assets, is bound; (iii) result in a violation or breach of, or (with or
without the giving of notice or lapse of time or both) constitute a default (or
give rise to any right of termination or cancellation)



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under, or give rise to or accelerate any material obligation under, or
pursuant to, any Scheduled Contract to which MSC, New Metals, or New Cayman is
a party or by which MSC, New Metals, or New Cayman, or any of their respective
assets, is bound; or (iv) result in any Lien or Restrictions (other than
any Lien or Restriction created by this Agreement or any of the other
Transaction Documents) on any capital stock of any of MSC, New Metals, New
Cayman, and the Acquired Entities, or on any of their respective assets.


Section 4.3             Consents and Approvals for the
Project.


(a)           To
the knowledge of Apex, all material (i) Government Approvals,
(ii) Authorizations, (iii) Mining Concessions, (iv) Other
Property Rights, and (v) Intellectual Property Rights, necessary in each
case for the development, construction, and operation of the Project in
accordance with the Development Plan are set forth in Section 4.3(a) of
the Apex Disclosure Schedule.


(b)           To
the knowledge of Apex, each of the (i) Government Approvals, (ii) Authorizations,
(iii) Mining Concessions, (iv) Other Property Rights, and
(v) Intellectual Property Rights set forth in Part A of
Section 4.3(a) of the Apex Disclosure Schedule has been obtained and is in
full force and effect.  Collectively, to
the knowledge of Apex, such Government Approvals, Authorizations, Mining
Concessions, Other Property Rights, and Intellectual Property Rights are
sufficient to permit (A) the development, construction, and operation of
the Project in all material respects as contemplated by the Development Plan
and (B) the performance by each of MSC, New Metals, and New Cayman of its
obligations under the Material Project Documents, in each case, with respect to
such Government Approvals, Authorizations, Mining Concessions, Other Property
Rights, and Intellectual Property Rights, other than those that (1) are
not now necessary and which are expected to be obtained in the ordinary course
of business by the time they are necessary (and that are listed in Part B of
Section 4.3(a) of the Apex Disclosure Schedule) or (2) the failure to
have or obtain would not reasonably be expected to have a Material Adverse
Effect on MSC, New Metals, or New Cayman.


(c)           To
the knowledge of Apex, MSC is in compliance (i) in all material respects
with all terms and conditions of all of the Mining Concessions and (ii) in
all material respects, with all terms and conditions of all of such Government
Approvals, Authorizations, Other Property Rights, and Intellectual Property
Rights, in each case under clauses (i) and (ii), listed in Part A of
Section 4.3(a) of the Apex Disclosure Schedule.


Section 4.4             Subsidiaries.  None of MSC, New Metals, New Cayman, or the
Acquired Entities has any Subsidiary or owns, otherwise Controls, or, to the
knowledge of Apex, has any right to acquire, directly or indirectly, any
capital stock of, or other equity interests in, any Entity (except that New
Sweden 1 owns shares of, and has Preemptive Rights in respect of, MSC, and
New Sweden 2 owns a quota of, and has Preemptive Rights in respect of, New
Metals).  Except as set forth in
Section 4.4 of the Apex Disclosure Schedule, none of MSC, New Metals, New



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Cayman, or the Acquired Entities owns or, to
the knowledge of Apex, has any right to acquire, directly or indirectly, any
debt securities, or any other Indebtedness, of any Entity (except in respect of
the net obligations, if any, of the Entities that are counterparties of New
Cayman under the Mandatory Metals Hedge Agreements, and Indebtedness between or
among any of MSC, New Metals, and New Cayman).


Section 4.5             Financial Statements; No
Undisclosed Liabilities; No Material Adverse Effect.


(a)           Apex
has delivered to Sumitomo (i) the audited separate balance sheets (the “Audited
Balance Sheets”) of MSC as of September 30, 2004 and 2005, and of
Old Metals as of December 31, 2005, (ii) the audited separate
statements of income and cash flows of MSC for the fiscal years ended on
September 30, 2004 and 2005, and of Old Metals for the fiscal year
ended on December 31, 2005, (iii) the unaudited separate balance
sheets of MSC and Old Metals as of June 30, 2006 (the “Unaudited
Balance Sheet Date”) and the unaudited separate balance sheets of New
Metals and New Cayman as of August 31, 2006 (the “Unaudited Separate
Balance Sheet Date”), and (iv) the unaudited separate statements of
income and cash flows of MSC for the nine months ended on June 30, 2006,
and of Old Metals for the six months ended on June 30, 2006 (the foregoing
financial statements, collectively, the “Financial Statements,” true, correct,
and complete copies of all of which are included as Section 4.5(a) of the
Apex Disclosure Bundle).


(b)           Except
(i) as set forth in Section 4.5(b) of the Apex Disclosure Schedule,
(ii) as described in the notes to the Financial Statements that are audited,
(iii) to the extent that the unaudited interim statements do not include
footnotes and other presentation items as required by GAAP, and (iv) in
the case of the unaudited statements, for normal, year-end adjustments
(which shall not be material individually or in the aggregate), the Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis and fairly present the separate financial condition and results of
operations and cash flows of MSC, Old Metals, New Metals, and New Cayman as of
the respective dates thereof and for the respective periods indicated therein.


(c)           Except
for (i) any liabilities set forth in Section 4.5(c) of the Apex
Disclosure Schedule, (ii) liabilities set forth or provided for on the
Financial Statements (including liabilities the amounts of which are set forth
numerically in the notes thereto), (iii) liabilities that have arisen
after the Unaudited Balance Sheet Date in the ordinary course of business
consistent with past practice, (iv) liabilities under the Financing
Documents to which MSC, Old Metals, New Metals, or New Cayman is a party or the
Scheduled Contracts, to the extent that the existence of such liabilities is
reasonably ascertainable solely by reference to such Financing Documents or
Scheduled Contracts, (v) Indebtedness set forth in Section 4.5(c) of
the Apex Disclosure Schedule of the type defined in clauses (a) and (c),
and clause (g) as it applies to clause (a) and (c), of the definition
of Indebtedness, and (vi) liabilities that have not had, individually or
together with other liabilities, a Material Adverse Effect on MSC, Old Metals,
New Metals, or New Cayman, neither MSC, Old Metals, New Metals, nor New Cayman
has any material



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liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due, including any
liability for Taxes).


(d)           Since
the Unaudited Balance Sheet Date, no event has occurred and no condition exists
that, individually or together with other events and conditions, has had a
Material Adverse Effect on MSC and Old Metals.


(e)           Since
the Unaudited Separate Balance Sheet Date, no event has occurred and no
condition exists that, individually or together with other events and
conditions, has had a Material Adverse Effect on New Metals and New Cayman.


(f)            Since
June 30, 2006, no event has occurred and no condition exists that,
individually or together with other events and conditions, has had a Material
Adverse Effect on Apex.


Section 4.6             Title to Properties.  To the knowledge of Apex, (a) MSC has
good, legal, and valid title to (or, in the case of any leased premises,
easement properties or licensed property, valid leasehold, easement, or license
interests in) all real and personal property (including the Mining Concessions)
and all rights, tangible or intangible (including Intellectual Property Rights
and Other Property Rights), now required for the construction and operation of
the Project substantially as contemplated by the Development Plan; and
(b) there are no Liens of any nature against such properties or rights
(other than (i) Permitted Liens and (ii) such Liens as are set forth
in Section 4.6 of the Apex Disclosure Schedule), in each case, except
where such failure of title or the existence of such Liens would not have a
Material Adverse Effect on MSC or the Project.


Section 4.7             Material Contracts.


(a)           All
Material Project Documents to which MSC is a party as of the date hereof, all Operational
Agreements to which New Metals is a party as of the date hereof, all Mandatory
Metals Hedge Agreements, and all Third Party Concentrate Sales Agreements are
listed on Section 4.7(a) of the Apex Disclosure Schedule (the “Scheduled
Contracts”).


(b)           To
the knowledge of Apex, there are no material services, materials, or rights
(other than Government Approvals and Authorizations) required for the current
stage of the development, financing, construction, operation, and ownership of
the Project, other than those granted by, or to be provided to MSC pursuant to
the Scheduled Contracts.


(c)           Except
for the amendments, modification, or supplements of the Scheduled Contracts
being entered into on the date hereof, none of the Scheduled Contracts have
been amended, modified, or supplemented, and, to the knowledge of Apex, all of
the Scheduled Contracts are in full force and effect, except as such
enforceability may be affected by applicable bankruptcy, reorganization,
insolvency,



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moratorium, or similar Laws affecting creditors’ rights generally (and
Apex and its Subsidiaries have no knowledge of any fact or circumstance that
has occurred that would make any such Laws applicable), and have not been
terminated, suspended, or rescinded by any party thereto.


(d)           To
the knowledge of Apex, all conditions precedent to the obligations of the
respective parties under the Scheduled Contracts have been satisfied or waived
except for such conditions precedent that need not or cannot be satisfied until
a later stage of development, financing, construction, operation, and ownership
of the Project, and Apex and its Subsidiaries have no reason to believe that
any such condition precedent cannot be satisfied on or prior to the
commencement of the appropriate state of development, financing, construction,
operation, and ownership of the Project, except as otherwise set forth on
Section 4.7(d) of the Apex Disclosure Schedule.


(e)           No
Subsidiary of Apex is in default in the performance of any covenant or
obligation set forth in, or otherwise in default under, any of the Scheduled
Contracts to which it is a party, which default would reasonably be expected to
result in a Material Adverse Effect on MSC, Old Metals, New Metals, or New
Cayman.  There exists no default under
the MSC Subordinated Debt by MSC, nor any event which, with notice or lapse of
time or both, would constitute a default thereunder by MSC.  The outstanding principal amount of the MSC
Subordinated Debt is US$208,387,865.00. 
To the knowledge of Apex, there has been no default by any counterparty
under, and no Event of Force Majeure (as defined in the Common Security
Agreement) has occurred under, any Scheduled Contract, which in either case
would reasonably be expected to have a Material Adverse Effect on MSC, Old Metals,
New Metals, or New Cayman.


(f)            The
Apex Disclosure Bundle includes true, correct, and complete copies of the
Scheduled Contracts and of any amendments to any of the foregoing except for
copies of confirmations under the Mandatory Metals Hedge Agreements.


Section 4.8             Employees; Employee Benefits.


(a)           Section 4.8(a)
of the Apex Disclosure Schedule contains a true, correct, and complete list of
all employment or employment-related or consulting Contracts to which MSC, Old
Metals, New Metals, or New Cayman is a party with any current executive officer
or director of MSC, Old Metals, New Metals, or New Cayman that are currently in
effect.  To the knowledge of Apex, no
executive officer, key employee, or significant group of employees plans to
terminate employment with MSC, New Metals, or New Cayman during the
next 12 months.


(b)           Section 4.8(b)
of the Apex Disclosure Bundle includes a true, correct, and complete copy of
each collective bargaining agreement relating to or affecting MSC, Old Metals,
New Metals, or New Cayman or any employee of MSC, Old Metals, New Metals, or
New Cayman.  Except as set forth in
Section 4.8(b) of the Apex Disclosure Schedule and except for such
exceptions as have not had, and would not reasonably be expected to have, a
Material Adverse Effect on MSC, Old Metals, New Metals, or New



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Cayman, (i) there is not occurring, and there has not occurred
during the previous five years, or, to the knowledge of Apex, there has not
been threatened, any strike, slow-down, picket, work stoppage, or other
concerted action by any union or other group of employees or other Persons
against either MSC, Old Metals, New Metals, or New Cayman or their respective
premises or products; (ii) there are, and during the previous five years
have been, no complaints or grievances known to Apex, by any union, other
group, or class of employees or other Persons which are unsettled or
unresolved; and (iii) to the knowledge of Apex, no other union or labor
organization has attempted to organize any of the employees of MSC, Old Metals,
New Metals, or New Cayman.


(c)           Except
as set forth in Section 4.8(c)  of
the Apex Disclosure Schedule and subject to the exceptions set forth in
Section 4.5(c), none of MSC, Old Metals, New Metals, New Cayman, or any
ERISA Affiliate has incurred or reasonably expects to incur any material
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due) with respect to any Employee
Benefit Plan that would reasonably be expected have a Material Adverse Effect
on MSC, Old Metals, New Metals, New Cayman, or the Project.


Section 4.9             Legal Compliance.  Except as set forth in Section 4.9 of
the Apex Disclosure Schedule, (a) to the knowledge of Apex, each of Apex
and its Subsidiaries is in compliance with, and has conducted its business,
including in the case of MSC and the Project, so as to comply with, the terms
of all Government Approvals and Laws applicable to it, including applicable
anti-corruption Laws in force in Bolivia, the Republic of Chile, U.S.,
Sweden, Switzerland, Peru, Argentina, and Mexico; (b) to the knowledge of
Apex, each of MSC, Old Metals, New Metals, New Cayman, and the Acquired
Entities has all Government Approvals that are required to operate its
business, and (c) none of MSC, Old Metals, New Metals, New Cayman, and the
Acquired Entities has any Legal Proceeding, claim, demand, or notice filed or
commenced against it alleging any failure to so comply, in each case except
where the failure to so comply or to have such Government Approvals has not
had, or would not reasonably be expected to have, a Material Adverse Effect on
MSC, Old Metals, New Metals, New Cayman, or either Acquired Entity.


Section 4.10           Taxes.  Each of MSC, Old
Metals, New Metals, New Cayman, and the Acquired Entities has timely filed or
caused to be filed all Tax Returns required to have been filed and has paid or
caused to be paid all Taxes shown as due and payable on such Tax Returns,
except (a) Taxes that are being contested in good faith by appropriate
proceedings diligently conducted and for which such Entity has set aside on its
books adequate reserves (as determined by generally accepted accounting
principles as used in the U.S.), (b) as set forth in Section 4.10 of
the Apex Disclosure Schedule, or (c) to the extent that the failure to do
so has not had, and would not reasonably be expected to have, a Material
Adverse Effect on it.  There are no
material disputes pending or, to the knowledge of Apex, threatened, between any
of MSC, Old Metals, New Metals, New Cayman, and the Acquired Entities, and any
Tax Authority relating to Taxes.  With
respect to the corporate and tax restructuring that has occurred prior to the
Closing, Section 4.10 of the Apex Disclosure Schedule sets forth a
complete and accurate description of all the material steps and actions taken
in connection with such restructuring. 
In connection with



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such restructuring, Apex has, and has caused its Subsidiaries to, take
only the steps set forth in such section of the Apex Disclosure Schedule.


Section 4.11           Legal Proceedings.  Except as set forth in Section 4.11
 of the Apex Disclosure
Schedule, there is no Legal Proceeding pending, or to the knowledge of Apex, threatened
in writing relating to MSC, Old Metals, New Metals, or New Cayman, which has
had, and would reasonably be expected to have, a Material Adverse Effect on
MSC, Old Metals, New Metals, or New Cayman. 
None of MSC, Old Metals, New Metals, or New Cayman is subject to any
Judgment, which has had, and would reasonably be expected to have, a Material
Adverse Effect on MSC, Old Metals, New Metals, or New Cayman.


Section 4.12           Environmental Matters.


(a)           To
the knowledge of Apex, the development, construction, and operation of the
Project and the activities and properties of MSC are in compliance in all
material respects with (i) the Environmental Guidelines, (ii) all
applicable Environmental Laws, and (iii) all environmental Government
Approvals.  To the knowledge of Apex, MSC
has designed the Project in compliance in all material respects with the
Environmental Guidelines.


(b)           No
notice, notification, demand, citation, summons, or order has been issued and
delivered to MSC, no written complaints have been filed and notice thereof
served on MSC, no penalty has been assessed, and, to the knowledge of Apex, no
investigation or review is pending or threatened by any Governmental Authority
or other Person with respect to any alleged failure by MSC to have any material
environmental Government Approval or to comply with any applicable
Environmental Law.


Section 4.13           Interested Party Transactions.  Other than transactions required or permitted
by this Agreement or the other Transaction Documents, Section 4.13
of the Apex Disclosure Schedule lists all transactions and Contracts between
Apex or any of its Subsidiaries (other than MSC, New Metals, or New Cayman), on
the one hand, and MSC, New Metals, or New Cayman, on the other hand, in each
case that involves consideration of US$500,000 or more and has not yet been
fully performed.


Section 4.14           Insurance.  Each of MSC, New Metals, and New Cayman
maintain with financially sound and reputable insurers, insurance with respect
to its properties and business against such casualties and contingencies and in
such amounts as are usually carried by businesses engaged in similar activities
as MSC, New Metals, and New Cayman and located in similar geographic areas in
which MSC, New Metals, and New Cayman operate.


Section 4.15           Financing Documents.  Section 4.15 of the Apex Disclosure
Schedule sets forth a correct and complete list of all Financing Documents to
which Apex or any of its Subsidiaries is a party and of all other Contracts
(except Scheduled Contracts and the New and Amended Financing Documents)
pursuant to which Apex or any of its Subsidiaries is required to provide credit
support in respect of the Project or any of MSC, Old Metals, New Metals, or New
Cayman.  True, correct, and complete
copies of all such Financing Documents and other



 38
 






 



 


Contracts, including all amendments,
supplements, modifications, and waivers thereof, are included as
Section 4.15 of the Apex Disclosure Bundle.


Section 4.16           No Default.  Except as disclosed in Section 4.16 of
the Apex Disclosure Schedule, to the knowledge of Apex, no Default or Event of
Default has occurred and is continuing.


Section 4.17           Performance Security.  There are no letters of credit, performance
bonds, or other types of performance security currently required to be posted
and in full force and effect under the Financing Documents or the Scheduled
Contracts, other than those listed on Section 4.17 of the Apex Disclosure
Schedule (the “Performance Security”). 
No drawing has been made under any of the Performance Security and, to
the knowledge of Apex, no event has occurred and currently exists that gives or
reasonably could be expected to give any beneficiary of a Performance Security
the right to draw thereunder.


Section 4.18           Acquired Entities.  Immediately prior to the Closing, each of New
Sweden 1 and New Sweden 2: (a) had no outstanding Indebtedness;
(b) had no liabilities (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due, including
any liability for Taxes), except for any liabilities under the Transaction
Documents and the Financing Documents to which such Entity is a party;
(c) owns no real or personal property except, with respect to New Sweden 1,
an SEK 100,000 cash deposit with Skandinaviska
Enskilda Banken (publ), shares of MSC, and the New Sweden 1 MSC
Subordinated Debt, and, with respect to New Sweden 2, an SEK 100,000
cash deposit with Skandinaviska Enskilda Banken (publ) and a quota of New
Metals; and (d) has no operations other than holding such properties and
being a party to such Contracts.


Section 4.19           No Liquidation; Intent.  None of MSC, New Metals, New Cayman, and the
Acquired Entities has commenced any voluntary proceeding or filed any petition,
and Apex is not aware of the commencement of any involuntary proceeding or the
filing of any involuntary petition, seeking (a) liquidation,
reorganization, or other relief in respect of any of MSC, New Metals, New
Cayman, or the Acquired Entities for its debts, or any substantial part of its
assets, under any applicable Law or (b) appointment of a receiver,
trustee, custodian, sequestrator, conservator, or similar official for any such
Entity or for a substantial part of its assets. 
Apex and its Subsidiaries are not entering into the transactions
contemplated hereby or by any of the Transaction Documents with the intent to
hinder, delay, or defraud any Person to which any such Entity is, or may
become, indebted. 


Section 4.20           Notices.  Apex has made available to Sumitomo true,
correct, and complete copies of all material notices and other documents
delivered under ARTICLE VI of the Common Security Agreement. 


Section 4.21           Project Information and Other
Information Furnished.  To the
knowledge of Apex, the Project Information and other information, financial
statements, exhibits, and schedules furnished in writing by or on behalf of
Apex to Sumitomo in connection with the negotiation, preparation, or delivery
of this Agreement and the other Transaction Documents or



 39
 






 



 


included herein or therein or delivered
pursuant hereto or thereto (including the documents included in the Apex
Disclosure Bundle), considered together, do not contain any material
misrepresentation or misstatement (or omit any material fact or circumstance
necessary in order to make the information contained therein not misleading);
provided, that the only representations and warranties made by Apex to Sumitomo
under this Section 4.21 in respect of projections, estimates, or other expressions
of view as to future circumstances included in the Apex Disclosure Bundle or
such other information, financial statements, exhibits, and schedules is that
such projections, estimates, or other expression of view were prepared in good
faith and were based on reasonable assumptions as to all factual and legal
matters materially related thereto as of their respective preparation dates.


ARTICLE V

OTHER COVENANTS


Section 5.1             Confidentiality.  Each Party shall keep confidential, shall
cause its Affiliates to keep confidential, and shall instruct its officers,
directors, employees, and advisors to keep confidential, all information
received from the other Party as a result of any due diligence investigation
conducted relating to the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement or otherwise,
except (i) as required by applicable securities or other Laws or stock
exchange rules or administrative process, and (ii) for information that is
or becomes generally available to the public other than as a result of a breach
of this Section 5.1 (such information, subject to clauses (i) and (ii), “Confidential
Information”).  Except to the extent
deemed necessary or advisable by counsel to maintain compliance with, or to
prevent violation of, applicable securities or other Laws or stock exchange
rules, each Party shall keep the existence of and the provisions of this
Agreement and the other Transaction Documents confidential and shall disclose
their contents only (1) to those lenders, investors, partners,
shareholders, directors, officers, employees, and agents who need to know such
information for purposes of its businesses and the transactions contemplated
hereby, and (2) to Governmental Authorities and other Persons for purposes
of obtaining approvals in connection with the transactions contemplated
hereby.  All Confidential Information
shall be treated as information covered by the Confidentiality Agreement, which
shall remain in full force and effect and shall not be modified or superseded
in any way by this Agreement.


Section 5.2             Expenses; Transfer Taxes; Tax
Cooperation.  Except as otherwise
specifically provided herein, all costs and expenses incurred in connection
with this Agreement, the other Transaction Documents, and the transactions
contemplated hereby and thereby shall be paid by the Party incurring such
expense.  Sumitomo shall pay all costs
and expenses incurred in connection with the formation of New Sweden 1 and
New Sweden 2.  For the avoidance of
doubt, the Parties agree that such costs and expenses shall exclude any
Taxes.  Sumitomo shall pay all transfer,
documentary, sales, use, stamp, registration and other similar Taxes and fees
(including any monetary adjustments, penalties and interest), but excluding any
other Taxes such as income, profits, excise, franchise or withholding taxes,
incurred on the transfer by Apex Sweden to Sumitomo of the New Sweden 1
Acquired Shares and the New Sweden 2 Acquired Shares.



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Section 5.3             Further Assurances.


(a)           From
time to time, as and when requested by any Party, the other Parties shall
execute and deliver, or cause to be executed and delivered, all such documents
and instruments, and shall take, or cause to be taken, all such further or
other actions, as the requesting Party may reasonably deem necessary or
desirable to consummate the transactions contemplated by this Agreement,
including executing and delivering such assignments, consents, and other
instruments the requesting Party may reasonably request as necessary or
desirable for such purpose.


(b)           (i) The
Parties shall use their commercially reasonable efforts to obtain the consent
and approval of those Persons under the Transmission Line Loan Documents, the
Financing Documents, and the New and Amended Financing Documents whose consent
and approval is required to consummate as promptly as practicable following the
Closing, without any additional consideration hereunder therefor, (A) the
assignment by ASC Bolivia to Sumitomo or its designated wholly-owned
Subsidiary of 35% of all the right, title, and interest of ASC Bolivia in and
to the Transmission Line Loan Documents (the “ASC Bolivia Acquired Assets”),
free and clear of all Liens and Restrictions, other than Liens or Restrictions
(1) created by this Agreement or any of the other Transaction Documents,
(2) imposed by applicable Law generally on the type of assets constituting
the Transmission Line Loan Documents, or (3) existing under the Financing
Documents or the Transaction Documents, and (B) the assumption by Sumitomo
of 35% of all the liabilities and obligations of ASC Bolivia under the
Transmission Line Loan Documents; provided, that, except as otherwise
specifically required by this Agreement, no loan agreement or Contract for
borrowed money shall be repaid except as currently required by its terms, in
whole or in part, and no Contract shall be amended to increase the amount
payable thereunder or otherwise to be more burdensome to the Project, MSC, New
Metals, New Cayman, or ASC Bolivia in order to obtain any such consent or
approval without first obtaining the approval of Apex and Sumitomo and no Party
shall be required to make any cash payment or relinquish any property or
contractual rights or change in any manner its operations or the operations of
its Subsidiaries to obtain any such consent or approval except for Filing fees
and fees and expenses of attorneys, accountants, and other professional
advisors and payments in accordance with the terms of Contracts existing on the
date hereof; and (ii) each Party shall, and shall cause its respective
Subsidiaries and Affiliates to, cooperate and use its respective commercially
reasonable efforts to take, or cause to be taken, all appropriate action to
cause to be made any necessary amendments to the Transmission Line Loan
Documents, the Financing Documents, and the New and Amended Financing Documents
to effect the same.  At the Closing, the
transactions referred to in clauses (A) and (B) of the immediately
preceding sentence shall be deemed, as between ASC Bolivia and Sumitomo, to
have occurred at the Closing, 35% of all gains, income, losses, and liabilities
related to the Transmission Line Loan Documents on or after the Closing to be
for the account of Sumitomo, and ASC Bolivia shall accede to the Dispute
Resolution Agreement and become a party thereto; provided,
 however,
if the assignment of 35% of the interest in ASC Bolivia to Sumitomo, as set
forth in this Section 5.3(b), is not consummated for any reason, Apex expressly
agrees to promptly pay to Sumitomo any and all proceeds that would otherwise
have been paid to Sumitomo if the assignment had in fact occurred as of the
date hereof.



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(c)           In
accordance with Section 2.2(c)(ii) of the MSC Shareholders Agreement,
promptly following the execution and delivery of this Agreement, an
extraordinary General Shareholders Meeting (as defined in the MSC Shareholders
Agreement) shall be held for the purpose of, among other things, amending and
restating the estatutos sociales of MSC in the
form of the Spanish language version attached as Exhibit A to the MSC
Shareholder Agreement.


ARTICLE
VI

CONDITIONS TO CLOSING


On or prior to the date hereof, each of the following
is occurring or has occurred:


Section 6.1             Authorizations and Government
Approvals.  One or more of the
Parties, MSC, Old Metals, New Metals, New Cayman, and the Acquired Entities has
made, or caused to be made, all notices and Filings with all Persons that are
required to have been made to consummate the transactions contemplated by this
Agreement and the other Transaction Documents, and has received all
Authorizations and Government Approvals that are required to have been received
to consummate the transactions contemplated by this Agreement and the other
Transaction Documents, except for such Authorizations and Government Approvals
the failure to make or obtain would not have a Material Adverse Effect on New
Metals, MSC, New Cayman, Apex, or Sumitomo, and all such Authorizations and
Government Approvals are in full force and effect.


Section 6.2             Closing Deliveries to Sumitomo.


(a)           Each
of the items described as being executed and delivered by Apex and its
Subsidiaries (including the Acquired Entities) pursuant to Section 2.5(a),
including the MSC Shareholders Agreement, the Metals Quotaholders Agreement,
the New Cayman Shareholders Agreement, the Apex Parent Guarantees, the Dispute
Resolution Agreement, the MSC Management Agreement, the New Metals Management
Agreement, the Deferred Payments Agreement, the Option Agreement, the
Reimbursement Agreement, the Apex Parent Guarantees, the Metals Hedge Novation
Agreements, the Old Metals Concentrate Sales Agreement Termination, the New
Concentrate Sales Agreement, and the New and Amended Financing Documents, has
been executed by Apex and its Subsidiaries (including the Acquired Entities),
as applicable, that are parties thereto and delivered to Sumitomo;


(b)           The
New and Amended Financing Documents have been executed by the lenders, the
hedge banks, the administrative agent, the technical agent, and the collateral
agent, as applicable, that are parties thereto and delivered to Sumitomo;


(c)           Sumitomo
has received (i) the opinion of Holme Roberts & Owen LLP, special New
York counsel to Apex regarding, among other things, Service Company,
(ii) the opinion of Quintanilla e Soria Abogados, special Bolivian counsel
to Apex regarding MSC, (iii) the opinion of Wistrand Advokatbyra, special
Swedish counsel to Apex regarding Apex Sweden, (iv) the opinions of
SuterHowald Rechstanwalte, special



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Swiss counsel to Apex regarding (A) New Metals and (B) Old
Metals, (v) the opinions of Walkers & Co., special Cayman Islands
counsel to Apex regarding (A) New Cayman and (B) Apex, and
(vi) the opinion of Bonn Schmitt Steichen, counsel to Apex regarding Apex Luxembourg,
in each case dated as of the Closing Date, addressed to Sumitomo, New
Sweden 1, and New Sweden 2, and in form and substance satisfactory to
Sumitomo in its reasonable discretion;


(d)           Apex
has delivered to Sumitomo copies of each of the public deeds evidencing the
Governing Documents of MSC, duly certified by a notary public under Bolivian
Law, together with certified copies of the registration of all such public
deeds in the Registry of Commerce
of Bolivia under the care of Fundempresa, on or soon before the date hereof;


(e)           Apex
has delivered to Sumitomo a copy of the articles of association (statuten) of New Metals, duly certified by the commercial
register of the Canton of Zug (Handels registeramt des
Kanton Zug) as of September 25, 2006; 


(f)            Apex
has delivered to Sumitomo a copy of the registration of MSC in the Registry of
Commerce of Bolivia under the care of Fundempresa with an updated certificate
of commercial registration for year 2005 (certificado de
actualización de matricula) issued on September 21, 2006 by the
Registry of Commerce of Bolivia under the care of Fundempresa;


(g)           Apex
has delivered to Sumitomo copy of the articles of association (statuts coordonnes) of Apex Luxembourg, duly certified by
Paul Frieders, notary public of Luxembourg, as of December 14, 2005;


(h)           Apex
has delivered to Sumitomo a copy of the articles of association (bolagsordning) of Apex Sweden, duly certified by the Swedish
Companies Registration Office (Bolagsverket)
as of September 22, 2006;


(i)            Apex
has delivered to Sumitomo a copy of the articles of association (bolagsordning) of New Sweden 1, duly certified by the
Swedish Companies Registration Office (Bolagsverket)
as of September 21, 2006;


(j)            Apex
has delivered to Sumitomo a copy of the articles of association (bolagsordning) of New Sweden 2, duly certified by the
Swedish Companies Registration Office (Bolagsverket)
as of September 21, 2006;


(k)           Apex
has delivered to Sumitomo copies of each of the public deeds evidencing the
Governing Documents of New Cayman, duly certified by G. Wayne Panton, notary
public in and for the Cayman Islands, as of September 22, 2006;


(l)            Apex
has delivered to Sumitomo a certified copy of the extract from the commercial
register of the Canton of Zug (Handelsregisteramt des
Kanton Zug — Hauptregister) regarding New Metals as of
September 4, 2006;


(m)          [Intentionally Omitted];



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(n)           Apex
has delivered to Sumitomo a certificate of the secretary of MSC, dated as of
the Closing Date, in form and substance reasonably satisfactory to Sumitomo, as
to (i) no amendments to the Governing Documents of MSC since the date
specified in Section 6.2(d); (ii) the resolutions of the board of
directors (or a duly authorized committee thereof) of MSC authorizing the execution,
delivery, and performance of the Transaction Documents to which it is a party
and the transactions contemplated thereby; and (iii) incumbency and
signatures of the officers of MSC executing such Transaction Documents and any
other agreements contemplated by this Agreement to which it is a party;


(o)           Apex
has delivered to Sumitomo a certificate signed by a managing officer of New
Metals, dated as of the Closing Date, in form and substance reasonably
satisfactory to Sumitomo, as to (i) no amendments to the Governing
Documents of New Metals since the date specified in Section 6.2(e);
(ii) the resolutions of all the managing officers of New Metals
authorizing the execution, delivery, and performance of the Transaction
Documents to which it is a party and the transactions contemplated thereby; and
(iii) incumbency and signatures of the managing officers of New Metals
executing such Transaction Documents and any other agreements contemplated by
this Agreement to which it is a party;


(p)           Apex
has delivered to Sumitomo a certificate of the assistant secretary of Apex,
dated as of the Closing Date, in form and substance reasonably satisfactory to
Sumitomo, as to (i) the resolutions of the board of directors (or a duly
authorized committee thereof) of Apex authorizing the execution, delivery, and
performance of this Agreement and the other Transaction Documents to which it
is a party and the transactions contemplated thereby; and (ii) incumbency
and signatures of the officers of Apex executing this Agreement, such other Transaction
Documents, and any other agreements contemplated by this Agreement to which it
is a party;


(q)           Apex
has delivered to Sumitomo a certificate of a manager of Apex Luxembourg, dated
as of the Closing Date, in form and substance reasonably satisfactory to
Sumitomo, as to (i) the resolutions of the managers of Apex Luxembourg
authorizing the execution, delivery, and performance of the Transaction
Documents to which it is a party and the transactions contemplated thereby; and
(ii) incumbency and signatures of the managers of Apex Luxembourg
executing such Transaction Documents and any other agreements contemplated by
this Agreement to which it is a party;


(r)            Apex
has delivered to Sumitomo a certificate of a director of Apex Sweden, dated as
of the Closing Date, in form and substance reasonably satisfactory to Sumitomo,
as to (i) the resolutions of the board of directors of Apex Sweden
authorizing the execution, delivery, and performance of the Transaction
Documents to which it is a party and the transactions contemplated thereby; and
(ii) incumbency and signatures of the directors (or deputy directors) of
Apex Sweden executing such Transaction Documents and any other agreements
contemplated by this Agreement to which it is a party;



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(s)           [Intentionally Omitted];


(t)            Apex
has delivered to Sumitomo a certificate of a director of New Sweden 1,
dated as of the Closing Date, in form and substance reasonably satisfactory to
Sumitomo, as to (i) no amendments to the Governing Documents of New
Sweden 1 since the date specified in Section 6.2(i); (ii) the
resolutions of the board of directors (or a duly authorized committee thereof)
of New Sweden 1 authorizing the execution, delivery, and performance of
the Transaction Documents to which it is a party and the transactions
contemplated thereby; and (iii) incumbency and signatures of the directors
(or deputy directors) of New Sweden 1 executing such Transaction Documents
and any other agreements contemplated by this Agreement to which it is a party;


(u)           Apex
has delivered to Sumitomo a certificate of a director of New Sweden 2,
dated as of the Closing Date, in form and substance reasonably satisfactory to
Sumitomo, as to (i) no amendments to the Governing Documents of New
Sweden 2 since the date specified in Section 6.2(j), (ii) the
resolutions of the board of directors (or a duly authorized committee thereof)
of New Sweden 2 authorizing the execution, delivery, and performance of
the Transaction Documents to which it is a party and the transactions
contemplated thereby; and (iii) incumbency and signatures of the directors
(or deputy directors) of New Sweden 2 executing such Transaction Documents
and any other agreements contemplated by this Agreement to which it is a party;


(v)           Apex
has delivered to Sumitomo a certificate of the secretary or assistant secretary
of New Cayman, dated as of the Closing Date, in form and substance reasonably
satisfactory to Sumitomo, as to (i) no amendments to the Governing
Documents of New Cayman since the date specified in Section 6.2(k), (ii) the
resolutions of the board of directors (or a duly authorized committee thereof)
of New Cayman authorizing the execution, delivery, and performance of the
Transaction Documents to which it is a party and the transactions contemplated
thereby; and (iii) incumbency and signatures of the officers of New Cayman
executing such Transaction Documents and any other agreements contemplated by
this Agreement to which it is a party;


(w)          Apex
has delivered to Sumitomo a copy of the certificate of incorporation of Service
Company, duly certified by the Secretary of State of the State of Delaware,
U.S.A. dated as of a recent date;


(x)            Apex
has delivered to Sumitomo a copy of the certificate issued by the Secretary of
State of the State of Delaware, U.S.A. dated as of a recent date, relating to
the good standing of Service Company in the State of Delaware, U.S.A.; and


(y)           Apex
has delivered to Sumitomo a certificate of the secretary or assistant secretary
of Service Company, dated as of the Closing Date, in form and substance
reasonably satisfactory to Sumitomo, as to (i) the resolutions of the
board of directors of Service Company authorizing the execution, delivery, and
performance of the Transaction Documents to which it is a party and the
transactions contemplated thereby; and (ii) incumbency and signatures of
the officers of Service Company executing such



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Transaction Documents and any other agreements contemplated by this
Agreement to which it is a party.


Section 6.3             Closing Deliveries to Apex, Apex
Sweden, and Apex Luxembourg.


(a)           Each
of the items described as being executed and delivered by Sumitomo or its
Subsidiaries (other than the Acquired Entities) pursuant to Section 2.5(b),
including the New Cayman Shareholders Agreement, the Sumitomo Guaranty, the
Dispute Resolution Agreement, the Deferred Payments Agreement, the Option
Agreement, the Reimbursement Agreement, and the New and Amended Financing
Documents, has been executed by Sumitomo and its Subsidiaries (other than the
Acquired Entities), as applicable, that are parties thereto and delivered to
Apex;


(b)           The
New and Amended Financing Documents have been executed by the lenders, the
hedge banks, the administrative agent, the technical agent, and the collateral
agent, as applicable, that are parties thereto and delivered to Apex;


(c)           Apex
has received (i) the opinion of Morrison & Foerster LLP, special New
York counsel to Sumitomo, and (ii) the opinion of Ito & Mitomi,
special Japanese counsel to Sumitomo, in each case dated as of the Closing
Date, addressed to Apex, and in form and substance satisfactory to Apex in its
reasonable discretion; and


(d)           Sumitomo
has delivered to Apex a certificate of the General Manager, Corporate Legal
& General Affairs Department of Sumitomo, dated as of the Closing Date, in
form and substance reasonably satisfactory to Apex, as to (i) the
resolutions of the board of directors (or a duly authorized committee thereof)
of Sumitomo authorizing the execution, delivery, and performance of this
Agreement and the other Transaction Documents to which it is a party and the
transactions contemplated thereby; and (ii) incumbency and signatures of
the officers of Sumitomo executing this Agreement, such other Transaction
Documents, and any other agreements contemplated by this Agreement to which it
is a party.


Section 6.4             Board Approvals.  This Agreement, the other Transaction
Documents, their execution and delivery, and the transactions contemplated
hereby and thereby, have been approved by Sumitomo’s board of directors and
Apex’s board of directors, and to the extent any of such approvals are subject
to the satisfaction or waiver of any conditions, such conditions have been
satisfied or waived.


Section 6.5             Restructuring.  All the material steps and actions with
respect to the corporate and tax restructuring set forth in Section 4.10 of the
Apex Disclosure Schedule to be taken prior to Closing have been taken.


ARTICLE
VII

INDEMNIFICATION


Section 7.1             Survival of Representations and
Warranties.  The respective
representations and warranties of the Parties contained in this Agreement or
any certificate



 46
 






 



delivered pursuant to this Agreement shall
survive the Closing until the first anniversary of the Closing Date; provided,
however, that the representation and warranties set forth in Section
3.1(l) through Section 3.1(p), Section 4.6, and Section 4.10 shall survive the
Closing until the expiration of any applicable statutes of limitations; provided,
further, that the obligations to indemnify specified in Section 7.2 shall
not terminate at the time provided above if, prior to such time, a notice of
claim relating to Losses specifying in detail the nature of such Losses
(although the amount of Losses, if not yet determinable, need not be specified)
has been given to Apex or Sumitomo, as applicable; and provided, further,
that notwithstanding anything to the contrary in this Agreement, a claim for
indemnity that is related to a Loss that results from fraud or intentional
malfeasance of Apex shall not have the benefit of any of the limitations set
forth in this ARTICLE VII.  The covenants
of the Parties in this Agreement shall survive the Closing without limitation
(except pursuant to their terms).


Section 7.2             Indemnification.


(a)           Subject
to a Party (an “Indemnified Party”) making a written claim for indemnification
against the other Party (the “Indemnifying Party”) pursuant to Section
7.3 within the survival period set forth in Section 7.1, the Indemnifying Party
shall indemnify and hold the Indemnified Party harmless from and against any
and all Losses the Indemnified Party may suffer (including Losses suffered or
paid, directly or indirectly, through the application of the Indemnified Party’s
assets or otherwise), arising out of, in the nature of, incident or relating
to, resulting from, or caused by (i) the failure of any representation or
warranty set forth in ARTICLE III or ARTICLE IV made by the Indemnifying Party
to be true and correct in all material respects at and as of the Closing Date
or (ii) the breach in any material respect by the Indemnifying Party of
any of its covenants under this Agreement.


(b)           No
indemnification by either Party pursuant to Section 7.2(a) shall be due and
payable unless the aggregate amount of all such claims asserted by the
Indemnified Party against the Indemnifying Party exceeds US$3,000,000.00 (the “Basket
Amount”), whereupon the applicable Indemnifying Party shall be obligated to
pay only the excess of the aggregate amount of such claims for indemnification
over the Basket Amount.


(c)           A
Party’s maximum aggregate indemnification obligations pursuant to Section
7.2(a) are limited to US$40,000,000.00; provided, however, that
the maximum aggregate indemnification obligations pursuant to Section 7.2(a)
are limited to $224,000,000 to the extent arising out of, in the nature of, incident
or relating to, resulting from, or caused by the failure of any representation
or warranty set forth in Section 3.1(l) through Section 3.1(p), or Section 4.6
to be true and correct at and as of the Closing Date.


(d)           Each
Party hereby acknowledges and agrees that its sole and exclusive monetary
remedy with respect to this Agreement, regardless of whether the relief
demanded or sought is found in contract or tort, shall be pursuant to the
indemnification provisions set forth in this ARTICLE VII.  Notwithstanding anything in the immediately
preceding sentence to the contrary, nothing in this Section 7.2(d) shall limit
in any way the availability of specific performance, injunctive relief,
rescission, or other



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non-monetary remedies to which a Party may otherwise be
entitled.  In no event shall either Party
be liable to any other Person for such other Person’s (i) lost profits,
loss of use, or lost revenues, (ii) punitive, multiple, or other exemplary
damages, or (iii) any other indirect, incidental, special, or
consequential Losses.  Each Party waives
and relinquishes claims for such lost profits, loss of use, lost revenues, or
other indirect, incidental, special, or consequential Losses.


Section 7.3             Procedures.


(a)           In
order for an Indemnified Party under this ARTICLE VII to be entitled to any
indemnification provided for under this Agreement, such Indemnified Party
shall, promptly following the discovery of the matters giving rise to any Loss,
notify the Indemnifying Party under this ARTICLE VII in writing of its claim
for indemnification for such Loss, specifying in reasonable detail the nature
of such Loss and the amount of the liability estimated to accrue therefrom; provided,
however, that the Indemnified Party’s failure to so notify the
Indemnifying Party shall not release the Indemnifying Party, in whole or in
part, from its obligations under this ARTICLE VII, except to the extent (and
solely to the extent) that the Indemnifying Party will have been actually
prejudiced as a result of such failure. 
Thereafter, the Indemnified Party shall deliver to the Indemnifying
Party, within five Business Days after the Indemnified Party’s receipt of such
request, all information and documentation reasonably requested by the
Indemnifying Party with respect to such Loss.


(b)           If
any third party notifies any Indemnified Party seeking indemnification under
Section 7.2, with respect to any matter, claim, investigation, action, suit,
charge, complaint, demand, or other Legal Proceeding, whether pending or
threatened (an “Action”), that may give rise to a claim for
indemnification under this ARTICLE VII, then the Indemnified Party shall
promptly give notice of the Action to the Indemnifying Party pursuant to
Section 8.5; provided, however, that the Indemnified Party’s
failure to so notify the Indemnifying Party of any Action shall not release the
Indemnifying Party, in whole or in part, from its obligations under this
ARTICLE VII, except to the extent (and solely to the extent) that the
Indemnified Party’s failure to so notify actually prejudices the Indemnifying
Party’s ability to defend against such Action.


(c)           The
Indemnified Party may, at the sole expense and liability of the Indemnifying
Party, exercise full control of the defense, compromise, or settlement of any
such Action, unless, at any time within 30 days after the Indemnified Party has
given notice to the Indemnifying Party of the Action, the Indemnifying Party
(i) delivers a written confirmation to such Indemnified Party that the
indemnification provisions of Section 7.2 are applicable to such Action and
that, subject to the other provisions of this ARTICLE VII, the Indemnifying
Party shall indemnify such Indemnified Party in respect of such Action pursuant
to the terms of Section 7.2, (ii) notifies such Indemnified Party in
writing of the Indemnifying Party’s intention to assume the defense thereof and
thereafter conducts the defense actively and diligently, and (iii) retains
legal counsel reasonably satisfactory to such Indemnified Party to conduct the
defense of such Action.  Notwithstanding
anything to the contrary in the immediately preceding sentence, the



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Indemnifying Party shall not have any right to assume the defense of
such Action, if (1) such Action seeks an injunction or other equitable
relief and not money damages only, or (2) the settlement or compromise of,
or an adverse judgment with respect to, such Action is, in the good faith
judgment of the Indemnified Party, likely to establish a precedent, custom or
practice materially adverse to the continuing business interests or the
reputation of the Indemnified Party.


(d)           The
Indemnified Party and the Indemnifying Party shall use their commercially
reasonable efforts to cooperate with the Party assuming the defense,
compromise, or settlement of any such Action in accordance herewith in any
manner that such Party reasonably may request. 
If the Indemnifying Party assumes the defense of any such Action, the
Indemnified Party shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement
thereof, but the fees and expenses of such counsel shall be the expense of such
Indemnified Party unless (i) the Indemnifying Party has specifically
agreed to pay such fees and expenses or (ii) the Indemnified Party has
been advised by its counsel that there may be one or more legal defenses from
claims available to it that are different from or additional to those available
to the Indemnifying Party or that there may be a conflict of interest between
the Indemnifying Party and the Indemnified Party in the conduct of the defense
of such Action (in either of which cases the Indemnifying Party shall not have
the right to direct the defense, compromise, or settlement of such Action on
behalf of the Indemnified Party), and in any such case the reasonable fees and
expenses of such separate counsel shall be borne by the Indemnifying Party, it
being understood and agreed, however, that the Indemnifying Party shall not be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for the Indemnified Party.  No
Indemnified Party shall settle or compromise or consent to entry of any
judgment with respect to any such Action for which it is entitled to
indemnification hereunder without the prior written consent of the Indemnifying
Party, unless the Indemnifying Party fails to assume control of such Action in
the manner provided in Section 7.3(c). 
The Indemnifying Party shall not, without the written consent of the Indemnified
Party, settle or compromise or consent to entry of any judgment with respect to
any such Action (1) in which any relief other than the payment of money
damages is or may be sought against any Indemnified Party, or (2) that
does not include as an unconditional term thereof the giving by the claimant,
party conducting such investigation, plaintiff or petitioner to such
Indemnified Party of a release from all liability with respect to such Action.


Section 7.4             Insurance Proceeds.  Notwithstanding anything to the contrary in
the other provisions of this ARTICLE VII, the amount that any Indemnifying
Party may be required to pay to an Indemnified Party pursuant to this ARTICLE
VII shall be reduced (retroactively, if necessary) by any insurance proceeds or
refunds actually recovered by or on behalf of the applicable Indemnified Party
in reduction of the related Losses (on an after-Tax basis).  If an Indemnified Party receives the payment
required by this ARTICLE VII from the Indemnifying Party in respect of Losses
and subsequently receives insurance proceeds in respect of such Losses, then
the Indemnified Party shall promptly repay to the Indemnifying Party a sum
equal to the amount of such insurance proceeds or refunds actually received,
net of costs and expenses and on an after-Tax basis, but not exceeding
the amount paid by the Indemnifying Party to such



 49
 






 



Indemnified Party in respect of such
Losses.  No representation, warranty,
covenant, or agreement contained in this Agreement is for the benefit of any
insurer.


ARTICLE
VIII

MISCELLANEOUS


Section 8.1             Entire Agreement.  This Agreement (together with the Disclosure
Schedules, other Schedules and Exhibits annexed hereto) and the other
Transaction Documents contain, and are intended as, a complete statement of all
of the terms of the agreements among the Parties with respect to the matters
provided for herein and therein, and supersede and discharge any previous
agreements and understandings between the Parties with respect to those
matters; provided, however, that the Confidentiality Agreement
shall survive the execution and delivery hereof and the Closing hereunder and
continue in full force and effect in accordance with its terms.


Section 8.2             Governing Law; Language.  This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, including
Section 5-1401 of the New York General Obligations Law, as applied to
contracts made and performed within the State of New York, without regard to
any choice or conflicts of law provision or rule that would cause the application
of the Laws of any jurisdiction other than the State of New York.  This Agreement has been negotiated and
executed by the Parties in English.  In
the event any translation of this Agreement is prepared for convenience or any
other purpose, the provisions of the English version shall govern.  Certain Schedules and/or Exhibits to this
Agreement are being executed in both English and Spanish or German.  If any doubt, misunderstanding or dispute
arises in their interpretation, the English version shall govern.


Section 8.3             Dispute Resolution.  Any controversy, claim, or dispute between
the Parties that arises out of or relates to this Agreement, including any
claim or controversy relating to the interpretation, breach, termination, or
invalidity of any provision hereof, shall be exclusively and finally settled
pursuant to and in accordance with the Dispute Resolution Agreement.


Section 8.4             Headings.  The article and section headings of this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.


Section 8.5             Notices.  All notices and other communications
hereunder shall be in writing and shall be delivered personally, telecopied (if
receipt of which is confirmed by the Person to whom sent), or sent by
internationally recognized overnight delivery service to the Parties at the
following addresses (or to such other Person or address for a Party as
specified by such Party by like notice) (notice shall be deemed given and
received upon receipt, if delivered personally, by overnight delivery service
or by telecopy, or on the third Business Day following mailing, if mailed,
except that notice of a change of address shall not be deemed given and
received until actually received):



 50
 






 



(a)          If
to Apex, Apex Sweden, or Apex Luxembourg, to it at:


c/o Apex Silver
Mines Corporation

1700 Lincoln Street, Suite 3050

Denver, Colorado  80203  U.S.A.

Attention:  President

Telecopier: +1 (303) 839-5907


with a copy to:


Holme Roberts
& Owen LLP

1700 Lincoln Street, Suite 4100

Denver, Colorado 80203 U.S.A.

Attention:  Paul G. Thompson, Esq.

Telecopier:  +1 (303) 866-0200


with a further
copy to:


Davis Graham &
Stubbs LLP

1550 17th Street, Suite 500

Denver, Colorado 80202 U.S.A.

Attention:  Deborah J. Friedman, Esq.

Telecopier:  +1 (303) 893-1379


(b)          If
to Sumitomo, to it at:


Sumitomo
Corporation

8-11, Harumi, 1-chome,

Chuo-ku, Tokyo, 104-8610 Japan

Attention:  General Manager of the Non
Ferrous Metals & Raw Materials Department

Telecopier: +81-3-5166-6423


with a copy to:


Morrison &
Foerster LLP

1290 Avenue of the Americas

New York, New York 10104 U.S.A.

Attention:  Michael C. Graffagna, Esq.

Telecopier:  +1 (212) 468-7900


Section 8.6             Severability.  If at any time any covenant or provision
contained herein is deemed in a final ruling of a court or other body of
competent jurisdiction (including an arbitral tribunal convened in accordance
with the Dispute Resolution Agreement) to be invalid or unenforceable, such
covenant or provision shall be considered divisible and such covenant or
provision shall be deemed immediately amended and reformed to include only such
portion of such covenant or provision as such court or other body has held to
be valid and enforceable; and the Parties agree that such covenant or
provision, as so amended and reformed, shall be valid and binding as though the
invalid or unenforceable portion had not been included herein.



 51
 






 



Section 8.7             Amendment; Waiver.  No provision of this Agreement may be amended
or modified except by an instrument or instruments in writing signed by the
Parties and designated as an amendment or modification.  No waiver by any Party of any provision of
this Agreement shall be valid unless in writing and signed by the Party making
such waiver and designated as a waiver. 
No failure or delay by any Party in exercising any right, power, or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof or the exercise of any other right, power, or remedy
preclude any further exercise thereof or the exercise of any other right,
power, or remedy.  No waiver of any
provision hereof shall be construed as a waiver of any other provision.


Section 8.8             Assignment and Binding Effect.  No Party may assign any of its rights or
delegate any of its obligations under this Agreement without (a) the prior
written consent of the other Parties, and (b) the complete written
assumption by the assignee of all of the obligations of the assignor under this
Agreement.  All of the terms and
provisions of this Agreement shall be binding on, and shall inure to the
benefit of, the respective successors and permitted assigns of the Parties.


Section 8.9             No Benefit to Others.  Except as expressly set forth herein, the
representations, warranties, covenants, and agreements contained in this
Agreement are for the sole benefit of the Parties and their respective
successors and permitted assigns, and they shall not be construed as conferring
and are not intended to confer any rights, remedies, obligations, or
liabilities on any other Person, unless such Person is expressly stated herein
to be entitled to any such right, remedy, obligation, or liability.


Section 8.10           Counterparts.  This Agreement may be executed by the Parties
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument.


Section 8.11           Interpretation.


(a)           As
used herein, except as otherwise indicated herein or as the context may
otherwise require: (i) the words “include,” “includes,” and “including”
are deemed to be followed by “without limitation” whether or not they are in
fact followed by such words or words of like import; (ii) the words “hereof,”
“herein,” “hereunder,” and comparable terms refer to the entirety of this
Agreement, including the Exhibits, Disclosure Schedules, and other Schedules
hereto, and not to any particular article, section, or other subdivision hereof
or Exhibit, Disclosure Schedule, or Schedule hereto; (iii) any pronoun
shall include the corresponding masculine, feminine, and neuter forms;
(iv) the singular includes the plural and vice versa; (v) references
to any agreement or other document are to such agreement or document as
amended, modified, supplemented, and restated now or hereafter from time to
time; (vi) references to any statute or regulation are to it as amended,
modified, supplemented, and restated now or hereafter from time to time, and to
any corresponding provisions of successor statutes or regulations;
(vii) except as otherwise expressly provided in this Agreement, references
to “Article,” “Section,” “preamble,” “recital,” or another subdivision or to an
“Exhibit,” “Disclosure Schedule,” or “Schedule” are to an article, section,
preamble, recital or subdivision hereof or an 



 52
 






 



“Exhibit,” “Disclosure Schedule,” or “ Schedule” hereto; and
(viii) references to any Person or Entity include such Person’s or Entity’s
respective successors and permitted assigns.


(b)           In
this Agreement,


(i)                                     any reference to
Sumitomo’s “knowledge,” and comparable terms including “know,” “known,” “aware,”
or “awareness,” of a particular fact or other matter means the knowledge of one
or more of the executive officers or directors of Sumitomo or the knowledge
such individuals should be expected to know after conducting a due,
appropriate, and reasonable investigation; and


(ii)                                  any reference to Apex’s
“knowledge,” and comparable terms including “know,” “known,” “aware,” or “awareness,”
of a particular fact or other matter means the knowledge of any of the following
individuals or the knowledge such individuals should be expected to know after
conducting a due, appropriate, and reasonable investigation:


(A)                              Keith R. Hulley, chairman
and director of Apex;


(B)                                Jeffrey G. Clevenger,
president, chief executive officer, and director of Apex;


(C)                                Harry M. Conger,
director of Apex;


(D)                               Ove Hoegh, director of
Apex;


(E)                                 Kevin R. Morano,
director of Apex;


(F)                                 Terry M. Palmer,
director of Apex;


(G)                                Charles B. Smith,
director of Apex;


(H)                               Paul Soros, director of
Apex;


(I)                                    Alan Edwards,
executive vice president and chief operating officer of Apex;


(J)                                   Gerald J. Malys,
senior vice president and chief financial officer of Apex;


(K)                               Marcel F. DeGuire,
senior vice president of marketing and projects of Apex;



 53
 






 



(L)                                 Terry L. Owen, senior
vice president of project development of Apex;


(M)                            Jerry W. Danni, senior vice
president of corporate affairs of Apex;


(N)                               Robert P. Vogels, vice
president and controller of Apex;


(O)                               Robert B. Blakestad,
vice president exploration of Apex;


(P)                                 Igor Levental, vice
president, investor relations and corporate development of Apex;


(Q)                               Graham Buttenshaw, vice
president and general manager of MSC; and


(R)                                Gerardo Garrett, vice
president corporate of MSC.


(c)           Any
reference herein to a “day” or number of “days” (without the explicit
qualification of “Business”) shall be deemed to refer to a calendar day or
number of calendar days.  If any action
or notice is to be taken or given on or by a particular calendar day, and such
calendar day is not a Business Day, then such action or notice may be taken or
given on the next succeeding Business Day.


(d)           Any
financial or accounting terms that are not otherwise defined herein shall have
the meanings given thereto under generally accepted accounting principles as
used in the U.S.  For purposes of each
reference herein to an amount in Dollars in circumstances where the actual item
is expressed in any other currency shall be considered a reference to the
Dollar equivalent of such other currency on the relevant date of determination
of such amount at the relevant noon buying rate in the City of New York for
cable transfers in foreign currencies, as announced by the Federal Reserve Bank
of New York for customs purposes (the “Reference Exchange Rate”).


Section 8.12           Rules of Construction.  The Parties agree that they have been
represented by counsel during the negotiation, preparation, and execution of
this Agreement and, therefore, waive the application of any Law or rule of
construction providing that ambiguities in an agreement or other document shall
be construed against the Party drafting such agreement or document.


Section 8.13           No Partnership.  No provision of this Agreement creates a
partnership or joint venture between or among the Parties or makes any Party
the agent of any other Party for any purpose. 
No Party has the authority or power to bind, to contract in the name of,
or to create any liability for any other Party in any way or for any purpose.


[Remainder of page
intentionally left blank]



 54














 


IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the date first written above.


 


 


	
  

  	
  APEX SILVER MINES LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Clevenger

  
	
   

  	
   

  	
  Jeffrey Clevenger

  
	
   

  	
  Its:

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
  APEX LUXEMBOURG S.À R.L.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald Malys

  
	
   

  	
   

  	
  Gerald Malys

  
	
   

  	
  Its:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  APEX SILVER MINES SWEDEN AB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcel DeGuire

  
	
   

  	
   

  	
  Marcel DeGuire

  
	
   

  	
  Its:

  	
  Director

  



 









 



 


	
  

  	
  SUMITOMO CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitsuhiko Yamada

  
	
   

  	
   

  	
  Mitsuhiko Yamada

  
	
   

  	
  Its:

  	
  Executive Officer and General Manager,

  Mineral Resources Division 1