Document:

Exhibit 10.2

 

EXECUTION
COPY

 

PURCHASE AND
SALE AGREEMENT

 

Entered into
as of January 12, 2009

 

among

 

APEX SILVER
MINES LIMITED,

 

APEX
LUXEMBOURG S.À R.L.,

 

APEX SILVER
MINES SWEDEN AB,

 

APEX SILVER MINES CORPORATION,

 

ASC BOLIVIA LDC, SUCURSAL BOLIVIA, THE BOLIVIAN

BRANCH OF ASC
BOLIVIA LDC,

 

SUMITOMO
CORPORATION

 

AND

 

SC MINERALS AKTIEBOLAG

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  PURCHASE AND SALE;
  CLOSING

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Purchase and Sale

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 1.2

  	
  Purchase Price

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 1.3

  	
  Intentionally Deleted

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 1.4

  	
  Allocation of Cash
  Purchase Price

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 1.5

  	
  Closing

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 1.6

  	
  Closing Deliveries

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  TRANSACTION
  REPRESENTATIONS AND WARRANTIES

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Apex’s Representations
  and Warranties

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.2

  	
  Sumitomo’s
  Representations and Warranties

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND
  WARRANTIES REGARDING MSC

  AND THE PURCHASED PROPERTIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 3.1

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

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 3.2

  	
  No Conflicts

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 3.3

  	
  Consents and Approvals
  for the Project

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 3.4

  	
  Subsidiaries

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 3.5

  	
  Financial Statements;
  No Undisclosed Liabilities; No Material Adverse Effect

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 3.6

  	
  Title to Properties;
  Sufficiency of Assets

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 3.7

  	
  Material Contracts

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 3.8

  	
  Employees; Employee
  Benefits

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 3.9

  	
  Legal Compliance

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 3.10

  	
  Taxes

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 3.11

  	
  Legal Proceedings

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.12

  	
  Environmental Matters

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.13

  	
  Interested Party
  Transactions

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.14

  	
  Insurance

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.15

  	
  Credit Support

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.16

  	
  Performance Security

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.17

  	
  No Liquidation; Intent

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.18

  	
  Project Information and
  Other Information Furnished

  	
  22

  
								

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  PRE-CLOSING COVENANTS

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Commencement of
  Bankruptcy

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 4.2

  	
  Plan Support Agreement

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 4.3

  	
  SC Designated
  Purchasers

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  OTHER COVENANTS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Conduct of Business
  Pending the Closing

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 5.2

  	
  Confidentiality

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 5.3

  	
  Expenses; Transfer
  Taxes

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.4

  	
  Further Assurances

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.5

  	
  Solicitation of
  Transactions

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.6

  	
  Return of ASC Bolivia
  L/C Collateral

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 5.7

  	
  Dissolution of ASF

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 5.8

  	
  Reimbursement of Apex
  Expenditures

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 5.9

  	
  Efforts to Prevent
  Insolvency

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.10

  	
  SC Working Capital
  Facility

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.11

  	
  Transmission Line

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.12

  	
  Public Announcements

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.13

  	
  Enforcement in Bolivia

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  CONDITIONS TO CLOSING

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Conditions to
  Sumitomo’s Obligations

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.2

  	
  Conditions to Apex’s
  Obligations

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 6.3

  	
  Conditions to
  Obligations of Each Party

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  SURVIVAL AND
  INDEMNIFICATION

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Survival

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 7.2

  	
  Indemnification

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.3

  	
  Tax Indemnity

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.4

  	
  Limitations on
  Indemnification

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.5

  	
  Intentionally Deleted.

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.6

  	
  Procedures for
  Indemnification

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  TERMINATION

  	
  43

  
							

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Events of Termination

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 8.2

  	
  Effect of Termination
  or Breach

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.3

  	
  Purchaser Protections

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Entire Agreement

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.2

  	
  Governing Law; Language

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.3

  	
  Submission to
  Jurisdiction; Waiver of Jury Trial; Service of Process

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.4

  	
  Headings

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.5

  	
  Notices

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.6

  	
  Severability

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 9.7

  	
  Amendment; Waiver

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 9.8

  	
  Assignment and Binding
  Effect

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 9.9

  	
  No Benefit to Others

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 9.10

  	
  Counterparts

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 9.11

  	
  Rules of
  Construction

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 9.12

  	
  No Partnership

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 9.13

  	
  Stock Purchase
  Agreement Not a Plan

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 9.14

  	
  Interpretation

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 9.15

  	
  Specific Performance

  	
  49

  
					

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Annexes/Exhibits/Schedules

  	
   

  
	
   

  	
   

  
	
  Annex I — Defined Terms

  	
   

  
	
   

  	
   

  
	
  Exhibit A
  — Intentionally Deleted

  	
   

  
	
  Exhibit B —
  Form of AMM Assignment Agreement

  	
   

  
	
  Exhibit C —
  Form of Bill of Sale

  	
   

  
	
  Exhibit D —
  Form of Assignment and Assumption Agreement

  	
   

  
	
  Exhibit E —
  Intentionally Deleted

  	
   

  
	
  Exhibit F —
  Form of Reorganized Apex Parent Guaranty

  	
   

  
	
  Exhibit G —
  Form of Management Services Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule A — Apex
  Disclosure Schedule

  	
   

  
	
  Schedule B —
  Sumitomo Disclosure Schedule

  	
   

  
	
  Schedule C —
  Shareholder Loans

  	
   

  
	
  Schedule D —
  Assumed Liabilities

  	
   

  
	
  Schedule E —
  Company Agreements

  	
   

  
	
  Schedule F — Apex
  Reimbursable Expenditures

  	
   

  

 

iv

 

PURCHASE AND SALE AGREEMENT

 

This Purchase and Sale Agreement is entered
into as of January 12, 2009, by and among:

 

APEX SILVER MINES LIMITED,
an exempted company limited by shares organized and 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 organized
and existing under the Laws of the Grand Duchy of Luxembourg (“Apex
Luxembourg”), with its registered office at 13, avenue de la Liberté,
L-1931 Luxembourg, registered with the Luxembourg Register of Commerce (Registre de Commerce et des Sociétés du Grand-Duché
de Luxembourg) under number B 110 956 and with a capital amount
of US$21,516,960.00;

 

APEX SILVER MINES SWEDEN AB,
organization number 556681-9586, a privat
aktiebolag organized and existing under the Laws of the Kingdom of
Sweden (“Apex Sweden”), with its registered office at c/o Anders
Sköldberg, Ernst & Young AB, 401 82 Göteborg, Sweden;

 

APEX SILVER MINES CORPORATION,
a Delaware corporation (“Service Company”), having its principal place
of business at 1700 Lincoln Street, Suite 3050, Denver, Colorado 80203,
U.S.A.;

 

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 commerce number 13931, of ASC
Bolivia LDC, an exempted limited duration company organized under the Laws of
the Cayman Islands, British West Indies (“ASC Bolivia”), with its
registered office at Walker House, Mary Street, George Town, Grand Cayman,
Cayman Islands, British West Indies;

 

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

 

SC MINERALS AKTIEBOLAG,
organization number 556702-1083, a privat
aktiebolag organized and existing under the Laws of the Kingdom of
Sweden (“SC Minerals”), with its registered office at c/o Ernst &
Young AB, 401 82 Göteborg, Sweden.

 

Apex, Apex Luxembourg, Apex Sweden, Service
Company and ASC Bolivia are sometimes referred to individually as a “Seller”
and collectively as the “Sellers”, and any Sumitomo Affiliate that
Sumitomo designates as a purchaser of the Purchased Properties are sometimes
referred to individually as an “SC Designated Purchaser” and
collectively, together with Sumitomo and SC Minerals, the “Purchasers”.  The Sellers, as a group, and the Purchasers,
as a group, are sometimes referred to herein as a “Party” and both
groups collectively as the 

 

1

 

“Parties.”  Capitalized terms used and not otherwise defined
in this Agreement have the respective meanings ascribed thereto in Annex I.

 

RECITALS

 

A.                                   Each
of Apex Sweden and Apex Luxembourg own, beneficially and of record, shares
which together represent sixty-five percent (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 Potosí, Bolivia, with register of commerce
number 13681.

 

B.                                     Apex
Sweden owns, beneficially and of record, one quota representing sixty-five
(65%) of the issued and outstanding capital of Apex Metals Marketing GmbH, a Gesellschaft mit beschränkter Haftung organized under the
laws of Switzerland (“AMM”), with its seat in Zug, Canton of Zug,
Switzerland and with a registered address of Bahnofstrasse 10, 6300 Zug,
Switzerland.

 

C.                                     Apex
Sweden is the holder of those certain shareholder loans made to MSC, dated as
of the dates, in the original principal amounts and made by the persons
specified in Schedule C, of which US$293,150,378  in aggregate principal amount and US$22,306,605.09 in
accrued interest is outstanding on the date hereof and any shareholder loans
made by Apex or its Affiliates following the date hereof (the “Shareholder
Loans”).

 

D.                                    Under
the 2006 Management Services Agreement, there remain certain Deferred
Management Fee Obligations due and owing by MSC to Service Company.

 

E.                                      Apex
and certain Apex Affiliates own the Other MSC Obligations to Apex.

 

F.                                      ASC
Bolivia owns, beneficially and of record, the ASC Bolivia Assets.

 

G.                                     MSC
owns and is operating the San Cristóbal silver, zinc, and lead mine in Bolivia.

 

H.                                    The
Sellers desire to sell to the Purchasers, and the Purchasers desire to purchase
from the Sellers, the Purchased Properties, in consideration for, among other
things, the Cash Purchase Price.

 

I.                                         Apex
and Service Company intend to file voluntary petitions for relief under Chapter
11 of the Bankruptcy Code (the “Bankruptcy Case”) in the United States
Bankruptcy Court for the Southern District of New York.

 

J.                                        In
connection with the Bankruptcy Case, Apex and Service Company intend to file a
joint Chapter 11 plan of reorganization (the “Plan”) pursuant to which
Apex and Service Company intend to seek Bankruptcy Court approval of this
Agreement, the transactions and 

 

2

 

releases contemplated hereunder, and
authority to perform all of their obligations under this Agreement and the
other Transaction Documents.

 

K.                                    In
connection with the Transactions, Sumitomo shall designate prior to the Closing
the SC Designated Purchasers to purchase the Purchased Properties.

 

L.                                      In
connection with their purchase of the Purchased Properties, the Purchasers
shall assume certain liabilities of the Sellers.

 

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:

 

ARTICLE I

PURCHASE AND SALE; CLOSING

 

Section 1.1                                      Purchase and
Sale.  On and subject to the terms and
conditions of this Agreement, and for the consideration specified in Section 1.2
and for the assumption of the Assumed Liabilities:

 

(a)                                  MSC
Acquired Shares.  Sumitomo agrees to
cause one or more SC Designated Purchasers to purchase from Apex Sweden and
Apex Luxembourg, and Apex Sweden and Apex Luxembourg agree to sell, transfer,
assign, convey, and deliver to such SC Designated Purchasers, all their right,
title, and interest in and to shares of MSC representing sixty-five (65%) of
the issued and outstanding shares of MSC as of the Closing, including any and
all present, future and contingent patrimonial rights and obligations related
thereto, such as reserves, contributions pending capitalization, global
adjustments of equity and the like, with no exception (the “MSC Acquired
Shares”), free and clear of all Liens and Restrictions, other than Liens or
Restrictions (i) created by this Agreement, (ii) imposed by
applicable Law or the Governing Documents of MSC generally on all shares of
MSC, (iii) under the MSC Shareholders Agreement or (iv) existing
under the Financing Documents;

 

(b)                                 AMM Acquired Quota.  Sumitomo agrees to cause
one or more SC Designated Purchasers to purchase from Apex Sweden and Apex Sweden agrees to sell, transfer,
assign, convey and deliver to such SC Designated Purchaser(s) all of its
right, title and interest in and to one quota of AMM representing sixty-five
(65%) of the issued and outstanding capital of AMM (the “AMM Acquired Quota”)
free and clear of all Liens and Restrictions, other than (i) Liens and
Restrictions created by this Agreement, (ii) imposed by Applicable Law or
the Governing Documents of AMM generally on all quotas of AMM, (iii) under
the AMM Quotaholders Agreement or (iv) existing under the Financing
Documents;

 

(c)                                  Shareholder
Loans.  Sumitomo agrees to cause one
or more SC Designated Purchasers to purchase from Apex Sweden and Apex Sweden
agrees to sell, transfer, 

 

3

 

assign, convey and deliver to such SC Designated
Purchaser(s) all of its right, title and interest in and to the
Shareholder Loans free and clear of all Liens and Restrictions, other than
Liens and Restrictions (i) created by this Agreement, (ii) imposed by
applicable Law or the Governing Documents of MSC generally on all loans from
its shareholders, (iii) under the MSC Shareholders Agreement or (iv) existing
under the Financing Documents;

 

(d)                                 Deferred
Management Fee Obligations.  Sumitomo agrees to cause one or
more SC Designated Purchasers to purchase from Service Company and Service
Company agrees to sell, transfer, assign, convey and deliver to such SC
Designated Purchaser(s) all of its right, title and interest in and to the
Deferred Management Fee Obligations free and clear of all Liens and
Restrictions other than Liens and Restrictions (i) created by this
Agreement, (ii) imposed by applicable Law or (iii) existing under the
Financing Documents;

 

(e)                                  Other
MSC Obligations to Apex.  Sumitomo
agrees to cause one or more SC Designated Purchasers to purchase from Apex and
the applicable Apex Affiliates, and Apex agrees, and agrees to cause each of
its applicable Apex Affiliates, to sell, transfer, assign, convey and deliver
to such SC Designated Purchaser(s) all of its and their respective right,
title and interest in and to the Other MSC Obligations to Apex free and clear
of all Liens and Restrictions other than Liens and Restrictions (i) created
by this Agreement, (ii) imposed by applicable Law or (iii) existing
under the Financing Documents;

 

(f)                                    ASC Bolivia Assets. Sumitomo agrees to cause one or
more SC Designated Purchasers to purchase from ASC Bolivia and ASC Bolivia
agrees to sell, transfer, assign, convey to such SC Designated Purchaser(s) all
of ASC Bolivia’s right, title and interest in and to the ASC Bolivia Assets
free and clear of all Liens and Restrictions other than Liens and Restrictions (i) created
by this Agreement, (ii) imposed by applicable Law or (iii) existing
under the Financing Documents.

 

(g)                                 Assumed
Liabilities.  At the Closing, the
Sellers shall assign, and one or more SC Designated Purchasers determined and
notified to Apex by Sumitomo shall assume, only the Assumed Liabilities set
forth on Schedule D (the “Assumed Liabilities”); and

 

(h)                                 Excluded
Liabilities. Except for the Assumed Liabilities, the Purchasers shall not
assume and shall not be liable or responsible for any Losses of, or claimed
against, the Sellers or any Apex Affiliate (collectively, the “Excluded
Liabilities”).

 

Section 1.2                                      Purchase Price.  On the terms and subject to the conditions of
this Agreement, at the Closing, as partial consideration for the Purchased
Properties, Sumitomo, on behalf of the Purchasers, will pay or cause to be
paid to the Sellers an aggregate amount equal to US$27,500,000.00 (the “Cash
Purchase Price”) by wire transfer of immediately available US$ funds to
such account or accounts and in such amounts, as Apex has specified in writing
to Sumitomo prior to the Closing.

 

Section 1.3                                      Intentionally
Deleted.

 

4

 

Section 1.4                                      Allocation of
Cash Purchase Price.  As soon as
practicable after the Closing, the Purchasers shall provide to the Sellers for
the Sellers’ review and approval (which approval shall not be unreasonably
delayed, conditioned or withheld) a proposed allocation of the Purchase Price
among the Purchased Properties for all purposes (including financial accounting
and Tax purposes); provided that such allocations are consistent with
Law (including financial reporting and Tax Law).  The Parties covenant and agree that (a) such
allocation will be determined in an arm’s length negotiation and none of the
Parties shall take a position on any financial statements or Tax Return that is
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
in writing regarding the existence of any tax audit, controversy, or litigation
related to such allocation.

 

Section 1.5                                      Closing.  The closing of the Transactions contemplated
by this Agreement (the “Closing”) shall occur at the offices of Cleary
Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New York
10006, at a time and date to be specified by the Parties, which will be no
later than the second Business Day after the satisfaction or waiver of the
conditions set forth in Section 6.1 and Section 6.2 in
accordance with this Agreement, or at such other location, time and date as the
Parties agree in writing (the “Closing Date”).

 

Section 1.6                                      Closing
Deliveries.

 

(a)                                  Apex
Closing Deliveries.  At the Closing,
the Sellers shall deliver (or, as specified herein, shall have made available)
to the Purchasers:

 

(i)                                     (A) two
or more original certificates evidencing the MSC Acquired Shares, duly endorsed
by Apex Sweden or Apex Luxembourg, as applicable, to the applicable SC
Designated Purchasers, together with a copy of the shareholders’ register of
MSC evidencing that such SC Designated Purchasers have been duly registered and
entered therein as holders of the MSC Acquired Shares, certified by the
Secretary of the Board of Directors of MSC, (B) a copy of the powers of
attorney of the representative of Apex Sweden and Apex Luxembourg with
sufficient evidence of authority to sell, transfer and endorse the MSC Acquired
Shares; and (C) a certificate issued by the President and Secretary of the
Board of Directors of MSC and one of its Sindicos, certifying that as of the
date of such registration there are no registered liens, pledges, claims by
third parties or similar, nor any other restrictions or limitations to transfer
of the MSC Acquired Shares other than Liens or Restrictions (A) created by
this Agreement, (B) imposed by applicable Law or by the Governing
Documents of MSC generally on all shares of MSC, (C) under the MSC
Shareholders Agreement or (D) existing under the Financing Documents; in respect of the
share certificates of the MSC Acquired Shares referred to above the endorsement
must be in form and content reflecting all required formalities in respect of
any prior endorsements that will enable the proper registration of the MSC
Acquired Shares with the shareholders’ register of MSC, including

 

5

 

“endorsements in return”, and new endorsements,
including, to the extent applicable, guarantee endorsements pursuant to the
Financing Documents as may have been modified and/or having to be properly
modified;

 

(ii)                                  (A) a copy of the quotaholders’
register of AMM evidencing that the applicable SC Designated Purchaser(s) has
been entered therein as a holder of the AMM Acquired Quota; (B) an
executed copy of the assignment agreement in substantially the form attached
hereto as Exhibit B (the Parties hereby agree that such assignment
agreement shall only be used for the purposes of registering the SC Designated
Purchaser(s) in the commercial register, and the interpretation, rights
and obligations of each party to the assignment agreement shall be exclusively
governed by this Agreement); and (C) a copy of the quotaholders’
resolution consenting to the sale of the AMM Acquired Quota and confirming its
compliance with the terms and conditions of the AMM Quotaholders Agreement;

 

(iii)                               appropriate instruments evidencing the
transfer to the applicable SC Designated Purchaser(s) of all Shareholder
Loans duly endorsed by Apex Sweden, in form and substance reasonably
satisfactory to such SC Designated Purchaser(s);

 

(iv)                              appropriate instruments evidencing the
assignment to the applicable  SC
Designated Purchaser(s) of the Deferred Management Fee Obligations duly
executed by the Service Company, in form and substance reasonably satisfactory
to such SC Designated Purchaser(s);

 

(v)                                 appropriate instruments evidencing the
assignment to the applicable SC Designated Purchaser(s) of the Other MSC
Obligations to Apex duly executed by Apex and the applicable Apex Affiliates,
in form and substance reasonably satisfactory to such SC Designated
Purchaser(s);

 

(vi)                              counterparts of the termination and
releases, in form and substance reasonably satisfactory to the Parties,
evidencing the termination of the agreements listed on Schedule E
attached hereto (the “Company Agreements”), effective as of the Closing
Date.

 

(vii)                           the various certificates, instruments,
and documents referred to in Section 6.1;

 

(viii)                        Intentionally Deleted;

 

(ix)                                the Reorganized Apex Parent Guaranty,
duly executed by Reorganized Apex;

 

(x)                                   written letters of resignation and
releases from all claims and rights from each Apex appointed or elected
director to the Board of Directors of MSC and from each Apex elected sindico to
be effective immediately following the Closing;

 

6

 

(xi)                                written letters of resignation and releases
from all claims and rights from each Apex appointed or elected director or
officer or any person holding such equivalent position of AMM to be effective
immediately following the Closing;

 

(xii)                             written letters of resignation and
release addressed to the Board of Directors of MSC from each individual,
whether a member of the Board of Directors of MSC or not, who has received upon
a decision of the Board of Directors of MSC general management powers of
attorney;

 

(xiii)                          management
powers of attorney of all special powers of attorney for any purposes granted
either by resolution of MSC’s board of directors or by delegation or otherwise
of any attorney in fact based on the authority granted upon it shall have been
made available and, if requested, delivered to the Purchasers’ Bolivian
counsel;

 

(xiv)                         General Assignment and Bill of Sale(s) covering
all of the applicable Purchased Properties, substantially in the form attached
hereto as Exhibit C;

 

(xv)                            instruments evidencing the discharge and
release of MSC and AMM, their Affiliates and respective principals, employees,
agents, officers, directors, sindicos, shareholders and professionals, of all
liability to Reorganized Apex, the Sellers and every Apex Affiliate relating to
or arising our of any and all Causes of Action of any nature whatsoever arising
prior to the Closing Date or as a result thereof except for the Deferred
Management Fee Obligations and Other MSC Obligations to Apex, to the extent
such Deferred Management Fee Obligations and Other MSC Obligations to Apex are
sold to the Purchasers pursuant to this Agreement, and except for any
liabilities under the Transaction Documents;

 

(xvi)                         instruments evidencing the discharge and
release of the Purchasers and every Sumitomo Affiliate and their respective
principals, employees, agents, officers, directors, sindicos, shareholders and
professionals, of all liability to the Sellers and every Apex Affiliate
relating to or arising out of any and all Causes of Action of any nature
whatsoever, arising prior to the Closing Date or as a result thereof except for
liabilities arising under this Agreement and the Transaction Documents;

 

(xvii)                      a
copy of the order entered by the Bankruptcy Court confirming the Plan (the “Confirmation
Order”), which Plan and Confirmation Order shall be in form and substance
reasonably satisfactory to Sumitomo and shall, among other things, (i) approve
this Agreement, the other Transaction Documents and the transactions
contemplated hereunder in their entirety, (ii) authorize Apex and Service
Company to enter into this Agreement and the other Transaction Documents and
perform their obligations thereunder, including the sale of the Purchased
Assets free and clear of all Liens, claims and encumbrances in accordance with
this Agreement and, where applicable, Section 363(f) of the
Bankruptcy Code, and (iii) provide for and approve a 

 

7

 

general release by Apex and Service Company, and Apex’s and
Service Company’s creditors and interest holders of any Cause of Action, to the
fullest extent permitted by applicable law, whether liquidated or unliquidated,
fixed or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, then existing or thereafter arising, in law, equity or otherwise
that are based in whole or in part on any act, omission, transaction, event or
other occurrence taking place on or prior to the effective date of the Plan
against (a) Sumitomo, (b) any of Sumitomo’s current and former
directors, officers, employees, agents, members, shareholders and
professionals, and (c) with respect to each of the foregoing, their
respective Affiliates;

 

(xviii)                   Assignment and Assumption Agreement(s),
covering all of the Material Contracts and Assumed Liabilities, substantially
in the form attached hereto as Exhibit D, duly executed by the
relevant Apex Affiliates; and

 

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

 

(b)                                 Sumitomo Closing Deliveries. 
At the Closing, the Purchasers shall deliver to the Sellers:

 

(i)                                     the Cash Purchase Price;

 

(ii)                                  the Sumitomo guaranty, substantially in the form set forth
as Exhibit A to the Management Services Agreement, duly executed by
Sumitomo;

 

(iii)                               Assignment and Assumption Agreement(s),
covering all of the Material Contracts and Assumed Liabilities, substantially
in the form attached hereto as Exhibit D, duly executed by the
relevant SC Designated Purchasers;

 

(iv)                              counterparts of the termination and
releases, in form and substance reasonably satisfactory to Apex, evidencing the
termination of the Company Agreements, effective as of the Closing Date;

 

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

 

(vi)                              instruments evidencing the discharge and
release of the Sellers and every Apex Affiliate and their respective
principals, employees, agents, officers and directors, sindicos, shareholders
and professionals, of all liability to the Purchasers and every Sumitomo
Affiliate relating to or arising our of any and all Causes of Action of any
nature whatsoever, arising prior to the Closing Date or as a result thereof
except for liabilities arising under this Agreement and the Transaction
Documents; and

 

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

 

8

 

ARTICLE II

TRANSACTION REPRESENTATIONS AND WARRANTIES

 

Section 2.1                                      Apex’s Representations and Warranties. 
The Sellers, jointly and severally, represent and warrant to the
Purchasers that the statements contained in this Section 2.1 are
true, correct, and complete as of the date of this Agreement and as of the
Closing Date (except to the extent any such representation and warranty
specifically speaks as of a different date).

 

(a)                                  Organization. 
Apex and each Seller 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. 
Apex and each Seller has all requisite corporate or other Entity power
and authority to enter into, and to perform its obligations under this
Agreement and the other Transaction Documents to which it is a party, and the
execution and delivery by Apex and each Seller of this Agreement and the other
Transaction Documents to which it is a party, and the performance by Apex and
such Seller of its obligations under such of this Agreement and the other
Transaction Documents to which it is a party, have been duly authorized by all
requisite corporate or other Entity action.

 

(c)                                  Validity.  This
Agreement and the other Transaction Documents to which Apex and each Seller is
a party have been duly executed and delivered by Apex and/or each Seller which
is a party thereto, and assuming the due execution and delivery by the Purchasers,
such of this Agreement and the other Transaction Documents to which Apex and
each Seller is a party shall constitute Apex’s and such Seller’s legal, valid,
and binding obligation, enforceable against Apex and such Seller 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 as set
forth in Section 2.1(d) of the Apex Disclosure Schedule (the “Apex
Required Consents”), no Governmental Approval or Authorization is required
by or on behalf of Apex or any Seller in connection with the execution,
delivery, or performance by Apex or such Seller of this Agreement and the other
Transaction Documents to which it is a party or the consummation of the
Transactions.

 

(e)                                  No Conflicts. 
The execution and delivery by Apex and each Seller of this Agreement and
the other Transaction Documents to which it is a party, and the performance by
Apex and each Seller of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby do not and
shall not, (i) violate or conflict with any provision of the Governing
Documents of Apex or any Seller; (ii) violate any of the terms,
conditions, or provisions of any Law or Government Approval to which Apex or
any Seller is subject or by which Apex or any Seller or any of its assets are
bound; (iii) assuming the obtaining of all of the Apex Required Consents,
result in a violation or breach of, or (with or

 

9

 

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 Apex or any Seller is a party or by which
Apex or any Seller or any of its assets are bound; or (iv) result in a
Lien or Restriction (other than any Lien or Restriction of the type referred to
in Section 2.1(f) through Section 2.1(l)), on any
of the Purchased Properties.

 

(f)                                    Ownership of Shares of MSC. 
Apex Sweden is the owner, beneficially and of record, of, and has good
and valid title to, 14,608,749 registered shares of the issued and outstanding
shares of MSC, and 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, in each case free and clear of all Liens and Restrictions,
other than Liens or Restrictions (i) created by this Agreement, (ii) imposed
by applicable Law or by the Governing Documents of MSC generally on all shares
of MSC, (iii) under the MSC Shareholders Agreement or (iv) existing
under the Financing Documents.  The MSC
Acquired Shares 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,
attributable thereto under applicable Law. 
There are no voting trusts, proxies, powers of attorney, or other
agreements or understandings with respect to the voting of such MSC Acquired
Shares, other than under the MSC Shareholders Agreement and the Financing
Documents.

 

(g)                                 Ownership of Quota of AMM.    Apex Sweden is the
owner, beneficially and of record, of and has good and valid title to, one
uncertificated quota representing sixty-five (65%) of the issued and
outstanding capital of AMM, with a nominal value of CHF 13,000, that is fully
paid up, free and clear of all Liens and Restrictions, other than Liens and
Restrictions (i) created by this Agreement, (ii) imposed by applicable
Law or the Governing Documents of AMM generally on all quotas of AMM, (iii) under
the AMM Quotaholders Agreement or (iv) existing under the Financing
Documents.  The AMM Acquired Quota
includes 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,
attributable thereto under applicable Law. 
There are no voting trusts, proxies, powers of attorney, or other
agreements or understandings with respect to the voting of the AMM Acquired
Quota, other than under the AMM Quotaholders Agreement and the Financing
Documents.

 

(h)                                 Ownership of Shareholder Loans. 
Apex Sweden is the holder of, and has good and valid title to, the
Shareholder Loans, free and clear of all Liens and Restrictions other than (i) created
by this Agreement, (ii) imposed by applicable Law or the Governing
Documents of MSC generally on all loans from its shareholders, (iii) under
the MSC Shareholders Agreement or (iv) existing under the Financing
Documents.

 

10

 

(i)                                     Ownership of Deferred Management Fee
Obligations.  Service Company is the owner of, and has good
and valid title to, the Deferred Management Fee Obligations free and clear of
all Liens and Restrictions, other than Liens and Restrictions (i) created
by this Agreement, (ii) imposed by applicable Law or (iii) existing
under the Financing Documents.

 

(j)                                     Ownership of Other MSC Obligations to
Apex.  Apex and/or those Apex Affiliates listed in Section 2.1(j) of
the Apex Disclosure Schedule is or are the owner(s) of, and has or have
good and valid title to, the Other MSC Obligations to Apex free and clear of
all Liens and Restrictions, other than Liens and Restrictions (i) created
by this Agreement, (ii) imposed by applicable Law or (iii) existing
under the Financing Documents.

 

(k)                                  Ownership of ASC Bolivia Assets. 
ASC Bolivia is the owner of, and has good and valid title to, the ASC
Bolivia Assets free and clear of all Liens and Restrictions, other than Liens
and Restrictions (i) created by this Agreement, (ii) imposed by
applicable Law or (iii) existing under the Financing Documents.

 

(l)                                     Legal Proceedings. 
There is no Legal Proceeding pending, or to Apex’s knowledge, threatened
against Apex or any Seller or any Apex Affiliate that (i) questions the
validity of the Transaction Documents or the right of Apex or any Seller or any
Apex Affiliate to enter into the Transaction Documents or to consummate the
transactions contemplated thereby, (ii) would, or is reasonably likely to,
prevent or materially delay consummation of the transactions contemplated by
the Transaction Documents or otherwise prevent the Sellers from performing their
obligations under any Transaction Document or (iii) except for the
Bankruptcy Case and 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, such Seller or any Apex Affiliate.

 

(m)                               Transactions with Affiliates. 
Except as set forth in Section 2.1(m) of the Apex
Disclosure Schedule, neither MSC nor AMM is indebted to Apex or any of the
Sellers or any Apex Affiliate, nor is MSC or AMM committed to make loans or
extend or guarantee credit to any of the Sellers or any Apex Affiliate.  Except as set forth in Section 2.1(m) of
the Apex Disclosure Schedule, none of the Sellers nor any Apex Affiliate have
any claim or right against MSC or AMM other than the Shareholder Loans, the
Deferred Management Fee Obligations and the Other MSC Obligations to Apex, and
no event has occurred, and no condition or circumstance exists, that might
(with or without notice or lapse of time) directly or indirectly give rise to
or serve as a basis for any claim or right in favor of Apex, any Seller or any
Apex Affiliate against MSC or AMM. 
Except as set forth in Section 2.1(m) of the Apex Disclosure
Schedule, neither MSC nor AMM is a party to any Contract with Apex, any Seller
or any Apex Affiliate or has had any direct or indirect interest in, any
Contract, transaction or business dealing of any nature involving Apex, any
Seller or any Apex Affiliate or received from or furnished to the Sellers or
any Apex Affiliate any goods or services (with or without consideration).

 

11

 

(n)                                 Sales Price/Solvency/No Fraudulent
Conveyance.  The Sellers are not entering into the
Transactions or any transactions otherwise contemplated by any of the
Transaction Documents with the intent to hinder, delay or defraud any Person to
which such Seller is, or may become, indebted. 
The Purchase Price is not less than the reasonably equivalent value or
fair consideration of the Purchased Properties. 
Each of ASC Bolivia, Apex Luxembourg and Apex Sweden is Solvent and,
after giving effect to the transactions contemplated by the Transaction
Documents, will remain Solvent.  Each of
ASC Bolivia, Apex Luxembourg and Apex Sweden is able, and after giving effect
to the transactions contemplated by the Transaction Documents will continue to
be able, to satisfy its debts as they mature. 
After giving effect to the transactions contemplated by the Transaction
Documents immediately after the Closing, each of ASC Bolivia, Apex Luxembourg
and Apex Sweden will have sufficient capital and property remaining to conduct
the business it will thereafter be engaged in and to meet its existing obligations
with its creditors as they become due.

 

(o)                                 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, the Sellers or
any Apex Affiliate 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 and thereby and which fee or commission would be or become
a Loss of the Purchasers, any Sumitomo Affiliate, MSC or AMM.

 

Section 2.2                                      Sumitomo’s Representations and Warranties. 
The Purchasers, jointly and severally, represent and warrant to the
Sellers that the statements contained in this Section 2.2 are true,
correct, and complete as of the date of this Agreement and as of the Closing
Date (except to the extent any such representation and warranty specifically
speaks as of a different date).

 

(a)                                  Organization. 
Each Purchaser 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, Authority and Validity. 
Each Purchaser has all requisite corporate or other Entity power and
authority to enter into, and to perform its obligations under this Agreement
and the other Transaction Documents to which it is a party, and the execution
and delivery by each Purchaser of this Agreement and the other Transaction
Documents to which it is a party, and the performance by it of its obligations
under this Agreement and the other Transaction Documents to which it is a
party, have been duly authorized by all requisite corporate or other Entity
action.

 

(c)                                  Validity.  This
Agreement and the other Transaction Documents have been duly executed and
delivered by each Purchaser which is a party thereto, and assuming the due
execution and delivery by the Sellers, this Agreement and the other Transaction
Documents to which each Purchaser is a party shall constitute such Purchaser’s
legal, valid, and binding

 

12

 

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 as set
forth in Section 2.2(d) of the Sumitomo Disclosure Schedule
(the “Sumitomo Required Consents”), no Governmental Approval or Authorization
is required, on behalf of any Purchaser in connection with the execution,
delivery, or performance by such Purchaser of this Agreement and the
Transaction Documents to which it is a party or the consummation of the
Transactions.

 

(e)                                  No Conflicts.  The execution and delivery by each Purchaser
of this Agreement and the other Transaction Documents to which it is a party,
and the performance by each Purchaser of its obligations hereunder and
thereunder 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) assuming the obtaining of all
Sumitomo Required Consents, 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 are bound.

 

(f)                                    Legal Proceedings. 
There is no Legal Proceeding pending or, to the Purchasers’ knowledge,
threatened against any Purchaser or any Sumitomo Affiliate that (i) questions
the validity of the Transaction Documents or the right of any Purchaser or any
Sumitomo Affiliate to enter into the Transaction Documents or to consummate the
transactions contemplated thereby, (ii) that would, or is reasonably
likely to, prevent or materially delay consummation of the transactions
contemplated by the Transaction Documents or otherwise prevent the Purchasers
from performing their obligations under any Transaction Document, or (iii) if
adversely determined would reasonably be expected to have a Material Adverse
Effect on any Purchaser.

 

(g)                                 No External Financing. 
Sumitomo does not require any third-party financing to complete the
Transactions, including the payment of the Cash Purchase Price to the Sellers,
or perform or cause any Purchaser to perform its obligations under the
Transaction Documents.

 

(h)                                 Brokers’ and Finders’ Fees. 
There is no broker, finder, investment bank or similar intermediary that
has been retained by, or is authorized to act on behalf of, the Purchasers or
any Sumitomo Affiliate 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 thereby and which fee or commission could become a Loss of the
Sellers or any Apex Affiliate

 

13

 

(i)                                     No Knowledge of Breach of Apex or Seller
Representations and Warranties.  As of the
date of this Agreement, the Purchasers are not aware of any facts or
circumstances that would serve as the basis for a claim by a Purchaser against
Apex or any Seller based upon a breach of any of the representations and
warranties of Apex or any Seller contained in this Agreement.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

REGARDING MSC AND THE PURCHASED PROPERTIES

 

The Sellers, jointly and severally, represent
and warrant to the Purchasers that the statements contained in this Article III
are true, correct, and complete as of the date of this Agreement and as of the
Closing Date (except to the extent any such representation and warranty
specifically speaks as of a different date).

 

Section 3.1                                      Organization, Good Standing, Authority,
Governing Documents, Books and Records.

 

(a)                                  MSC (i) is duly organized, validly
existing, and, to the extent applicable under the Laws of Bolivia, in good
standing as a sociedad anónima under the Laws
of Bolivia, (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 operate the Project as contemplated in the Current
Operating 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 MSC.

 

(b)                                 The share capital of MSC is
Bs.2,247,500,000, divided into 22,475,000 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 Section 3.1(b) of the Apex Disclosure Schedule,
and the information set forth therein is true, correct and complete.  All 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 MSC Shareholder’s Agreement, the Working
Capital Loan Agreement or the Governing Documents of MSC, and except as may
have been created by the Purchasers, 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 phantom shares, phantom equity
interests, or stock or equity appreciation rights, or other ownership interests
in MSC or obligating MSC to grant, extend, or 

 

14

 

enter into any such subscription, option, warrant,
put, call, trust, right, exchangeable or convertible security, commitment or
agreement.

 

(c)                                  AMM (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 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
AMM.

 

(d)                                 The share capital of AMM is CHF 20,000,
divided into one quota of a par value of CHF 7,000, and into the AMM Acquired
Quota of a par value of CHF 13,000.  The
issued and outstanding quotas of AMM are as set forth on Section 3.1(d) of
the Apex Disclosure Schedule and the information set forth therein is true,
correct, and complete.  Such issued and
outstanding quotas are duly authorized, validly issued, fully paid, and
nonassessable, and not issued in violation of any Preemptive Rights; and except
as provided in the AMM Quotaholders Agreement and the 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 AMM or obligating AMM,
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 capital, other securities, or ownership interests or any phantom shares,
phantom equity interests, or stock or equity appreciation rights, or other
ownership interests in AMM or obligating AMM to grant, extend, or enter into
any such subscription, option, warrant, put, call, trust, right, exchangeable
or convertible security, commitment, or agreement.

 

(e)                                  Apex has made available to Sumitomo true,
correct, and complete copies of (i) the Governing Documents of MSC and AMM
including all amendments thereto, as presently in effect and (ii) all
share or equity interest records of MSC and AMM, including MSC’s and AMM’s share
ledger and copies of any share or quota certificates (front and back) issued by
MSC and AMM.  Since September 25,
2006, there have been no meetings or other formal proceedings or actions taken
by written consent or otherwise without a meeting of (A) the shareholders
of MSC and quotaholders of AMM, (B) the boards of directors of MSC and
AMM, and (C) all committees of such board of directors or management
boards, in which a Sumitomo Representative did not participate.

 

Section 3.2                                      No Conflicts.  Except as set
forth in Section 3.2 of the Apex Disclosure Schedule, the execution
and delivery by the Sellers of this Agreement and the other Transaction
Documents to which it is a party, and the performance by the Sellers of their
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby do not and shall not, assuming the obtaining of
all of the Apex Required Consents, result in a violation or breach of, or (with
or without the giving of notice or lapse of time or both)

 

15

 

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 AMM or MSC is a party or by which AMM or MSC or any
of its assets are bound.

 

Section 3.3                                      Consents and Approvals for the Project.

 

(a)                                  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 operation of the Project in accordance with the Current Operating
Plan and for the conduct of AMM’s business as presently conducted are set forth
in Section 3.3(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 Section 3.3(a) of
the Apex Disclosure Schedule has been obtained and is in full force and effect,
except to the extent the failure to so obtain or be in full force and effect
would not reasonably be expected to result in a Material Adverse Effect on MSC
or AMM.  To the knowledge of Apex, such
Government Approvals, Authorizations, Mining Concessions, Other Property
Rights, and Intellectual Property Rights are sufficient to permit the operation
of the Project in all material respects as contemplated by the Current
Operating Plan and to permit the conduct of AMM’s business as presently
conducted.

 

(c)                                  Each of MSC and AMM is in compliance, as
applicable, (A) in all respects with all terms and conditions of all of
the Mining Concessions and (B) in all respects, with all terms and
conditions of all of such Government Approvals, Authorizations, Other Property
Rights, and Intellectual Property Rights listed in Section 3.3(a) of
the Apex Disclosure Schedule, except to the extent the failure to be in
compliance would not reasonably be expected to result in a Material Adverse
Effect on it.

 

Section 3.4                                      Subsidiaries.  Neither MSC
nor AMM has any Subsidiaries nor does it own, otherwise Control or have any
right to acquire, directly or indirectly, any capital stock of, or other equity
interests in, any Entity.

 

Section 3.5                                      Financial Statements; No Undisclosed Liabilities; No
Material Adverse Effect.

 

(a)                                  Apex has made available to Sumitomo (i) the
audited separate balance sheets (the “Audited MSC Balance Sheets”) of
MSC as of September 30, 2005, 2006 and 2007, (ii) the audited
separate balance sheet of AMM as of September 30, 2007 (the “Audited
AMM Balance Sheets”), (iii) the audited separate statements of income
and cash flows of MSC for its fiscal years ended on September 30, 2005,
2006 and 2007, (iv) the audited separate statements of income and cash
flows of AMM for its fiscal year ended on September 30, 2007, (v) the
unaudited balance sheets of MSC as of September 30, 2008, (vi) the
unaudited balance sheets of AMM as of September 30, 2008, (vii) the
unaudited separate statements of income and cash 

 

16

 

flows of MSC for the twelve months ended on September 30, 2008,
and (viii) the unaudited separate statements of income and cash flow of
AMM for the 12 months ended on September 30, 2008 (the foregoing financial
statements, collectively, the “Financial Statements,” true, correct, and
complete copies of all of which are included as Section 3.5(a) of
the Apex Disclosure Bundle).

 

(b)                                 Except (i) as set forth in Section 3.5(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 as well as, with respect to AMM, in accordance with
applicable provisions of Swiss law, applied on a consistent basis and fairly
present in all material respects the separate financial condition and results
of operations and cash flows of MSC and AMM, as applicable, as of the
respective dates thereof and for the respective periods indicated therein.

 

(c)                                  Except for (i) any liabilities set
forth in Section 3.5(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 September 30, 2008, in the ordinary course of
business consistent with past practice, (iv) liabilities under the
Financing Documents to which MSC or AMM is a party or the Scheduled Contracts
and the AMM Contracts, to the extent that the existence of such liabilities is
reasonably ascertainable solely by reference to such Financing Documents or
Scheduled Contracts and the AMM Contracts and (v) liabilities that have
not had or would not reasonably be expected to have, individually or together
with other liabilities, a Material Adverse Effect on MSC or AMM, neither MSC
nor AMM has any 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), except that no representation is made with respect to
any liability for Bolivian taxes or CEDEIMs that may result from any audit by  Bolivian tax authorities or from
challenges to claims made by MSC for refunds of value added taxes or
receivables for CEDEIMs.

 

Section 3.6                                      Title to Properties; Sufficiency of
Assets.

 

(a)                                  (i) Except as provided in the legal
opinions included in Section 3.6(a) of the Apex Disclosure
Bundle and except with respect to the Transmission Line, each of MSC and AMM
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 and all rights, tangible or
intangible (including Intellectual Property Rights and Other Property Rights),
now required, in MSC’s case, for the operation of the Project substantially as
contemplated by the Current Operating Plan and, in AMM’s case, for the conduct
of its business as presently conducted, and (ii) there are no Liens of any
nature against

 

17

 

such properties or rights (other than (A) Permitted
Liens and (B) such Liens as are set forth in Section 3.6 of
the Apex Disclosure Schedule), in each case, except where such failure of title
or the existence of such Liens would not reasonably be expected to have a
Material Adverse Effect on MSC or AMM.

 

(b)                                 Except as the Parties may agree pursuant
to Section 5.11, none of the assets that the Sellers or any other
Apex Affiliate shall continue to own immediately after the Transactions is
material to the operation of the Project in accordance with the Current
Operating Plan or the conduct of AMM’s business as currently conducted.

 

Section 3.7                                      Material Contracts.

 

(a)                                  All Contracts to which MSC is a party or
by which its assets are bound as of the date hereof that have a term of at
least one year, have payments due to or from MSC thereunder in excess of
US$10,000,000 and are not terminable by MSC by notice of not more
than thirty (30) days at no cost to MSC are listed on  Section 3.7(a) of the
Apex Disclosure Schedule (the “Scheduled Contracts”).

 

(b)                                 Except as set forth in Section 3.7(b) of
the Apex Disclosure Schedule, none of the Scheduled Contracts have pursuant to
a writing been amended, modified, or supplemented, and all of the Scheduled
Contracts are in full force and effect in all material respects and are
enforceable by MSC in accordance with their respective terms, except as such
enforceability may be affected by applicable bankruptcy, reorganization,
restructuring, insolvency, moratorium, or similar Laws affecting creditors’
rights generally, and have not been terminated, suspended, or rescinded by any
party thereto.

 

(c)                                  All (i) Third Party Concentrate
Sales Agreements to which AMM is a party and (ii) all other Contracts to
which AMM is a party or by which its assets are bound as of the date hereof
which, in the case of such other Contracts have a term of at least
one year, have payments due to or from AMM thereunder in excess of
US$10,000,000 and are not terminable by AMM by notice of not more
than thirty (30) days at no cost to AMM are listed on Section 3.7(c) of the Apex Disclosure Schedule
(the “AMM Contracts”).

 

(d)                                 Except as set forth on Section 3.7(d) of
the Apex Disclosure Schedule, none of the AMM Contracts have pursuant to a
writing been amended, modified, or supplemented, and all of the AMM Contracts
are in full force and effect in all material respects and are enforceable by
AMM in accordance with their respective terms, except as such enforceability
may be affected by applicable bankruptcy, reorganization, restructuring,
insolvency, moratorium, or similar Laws affecting creditors’ rights generally,
and have not been terminated, suspended, or rescinded by any party thereto.

 

(e)                                  None of the Contracts included in the ASC
Bolivia Assets (the “ASC Contracts”), including any Transmission Line
Loan Document, have pursuant to a writing been amended, modified, or
supplemented, and all of the ASC Contracts are in full force and effect in

 

18

 

all material respects and are enforceable by ASC
Bolivia in accordance with their respective terms, except as such enforceability
may be affected by applicable bankruptcy, reorganization, restructuring,
insolvency, moratorium, or similar Laws affecting creditors’ rights generally,
and have not been terminated, suspended, or rescinded by any party thereto.

 

(f)                                    Except as set forth in Section 3.7(f) of
the Apex Disclosure Schedule or as would not reasonably be expected to have a
Material Adverse Effect on MSC or AMM, neither Apex nor any Apex Affiliate is
in default in the performance of any covenant or obligation set forth in, or
otherwise in default under, any of the Scheduled Contracts or AMM Contracts to
which it is a party.  To the knowledge of
Apex, no counterparty is in material default in the performance of any covenant
or obligation set forth in, or otherwise in material default under, any of the
Scheduled Contracts or AMM Contracts to which it is a party.

 

(g)                                 The Apex Disclosure Bundle includes true,
correct, and complete copies of the Scheduled Contracts, the AMM Contracts and
the ASC Contracts and of any material amendments to any of the foregoing.

 

(h)                                 The Apex Disclosure Bundle includes true,
correct, and complete copies of all written Contracts pursuant to which MSC
and/or Apex or any Apex Affiliate have material commitments and undertakings
with all local and regional governments and indigenous people, communities, and
other social, civic or civil Persons.

 

Section 3.8                                      Employees; Employee Benefits.

 

(a)                                  Section 3.8(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 or AMM is a party with
any current executive officer, director, key employee or key consultant of MSC
or AMM that are currently in effect. 
Except as set forth in Section 3.8(a) of the Apex Disclosure
Schedule, to the knowledge of Apex, no executive officer, key employee, or
significant group of employees of MSC or AMM presently plans to terminate
employment with MSC or AMM during the next 6 months.

 

(b)                                 There are no collective bargaining
agreements relating to or affecting MSC or AMM or by which MSC or AMM or their
respective assets is bound.  Except as
set forth in Section 3.8(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 or AMM, (i) there is
not occurring and, 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 MSC or AMM or their
respective premises or products; (ii) there are no complaints or
grievances against MSC or AMM 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 or AMM.

 

19

 

(c)                                  Except as set forth in Section 3.8(c) of
the Apex Disclosure Schedule and subject to the exception set forth in Section 3.5(c) with
respect to CEDEIMs, none of MSC, AMM or any ERISA Affiliate of MSC or AMM 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, AMM or the
Project.

 

Section 3.9                                      Legal Compliance.  From September 25,
2006, to the knowledge of Apex, except as set forth in Section 3.9
of the Apex Disclosure Schedule or as contemplated in Section 3.10
below, (a) each of MSC and AMM is in compliance with, and has conducted
its business, including with respect to 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 and Switzerland, and (b) neither
MSC nor AMM has any Legal Proceeding, claim, demand (other than periodic labor
demands and shutdowns), 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 or AMM.

 

Section 3.10                                Taxes.

 

(a)                                  Each of MSC and AMM has timely filed or
caused to be filed all material Tax Returns required to have been filed by
it.  To the knowledge of Apex, all such
Tax Returns were correct and complete in all material respects.  All Taxes owed by either MSC or AMM (whether
or not shown on any Tax Return) have been paid, except (i) Taxes that are
being contested in good faith by appropriate proceedings diligently conducted
and for which MSC or AMM, as applicable, has set aside on its books adequate
reserves (as determined by GAAP), (ii) as set forth in Section 3.10
of the Apex Disclosure Schedule or (iii) to the extent that the failure to
do so has not had, and would not have, a Material Adverse Effect on it;

 

(b)                                 there are no material disputes pending
or, to the knowledge of the Sellers, threatened, between MSC or AMM and any Tax
Authority relating to Taxes; and

 

(c)                                  each of MSC and AMM has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder,
or other third party.

 

provided, that with
respect to the representations in this Section 3.10, all such actions
taken by the Sellers have been in accordance with the Sellers’ reasonable
interpretation of relevant Tax Law.

 

The Sellers have made available to the Purchasers correct and complete
copies of all Tax Returns since and including 2004, examination reports, and
any statements of deficiencies assessed against or agreed to by MSC or AMM.

 

20

 

Section 3.11                                Legal Proceedings.  Except as set
forth in Section 3.11 of the Apex Disclosure Schedule, as the same
may be updated at the Closing, there is no Legal Proceeding pending or, to the
knowledge of Apex, threatened in writing relating to MSC or AMM, which has had,
or would reasonably be expected to have, a Material Adverse Effect on MSC or
AMM.  Neither MSC nor AMM is subject to
any Judgment, which has had, or would reasonably be expected to have, a
Material Adverse Effect on it.

 

Section 3.12                                Environmental Matters.

 

(a)                                  Except as
otherwise would not reasonably be expected to have a Material Adverse Effect on
MSC or AMM, the
operation of the Project and the activities and properties of MSC and AMM are
in compliance in all respects with (i) the Environmental Guidelines, (ii) all
applicable Environmental Laws, and (iii) all environmental Government
Approvals.  MSC has designed the Project
in compliance in all material respects with the Environmental Guidelines.

 

(b)                                 Except as
otherwise would not reasonably be expected to have a Material Adverse Effect on
MSC or AMM, no
notice, notification, demand, citation, summons, or order has been issued and
delivered to MSC or AMM, no written complaints have been filed and notice
thereof served on MSC or AMM, 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 or AMM to have any material environmental Government Approval or to comply
with any applicable Environmental Law.

 

Section 3.13                                Interested Party Transactions. 
Other than transactions required or permitted by this Agreement or the
other Transaction Documents, Section 3.13 of the Apex Disclosure
Schedule lists all transactions and Contracts between Apex or any of its
Affiliates (other than MSC or AMM), on the one hand, and MSC or AMM on the
other hand, in each case that involves consideration of US$500,000 or more and
that has not yet been fully performed.

 

Section 3.14                                Insurance.  Each of MSC
and AMM maintains 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 and AMM, as applicable, and located in similar
geographic areas in which MSC and AMM, as applicable, operates.

 

Section 3.15                                Credit Support.  Section 3.15
of the Apex Disclosure Schedule sets forth a correct and complete list of all
Contracts (except Scheduled Contracts, the AMM Contracts and the Financing
Documents) pursuant to which Apex or any Apex Affiliate is required to provide
credit support in respect of the Project or to MSC or AMM.  True, correct, and complete copies of all
such Contracts, including all amendments, supplements, modifications, and
waivers thereof, are included as Section 3.15 of the Apex
Disclosure Bundle.

 

Section 3.16                                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

 

21

 

under the Scheduled Contracts, the AMM Contracts or
the ASC Contracts, other than those listed on Section 3.16 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 3.17                                No Liquidation; Intent.  Neither MSC
nor AMM has commenced any voluntary Insolvency Proceeding or filed any related
petition, there is no commencement of any involuntary Insolvency Proceeding
against MSC and, to the knowledge of Apex, there is no involuntary Insolvency Proceeding
against AMM, seeking (a) liquidation, reorganization, restructuring, or
other relief in respect of MSC or AMM, as the case may be, for its debts, or
any substantial part of its assets, under any applicable Law or (b) appointment
of a receiver, trustee, sindico, custodian, sequestrator, conservator, or
similar official for MSC or AMM, as the case may be, or for a substantial part
of its assets.

 

Section 3.18                                Project Information and Other Information Furnished. 
The 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 or included herein or
delivered pursuant hereto (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 3.18 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 IV

PRE-CLOSING COVENANTS

 

Section 4.1                                      Commencement of Bankruptcy.

 

(a)                                  In order to implement the Transactions,
Apex and Service Company shall (i) execute and deliver the Plan Support
Agreement, and use commercially reasonable efforts to obtain execution and
delivery of the Plan Support Agreement by holders of no less than (A) fifty
percent (50%) in amount of the Apex Convertible Senior Subordinated Notes (the “Required
Noteholders”), or (B) ninety-seven percent (97%) in amount and number
of the Existing Debt (the “Required Lenders”); (ii) prepare the
Plan consistent in all material respects with the Plan Support Agreement and a
supporting disclosure statement (the “Disclosure Statement”), with each
of the Plan and Disclosure Statement in form and substance reasonably
satisfactory to Sumitomo; and (iii) file a voluntary petition (the “Petition”)
for relief under Chapter 11 of Title

 

22

 

11 of the United States Code, 11 U.S.C. §§ 101, et
seq. (the “Bankruptcy Code”) in the Bankruptcy Court.  The Petition shall be filed on or before January 12,
2009.

 

(b)                                 Within three (3) Business Days of
the Petition Date, Apex and Service Company shall file with the Bankruptcy
Court in the Bankruptcy Case a motion (the “Fee Approval Motion”), in
form and substance reasonably satisfactory to Sumitomo, with such motion to be
heard on an expedited basis, by which Apex and Service Company will seek, among
other forms of relief, an order of the Bankruptcy Court authorizing Apex to (i) pay
of a fee in the amount of US$16,000,000 (the “Break-Up Fee”) to Sumitomo
in accordance with the terms and conditions of Section 8.3, and (ii) reimburse
Sumitomo and its Affiliates for their documented reasonable out-of-pocket
expenses relating to the Transaction, including reasonable professional fees
and expenses, in an amount not to exceed US$2,000,000  (the “Reimbursement Amount”), in
accordance with the terms and conditions of Section 8.3.  The Fee Approval Motion shall request that the
Break-Up Fee and Reimbursement Amount shall be deemed to be administrative
expenses of Apex’s and Service Company’s bankruptcy estates under Sections 503(b) and
507(b) of the Bankruptcy Code, to be paid in accordance with Section 8.3
without further application, motion or order of the Bankruptcy Court.

 

(c)                                  Within three (3) Business Days of
the Petition Date, Apex and Service Company shall file with the Bankruptcy
Court in the Bankruptcy Case a motion (the “Support Motion”), in form
and substance reasonably satisfactory to Sumitomo, with such motion to be heard
on an expedited basis, by which Apex and Service Company will seek an order of
the Bankruptcy Court authorizing Apex, in its discretion, to advance or
otherwise furnish Apex Luxembourg, Apex Sweden and ASC Bolivia with the
financial support necessary for each of them to pay their debts when and as
due, meet their ordinary course obligations pending the Closing Date and
otherwise maintain their solvency, which support shall in no event be greater
than US$500,000.

 

(d)                                 Within three (3) Business Days of
the Petition Date, Apex shall file with the Bankruptcy Court, the Plan and a
motion (the “Scheduling Motion”) requesting that the Bankruptcy Court
schedule (i) a hearing on or before February 9, 2009 to consider the
adequacy of the Disclosure Statement and approval of the procedures to solicit
acceptances of the Plan; provided, however, that the Disclosure
Statement shall be filed with the Bankruptcy Court on or before January 20,
2009, and (ii) a hearing on or before March 16, 2009 to consider
confirmation of the Plan and entry of the Confirmation Order on the date of
such hearing, which Plan and Scheduling Motion shall each be in form and
substance reasonably satisfactory to Sumitomo.

 

(e)                                  In support of the Scheduling Motion, Apex
shall file pleadings and supporting declarations or affidavits describing (i) the
marketing process initiated and implemented by Apex and its Advisors to either
raise additional debt or equity for Apex or sell the Purchased Properties to a
third party, (ii) the arms’ length negotiations between the Sellers and
the Purchasers and (iii) that Sumitomo’s offer was the highest and best
offer received by Apex.

 

23

 

(f)                                    The Confirmation Order proposed by Apex
and filed with the Bankruptcy Court shall, in addition to the provisions
outlined in Section 1.6(a)(xvii), (i) include a waiver of the
stay set forth in Federal Rule of Bankruptcy Procedure 3020(e) (the “Bankruptcy
Rules”); (ii) provide that neither Sumitomo nor any other Purchaser
shall be subject to any successor liability and shall have no Losses or suffer
any Losses for any Liens (other than Permitted Liens) existing prior to the
Closing Date which may be asserted against Apex, Service Company, Reorganized
Apex, the MSC Acquired Shares, the AMM Acquired Quota or other Purchased
Properties or Apex’s bankruptcy estate, including any claims against any
Purchaser as successor to the MSC Acquired Shares, the AMM Acquired Quota or
other Purchased Properties; (iii)  provide for the retention of
jurisdiction by the Bankruptcy Court to resolve any and all disputes that may
arise under or relate to this Agreement or the Confirmation Order, whether
between Apex or Service Company and Sumitomo or involving a Person in interest
in the Bankruptcy Case; and (iv) contain findings of fact and conclusions
of law which include the following: (A) the transactions under this
Agreement were negotiated and entered into in good faith and at arms-length; (B) the
marketing and sale process conducted by Apex were bona fide and adequate; (C) 
Apex and Service Company gave due and proper notice and an opportunity to be
heard to all interested parties, of this Agreement and the transactions
contemplated hereby; (D) the consideration to be paid by the Purchasers
under this Agreement constitutes “reasonably equivalent value” and “fair
consideration” (as such terms are used in each of the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of the
Bankruptcy Code) and fair consideration for the Purchased Properties; and (E) neither
Sumitomo nor any other Purchaser nor Apex nor any other Seller is entering into
the transactions contemplated by this Agreement fraudulently.

 

(g)                                 The Plan and Confirmation Order shall
authorize (i) Apex to assign to Reorganized Apex all of its right title
and interest in this Agreement and (ii) Reorganized Apex to assume all of
Apex’s obligations under this Agreement. 
Reorganized Apex shall execute an assignment agreement in form and
substance reasonably acceptable to Sumitomo, evidencing the assignment of this
Agreement to Reorganized Apex.

 

(h)                                 In the event an appeal is taken, or a
stay pending appeal is requested or reconsideration is sought, from the Confirmation
Order, Apex shall immediately notify Sumitomo of such appeal or stay request
and shall provide to Sumitomo within one (1) Business Day a copy of the
related notice of appeal or order of stay or application for
reconsideration.  Apex shall also provide
Sumitomo with written notice (and copies) of, any other or further notice of
appeal, motion or application filed in connection with any appeal from or
application for reconsideration of, either of such orders and any related
briefs.

 

(i)                                     Apex shall promptly notify Sumitomo in
writing and, as is required by the Bankruptcy Code, all parties entitled to
notice pursuant to the Bankruptcy Code, the Bankruptcy Rules and orders of
the Bankruptcy Court, of all motions, notices and orders required to consummate
the Transactions contemplated by this Agreement (including any appeals of such
orders), as modified by orders in respect of notice which may be issued at any
time and from time to time by the Bankruptcy Court.

 

24

 

Section 4.2                                      Plan Support Agreement.  Prior to the
filing of the Petition, the Parties will use commercially reasonable efforts to
obtain the execution and delivery by the Required Noteholders or the Required
Lenders of an agreement (the “Plan Support Agreement”), that would among
other things (i) result in the releases of Apex, Apex Affiliates, Sumitomo
and Sumitomo Affiliates described in Sections 1.6(a)(xv), 1.6(a)(xvi),
1.6(a)(xvii) and 1.6(b)(vi), (ii) commit the signatories to
support the Transactions and the Plan, and (iii) require that if any
signatory sells, assigns or otherwise conveys any of its claims against Apex,
it will, as a condition of such transfer, require the transferee to agree and
become a party to the Plan Support Agreement.

 

Section 4.3                                      SC Designated Purchasers. 
As promptly after the date of this Agreement as practical, Sumitomo or
its Representatives shall provide written notice to Apex setting forth the SC
Designated Purchasers and the Purchased Properties each such SC Designated
Purchaser will be acquiring.

 

ARTICLE V

OTHER COVENANTS

 

Section 5.1                                      Conduct of Business Pending the Closing.  (a) Between
the date of this Agreement and the Closing Date, unless Sumitomo shall
otherwise agree in writing, (i) Apex shall cause MSC and AMM to conduct
their respective businesses in the ordinary course of business and in a manner
consistent with past practice and in compliance in all material respects with
all applicable Laws; (ii) Apex shall, subject to cooperation by Sumitomo,
use its commercially reasonable efforts, and shall be free to use debtor in
possession funds provided by Sumitomo, to preserve substantially intact the
business organization of MSC and AMM, to keep available the services of the
current officers, directors and key employees of MSC and AMM and, except for
determinations made in the ordinary course of business, to preserve the current
material relationships of MSC and AMM with customers, suppliers, distributors,
licensors, licensees and other Persons with which any of MSC or AMM has
business relations; (iii) Apex shall not, and shall cause MSC and AMM not
to, take any action which would adversely affect or delay in any material
respect the ability of any Party or MSC or AMM to obtain or make any necessary
Governmental Approval or Authorization required for the transactions
contemplated hereby or under any of the other Transaction Documents; and (iv) Apex
shall cause MSC and AMM to prepare and timely file all Tax Returns required to
be filed by them on or before the Closing Date (“Post-Signing Returns”)
in a manner consistent with past practice, except as otherwise required by
applicable Laws, and, subject to the availability of funds at MSC or AMM as
applicable (and Apex shall be free to use debtor in possession funds provided
by Sumitomo for these purposes) shall cause MSC and AMM to fully and timely pay
all Taxes due and payable pursuant to such Post-Signing Returns that are so
filed;  provided, however, that in each case, Apex shall only be
responsible to provide funding for sixty-five percent (65%) of the funds
required by MSC and AMM to comply with the provisions of this Section 5.1.

 

25

 

By way of amplification and not limitation,
between the date of this Agreement and the Closing Date, Apex shall cause each
of MSC and AMM not to directly or indirectly, do, or propose to do, any of the
following without the prior written consent of Sumitomo:

 

(A)                              amend or otherwise change
its Governing Documents;

 

(B)                                issue, sell, pledge,
dispose of, grant, encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of, any shares of any class of its capital
stock, any quotas, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock or quotas, or
any other ownership interest (including any phantom interest);

 

(C)                                transfer, lease, sell,
pledge, license, dispose of or encumber any of its assets or properties, except
in the ordinary course of business and in a manner consistent with past
practice;

 

(D)                               declare, set aside, make
or pay any dividend or other distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock or quotas;

 

(E)                                 reclassify, combine,
split, subdivide or redeem, or purchase or otherwise acquire, directly or
indirectly, any of its capital stock or quotas;

 

(F)                                 (i) acquire
(including by merger, consolidation, or acquisition of stock or assets or any
other business combination) any corporation, partnership, other business
organization or any division thereof, or any equity interest in any Person; (ii) acquire
any material amount of assets, except in the ordinary course of business and
consistent with past practice; (iii) incur any indebtedness for borrowed
money or issue any debt securities, or assume, guarantee or endorse, or
otherwise become responsible for (contingently or otherwise), the obligations
of any Person; (iv) make any loans, advances or capital contributions; or (v) enter
into or amend any contract, agreement, commitment or arrangement with respect
to any matter set forth in this Section 5.1(a)(F);

 

(G)                                except as may be
required by Bolivian Law, (i) increase the compensation payable or to
become payable (including bonus grants) or increase or accelerate the vesting
of the benefits provided to its directors, officers or employees or other
service providers, except for increases in the ordinary course of business and
consistent with past practice in salaries or wages of employees other than the
VPGM and Senior Management (as defined in the Management Services Agreement), (ii) grant
any severance or termination pay or benefits, except in the ordinary course of
business and consistent with past practice, to employees other than the VPGM
and Senior Management, (iii) enter into any employment, severance,
retention, change in control, consulting or termination agreement with, any
director, officer or other employee or other service providers, except for
agreements entered into with employees other than the 

 

26

 

VPGM and Senior Management in the ordinary course of business and
consistent with past practice, (iv) establish, adopt, enter into or amend
any collective bargaining, bonus, profit-sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee or other
service providers or (v) pay or make, or agree to pay or make, any accrual
or arrangement for payment of any pension, retirement allowance, or any other
employee benefit;

 

(H)                               except as publicly
announced, or as announced to employees generally, prior to the date hereof,
announce, implement or effect any reduction in labor force, lay-off, early
retirement program, severance program or other program or effort concerning the
termination of employment of its employees, other than routine employee
terminations;

 

(I)                                    enter into a new
line of business;

 

(J)                                   take any action,
other than reasonable actions in the ordinary course of business and consistent
with past practice, with respect to accounting policies or procedures
(including procedures with respect to the payment of accounts payable and
collection of accounts receivable, and the revaluation of any assets);

 

(K)                               make or revoke any
material Tax election, agree to any audit assessment by any Tax Authority, file
any income Tax Return or related estimated income Tax Return (including an
amended income Tax Return) unless a copy of such income Tax Return has first
been delivered to Sumitomo for its review and approval at a reasonable time
prior to filing, enter into any closing agreement with any Tax Authority,
settle any Tax claim or assessment relating to MSC or AMM, surrender any right
to claim a refund of Taxes, or consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to MSC or
AMM;

 

(L)                                 pay, discharge or
satisfy any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), including any litigation, arbitration or
other action, other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of liabilities
reflected or reserved against in the Audited MSC Balance Sheets or Audited AMM
Balance Sheets or subsequently incurred in the ordinary course of business and
consistent with past practice;

 

(M)                            amend, modify or consent to
the termination of any Scheduled Contract, AMM Contract or ASC Contract,
except, in each case, pursuant to annual contract term negotiations and in the
ordinary course of business and consistent with past practice;

 

27

 

(N)                               enter into or amend any
agreements pursuant to which any other party is granted exclusive marketing or
other exclusive rights of any type or scope with respect to any of its products
or technology or which restricts it or, upon completion of the Transactions,
Sumitomo or any Sumitomo Affiliate, from engaging or competing in any line of
business or in any location;

 

(O)                               enter into any lease for
real property or material operating lease;

 

(P)                                 terminate, cancel,
amend or modify any insurance coverage policy unless it is promptly replaced by
a comparable amount of insurance coverage;

 

(Q)                               enter into or amend or
otherwise modify any agreement or arrangement with Persons that are affiliates
or are executive officers or directors of Apex or any Apex Affiliate;

 

(R)                                commence or settle any
material Legal Proceeding; or

 

(S)                                 agree to do anything
prohibited by this Section 5.1(a).

 

(b)                                 Any written
request for consent to action in accordance with Section(s) 5.1(a)(G),
(K), (L) and (M) solely, that is submitted to
Sumitomo by Apex shall be deemed consented to or approved if no response is
received from Sumitomo within five (5) Business Days after the submission
of such request.

 

Section 5.2                                      Confidentiality.

 

(a)                                  Each
of the Purchasers will treat and hold as
confidential all Confidential Information, and, unless and until the
Transactions shall have been consummated, the Purchasers shall not use such Confidential Information or disclose the
same to others, other than counsel, accountants and other Representatives of
the Purchasers engaged in connection with the Transactions, who shall be
subject to this provision, except with written permission of the Sellers.

 

(b)                                 Each
of the Sellers and their Affiliates will
treat and hold as confidential all Confidential Information, and, unless
and until the Transactions shall have been consummated, the Sellers shall not
use such Confidential Information or
disclose the same to others, other than counsel, accountants and other
Representatives of the Sellers engaged in connection with the Transactions, who
shall be subject to this provision, except with written permission of the
Purchasers.  If, in the absence of a protective order or
the receipt of a waiver hereunder, any of the Sellers is, on the advice of
counsel, compelled to disclose any Confidential Information to any Governmental
Authority, that Seller may disclose the Confidential Information to the
Governmental Authority; provided, however, that the disclosing
Person shall use its best efforts to obtain, at the reasonable request of the
Purchasers, an order or other assurance that confidential treatment will be
accorded to such portion of the Confidential Information required to be
disclosed as the Purchasers shall designate.

 

28

 

Section 5.3                                      Expenses;
Transfer Taxes.  Except as otherwise
specifically provided herein, all costs and expenses incurred in connection
with the Transaction Documents and the transactions contemplated thereby, shall
be paid by the Party incurring such expense. 
For the avoidance of doubt, the Parties agree that such costs and
expenses shall exclude any Taxes.  The
Purchasers 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, capital gains,
profits, excise, franchise or withholding taxes (including, in each case, any
monetary adjustments, penalties, and interest), incurred by the Sellers on the
transfer by the Sellers to the Purchasers of the Purchased Properties and
Assumed Liabilities, which Taxes shall be borne by the Sellers.

 

Section 5.4                                      Further Assurances.  Each of the Parties shall take all actions,
and do all things, reasonably necessary, proper or advisable on its part to
cooperate with the other Party and make effective the transactions contemplated
by this Agreement and the Transaction Documents, including executing and
delivering any and all further materials, documents and instruments as may
reasonably be requested by the other Party. 
Without limiting the generality of the foregoing, the Purchasers shall
execute and deliver, in a form reasonably satisfactory to the Purchasers, any
and all further materials, documents, and instruments, as may reasonably be
requested by the Sellers to facilitate the satisfaction of the closing
conditions set forth in Sections 6.2(d) and 6.2(g).  After the Closing, upon the request of the
Purchasers, Reorganized Apex and the Sellers shall (i) execute and deliver
any and all further materials, documents and instruments of conveyance,
transfer or assignment as may reasonably be requested by the Purchasers to
effect, record or verify the transfer to, and vesting in each SC Designated
Purchaser, of the Sellers’ right, title and interest in and to the Purchased
Properties, free and clear of all Liens or Restrictions (other than any Lien or
Restriction of the type referred to in Section 2.1(f) through Section 2.1(l)),
in accordance with the terms of this Agreement; and (ii) cooperate with
the Purchasers, at the Purchasers’ expense, to enforce the terms of any
Contracts that constitute Purchased Assets and to contest or defend against any
Legal Proceeding relating to the Transactions or to the operation of the
Project before the Closing Date.  After
the Closing, Reorganized Apex and the Sellers shall promptly deliver to the
Purchasers (i) any mail, packages and other communications addressed to
the Sellers relating to the Project, except as otherwise contemplated by the
Management Services Agreement, and (ii) any cash or other property that
Reorganized Apex or the Sellers receive and that properly belongs to the
Purchasers, including any insurance proceeds, payments with respect to
receivables, and interest payable thereon.

 

Section 5.5                                      Solicitation
of Transactions.

 

(a)                                  From
the date of this Agreement to the date this Agreement is terminated pursuant to
Section 8.1, the Sellers shall not, and shall cause all Apex
Affiliates, MSC and AMM and the Representatives of the Sellers, Apex
Affiliates, MSC and AMM not to, directly or indirectly, (i) solicit,
initiate, knowingly facilitate or knowingly encourage the submission of, or any
inquiries with respect to, any Alternative Proposal by a Third Party; (ii) participate
in any discussions or negotiations with a Third Party or such Third Party’s
Representatives regarding, or furnish to any Third Party or Third Party
Representative any information or data with respect

 

29

 

to, or otherwise cooperate in any way with respect to,
or assist or participate in, any Alternative Proposal or any potential
Alternative Proposal; or (iii) enter into any letter of intent, memorandum
of understanding, acquisition agreement or other agreement, arrangement or
understanding that contemplates an Alternative Proposal by such Third Party or
requiring the Sellers to terminate, abandon or fail to consummate this
Agreement or any of the Transactions; provided, that prior to the
termination of this Agreement, the Sellers, in connection with any bona fide
Alternative Proposal received by the Sellers without any violation of clause (i) above,
may furnish information and data to a Third Party and such Third Party’s
Representatives and take any other action referred to in clause (ii) above,
if:  (A) the Board of Directors of
Apex determines in good faith that the Alternative Proposal constitutes, or may
lead to, a Superior Proposal; (B) Apex gives Sumitomo prompt written
notice of the Sellers’ intention to furnish information or data to or to engage
in negotiations or discussions with the Third Party submitting such Acquisition
Proposal or such Third Party’s Representatives; (C) prior to providing any
information or data to such Third Party or Third Party’s Representatives, Apex
enters into a confidentiality agreement with such Third Party which shall not
contain restrictions that would prevent the Sellers from complying with their
disclosure obligations under this Section 5.5; and (D) the Fee
Approval Motion has been approved by the Bankruptcy Court.

 

(b)                                 For
purposes of this Agreement, a “Superior Proposal” means any bona fide
written Alternative Proposal, not solicited, initiated or knowingly encouraged
in violation of clause (i) of Section 5.5(a), made by a Third
Party to (i) acquire, directly or indirectly, (A) all or
substantially all of the MSC Acquired Shares and the AMM Acquired Quota or all
or substantially all of the assets of MSC and AMM and (B) all or
substantially all of the other Purchased Properties and (ii) assume the
Assumed Liabilities, if and only if the Board of Directors of Apex reasonably
determines (after consultation with its financial advisor) that (x) the
proposed transaction would be more favorable from a financial point of view to
Apex’s stockholders and/or creditors than the Transactions, taking into account
at the time of such determination any changes to the terms of this Agreement
that as of that time had been agreed by Sumitomo and the amount of the release,
if any, of Apex and any Apex Affiliates from their obligations under the
Financing Documents contemplated by such Alternative Proposal, and (y) the
subject Alternative Proposal is otherwise likely to be consummated, taking into
account all legal, financial, regulatory, and other aspects of the proposal and
the Person making the proposal.

 

(c)                                  None
of Apex nor any Seller shall approve any Alternative Proposal by a Third Party
or cause or permit Apex or any Seller to take any action contemplated by Section 5.5(a)(iii);
provided, however, notwithstanding the foregoing, Apex may, in
response to a written Alternative Proposal received by the Sellers and provided,
that there has been no violation of Section 5.5(a)(i) in
connection with such Alternative Proposal (or any precursor or related
Acquisition Proposal), take any of the actions described in the first sentence
of this Section 5.5 (c) (i.e., approving an Alternative
Proposal by a Third Party or taking an action described in Section 5.5(a)(iii))
(each a “Specified Action”) if, and only if:

 

(i)                                    the
Board of Directors of Apex shall have determined in good faith (after
consultation with outside legal counsel) that failing to take

 

30

 

such Specified Action would be inconsistent with such Board’s fiduciary
duties;

 

(ii)                                 the
Board of Directors of Apex shall have determined that such Alternative Proposal
constitutes a Superior Proposal (a “Designated Superior Proposal”);

 

(iii)                             the
Board of Directors of Apex shall have provided written notice to Sumitomo that
it intends to take a Specified Action in response to such Designated Superior
Proposal (a “Notice of Designated Superior Proposal”), which notice shall
attach the most current form or draft of any written agreement providing for
the transaction contemplated by such Designated Superior Proposal; and

 

(iv)                             Sumitomo
shall not have made, during the period commencing upon its receipt of such
Notice of Designated Superior Proposal and ending seven (7) Business Days
thereafter (the “Matching Period”), (x) an offer or proposal that
the Board of Directors of Apex determines in good faith, after consultation
with outside legal counsel and a financial advisor of nationally recognized
reputation, is at least as favorable, from a financial point of view, to Apex
as such Designated Superior Proposal and (y) an offer to pay up to
US$250,000 of the documented expenses of the Person making the Designated
Superior Proposal in the event that Sumitomo’s offer described in clause (x) is
accepted and the Designated Superior Proposal is rejected.

 

During
the Matching Period, Apex and its Representatives shall meet with Sumitomo and
negotiate in good faith with respect to any revisions to this Agreement
Sumitomo may propose.  Apex shall deliver
to Sumitomo a new Notice of Designated Superior Proposal with respect to (A) each
material revision or material modification to a Designated Superior Proposal
that was the subject of a previous Notice of Designated Superior Proposal where
such revision or modification is adverse to Apex, and (B) each other
material revision or material modification to a Designated Superior Proposal
that was the subject of a previous Notice of Designated Superior Proposal where
such revision or modification is made during a Matching Period, and a new
Matching Period shall commence for purposes of this Section 5.5(b) under
either of the circumstances described in clauses (A) and (B) above at
the time Sumitomo receives the new Notice of Designated Superior Proposal.  Notwithstanding anything to the contrary
contained in this Agreement, none of the Sellers shall be entitled to take a
Specified Action unless (x) any and all such Matching Periods have
expired, (y) this Agreement has been, or concurrently is, terminated by
its terms pursuant to Section 8.1(j), and (z) the
Sellers have paid, or concurrently with the taking of a Specified Action, pay,
the Reimbursement Amount to the Purchasers by wire

 

31

 

transfer
of immediately available funds, and confirm in a writing delivered to the
Purchasers, the Sellers’ obligation to pay the Break-Up Fee in the
circumstances described in Section 8.3.

 

(d)                                 The
Sellers immediately shall, and shall cause their Representatives immediately
to, cease and cause to be terminated any discussions or negotiations with any
Persons that may be ongoing with respect to any Alternative Proposal existing
prior to the date of this Agreement.

 

(e)                                  From
the date of this Agreement to the date this Agreement is terminated pursuant to
Section 8.1, Apex shall: (i) promptly (and in any event within
24 hours) advise Sumitomo orally and in writing of the receipt, directly or
indirectly, of any Alternative Proposal or any inquiries relating to an
Alternative Proposal or any request for information with respect to any
Alternative Proposal, including the material terms and conditions of such
Alternative Proposal and the identity of the Person making such Alternative
Proposal, inquiry or request, and furnish Sumitomo a copy of any such written
Alternative Proposal, inquiry or request and a copy of any information provided
to or by such Person; and (ii) promptly (and in any event within 24 hours)
advise Sumitomo orally and in writing of any material changes in any such
Alternative Proposal, inquiry or request. Apex shall provide Sumitomo with 48
hours’ prior notice (or such lesser prior notice as is provided to the members
of the Board of Directors of Apex) of any meeting of the Board of Directors of
Apex at which the Board of Directors of Apex is expected to consider any
Alternative Proposal, inquiry or request or to consider providing information
to any Person or group in connection with an Alternative Proposal, inquiry or
request.

 

(f)                                    Without
limiting the generality of the foregoing, the Sellers acknowledge and hereby
agree that any violation of the restrictions set forth in Section 5.5(a) by
any Representative of the Sellers shall be deemed to be a breach of Section 5.5(a) by
the Sellers.  The Sellers shall notify
their Representatives of the restrictions under Section 5.5(a) promptly
after the date hereof.

 

Section 5.6                                      Return of ASC
Bolivia L/C Collateral.  ASC Bolivia
has posted US$500,000 as cash collateral to secure a letter of credit issued on
behalf of ASC Bolivia in favor of Antofagasta Railway Company PLC.  Apex and Sumitomo shall take commercially
reasonable efforts to have such cash collateral released and repaid to Apex at
Closing, or, in lieu thereof, Sumitomo may elect to pay Apex at Closing the sum
of US$500,000 (such release or payment being the “L/C Collateral Payment”).  If Sumitomo makes the L/C Collateral Payment,
Apex shall assign to Sumitomo all of Apex’s right, title and interest in and to
such cash collateral.

 

Section 5.7                                      Dissolution of
ASF.  Promptly following the date
hereof, Apex and Sumitomo shall take and shall cause their respective
Affiliates to take the steps required to adopt and implement a plan for the
liquidation and dissolution of ASF.

 

Section 5.8                                      Reimbursement
of Apex Expenditures.  Sumitomo shall
cause MSC to pay in cash within three (3) Business Days after the Closing
Date, US$2,500,000, in complete

 

32

 

satisfaction of the expenditures made by Apex or any
Apex Affiliate on behalf of MSC up to the Term Sheet Date as set forth on Schedule
F (“Apex Reimbursable Expenditures”).  Other than payment of the Apex Reimbursable
Expenditures, Apex and any Apex Affiliate shall not demand and shall not cause
MSC to pay to Apex or any Apex Affiliate any amount attributable to
expenditures made by Apex or any Apex Affiliate on behalf of MSC on or prior to
the Term Sheet Date.  For clarification,
Apex Reimbursable Expenditures are not intended to be included in or be a part
of the Deferred Management Fee Obligations, and Apex and any Apex Affiliate
shall be entitled to payment of the Apex Reimbursable Expenditures
notwithstanding the sale and release by the Service Company of the Deferred
Management Fee Obligations. For the avoidance of doubt, MSC shall
continue to pay the Management Fee Obligations and reimbursables arising in the
ordinary course, from the Term Sheet Date to the Closing Date.

 

Section 5.9                                      Efforts to
Prevent Insolvency.  To the extent
within the control of Apex, Apex shall cause Apex Sweden, Apex Luxembourg, AMM,
ASC Bolivia and Service Company to meet their respective obligations through
the Closing Date to prevent the filing of Insolvency Proceedings.  In addition, to the extent within the control
of Apex or Reorganized Apex, Apex or Reorganized Apex, as applicable, shall
cause Apex Luxembourg to prevent the filing of an Insolvency Proceeding for a
period of at least six (6) months and ten (10) days from the Closing
Date.  Notwithstanding the foregoing,
nothing shall prevent Apex, Apex Sweden, Apex Luxembourg, AMM, ASC Bolivia or
Service Company from taking any actions in connection with any such filing
required under applicable Law, provided that no such filing shall excuse
Apex, Reorganized Apex, any Seller or any other Apex Affiliate from any of its
obligations under this Agreement or any other Transaction Document.

 

Section 5.10                                SC Working Capital
Facility.  Nothing in this Agreement
shall restrict, limit or otherwise affect or alter any of SC Minerals’ rights
under the Working Capital Loan Agreement to acquire additional equity
securities of MSC in accordance with the terms thereof, and neither this
Agreement nor any of the other Transaction Documents shall be deemed to impose
any duty or obligation on SC Minerals to refrain from exercising any and all of
its rights under the Working Capital Loan Agreement.

 

Section 5.11                                Transmission Line.
The Sellers have advised the Purchasers that ASC Bolivia has been engaging in
discussions regarding the acquisition of title to the Transmission Line but
that such acquisition may not be completed by the Closing.  From the date hereof, the Sellers shall
continue to keep the Purchasers apprised of the progress of such discussions
and negotiations and shall provide the Purchasers with an opportunity to review
and approve any related draft documents (such approval not to be unreasonably
delayed, conditioned or withheld) and each of the Purchasers, Apex, MSC, and
ASC Bolivia shall cooperate to, as promptly as practicable following the
Closing, effect the transfer to MSC of all right, title, and interest in and to
the Transmission Line in a manner reasonably satisfactory to MSC.

 

Section 5.12                                Public Announcements.  The Sellers, on the one hand, and the Purchasers,
on the other hand, shall consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any press release or
other public statements with

 

33

 

respect to this Agreement or the Transactions and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable Law, Legal
Proceedings or by obligations pursuant to any listing agreement with any
national securities exchange.

 

Section 5.13                                Enforcement in
Bolivia.  Upon reasonable request by
a Party, all Parties shall fully legalize all signatures to this Agreement and
any other Transaction Document in accordance with Bolivian law as promptly as
practicable.

 

ARTICLE VI

CONDITIONS TO CLOSING

 

Section 6.1                                      Conditions to
Sumitomo’s Obligations.  The
obligations of the Purchasers to purchase the Purchased Properties and to
consummate the Transactions are subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions, any of which may be waived
(in whole or in part) by the Purchasers:

 

(a)                                  Closing
Deliveries to Sumitomo.

 

(i)                                    Each
of the items described as being executed and delivered by the Sellers or any
other Person pursuant to Section 1.6(a), shall have been executed
by the Sellers and such Person, as applicable, and delivered to the Purchasers,
and the Sellers shall comply with each of their other obligations under Section 1.6(a).

 

(ii)                                The
Sellers shall have delivered to the Purchasers 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, each such certificate to
be on or shortly prior to the Closing Date;

 

(iii)                             The
Sellers shall have delivered to the Purchasers 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 2008 (certificado de actualización de matricula)
issued on or shortly prior to the Closing Date by the Registry of Commerce of
Bolivia under the care of Fundempresa;

 

(iv)                             The
Sellers shall have delivered to the Purchasers a recent notarized copy of the
then current articles of association (statuts
coordonnés) of Apex Luxembourg on or shortly prior to the Closing
Date;

 

34

 

(v)                                The
Sellers shall have delivered to the Purchasers a copy of the articles of
association (bolagsordning) of
Apex Sweden, duly certified by the Swedish Companies Registration Office (Bolagsverket) on or shortly prior to the
Closing Date;

 

(vi)                             The
Sellers shall have delivered to the Purchasers copies of each of the public
deeds evidencing the Governing Documents of AMM, as amended to reflect the new
legislation regarding Swiss LLC’s as of January 1, 2008, duly certified by
the commercial registry of the Canton of Zug and a certified copy of the
extract from the commercial register of the Canton of Zug (Handelsregisteramt des Kanton Zug — Hauptregister)
regarding AMM on or shortly prior to the Closing Date;

 

(vii)                          The
Sellers shall have delivered to the Purchasers a certificate of the President
and Secretary of MSC, dated as of the Closing Date, in form and substance
reasonably satisfactory to Sumitomo, as to no amendments to the Governing
Documents of MSC since the date specified in Section 6.1(a)(iii);

 

(viii)                       The
Sellers shall have delivered to the Purchasers a certificate signed by a
managing officer of AMM, dated as of the Closing Date, in form and substance
reasonably satisfactory to Sumitomo, as to no amendments to the Governing
Documents of AMM since the date of the certification specified in Section 6.1(a)(vi);

 

(ix)                               The
Sellers shall have delivered to the Purchasers 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) no amendments to the Governing
Documents of Apex Luxembourg since the date mentioned in Section 6.1(a)(iv),
(ii) 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; and (iii) incumbency and signatures of
the managers of Apex Luxembourg executing such Transaction Documents and any
other documents relating to the Transactions;

 

(x)                                  The
Sellers shall have delivered to the Purchasers 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) no amendments to the Governing
Documents of Apex Sweden since the date mentioned in Section 6.1(a)(v),
(ii) the resolutions of the shareholders and the board of directors of
Apex Sweden

 

35

 

authorizing the
execution, delivery, and performance of the Transaction Documents to which it
is a party and the Transactions; and (iii) incumbency and signatures of
the directors of Apex Sweden executing such Transaction Documents and any other
documents relating to the Transactions; and

 

(xi)                              The
Sellers shall have made available and, if requested, delivered to the
Purchasers’ Bolivian counsel certified
copies (testimonios) of all
management powers of attorney and special powers of attorney, granted by either
(i) resolution of the MSC board of directors; (ii) by delegation; or (iii) by
an attorney in fact pursuant to authority granted upon it, from the date hereof
to the Closing Date.

 

(b)                                 Required
Consents.  The Purchasers shall have
received all Sumitomo Required Consents and all Authorizations and Governmental
Approvals set forth in Section 3.2(a) of the Apex Disclosure
Schedule, from the Person to whom such consent applies, in each case, in form
and substance reasonably acceptable to the Purchasers.

 

(c)                                  Representations
and Warranties. The representations and warranties of the Sellers set forth
in this Agreement (a) that are qualified by materiality or Material
Adverse Effect will be true and correct and (b) that are not qualified by
materiality or Material Adverse Effect will be true and correct in all material
respects, in each case on and as of the Closing with the same force and effect
as if they had been made on the Closing Date (except for any such
representations and warranties that, by their terms, speak only as of a
specific date or dates, in which case such representations and warranties that
are qualified by materiality or Material Adverse Effect will be true and
correct, and such representations and warranties that are not qualified by
materiality or Material Adverse Effect will be true and correct in all material
respects, on and as of such specified date or dates).

 

(d)                                 Covenants
and Agreements.  The Sellers shall
have performed in all material respects the covenants, agreements and conditions
required by this Agreement to be performed, satisfied and complied with by them
hereunder on or prior to the Closing.

 

(e)                                  Intentionally
Deleted.

 

(f)                                    No
Bankruptcy of Apex Sweden and Apex Luxembourg.  Neither Apex Sweden nor Apex Luxembourg shall
be the subject of any Insolvency Proceeding.

 

(g)                                 Bankruptcy
Conditions.  (i) The
Confirmation Order, approving
this Agreement and the other Transaction Documents, authorizing Apex and
Service Company to enter into and perform their respective obligations hereunder
and under the other Transaction Documents, assign their right, title and
interest in this Agreement to Reorganized Apex and containing
the general releases contemplated hereunder, in form and substance, reasonably

 

36

 

satisfactory to Sumitomo, shall have
been entered on the Bankruptcy Court’s docket by the Clerk of the Bankruptcy
Court and such order shall have become a Final Order and (ii) the
conditions precedent to the occurrence of the effective date of the Plan shall
have occurred.

 

(h)                                 Dissolution
of ASF.  Either (i) the
directors of ASF shall have applied to the Registrar of Companies of the Cayman
Islands to have ASF struck from the registrar or (ii) Sumitomo Corporation
and Apex Luxembourg shall have passed a special resolution requiring ASF to be
wound up voluntarily and appointing a liquidator.

 

(i)                                     Cayman
Insolvency Proceedings.  Apex
shall have commenced a joint provisional liquidation proceeding under Cayman
Law, and (i) The Grand Court of the Cayman Islands shall have made orders
appointing joint provisional liquidators for Apex on terms which empower those
joint provisional liquidators to approve the Transactions or to concur with
actions taken by the Board of Directors of Apex to enter into the Transactions;
and (ii) such joint provisional liquidators shall have granted such
approval or concurrence, in writing, as applicable.

 

(j)                                     Expropriation
and Change in Law.  Except for any
such notice or threat pursuant to a Law of general applicability, neither MSC
nor AMM has received written notice of, or has been threatened with, any action
by any Governmental Authority as a result of any laws or legislation enacted
after the date hereof and prior to the Closing Date that would require the sale,
transfer, disposition, voluntary or involuntary, by way of condemnation,
expropriation or otherwise, of the Mining Concessions, any portion of MSC’s or
AMM’s equity capital or any material portion of MSC’s or AMM’s assets.

 

Section 6.2                                      Conditions to
Apex’s Obligations.  The obligation
of the Sellers to sell the Purchased Properties and to consummate the
Transactions contemplated hereby is subject to the satisfaction, on or prior to
the Closing Date, of each of the following conditions, any of which may be waived
(in whole or in part) by the Sellers.

 

(a)                                  Closing
Deliveries to the Sellers.

 

(i)                                    Each
of the items described as being executed and/or delivered by the Purchasers
pursuant to Section 1.6(b), shall have been executed by the
Purchasers, as applicable, that are parties thereto and delivered to the
Sellers and the Purchasers shall comply with each of their other obligations
under Section 1.6(b);

 

(ii)                                 Sumitomo
shall have 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

 

37

 

a party; and (ii) incumbency
and signatures of the officers of Sumitomo executing such Transaction Documents
and any other documents relating to the Transactions.

 

(iii)                             SC
Minerals shall have delivered to the Sellers a certificate of a director of SC
Minerals, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Sellers, as to (i) the resolutions of the board of
directors (or a duly authorized committee thereof) of SC Minerals authorizing
the execution, delivery, and performance of this Agreement and the other
Transaction Documents to which it is a party; and (ii) incumbency and
signatures of the directors of SC Minerals executing such Transaction Documents
and any other documents relating to the Transactions.

 

(iv)                             Each
SC Designated Purchaser shall have delivered to the Sellers a certificate of a
director of such SC Designated Purchaser, dated as of the Closing Date, in form
and substance reasonably satisfactory to the Sellers, as to (i) the
resolutions of the board of directors (or a duly authorized committee thereof)
of such SC Designated Purchaser authorizing the execution, delivery, and performance
of this Agreement and the other Transaction Documents to which it is a party;
and (ii) incumbency and signatures of the director of such SC Designated
Purchaser executing such Transaction Documents and any other documents relating
to the Transactions.

 

(v)                                The
applicable SC Designated Purchaser shall have delivered to MSC a notice of the
assignment of each Shareholder Loan.

 

(b)                                 Representations
and Warranties. The representations and warranties of the Purchasers set
forth in this Agreement (a) that are qualified by materiality or Material
Adverse Effect will be true and correct and (b) that are not qualified by
materiality or Material Adverse Effect will be true and correct in all material
respects, in each case on and as of the Closing with the same force and effect
as if they had been made on the Closing Date (except for any such
representations and warranties that, by their terms, speak only as of a
specific date or dates, in which case such representations and warranties that
are qualified by materiality or Material Adverse Effect will be true and
correct, and such representations and warranties that are not qualified by
materiality or Material Adverse Effect will be true and correct in all material
respects, on and as of such specified date or dates).

 

(c)                                  Covenants
and Agreements.  The Purchasers shall
have performed in all material respects the covenants, agreements and
conditions required by this Agreement to be performed, satisfied and complied
with by them hereunder on or prior to the Closing.

 

38

 

(d)                                 Required
Consents. The Sellers shall have received all Apex Required Consents, in
each case, in form and substance, reasonably acceptable to the Sellers.

 

(e)                                  Bankruptcy
Condition. The Confirmation Order, in form and substance reasonably
satisfactory to the Sellers shall have been entered on the Bankruptcy Court’s
docket by the Clerk of the Bankruptcy Court.

 

(f)                                    Financing
Documents. Apex and any applicable Apex Affiliate shall have received terminations
and releases, in form and substance reasonably satisfactory to Apex, evidencing
the termination of all of Apex’s and any Apex Affiliate’s obligations under the
Financing Documents, other than any distributions to be made to the Senior
Lender Group (as defined in the Common Security Agreement) under the Plan.

 

(g)                                 Releases
of Third Party Guarantees.  Apex and
any applicable Apex Affiliate shall have received either (i) terminations
and releases, in form and substance reasonably satisfactory to Apex, evidencing
the termination of all of Apex’s and any Apex Affiliate’s obligations under
those guarantees and other obligations of Apex and any Apex Affiliate listed on
Section 6.2(g) of the Apex Disclosure Schedule to the extent
such guarantees and obligations relate to the business and assets of MSC, AMM
or to any other Purchased Properties or (ii) an assumption by the
Purchasers of the obligations of Apex and the Apex Affiliates referred to in
clause (i) of this Section 6.2(g), which assumption shall be in
form and substance reasonably satisfactory to Apex.

 

(h)                                 Receipt
of L/C Collateral Payment.  Apex
shall have received the L/C Collateral Payment.

 

(i)                                     Apex Reimbursable Expenditures. 
Apex shall have been paid the Apex Reimbursable Expenditures.

 

(j)                                     Cayman
Insolvency Proceedings.  The joint
provisional liquidator appointed by The Grand Court of the Cayman Islands shall
have either approved the Transactions or concurred with the actions taken by
the Board of Directors of Apex to enter into the Transactions, in each case, in
writing.

 

Section 6.3                                      Conditions to
Obligations of Each Party.  The
respective obligations of each Party to this Agreement to consummate the
Transactions shall be subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, which may be waived by the
Purchasers or the Sellers, as applicable, in writing:

 

(a)                                  No
Legal Impediments to Closing.  There
shall not be in effect any Legal Proceeding preventing the consummation of the
Transactions, seeking any Losses as a result of the Transactions, or otherwise
affecting the right or ability of the Purchasers to own, operate or control the
Purchased Properties, nor shall any Legal Proceeding be pending that seeks any
of the foregoing.  There shall not be any
Law prohibiting the Sellers from selling or the Purchasers

 

39

 

from owning, operating or controlling the Purchased
Properties, or that makes this Agreement or the consummation of any of the
Transaction Documents illegal.

 

(b)                                 Regulatory
Approvals.  Any waiting period, and
any extensions thereof, applicable to the consummation of the Transactions
under any applicable Law shall have expired or been terminated, and any
approvals required thereunder shall have been obtained.

 

(c)                                  Management
Services Agreement. The Management Services Agreement shall have been duly
executed and delivered by each signatory thereto; provided that Apex and
Sumitomo shall have finalized Schedules B, C, F and G in accordance with the
provisions of the Management Services Agreement.

 

ARTICLE VII

SURVIVAL AND INDEMNIFICATION

 

Section 7.1                                      Survival.  (a) All representations and warranties
contained in this Agreement or in any certificate or other writing delivered
pursuant hereto or in connection herewith shall terminate on the Closing Date
and shall not be subject to any claim after the Closing Date, provided, however, that the representations
and warranties of Apex contained in Section 2.1(f), (g), (h),
(i), (j) and  (k), (Ownership of Purchased
Properties) and the representations and warranties contained in Section 3.1(b) and
Section 3.1(d) (Capitalization) (the “Special
Representations and Warranties”) will remain operative and in full force
and effect, regardless of any investigation or disclosure made by or on behalf
of any of the Parties, including as against Reorganized Apex, indefinitely ; provided,
further, that the representations and warranties of Apex contained in Section 3.13
(Interested Party Transactions) will remain operative and in full force and
effect, regardless of any investigation or disclosure made by or on behalf of
any of the Parties, including as against Reorganized Apex, until the two-year
anniversary of the Closing Date; provided, further, that such
expiration shall not affect the rights of any Indemnified Party under this Article VII
or otherwise to seek recovery for indemnifiable Losses arising out of any fraud
or intentional misrepresentation by any Party until the expiration of the
applicable statute of limitations.  All
covenants of the Parties will survive according to their respective terms.

 

(b) (i) All liabilities of
Reorganized Apex and the Sellers for indemnification (A) pursuant to Section 7.2(a)(i) or
Section 7.2(a)(ii), shall survive indefinitely, (B) pursuant
to Section 7.2(a)(iii), shall survive until the two-year
anniversary of the Closing Date, (C) pursuant to Section 7.2(a)(iv),
shall survive according to the respective terms of such covenant and (D) in
each case, shall not be subject to objection or disallowance under Section 502(e) of
the Bankruptcy Code.

 

(ii) All liabilities of the Purchasers
for indemnification (A) pursuant to Section 7.2(b)(i), shall
survive indefinitely and (B) pursuant to Section 7.2(b)(ii),
shall survive according to the respective terms of such covenant.

 

40

 

Section 7.2                                      Indemnification.  (a) From and after the Closing Date, Reorganized Apex and the Sellers shall jointly and
severally indemnify and hold harmless the Purchasers, each Sumitomo
Affiliate, MSC, AMM and each of their respective Representatives (each a “Sumitomo
Indemnified Party”) from any Losses arising out of or resulting from, or
relating to (i) any Excluded Liabilities, (ii) any inaccuracy or
breach of a Special Representations and Warranty, (iii) any inaccuracy or breach of the representations and
warranties contained in Section 3.13 (Interested Party
Transactions) or (iv) any breach of any covenant of Apex or any Seller in
this Agreement , the Bill of
Sale, the Assignment and Assumption Agreement or the AMM Assignment Agreement.

 

(b)                                 From
and after the Closing Date, the Purchasers
shall jointly and severally indemnify and hold harmless Reorganized Apex
and the Sellers, and each of their respective Representatives (each an “Apex
Indemnified Party”), from any Losses arising out of or resulting from, or
relating to (i) any Assumed Liability
or (ii) any breach of any covenant of the Purchasers in this Agreement,
the Bill of Sale, the Assignment and Assumption Agreement or the AMM Assignment
Agreement.

 

Section 7.3                                      Tax Indemnity.  From and
after the Closing Date, Reorganized Apex and the Sellers shall jointly and
severally indemnify and hold harmless the Purchasers, MSC and AMM from
all Taxes resulting from the several liability of MSC or AMM solely by reason
of either MSC or AMM having been a member of any consolidated, combined or
unitary group of which Apex or an Apex Affiliate was the common parent on or
prior to the Closing Date.

 

Section 7.4                                      Limitations on
Indemnification.  Notwithstanding
anything herein to the contrary, Reorganized Apex and the Sellers shall not be
obligated to indemnify the Indemnified Parties under this Article VII:  (i) unless the aggregate of all Losses
indemnifiable by the Sellers exceeds US$1,000,000 (the “Indemnity Basket”),
in which case the Indemnified Parties shall be entitled to recover all Losses,
including the amount equal to the Indemnity Basket up to a total aggregate
amount of the Cash Purchase Price (the “Indemnification Cap”); provided,
however, that the Indemnification Cap and the Indemnity Basket shall not
apply to any of the Indemnifying Party’s indemnification
obligations arising out of, relating to or resulting from the Excluded
Liabilities or fraud or intentional misrepresentation by the Sellers.

 

Section 7.5                                      Intentionally
Deleted.

 

Section 7.6                                      Procedures for Indemnification.

 

(a)                                  An Indemnified Party shall, promptly following the
discovery of any matter that may give rise to any Losses, notify the
Indemnifying Party in writing of its claim for indemnification for such Losses,
specifying in reasonable detail the nature of such Losses and the amount of the
Losses 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 has been actually
prejudiced as a result of such failure.

 

41

 

Thereafter, the Indemnified Party
shall deliver to the Indemnifying Party, within five (5) 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 Losses.  Following
notification to the Indemnifying Party pursuant to this Section 7.6,
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 Legal Proceeding that may give rise to a claim for
indemnification under this Article VII, unless and until the
Indemnifying Party (i) delivers a written confirmation to such Indemnified
Party that the indemnification provisions of this Article VII are
applicable to such Legal Proceeding and that, subject to the other provisions
of this Article VII, the Indemnifying Party shall indemnify such
Indemnified Party in respect of such Legal Proceeding pursuant to the terms of
this Article VII; (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 Legal Proceeding. 
Notwithstanding anything to the contrary in the immediately preceding
sentence, the Indemnifying Party shall not have any right to assume the defense
of such Legal Proceeding, if (1) such Legal Proceeding 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 Legal
Proceeding 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.

 

(b)                                 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 Legal Proceeding in accordance herewith
in any manner that such party may reasonably request.  If the Indemnifying Party assumes the defense
of any such Legal Proceeding, 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 Legal Proceeding (in either of which
cases the Indemnifying Party shall not have the right to direct the defense,
compromise, or settlement of such Legal Proceeding 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 Legal
Proceeding 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 Legal Proceeding in the manner provided in this
Section 7.6(b).  The
Indemnifying Party shall not, without the written consent of the Indemnified
Party, settle or compromise or consent

 

42

 

to entry of any judgment with respect to any such
Legal Proceeding (i) in which any relief other than the payment of money
damages is or may be sought against any Indemnified Party or (ii) 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 Losses with respect to such Legal
Proceeding.

 

ARTICLE VIII

TERMINATION

 

Section 8.1                                      Events of
Termination.  This Agreement may be
terminated prior to the Closing:

 

(a)                                  at
any time by mutual written consent executed by the Sellers and the Purchasers;

 

(b)                                 by
either the Purchasers or the Sellers if (i) the non-terminating party is
in material breach of any material provision of this Agreement and such breach
shall not have been cured within thirty (30) days of receipt by such party of
written notice from the terminating party of such breach; and (ii) the
terminating party is not, on the date of termination, in material breach of any
material provision of this Agreement;

 

(c)                                  by
the Purchasers if the Plan Support Agreement has not been executed and
delivered to Apex by the Required Lenders on or before the date hereof;

 

(d)                                 by
the Purchasers if Apex has not commenced the Bankruptcy Case by January 12,
2009;

 

(e)                                  by the Purchasers if the Fee
Approval Motion has not been approved by the Bankruptcy Court within ten (10) days
of the Petition Date or such later date that the Bankruptcy Court holds a
hearing to consider approval of the Fee Approval Motion, which shall, in no
event, be later than twenty (20) days following the Petition Date;

 

(f)                                    by the Purchasers if the Support
Motion has not been approved by the Bankruptcy Court on (i) an interim
basis within ten (10) days of the Petition Date or (ii) a final basis
within twenty (20) days of the Petition Date;

 

(g)                                 by
the Purchasers if the Confirmation Order has not been entered on the Bankruptcy
Court docket by March 16, 2009;

 

(h)                                 by
the Purchasers if the Confirmation Order has not become a Final Order by March 26,
2009;

 

(i)                                     by
either the Purchasers or the Sellers if (i) satisfaction of a closing
condition of the terminating party in Article VI is impossible; and (ii) the
terminating party is not, on the date of termination, in material breach of any
material provision of this Agreement;

 

43

 

(j)                                     by
the Purchasers or the Sellers if the Sellers take a Specified Action in
compliance with Section 5.5 provided, the Sellers may not terminate
this Agreement pursuant to this Section 8.1(j), and any such
purported termination of this Agreement by the Sellers shall be void unless the
Board of Apex shall have taken such Specified Action in full compliance with
the procedures specified in Section 5.5(c), and either (A) if
such termination occurs on or after the Petition Date, prior to or
simultaneously with such termination the Bankruptcy Court shall have approved
the Fee Motion in its entirety authorizing Apex to pay the Break-Up Fee and
Reimbursement Amount to Sumitomo as provided in Section 8.3, or (B) if
such termination occurs prior to the Petition Date, prior to or simultaneously
with such termination, the Sellers shall have paid the Reimbursement Amount to
Sumitomo and confirmed in writing their obligation to pay the Break-Up Fee as
provided in Section 8.3;

 

(k)                                  by
(i) the Purchasers if (A) the Closing has not occurred on or prior to
March 31, 2009 for any reason; and (B) the Purchasers are not, on the
date of termination, in material breach of any material provision of this
Agreement, or (ii) the Sellers if (A) the Closing has not occurred on
or prior to June 30, 2009 for any reason; and (B) the Sellers are
not, on the date of termination, in material breach of any material provision
of this Agreement; or

 

(l)                                     by
either the Purchasers or the Sellers if consummation of the Transactions has
been prohibited by a final, non-appealable order, decree or injunction of a
court of competent jurisdiction or other Governmental Authority.

 

Section 8.2                                      Effect
of Termination or Breach.

 

(a)                                  Except
as specifically set forth in Section 8.2(b), in the event this
Agreement is terminated pursuant to Section 8.1, all obligations of
the Purchasers and the Sellers under this Agreement shall terminate and there
shall be no liability of the Purchasers or the Sellers to any of the other
Parties, and the Purchasers or the Sellers shall bear their own expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement; provided that the foregoing shall not
relieve either the Purchasers or the Sellers of Losses actually incurred by the
other Parties as a result of any breach of this Agreement by such Parties.

 

(b)                                 If
this Agreement is terminated as provided in Section 8.2(a), this
Agreement shall become null and void and of no further force and effect (except
for any liability of any party then in breach), except for the obligations of
the Parties contained in this Section 8.2, Section 8.3
and Article IX hereof which shall survive.

 

Section 8.3                                      Purchaser
Protections.  If this Agreement is
terminated by the Purchasers pursuant to Section 8.1(b) or by
either the Purchasers or the Sellers pursuant to Section 8.1(j),
then the Sellers shall pay the Reimbursement Amount to the Purchasers by wire
transfer of immediately available funds within two (2) Business Days of
such termination.  Payment of the Reimbursement Amount shall not
be deemed to be liquidated damages for any breach of any of Apex or any
Seller.  If this Agreement is
terminated by either the Purchasers or the Sellers 

 

44

 

pursuant to Section 8.1(j) and if the
Sellers, MSC or AMM, or any of them, consummates an Alternative Transaction,
then the Sellers shall promptly pay the Break-Up Fee to the Purchasers by wire
transfer of immediately available funds within two (2) Business Days of
the consummation of such Alternative Transaction.  The obligation of the Sellers to pay the
Reimbursement Amount and/or Break-Up Fee shall be joint and several.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.1                                      Entire
Agreement.  This Agreement (together
with the Schedules and Exhibits annexed hereto) contains, and is 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.

 

Section 9.2                                      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, 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.

 

Section 9.3                                      Submission
to Jurisdiction; Waiver of Jury Trial; Service of Process.

 

(a)                                  Each
Party hereby (i) submits to the non-exclusive
jurisdiction of any New York State or United States federal court located in
the Borough of Manhattan, The City of New York, for the purpose of any Legal
Proceeding arising out of or relating to this Agreement and the other
Transaction Documents, (ii) agrees that all
claims in respect of any such Legal Proceeding may be heard and determined in
such courts, and (iii) irrevocably waives (to
the extent permitted by applicable Law) any objection which it now or hereafter
may have to the laying of venue of any such Legal Proceeding brought in any of
the foregoing courts, and any objection on the ground that any such Legal
Proceeding in any such court has been brought in an inconvenient forum; provided,
however, that during the pendency of the Bankruptcy Case, the Bankruptcy
Court shall have and retain exclusive jurisdiction to enforce the terms of this
Agreement and to decide any claims or disputes which may arise or result from,
or be connected with, this Agreement, any breach or default hereunder, or the
Transactions contemplated hereby.

 

(b)                                 Nothing
in this Section 9.3 shall limit the right of each Party to bring
any Legal Proceeding against any other Party or its property in the courts of
other jurisdictions.

 

(c)                                  EACH
PARTY HERETO HEREBY AGREES TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY

 

45

 

IN ANY
LEGAL PROCEEDING OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE.  EACH PARTY AGREES THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY.  WITHOUT IN ANY WAY LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION 9.3(C) AS TO ANY
ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS.  A COPY OF
THIS SECTION 9.3(C) MAY BE FILED WITH ANY COURT AS
WRITTEN EVIDENCE OF THE WAIVER OF THE RIGHT TO TRIAL BY JURY AND CONSENT TO
TRIAL BY COURT.

 

(d)                       Each
of Apex, each Seller and each Purchaser, by the execution and delivery of this
Agreement, designates and appoints CT Corporation System for a period of no
less than seven (7) years as the authorized agent of each such Person upon
whom process may be served in any Legal Proceeding against such Person instituted
by any other such Person and based upon or arising out of this Agreement or any
of the Transaction Documents, in any New York State or United States federal
court located in the Borough of Manhattan, in The City of New York.  Such designations and appointments shall be
irrevocable, unless and until a successor authorized agent in the County and
State of New York reasonably acceptable to the Sellers in connection with any
successor appointed by any of the Purchasers, and to Sumitomo in connection
with any successor appointed by Apex or any of the Sellers, shall have been
appointed, such successor shall have accepted such appointment, and written
notice thereof shall have been given to all Parties.  Each of Apex, each Seller and each Purchaser
further agrees that service of process upon its authorized agent or successor
shall be deemed in every respect personal service of process upon such Person
in any such Legal Proceeding.  Upon the
execution and delivery of this Agreement, Apex, each Seller and each Purchaser
has furnished to all Parties evidence of its appointment of CT Corporation
System as such agent and evidence of full payment to CT Corporation System for
its charges in respect thereof.

 

Section 9.4                            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 9.5                            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 seventh (7th)
Business Day 

 

46

 

following
mailing, if mailed, except that notice of a change of address shall not be
deemed given and received until actually received):

 

	
  (a)

  	
   

  	
  If to Apex or any of the Sellers, to them 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:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cleary
  Gottlieb Steen & Hamilton LLP

  
	
   

  	
   

  	
  One Liberty
  Plaza

  
	
   

  	
   

  	
  New York,
  New York 10006 U.S.A.

  
	
   

  	
   

  	
  Attention:
  Richard S. Lincer; Sean A. O’Neal

  
	
   

  	
   

  	
  Telecopier:
  +1 (212) 225-3999

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  If to the
  Purchasers, to them at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sumitomo Corporation

  
	
   

  	
   

  	
  8-11, Harumi, 1-chome,

  
	
   

  	
   

  	
  Chuo-ku, Tokyo, 104-8610 Japan

  
	
   

  	
   

  	
  Attention:
  General Manager of San Cristobal Project 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

  
	
   

  	
   

  	
  Telecopier: +1 (212) 468-7900

  

 

Section 9.6                            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 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.

 

Section 9.7                            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

 

47

 

as an
amendment or modification, subject, if the Bankruptcy Case has commenced, to
Bankruptcy Court approval.  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 9.8                            Assignment and Binding
Effect.  Except as otherwise provided
for in Section 4.1(g), 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.  Any purported assignment or
delegation not complying with the foregoing shall be null and void.

 

Section 9.9                            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 9.10                      Counterparts.  This Agreement may not be executed by the
Parties in separate counterparts.

 

Section 9.11                      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 9.12                      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.

 

Section 9.13                      Stock Purchase Agreement Not a
Plan.  This Agreement does not
constitute a plan of reorganization or confirmation thereof under title 11 of
the United States Code.  The Transactions
are not effective unless and until the Bankruptcy Court enters the Confirmation
Order and such order has become a Final Order.

 

48

 

Section 9.14                      Interpretation.

 

(a)                        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.  In case of any enforcement action in the
Republic of Bolivia, however, the official translation attained in accordance
with Bolivian laws shall govern.

 

(b)                       Each
definition used in this Agreement includes the singular and the plural, and
reference to the neuter gender includes the masculine and feminine where
appropriate.  The headings to the
Articles and Sections are for convenience of reference and shall not affect the
meaning or interpretation of this Agreement. 
Except as otherwise stated, reference to Sections, Exhibits and
Schedules means the Sections, Exhibits and Schedules of this Agreement.  The words “including” or “includes” or
similar terms used herein shall be deemed to be followed by the words “without
limitation,” whether or not such additional words are actually set forth
herein.  Each agreement referred to
herein shall mean such agreement as amended, supplemented or modified from time
to time to the extent permitted by the applicable provisions thereof and
hereof.  The Exhibits and Schedules
hereto are hereby incorporated by reference into, and shall be deemed a part
of, this Agreement, provided that no Exhibit that consists of a form of
agreement or instrument shall be deemed to become effective until executed and
delivered by the appropriate parties.

 

Section 9.15                      Specific Performance.  The Parties agree that irreparable damage
would occur in the event any provision of this Agreement were not performed in
accordance with the terms hereof and that the Parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
Law or equity.

 

[Remainder of page intentionally left blank]

 

49

 

IN WITNESS WHEREOF, the Parties have executed
this Agreement in eight (8) originals as of the date first written above.

 

 

	
   

  	
   

  	
  APEX SILVER MINES LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Robert P. Vogels

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:   

  	
  Vice President and Controller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APEX LUXEMBOURG S.À.R.L.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Gerald Malys

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APEX SILVER MINES SWEDEN AB

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Gerald Malys

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APEX SILVER MINES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Robert P. Vogels

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:   

  	
  Vice President and Controller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASC BOLIVIA LDC
  (SUCURSAL BOLIVIA)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  Gerald Malys

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  

 

50

 

	
   

  	
   

  	
  SUMITOMO CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Haruo Matsuzaki

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:  

  	
  General Manager, San Cristobal Project 

  Department

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SC MINERALS AKTIEBOLAG

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Haruo Matsuzaki

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:  

  	
  Vice President

  

 

51

 

Annex I

 

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

 

“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 and Schedules attached hereto).

 

“Alternative Proposal”
means any bona fide proposal not solicited, initiated or knowingly encouraged
in violation of Section 5.5 made by a Third Party to acquire,
directly or indirectly (i) from Apex and/or any Apex Affiliate any of the
MSC Acquired Shares or the AMM Acquired Quota, and/or (ii) from MSC or
AMM, as applicable, any of the issued and outstanding shares or quotas of MSC
or AMM, as applicable, and/or (iii) from Apex, an Apex Affiliate, MSC or
AMM any right, option or other instrument giving such Third Party or Third
Parties the right to acquire such shares or quotas from Apex, any Apex
Affiliate or from MSC or AMM, as the case may be, and/or (iv) from MSC or
AMM, any material asset of MSC or AMM.

 

“Alternative Transaction”
means any acquisition by one or more Third Parties, directly or indirectly, (i) from
Apex and/or any Apex Affiliate of twenty percent (20%) or more of the MSC
Acquired Shares or twenty percent (20%) or more of the AMM Acquired Quota,
and/or (ii) from MSC of twenty percent (20%) or more of the issued and
outstanding shares of MSC (computed after issuance) and/or (iii) from AMM
of twenty percent (20%) or more of the issued and outstanding quotas of AMM
(computed after issuance) and/or (iv) of a right, option or other instrument
giving such Third Parties the right to acquire the shares or quotas specified
in clause (i), (ii), (iii) and/or (v) of any material asset of MSC or
AMM.

 

“AMM” has the meaning
specified in Recital B.

 

“AMM Acquired Quota” has
the meaning specified in Section 1.1(b).

 

“AMM Contracts” has the
meaning specified in Section 3.7(c).

 

“AMM Management Agreement”
means the Management and Services Agreement dated September 25, 2006,
among AMM, ASF and Service Company.

 

“AMM Quotaholders Agreement”
means the shareholders agreement by Apex Sweden, CMB, and AMM dated September 25,
2006.

 

“Apex” has the meaning
specified in the preamble.

 

“Apex Affiliate” means
any Entity Controlled by Apex not including MSC and AMM.

 

A-1

 

“Apex Convertible Senior
Subordinated Notes” means Apex’s 2.875% and its 4.0% Convertible Senior
Subordinated Notes due 2024.

 

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

 

“Apex Disclosure Schedule”
means the Schedule so named and attached hereto as Schedule A.

 

“Apex Indemnified Parties”
has the meaning specified in Section 7.2(b).

 

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

 

“Apex Reimbursable Expenditures”
has the meaning specified in Section 5.8.

 

“Apex Required Consents”
has the meaning specified in Section 2.1(d).

 

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

 

“ASC Bolivia” has the
meaning specified in the preamble.

 

“ASC Bolivia Assets” means
all right, title and interest of ASC Bolivia in, to and under (i) the
Transmission Line Loan Documents, (ii) any Contract (whether oral or
written) with respect to the Transmission Line, including any letter of intent,
acquisition agreement or other similar Contract and (iii) all accounts
receivable of ASC Bolivia existing on the Closing Date.

 

“ASC Contracts” has the
meaning specified in Section 3.7(e).

 

“ASF” means Apex Silver
Finance Ltd., an exempted company limited by shares 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.

 

“Assumed Liabilities”
has the meaning specified in Section 1.1(g).

 

“Audited AMM Balance Sheets”
has the meaning specified in Section 3.5(a).

 

“Audited MSC Balance Sheets”
has the meaning specified in Section 3.5(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.

 

“Bankruptcy Case” has
the meaning specified in Recital I.

 

“Bankruptcy Code” has
the meaning specified in Section 4.1(a).

 

A-2

 

“Bankruptcy Court” means
the United States Bankruptcy Court for the Southern District of New York or
such other United States federal court of competent jurisdiction with respect
to the Bankruptcy Case.

 

“Bankruptcy Rules” has
the meaning specified in Section 4.1(f).

 

“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.

 

“Break-Up Fee” has the
meaning specified in Section 4.1(b).

 

“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.

 

“Cash Purchase Price”
has the meaning specified in Section 1.2.

 

“Causes of Action” means
all claims, rights, actions, causes of action, liabilities, obligations, suits,
debts, remedies, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages or judgments, whether known or unknown and
whether asserted or unasserted.

 

“CEDEIM” means Certificado de Devolución de Impuestos as regulated under the Laws of Bolivia.

 

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

 

“Closing” has the
meaning specified in Section 1.5.

 

“Closing Date” has the
meaning specified in Section 1.5.

 

“Common Security Agreement” means that certain Common Security
Agreement dated as of December 1, 2005, among MSC, Apex, Apex Luxembourg,
Apex Sweden, AMM, ASF, Sumitomo, SC Minerals, Comercial Metales Blancos AB,
Corporacion Andina de Fomento, the Administrative Agent, Technical Agent and
Collateral Agent identified therein, and the Senior Lenders and Hedge Banks
referred to therein.

 

“Company Agreements” has
the meaning specified in Section 1.6(a)(vi).

 

“Confidential Information”
means all information and documents
received from MSC or AMM or concerning the Purchased Properties, except such
information used or disclosed (i) as required by applicable securities or
other Laws or stock exchange rules or administrative process, (ii) as
necessary to obtain the necessary Government Approvals for the Project or to
obtain financing for the Project from potential lenders and providers of credit
support; (iii) as necessary 

 

A-3

 

to comply with
a court or administrative order; (iv) as necessary in connection with any
litigation or arbitration arising out of or related to the Project or this
Agreement; (v) as necessary to respond to an environmental emergency or
other emergency that may materially and adversely affect MSC or AMM or the
Project; (vi) for information (A) that was in the possession of a
Party or its Affiliates prior to receipt thereof from any Representative of
Apex, MSC or AMM (B) that has become known to such Party independently of
any disclosure by any Representative of Apex, MSC or AMM and which has not been
wrongfully disclosed to or obtained by such Party; and (vii) for
information that is or becomes generally available to the public other than as
a result of a breach of Section 5.2.

 

“Confirmation Order” has
the meaning specified in Section 1.6(a)(xvii).

 

“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
fifty percent (50%) of the aggregate outstanding economic interests in such
Entity.  The term “Controlled” has
a meaning correlative to that of Control.

 

“Current Operating Plan”
means that certain San Cristóbal Program and Budget, dated November 1,
2008.

 

“Deferred Management Fee
Obligations” means any liability or obligations of any nature due and owing
by MSC as of the Closing Date under the 2006 MSC Management Agreement, which
liability or obligation is outstanding by reason of a payment restriction or
similar provision of the Financing Documents.

 

“Designated Superior
Proposal” has the meaning specified in Section 5.5(c)(ii).

 

“Disclosure Statement”
has the meaning specified in Section 4.1(a).

 

“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
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),

 

A-4

 

with respect
to any of the foregoing, which is maintained, administered or contributed to
(directly or indirectly) of MSC, AMM or any ERISA Affiliate of MSC or AMM.

 

“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 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.

 

“Excluded Liabilities”
has the meaning specified in Section 1.1(h).

 

“Existing Debt” means
Indebtedness and other liabilities outstanding at any time under the Financing
Documents.

 

“Fee Approval Motion”
has the meaning specified in Section 4.1(b).

 

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

 

A-5

 

“Final Order” means (i) an
order or judgment of the Bankruptcy Court as to which the time to appeal,
petition for certiorari, or move for reargument or rehearing has expired and as
to which no appeal, petition for certiorari, or other proceedings for reargument
or rehearing shall then be pending, or (ii) in the event that an appeal,
writ of certiorari, reargument, or rehearing thereof has been sought, such
order of the Bankruptcy Court shall have been affirmed by the highest court to
which such order was appealed, or certiorari has been denied, or from which
reargument or rehearing was sought, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired;
provided, that no order shall fail to be a Final Order solely because of
the possibility that a motion pursuant to Rule 60 of the Federal Rules of
Civil Procedure or Bankruptcy Rule 9024 may be filed with respect to such
order.

 

“Financial Statements”
has the meaning specified in Section 3.5(a).

 

“Financing Documents” has the meaning specified in
the Common Security Agreement.

 

“GAAP” means the
generally accepted accounting principles, consistently applied, as in effect
from time to time in the United States.

 

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

 

“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 form 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 

 

A-6

 

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).

 

“Indemnification Cap”
has the meaning specified in Section 7.4.

 

“Indemnified Party”
means either a Sumitomo Indemnified Party or an Apex Indemnified Party, as the
context requires.

 

“Indemnifying Party”
means any party required to provide indemnification pursuant to Article VII
hereof.

 

“Indemnity Basket” has
the meaning specified in Section 7.4.

 

“Insolvency Proceeding”
means any bankruptcy, insolvency, liquidation, company reorganization,
restructuring, controlled management (gestion contrôlée), suspension of
payments (sursis
de paiement), scheme of arrangement (concordat), appointment of
provisional liquidator, receiver or administrative receiver, notification,
resolution, or petition for winding up or similar proceeding, under any
applicable Law, in any jurisdiction and whether voluntary or involuntary.

 

“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 Governmental 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.

 

“Knowledge” or “knowledge”
means, with respect
to Apex or any of the other Sellers, the actual knowledge (assuming the
reasonable discharge of such Person’s professional responsibility) of Jeffrey
G. Clevenger, Gerald J. Malys, Deborah J. Friedman, Robert P. Vogels, Terry L.
Owen or Michael Bunch.

 

“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.

 

“L/C Collateral Payment”
has the meaning specified in Section 5.6.

 

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

 

A-7

 

“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.

 

“Management Fee Obligations”
means any and all liability or obligations of any nature due and owing by AMM,
ASF or MSC as of the Closing Date under the AMM Management Agreement or under
the 2006 MSC Management Agreement, other than Deferred Management Fee
Obligations.

 

“Management Services
Agreement” means an agreement among MSC, AMM and Service Company in the
form of Exhibit G hereto.

 

“Matching Period” has
the meaning specified in Section 5.5(c)(iv).

 

“Material Adverse Effect”
means with respect to any Person, any event, change or effect that, when taken
individually or together with all other adverse events, changes and effects, is
or is reasonably likely (a) to be materially adverse to the condition
(financial or otherwise), properties, assets (including Purchased Properties),
liabilities (including Assumed Liabilities), business, operations, results of
operations or prospects of such Person; and (b) to prevent or materially
delay consummation of the Transactions or otherwise to prevent such Person or
its Affiliates from performing its obligations under this Agreement or any
Transaction Document.

 

“Mining Concessions”
means, collectively, the mining concessions listed in Section 3.3
of the Apex Disclosure Schedule.

 

“MSC” has the meaning
specified in Recital A.

 

“MSC Acquired Shares”
has the meaning specified in Section 1.1(a).

 

A-8

 

“MSC Shareholders Agreement”
means the shareholders agreement among Apex Luxembourg, Apex Sweden, Old
Metals, SC Minerals, and MSC dated September 25, 2006.

 

“Notice of Designated
Superior Proposal” has the meaning specified in Section 5.5(c)(iii).

 

“Other MSC Obligations to
Apex” means any and all rights related to any and all liabilities or
obligations of any nature due and owing by MSC or AMM to Apex or any Apex
Affiliate as of the Closing Date other than the Apex Reimbursable Expenditures
and any liabilities and obligations expressly provided for in this Agreement.

 

“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 3.16.

 

“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 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.

 

“Petition” has the meaning
specified in Section 4.1(a).

 

“Petition Date” means
the date of the filing of the Petition with the Bankruptcy Court.

 

A-9

 

“Plan” has the meaning
specified in Recital J.

 

“Plan Support Agreement”
has the meaning specified in Section 4.2.

 

“Post-Signing Returns”
has the meaning specified in Section 5.1.

 

“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
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.

 

“Purchased Assets” means
the Shareholder Loans, the Deferred Management Fee Obligations, the Other MSC
Obligations to Apex and the ASC Bolivia Assets.

 

“Purchased Equity” means
the MSC Acquired Shares and the AMM Acquired Quota.

 

“Purchase Price” means,
collectively, the consideration specified in Section 1.2 and the
Assumption of the Assumed Liabilities.

 

“Purchased Properties”
means the Purchased Equity and the Purchased Assets.

 

“Purchasers” have the
meanings specified in the preamble.

 

“Reimbursement Amount”
has the meaning specified in Section 4.1(b).

 

“Reorganized Apex” means
a new subsidiary of Apex to be formed as a holding company pursuant to the
Plan.

 

“Reorganized Apex Parent
Guaranty” means an agreement of Reorganized Apex substantially in the form
of Exhibit F hereto.

 

“Representative” means
the directors, officers, employees, agents (including the financial and legal
advisors) and other representatives of a Person.

 

“Required Lenders” has
the meaning specified in Section 4.1(a).

 

“Required Noteholders”
has the meaning specified in Section 4.1(a).

 

A-10

 

“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 documents relating
to the Transactions), 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 3.7(a).

 

“SC Minerals” has the
meaning specified in the preamble.

 

“SC Designated Purchaser”
has the meaning set forth in the preamble.

 

“Seller” and “Sellers”
have the meanings specified in the preamble.

 

“Service Company” has
the meaning set forth in the preamble.

 

“Shareholder
Loans” has the meaning specified in Recital C.

 

“Solvent” means, as to
any Person at any time, that (a) the fair value of the property of such
Person is greater than the amount of such Person’s liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (b) the present fair saleable value of the property of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability 

 

A-11

 

to pay as such
debts and liabilities mature; (e) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute unreasonably small capital; and (f) such
Person is not insolvent within the meaning of applicable Laws.

 

“Special Representations and
Warranties” has the meaning specified in Section 7.1.

 

“Specified Action” has
the meaning specified in Section 5.5(c).

 

“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 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 Affiliate”
means any Entity Controlled by Sumitomo.

 

“Sumitomo Disclosure
Schedule” means the Schedule so named and attached hereto as Schedule B.

 

“Sumitomo Indemnified
Parties” has the meaning specified in Section 7.2.

 

“Sumitomo Required Consents”
has the meaning specified in Section 2.2(d).

 

“Superior Proposal” has
the meaning specified in Section 5.5(b).

 

A-12

 

“Support Motion” has the
meaning specified in Section 4.1(c).

 

“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,
capital gains 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, 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.

 

“Term Sheet” means that
certain term sheet dated November 13, 2008, relating to the Transactions,
between Apex and Sumitomo.

 

“Term Sheet Date” means November 13,
2008, which is the date of the Term Sheet.

 

“Third Party” means any
Person other than Apex, an Apex Affiliate, Sumitomo, a Sumitomo Affiliate, MSC
or AMM.

 

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

 

“Transaction Documents”
means this Agreement, the Management Services Agreement, the Apex Required
Consents, the Reorganized Apex Parent Guaranty, the Plan Support Agreement, the
Plan, the Disclosure Statement, that certain Secured, Super-Priority
Debtor-in-Possession Credit Agreement, by and between Apex and Sumitomo or a
Sumitomo Affiliate, to be entered into in connection with the Bankruptcy Case,
the Bill of Sale, the Assignment and Assumption Agreement, the AMM Assignment 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.

 

“Transactions” means the
transactions specified in Section 1.1.

 

“Transmission Line”
means the electric transmission line currently owned by San Cristóbal
Transportadora de Electricidad S.A. and extending from the substation at
Punutuma, 

 

A-13

 

located in the
Quijarro Province, Potosí Department, Bolivia, to the substation at San
Cristóbal silver, zinc, and lead mine located in Potosí Department, Bolivia.

 

“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.

 

“2006 MSC Management
Agreement” means the Amended and Restated Management and Service Agreement
dated September 25, 2006, between MSC and Service Company.

 

“2006 PSA” means that
certain Purchase and Sale Agreement dated as of September 25, 2006, among
Apex, Apex Luxembourg, Apex Sweden and Sumitomo.

 

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

 

“US$” means United States Dollars.

 

“Working
Capital Loan Agreement” means that
certain Loan Agreement, dated as of August 11, 2008, by and between Apex
and SC Minerals, as amended by that certain First Amendment to Loan Agreement
dated October 1, 2008, that certain Second Amendment to Loan Agreement
dated October 31, 2008, that certain Third Amendment to Loan Agreement
dated November 27, 2008, that certain Fourth Amendment to Loan Agreement
dated December 17, 2008, and as further amended, modified, supplemented or
amended and restated from time to time.

 

A-14NOTE
PURCHASE AGREEMENT,

FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT, AND

FIRST AMENDMENT TO SUB-SUBLEASE AGREEMENT

 

This Note Purchase
Agreement, First Amendment to Stock Purchase Agreement and First Amendment to
Sub-Sublease Agreement (this “Agreement”),
dated as of January     ,  2009, is entered into by and among Overstock.com, Inc.,
a Delaware corporation (“Seller”),
Mountain Reservations, Inc. (f/k/a OTravel.com, Inc.), a Utah
corporation (the “Company”)
and Castles Travel, Inc., a Delaware corporation (“Buyer”).  Seller, the Company and Buyer are referred to
herein individually as a “Party”
and collectively as the “Parties”.  Capitalized terms used but not defined herein
shall have the respective meanings ascribed thereto in the Purchase Agreement
(as defined below).

 

WHEREAS, the Parties have
entered into a Stock Purchase Agreement dated as of April 25, 2007 (the “Purchase Agreement”);

 

WHEREAS, pursuant to Section 1.5(b)(ii) of
the Purchase Agreement, Buyer issued to Seller the Junior Seller Note, with an
initial principal amount of $3,000,000, and the Senior Seller Note, with an
initial principal amount of $3,000,000, each dated as of April 25, 2007
(collectively, the “Seller Notes”);

 

WHEREAS, in connection
with the Senior Seller Note, Buyer and Seller entered into a Pledge Agreement
dated as of April 25, 2007 (the “Pledge
Agreement”), whereby Buyer pledged to Seller and granted Seller
a security interest in all of the issued and outstanding capital stock of the
Company (the “Pledged Stock”);

 

WHEREAS, the Parties
desire to enter into this Agreement to provide for the sale to Buyer of the
Seller Notes in exchange for the consideration described herein;

 

WHEREAS, in accordance
with Section 9.3 of the Purchase Agreement, the Parties desire to amend
the Purchase Agreement as set forth herein; and

 

WHEREAS, the Company and
Seller have entered into a Sub-Sublease Agreement dated as of January 30,
2008 (the “Sub-Sublease Agreement”),
and desire to amend the Sub-Sublease Agreement as set forth herein.

 

NOW, THEREFORE, in
consideration of the mutual covenants, agreements and understandings herein
contained, the receipt and sufficiency of which is acknowledged, the Parties
agree as follows:

 

1.                                      Note
Purchase Agreement.

 

(a)                                  Purchase
and Sale of Seller Notes; Termination of the Pledge Agreement.  Seller hereby sells to Buyer, and Buyer
hereby purchases from Seller, all right, title and interest in the Seller Notes
(including all rights to receive payment of any unpaid principal and/or accrued
interest thereunder) (the “Purchase of
Seller Notes”) in exchange for a cash payment of $1,250,000 (the
“Note Purchase Price”).  As a result of the Purchase of Seller Notes,
and conditioned upon receipt by Seller of

 

 

the Purchase Price as specified in Section 1(b) below,
Buyer and Seller hereby agree that (i) the Seller Notes are hereby
cancelled and that neither Seller nor any other Person have any further rights
thereunder and (ii) the Pledge Agreement is hereby terminated and
cancelled with no further action required from any Party or other Person.

 

(b)                                 Payment
of the Note Purchase Price.  On the
date hereof, Buyer shall make a payment to Seller by wire transfer, or delivery
of other immediately available funds, in an amount equal to the Note Purchase
Price to an account designated by Seller.

 

(c)                                  Delivery
to Buyer of each Seller Note and Stock Certificate(s).  Within a reasonable time after the date
hereof, Seller shall deliver to Buyer (i) the Junior Seller Note and the
Senior Seller Note for cancellation and (ii) the stock certificate(s) representing
the Pledged Stock, together with any duly executed forms of assignment or stock
powers held by Seller in connection therewith.

 

2.                                      Amendment
to Purchase Agreement.  Subject to
the terms and conditions of this Agreement, effective as of Closing, the
Purchase Agreement shall be amended as follows:

 

(a)                                  Section 6.3(a).  The phrase “on and after the Closing until
the fifth anniversary of the Closing Date (the “Restricted Period”)” set forth in Section 6.3(a) of
the Purchase Agreement is hereby amended and restated in its entirety to the
following:

 

“on and after the Closing until January     ,
2009 (the “Restricted Period”)”

 

(b)                                 Section 6.3(d).  Section 6.3(d) of the Purchase
Agreement is hereby amended and restated in its entirety to the following:

 

“Seller hereby covenants and agrees that on and after
the Closing until the fifth anniversary of the Closing Date, Seller and its
Affiliates (including any company or other entity controlled by or under common
control with Seller (whether currently existing or hereafter acquired or
formed)) shall not, directly or indirectly, (i) solicit or induce, or
attempt to solicit or induce, any employee of the Company or of any of the
Company’s Subsidiaries to leave the employ of the Company or any of its
Affiliates for any reason whatsoever, (ii) hire or employ any employee of
the Company or of any of the Company’s Subsidiaries, or (iii) without the
prior written consent of Buyer, employ any employee of the Company or of any of
the Company’s Subsidiaries within one year of such Company employee leaving the
employment of the Company or any of the Company’s Subsidiaries; provided
however that Seller will be deemed not to have violated this clause
merely as a result of publishing a solicitation of general circulation.”

 

2

 

(c)                                  No
Other Amendments.  Except as
expressly modified herein, the Purchase Agreement shall remain in full force
and effect in accordance with its terms.

 

3.             Amendment to Sub-Sublease
Agreement.  Subject to
the terms and conditions of this Agreement, effective as of Closing, the
Sub-Sublease Agreement shall be amended as follows:

 

(a)                                  Section 4.  Section 4 of the Sub-Sublease Agreement
is hereby amended and restated in its entirety as follows:

 

“Base Rental.  Tenant agrees to pay directly to Landlord the
monthly Base Rental in advance on the first of every month, without previous
demand therefore and without set-off, abatement, credit, deduction or claim of
offset, on the first day of each and every calendar month during the Term (the “Due
Date”) pursuant to the following schedule:

 

	
  Period

  	
   

  	
  Base Rental

  	
   

  	
  Annual Cost Per

  Rentable Square Foot

  	
   

  
	
  July 25,
  2007 through August 1, 2008, inclusive

  	
   

  	
  $

  	
  10,063.44 per month

  	
   

  	
  $

  	
  19.44

  	
   

  
	
  August 2,
  2008 through February 1, 2009, inclusive

  	
   

  	
  $

  	
  10,415.66 per month

  	
   

  	
  $

  	
  20.12

  	
   

  
	
  February 2,
  2009 through August 1, 2009, inclusive

  	
   

  	
  $

  	
  9,374.09 per month

  	
   

  	
  $

  	
  18.11

  	
   

  
	
  August 2,
  2009 through August 1, 2010, inclusive

  	
   

  	
  $

  	
  9,702.19 per month

  	
   

  	
  $

  	
  18.74

  	
   

  
	
  August 2, 2010
  through August 1, 2011, inclusive

  	
   

  	
  $

  	
  10,041.77 per month

  	
   

  	
  $

  	
  19.40

  	
   

  
	
  August 2,
  2011 through August 1, 2012, inclusive

  	
   

  	
  $

  	
  10,393.23 per month

  	
   

  	
  $

  	
  20.08

  	
   

  
	
  August 2,
  2012 through August 1, 2013, inclusive

  	
   

  	
  $

  	
  10,756.99 per month

  	
   

  	
  $

  	
  20.78

  	
   

  
	
  August 2,
  2013 through August 1, 2014, inclusive

  	
   

  	
  $

  	
  11,133.49 per month

  	
   

  	
  $

  	
  21.51

  	
   

  
	
  August 2,
  2014 through July 17, 2015, inclusive

  	
   

  	
  $

  	
  11,523.16 per month

  	
   

  	
  $

  	
  22.26

  	
   

  

 

(b)                                 Section 7.  The following sentence shall be added to the
end of Section 7 of the Sub-Sublease Agreement:

 

“Notwithstanding the foregoing, beginning on January     ,
2009 and continuing for the remainder of the Term of the Sub-Sublease
Agreement, the Additional Rent that Tenant shall pay to Landlord shall be
reduced by an amount equal to ten percent (10%) of such Additional Rent.”

 

(c)                                  Section 17(c).  Section 17(c) of the Sub-Sublease
Agreement is hereby amended and restated in its entirety as follows:

 

“Data Center Space.  Tenant is hereby granted the permission to
occupy and access approximately 108 rentable square feet on the First Floor of
the Building in an “as-is” condition for the duration of the Term in order to
install not more than three (3) server racks.  Tenant shall pay $900.00 per month for the
use of this space escalating at 3.5% per year for each succeeding year of the
Lease term.  Tenant shall additionally
pay a one-time $500.00 set up fee to cover expenses related to preparing the
space for occupation.”

 

(d)                                 No
Other Amendments.  Except as
expressly modified herein, the Sub-Sublease Agreement shall remain in full
force and effect in accordance with its terms.

 

3

 

4.             Representations
and Warranties of Seller.  Seller hereby represents and warrants to
Buyer and the Company that the following statements contained in this Section 4 are true, correct and complete as of
the date hereof:

 

(a)                                  Title
to Seller Notes.  Seller is the
record and beneficial owner of each of the Junior Seller Note and the Senior
Seller Note and is the owner of Seller’s rights in the Pledge Agreement, free
and clear of any and all liens, security interests or other encumbrances except
for the security interest in the Junior Seller Note, the Senior Seller Note and
the Pledge Agreement granted by Seller to Wells Fargo Retail Finance, LLC (“Wells
Fargo”) on April 25, 2007 (such security interest, the “Wells Fargo
Security Interest”).  Seller has not
sold, transferred, conveyed, assigned or otherwise disposed of the Seller Notes
to any other Person.

 

(b)                                 Wells
Fargo Security Interest. 
Contemporaneous with the execution and delivery of this Agreement, and
the consummation of the Purchase of Seller Notes, Wells Fargo has released and
terminated the Wells Fargo Security Interest, and Seller has delivered evidence
of such release and termination to Buyer.

 

(c)                                  Existence
and Authorization.  Seller is duly
formed, validly existing and in good standing under the laws of its
jurisdiction of formation, and has the power and the governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.  The execution, delivery and
performance by Seller of this Agreement have been duly authorized by
Seller.  This Agreement constitutes a
valid and binding obligation of Seller enforceable in accordance with its
terms, except as such enforceability may be limited by:  (i) applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, or (ii) applicable equitable principles (whether considered in
a proceeding at law or in equity).

 

(d)                                 No
Breach.  The execution, delivery and
performance by Seller of this Agreement will not (i) result in any
material breach of any terms or provisions of, or constitute a material default
under, any material contract, agreement or instrument to which Seller is a
party or by which Seller is bound or (ii) violate any law applicable to
Seller.

 

5.             Representations
and Warranties of Buyer and the Company.  Buyer
and the Company hereby represent and warrant to Seller that the following
statements contained in this Section 5 are true, correct and complete as
of the date hereof:

 

(a)                                  Existence
and Authorization.  Each of Buyer and
the Company is duly formed, validly existing and in good standing under the
laws of its jurisdiction of formation, and has the power and the governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.  The
execution, delivery and performance by Buyer and the Company of this Agreement
have been duly authorized by Buyer and the Company.  This Agreement constitutes a valid and
binding obligation of Buyer and the Company enforceable in accordance with its
terms, except as such enforceability may be

 

4

 

limited by:  (i) applicable
insolvency, bankruptcy, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, or (ii) applicable equitable
principles (whether considered in a proceeding at law or in equity).

 

(b)                                 No
Breach.  The execution, delivery and
performance by the Company or Buyer of this Agreement will not (i) result
in any material breach of any terms or provisions of, or constitute a material
default under, any material contract, agreement or instrument to which the
Company or Buyer is a party or by which the Company or Buyer is bound or (ii) violate
any law applicable to the Company or Buyer.

 

6.             Miscellaneous.

 

(a)                                  Fees
and Expenses.  All fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, including the fees and disbursements of counsel, financial advisors and
accountants, shall be paid by the Party incurring such fees and expenses.

 

(b)                                 Descriptive
Headings; Interpretation.  Section headings
used in this Agreement are for convenience only and are not to affect the
construction of, or to be taken into consideration in interpreting, such
agreement.  The use of the word “including”
or any variation or derivative thereof in this Agreement is by way of example
rather than by limitation.

 

(c)                                  Counterparts;
Amendment and Waiver.  This Agreement
may be executed simultaneously in two or more counterparts, any one of which
need not contain the signatures of more than one Party, but all such
counterparts taken together shall constitute one and the same agreement.  Delivery of an executed signature page of
this Agreement (which may be by electronic or facsimile transmission) shall be
effective as delivery of a manually executed counterpart hereof.  This Agreement may not be amended or modified,
and no provisions hereof may be waived, without the written consent of the
Party sought to be bound by any such amendment, modification or waiver.

 

(d)                                 Successors
and Assigns.  No Party shall assign
any of its rights under this Agreement without the prior written consent of the
other Parties (and any attempted assignment without such consent shall be null
and void).  This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs and permitted assigns.

 

(e)                                  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable Law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable Law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

 

(f)                                    Governing
Law.  All issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by, and

 

5

 

construed in accordance with, the laws of the State of
Utah without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Utah or any other jurisdiction) that would
cause the application of the Laws of any jurisdiction other than the State of
Utah.

 

(g)                                 No
Strict Construction.  The Parties
have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties, and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.

 

(h)                                 Entire
Agreement.  This Agreement and the
other documents referred to herein contain the entire agreement between the
Parties and supersede any prior understandings, agreements or representations
by or between the Parties, written or oral, which may have related to the
subject matter hereof in any way.

 

6

 

IN WITNESS WHEREOF, the
Parties have executed this Note Purchase Agreement, First Amendment to Stock
Purchase Agreement and First Amendment to Sub-Sublease Agreement on the date
first written above.

 

 

	
   

  	
  OVERSTOCK.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOUNTAIN RESERVATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Julian Castelli 

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CASTLES TRAVEL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Julian Castelli

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

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