Document:

Exhibit 10.1

 

FORM OF

 

EXECUTIVE NON-QUALIFIED STOCK OPTION AGREEMENT FOR
EXCHANGED OPTION GRANTS

 

ENERNOC, INC.

 

AGREEMENT made as of the
21st day of January 2009, between EnerNOC, Inc.
(the “Company”), a Delaware corporation,
                          
and
                              
(the “Participant”).

 

WHEREAS, in connection
with the Company’s offer to exchange certain eligible option grants for new
option grants, the Company desires to grant to the Participant an Option to
purchase shares of its common stock, $.001 par value per share (the “Shares”),
under and for the purposes set forth in the Company’s 2007 Employee, Director
and Consultant Stock Plan (the “Plan”);

 

WHEREAS, the Company and
the Participant understand and agree that any terms used and not defined herein
have the same meanings as in the Plan; and

 

WHEREAS, the Company and
the Participant each intend that the Option granted herein shall be a
Non-Qualified Option.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the parties hereto agree as follows:

 

1.                                       GRANT
OF OPTION.

 

The Company hereby grants
to the Participant the right and option to purchase all or any part of an
aggregate of
                              
Shares, on the terms and conditions and subject to all the limitations set
forth herein, under United States securities and tax laws, and in the Plan,
which is incorporated herein by reference. 
The Participant acknowledges receipt of a copy of the Plan.

 

2.                                       PURCHASE
PRICE.

 

The purchase price of the
Shares covered by the Option shall be $11.47 per Share, subject to adjustment,
as provided in the Plan, in the event of a stock split, reverse stock split or
other events affecting the holders of Shares after the date hereof (the “Purchase
Price”).  Payment shall be made in
accordance with Paragraph 9 of the Plan.

 

3.                                       EXERCISABILITY
OF OPTION.

 

Subject
to the terms and conditions set forth in this Agreement and the Plan, the
Option granted hereby shall become exercisable as follows:

 

 

	
  January 21, 2010:

  	
   

  	
             
  Shares

  
	
   

  	
   

  	
   

  
	
  On
  the first day of each

  calendar month following

  January 21, 2010:

  	
   

  	
  An additional 2.0833%
  of the Shares rounded down to the nearest whole share

  

 

The foregoing rights are
cumulative and are subject to the other terms and conditions of this Agreement
and the Plan.

 

Notwithstanding the foregoing, in the event of a
Change of Control (as defined below),     % of the Shares
which would have vested in each vesting installment remaining under this Option
will be vested for purposes of Section 24(B) of the Plan unless this
Option has otherwise expired or been terminated pursuant to its terms or the
terms of the Plan.

 

Change of Control means the occurrence of any of the following events:

 

(i)                                   Ownership. 
Any “Person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities (excluding for
this purpose the Company or its Affiliates or any employee benefit plan of the
Company) pursuant to a transaction or a series of related transactions which
the Board of Directors does not approve; or

 

(ii)                                Merger/Sale of Assets.  A merger or consolidation of the Company
whether or not approved by the Board of Directors, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or the parent of such corporation) at least 50% of the total voting
power represented by the voting securities of the Company or such surviving
entity or parent of such corporation outstanding immediately after such
merger or consolidation, or the stockholders of the Company approve an
agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets; or

 

(iii)                             Change in Board
Composition.  A change in the composition
of the Board of Directors, as a result of which fewer than a majority of the
directors are Incumbent Directors.  “Incumbent
Directors” shall mean directors who either (A) are directors of
the Company as of [insert
grant date], or (B) are elected, or nominated for election, to the
Board of Directors with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

 

2

 

4.                                       TERM
OF OPTION.

 

This Option shall
terminate five years from the date of this Agreement, but shall be subject to
earlier termination as provided herein or in the Plan.

 

If the Participant ceases
to be an employee, director or consultant of the Company or of an Affiliate
(for any reason other than the death or Disability of the Participant or
termination of the Participant for “cause”, the Option may be exercised, if it
has not previously terminated, within three months after the date the
Participant ceases to be an employee, director or consultant of the Company or
an Affiliate, or within the originally prescribed term of the Option, whichever
is earlier, but may not be exercised thereafter.  In such event, the Option shall be
exercisable only to the extent that the Option has become exercisable and is in
effect at the date of such cessation of service.

 

Notwithstanding the
foregoing, in the event of the Participant’s Disability or death within three
months after the termination of service, the Participant or the Participant’s
Survivors may exercise the Option within one year after the date of the
Participant’s termination of service, but in no event after the date of
expiration of the term of the Option.

 

In the event the Participant’s
service is terminated by the Company or an Affiliate for “cause”, the
Participant’s right to exercise any unexercised portion of this Option shall
cease immediately as of the time the Participant is notified his or her service
is terminated for “cause,” and this Option shall thereupon terminate.  Notwithstanding anything herein to the
contrary, if subsequent to the Participant’s termination, but prior to the
exercise of the Option, the Board of Directors of the Company determines that,
either prior or subsequent to the Participant’s termination, the Participant
engaged in conduct which would constitute “cause,” then the Participant shall
immediately cease to have any right to exercise the Option and this Option
shall thereupon terminate.

 

In the event of the
Disability of the Participant, as determined in accordance with the Plan, the
Option shall be exercisable within one year after the Participant’s termination
of service or, if earlier, within the term originally prescribed by the
Option.  In such event, the Option shall
be exercisable:

 

(a)                                  to
the extent that the Option has become exercisable but has not been exercised as
of the date of Disability; and

 

(b)                                 in
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion through the date of Disability of any additional vesting
rights that would have accrued on the next vesting date had the Participant not
become Disabled.  The proration shall be
based upon the number of days accrued in the current vesting period prior to
the date of Disability.

 

In the event of the death
of the Participant while an employee, director or consultant of the Company or
of an Affiliate, the Option shall be exercisable by the Participant’s Survivors
within one year after the date of death of the Participant or, if earlier,
within the originally prescribed term of the Option.  In such event, the Option shall be
exercisable:

 

3

 

(x)                                   to
the extent that the Option has become exercisable but has not been exercised as
of the date of death; and

 

(y)                                 in
the event rights to exercise the Option accrue periodically, to the extent of a
pro rata portion through the date of death of any additional vesting rights
that would have accrued on the next vesting date had the Participant not
died.  The proration shall be based upon
the number of days accrued in the current vesting period prior to the
Participant’s date of death.

 

5.                                       METHOD
OF EXERCISING OPTION.

 

Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice to
the Company or its designee, in substantially the form of Exhibit A
attached hereto.  Such notice shall state
the number of Shares with respect to which the Option is being exercised and
shall be signed by the person exercising the Option.  Payment of the purchase price for such Shares
shall be made in accordance with Paragraph 9 of the Plan.  The Company shall deliver such Shares as soon
as practicable after the notice shall be received, provided, however, that the
Company may delay issuance of such Shares until completion of any action or
obtaining of any consent, which the Company deems necessary under any
applicable law (including, without limitation, state securities or “blue sky”
laws).  The Shares as to which the Option
shall have been so exercised shall be registered in the Company’s share
register in the name of the person so exercising the Option (or, if the Option
shall be exercised by the Participant and if the Participant shall so request
in the notice exercising the Option, shall be registered in the Company’s share
register in the name of the Participant and another person jointly, with right
of survivorship) and shall be delivered as provided above to or upon the
written order of the person exercising the Option.  In the event the Option shall be exercised,
pursuant to Section 4 hereof, by any person other than the Participant,
such notice shall be accompanied by appropriate proof of the right of such
person to exercise the Option.  All Shares
that shall be purchased upon the exercise of the Option as provided herein
shall be fully paid and nonassessable.

 

6.                                       PARTIAL
EXERCISE.

 

Exercise of this Option
to the extent above stated may be made in part at any time and from time to
time within the above limits, except that no fractional share shall be issued
pursuant to this Option.

 

7.                                       NON-ASSIGNABILITY.

 

The Option shall not be
transferable by the Participant otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act
or the rules thereunder.  Except as
provided above in this paragraph, the Option shall be exercisable, during the
Participant’s lifetime, only by the Participant (or, in the event of legal
incapacity or incompetency, by the Participant’s guardian or representative)
and shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment or similar process.  Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to 

 

4

 

the provisions of this Section 7,
or the levy of any attachment or similar process upon the Option shall be null
and void.

 

8.                                       NO
RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

 

The Participant shall
have no rights as a stockholder with respect to Shares subject to this
Agreement until registration of the Shares in the Company’s share register in
the name of the Participant.  Except as
is expressly provided in the Plan with respect to certain changes in the
capitalization of the Company, no adjustment shall be made for dividends or
similar rights for which the record date is prior to the date of such
registration.

 

9.                                       ADJUSTMENTS.

 

The Plan contains
provisions covering the treatment of Options in a number of contingencies such
as stock splits and mergers.  Provisions
in the Plan for adjustment with respect to stock subject to Options and the
related provisions with respect to successors to the business of the Company
are hereby made applicable hereunder and are incorporated herein by reference;
provided, however, that in the event of a Change of Control (as defined in Section 3
above)
              %
of the Shares which would have vested in each vesting installment remaining
under this Option will be vested for purposes of Section 24(B) of the
Plan.

 

10.                                 TAXES.

 

The Participant
acknowledges that upon exercise of the Option the Participant will be deemed to
have taxable income measured by the difference between the then fair market
value of the Shares received upon exercise and the price paid for such Shares
pursuant to this Agreement.  The Participant
acknowledges that any income or other taxes due from him or her with respect to
this Option or the Shares issuable pursuant to this Option shall be the
Participant’s responsibility.

 

The Participant agrees
that the Company may withhold from the Participant’s remuneration, if any, the
minimum statutory amount of federal, state and local withholding taxes
attributable to such amount that is considered compensation includable in such
person’s gross income.  At the Company’s
discretion, the amount required to be withheld may be withheld in cash from
such remuneration, or in kind from the Shares otherwise deliverable to the
Participant on exercise of the Option. 
The Participant further agrees that, if the Company does not withhold an
amount from the Participant’s remuneration sufficient to satisfy the Company’s
income tax withholding obligation, the Participant will reimburse the Company
on demand, in cash, for the amount under-withheld.

 

11.                                 PURCHASE
FOR INVESTMENT.

 

Unless the offering and
sale of the Shares to be issued upon the particular exercise of the Option
shall have been effectively registered under the Securities Act of 1933, as now
in force or hereafter amended (the “1933 Act”), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the
following conditions have been fulfilled:

 

(a)                                  The
person(s) who exercise the Option shall warrant to the Company, at the
time of such exercise, that such person(s) are acquiring such Shares for
their own 

 

5

 

respective accounts, for
investment, and not with a view to, or for sale in connection with, the
distribution of any such Shares, in which event the person(s) acquiring
such Shares shall be bound by the provisions of the following legend which
shall be endorsed upon the certificate(s) evidencing the Shares issued
pursuant to such exercise:

 

“The shares represented
by this certificate have been taken for investment and they may not be sold or
otherwise transferred by any person, including a pledgee, unless (1) either
(a) a Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b) the Company
shall have received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall
have been compliance with all applicable state securities laws;” and

 

(b)                                 If
the Company so requires, the Company shall have received an opinion of its
counsel that the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration thereunder.  Without limiting the generality of the
foregoing, the Company may delay issuance of the Shares until completion of any
action or obtaining of any consent, which the Company deems necessary under any
applicable law (including without limitation state securities or “blue sky”
laws).

 

12.                                 RESTRICTIONS
ON TRANSFER OF SHARES.

 

12.1                           The
Participant agrees that in the event the Company proposes to offer for sale to
the public any of its equity securities and such Participant is requested by
the Company and any underwriter engaged by the Company in connection with such
offering to sign an agreement restricting the sale or other transfer of Shares,
then it will promptly sign such agreement and will not transfer, whether in
privately negotiated transactions or to the public in open market transactions
or otherwise, any Shares or other securities of the Company held by him or her
during such period as is determined by the Company and the underwriters, not to
exceed 180 days following the closing of the offering, plus such additional
period of time as may be required to comply with Marketplace Rule 2711 of
the National Association of Securities Dealers, Inc. or similar rules thereto
(such period, the “Lock-Up Period”). 
Such agreement shall be in writing and in form and substance reasonably
satisfactory to the Company and such underwriter and pursuant to customary and
prevailing terms and conditions.  Notwithstanding
whether the Participant has signed such an agreement, the Company may impose
stop-transfer instructions with respect to the Shares or other securities of
the Company subject to the foregoing restrictions until the end of the Lock-Up
Period.

 

12.2                           The
Participant acknowledges and agrees that neither the Company, its shareholders
nor its directors and officers, has any duty or obligation to disclose to the
Participant any material information regarding the business of the Company or
affecting the value of the Shares before, at the time of, or following a
termination of the employment of the Participant by the Company, including,
without limitation, any information concerning plans for the Company to make a
public offering of its securities or to be acquired by or merged with or into
another firm or entity.

 

6

 

13.                                 NO
OBLIGATION TO MAINTAIN RELATIONSHIP.

 

The Company is not by the
Plan or this Option obligated to continue the Participant as an employee,
director or consultant of the Company or an Affiliate. The Participant
acknowledges: (i) that the Plan is discretionary in nature and may be
suspended or terminated by the Company at any time; (ii) that the grant of
the Option is a one-time benefit which does not create any contractual or other
right to receive future grants of options, or benefits in lieu of options; (iii) that
all determinations with respect to any such future grants, including, but not
limited to, the times when options shall be granted, the number of shares
subject to each option, the option price, and the time or times when each
option shall be exercisable, will be at the sole discretion of the Company; (iv) that
the Participant’s participation in the Plan is voluntary; (v) that the
value of the Option is an extraordinary item of compensation which is outside
the scope of the Participant’s employment contract, if any; and (vi) that
the Option is not part of normal or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.

 

14.                                 NOTICES.

 

Any notices required or
permitted by the terms of this Agreement or the Plan shall be given by
recognized courier service, facsimile, registered or certified mail, return
receipt requested, addressed as follows:

 

	
  If to the Company:

  	
   

  
	
   

  	
  EnerNOC, Inc.

  
	
   

  	
  Attn: Chief Financial
  Officer

  
	
   

  	
  75 Federal Street,
  Suite 300

  
	
   

  	
  Boston, MA 02110

  

 

If to the Participant:

 

 

 

or to such other address
or addresses of which notice in the same manner has previously been given. Any
such notice shall be deemed to have been given upon the earlier of receipt, one
business day following delivery to a recognized courier service or three
business days following mailing by registered or certified mail.

 

15.                                 GOVERNING
LAW.

 

This Agreement shall be
construed and enforced in accordance with the law of the Commonwealth of
Massachusetts without giving effect to the conflict of law principles thereof. For
the purpose of litigating any dispute that arises under this Agreement, the
parties hereby consent to exclusive jurisdiction in the State of Massachusetts  and agree that such litigation shall

 

7

 

be conducted in the courts of Suffolk County, Massachusetts  or the federal courts of the United States for the District
of Massachusetts.

 

16.                                 BENEFIT
OF AGREEMENT.

 

Subject to the provisions
of the Plan and the other provisions hereof, this Agreement shall be for the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.

 

17.                                 ENTIRE
AGREEMENT.

 

This Agreement, together
with the Plan, embodies the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof. No statement, representation, warranty, covenant or agreement
not expressly set forth in this Agreement shall affect or be used to interpret,
change or restrict, the express terms and provisions of this Agreement,
provided, however, in any event, this Agreement shall be subject to and
governed by the Plan.

 

18.                                 MODIFICATIONS
AND AMENDMENTS.

 

The terms and provisions
of this Agreement may be modified or amended as provided in the Plan.

 

19.                                 WAIVERS
AND CONSENTS.

 

Except as provided in the
Plan, the terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and for
the purpose for which it was given, and shall not constitute a continuing
waiver or consent.

 

20.                                 DATA
PRIVACY.

 

By entering into this
Agreement, the Participant: (i) authorizes the Company and each Affiliate,
and any agent of the Company or any Affiliate administering the Plan or
providing Plan recordkeeping services, to disclose to the Company or any of its
Affiliates such information and data as the Company or any such Affiliate shall
request in order to facilitate the grant of options and the administration of
the Plan; (ii) waives any data privacy rights he or she may have with
respect to such information; and (iii) authorizes the Company and each
Affiliate to store and transmit such information in electronic form.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

8

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Participant has hereunto set his or her hand,
all as of the day and year first above written.

 

	
   

  	
  ENERNOC, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant

  

 

9

 

Exhibit A

 

NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION

 

TO:                            EnerNOC, Inc.

 

IMPORTANT NOTICE: This
form of Notice of Exercise may only be used at such time as the Company has
filed a Registration Statement with the Securities and Exchange Commission
under which the issuance of the Shares for which this exercise is being made is
registered and such Registration Statement remains effective.

 

Ladies and Gentlemen:

 

I hereby exercise my
Non-Qualified Stock Option to purchase
                  
shares (the “Shares”) of the common stock, $.001 par value, of EnerNOC, Inc.  (the “Company”), at the exercise price of $                  per
share, pursuant to and subject to the terms of that certain Non-Qualified Stock
Option Agreement between the undersigned and the Company dated January 21,
2009.

 

I understand the nature
of the investment I am making and the financial risks thereof. I am aware that
it is my responsibility to have consulted with competent tax and legal advisors
about the relevant national, state and local income tax and securities laws
affecting the exercise of the Option and the purchase and subsequent sale of
the Shares.

 

I am paying the option
exercise price for the Shares as follows:

 

 

Please issue the Shares
(check one):

 

o to me; or

 

o to me and
                                                        ,
as joint tenants with right of survivorship,

 

at the following address:

 

 

 

A-1

 

My mailing address
for shareholder communications, if different from the address listed above, is:

 

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant
  (signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security
  Number

  

 

A-2Exhibit 10.1

 

EXECUTION VERSION

 

 

 

SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION

 

CREDIT AND SECURITY AGREEMENT

 

Dated as of January 20, 2009

 

between

 

Apex Silver Mines Limited

 

and

 

Sumitomo Corporation

 

as Lender

 

 

 

 

	
  1.

  	
  Definitions; Rules of Interpretation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  AMOUNT AND TERMS OF THE CREDIT FACILITY

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  The Loan

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Reserved

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Payments

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Right of Set-Off

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Use of Proceeds

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  Interest Rate

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Indemnity

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  Single Loan

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  Super-Priority Nature of Obligations and
  Lender’s Liens

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.10

  	
  Payment of Obligations

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.11

  	
  No Discharge; Survival of Claims

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.12

  	
  Release

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.13

  	
  Waiver of Any Priming Rights

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.14

  	
  Reserved

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  COLLATERAL

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Security

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Perfection of Security Interests

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Cash Collateral Account

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Rights of Lender

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Preservation of Collateral

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  Lender’s Appointment as Attorney-in-Fact

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Conditions to the Initial Advance

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Further Conditions to the Loan

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Organization; Powers

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Authorization; Enforceability

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Governmental Approvals; No Conflicts

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Properties

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Legal Proceedings

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Compliance with Applicable Laws and
  Agreements

  	
   

  	
  16

  

 

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Taxes

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.8

  	
  Disclosure

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.9

  	
  Collateral Documents

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.10

  	
  Reserved

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.11

  	
  MSC Projected Cash Forecast

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.12

  	
  Apex Budget

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.13

  	
  Reorganization Matters

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  FINANCIAL STATEMENTS AND INFORMATION

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Reports and Notices

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Communication with Financial Advisors

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Disclosure Statement

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Information Regarding Collateral

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Existence; Conduct of Business

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  Payment of Obligations

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5

  	
  Maintenance of Properties

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.6

  	
  Books and Records; Inspection Rights

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.7

  	
  Compliance with Applicable Laws

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.8

  	
  Use of Proceeds

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.9

  	
  Fee Approval and Support Motions

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.10

  	
  Further Assurances

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.11

  	
  Satisfied Liens

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  NEGATIVE COVENANTS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Indebtedness and Other Obligations

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Liens

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Fundamental Changes

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Investments, Loans, Advances, Guarantees
  and Acquisitions

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Asset Sales

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Restricted Payments; Certain Payments of
  Indebtedness

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Transactions with Affiliates

  	
   

  	
  23

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  Restrictive Agreements

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  Amendment of Material Documents

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Additional Subsidiaries

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.11

  	
  Fiscal Year

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.12

  	
  Environmental Laws

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.13

  	
  Repayment of Indebtedness

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.14

  	
  Chapter 11 Claims

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  TERM

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Termination

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Survival of Obligations Upon Termination of
  Financing Arrangements

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  EVENTS OF DEFAULT; RIGHTS AND REMEDIES

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Events of Default

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Remedies

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Waivers by Borrower

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  RESERVED

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  SUCCESSORS AND ASSIGNS

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Successors and Assigns

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  MISCELLANEOUS

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Complete Agreement; Modification of
  Agreement

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Amendments and Waivers

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  No Waiver

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Remedies

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  Severability

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.6

  	
  Conflict of Terms

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Confidentiality

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.8

  	
  GOVERNING LAW

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.9

  	
  Notices

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.10

  	
  Section Titles

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.11

  	
  Counterparts

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.12

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  32

  

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.13

  	
  Press Releases and Related Matters

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.14

  	
  Reinstatement

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.15

  	
  Advice of Counsel

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.16

  	
  No Strict Construction

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.17

  	
  Parties Including Trustees; Bankruptcy
  Court Proceedings

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.18

  	
  USA PATRIOT Act Notice

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.19

  	
  Lender Standstill

  	
   

  	
  33

  

 

iv

 

INDEX OF APPENDICES

 

	
  Annex A
  (Recitals)

  	
   

  	
  –

  	
   

  	
  Definitions

  
	
  Annex B

  	
   

  	
  –

  	
   

  	
  Closing
  Checklist

  
	
  Annex C

  	
   

  	
  –

  	
   

  	
  Financial
  Statement Reporting

  
	
  Annex D

  	
   

  	
  –

  	
   

  	
  Notice
  Addresses

  
	
  Exhibit A

  	
   

  	
  –

  	
   

  	
  Initial MSC
  Projected Cash Forecast

  
	
  Exhibit B

  	
   

  	
  –

  	
   

  	
  Form of
  Disbursement Request

  
	
  Exhibit C

  	
   

  	
  –

  	
   

  	
  Form of
  Interim Order

  
	
  Exhibit D

  	
   

  	
  –

  	
   

  	
  Form of
  Final Order

  
	
  Exhibit E

  	
   

  	
  –

  	
   

  	
  Form of
  Compliance Certificate

  
	
  Exhibit F

  	
   

  	
  –

  	
   

  	
  Initial Apex
  Budget

  
	
  Schedule 3.3

  	
   

  	
  –

  	
   

  	
  Securities
  Accounts and Deposit Accounts

  
	
  Schedule 5.5

  	
   

  	
  –

  	
   

  	
  Legal
  Proceedings

  
	
  Schedule 8.1

  	
   

  	
  –

  	
   

  	
  Indebtedness
  Outstanding on the Petition Date

  
	
  Schedule 8.2

  	
   

  	
  –

  	
   

  	
  Liens
  Existing on the Petition Date

  
	
  Schedule 8.4

  	
   

  	
  –

  	
   

  	
  Investments
  Existing on the Petition Date

  

 

v

 

This SECURED,
SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT (this “Agreement”),
dated as of January 20, 2009 between Apex Silver Mines Limited (“Apex”
or “Borrower”), a corporation organized and existing under the laws of
the Cayman Islands, and Sumitomo Corporation, a corporation organized and
existing under the laws of Japan (the “Lender”).

 

RECITALS

 

WHEREAS, on January 12,
2009 (the “Petition Date”), Borrower commenced a voluntary proceeding
under Case No. 09-10182 (JMP) (the “Chapter 11 Case”), by filing a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”), with the
United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”).  Borrower continues to
operate its business as Debtor-in-Possession pursuant to Sections 1107(a) and
1108 of the Bankruptcy Code;

 

WHEREAS,
Borrower and Lender indirectly own all of the issued and outstanding Stock or other
equity interests of Minera San Cristóbal, S.A. (“MSC”), a sociedad
anónima organized under the laws of Bolivia engaged in the business of metals
mining;

 

WHEREAS,
Borrower and Lender indirectly own all of the issued and outstanding Stock or
other equity interests of Apex Metals Marketing GmbH, a Gesellschaft mit beschränkter Haftung
organized under the laws of Switzerland (“AMM”);

 

WHEREAS,
Borrower directly owns all of the issued and outstanding Stock or other equity
interests of Apex Luxembourg S.À. R.L., a société à
responsabilité limitée organized under the laws of the Grand Duchy of Luxembourg (“Apex
Luxembourg”);

 

WHEREAS,
Borrower indirectly owns all of the issued and outstanding Stock or other
equity interests of Apex Silver Mines Sweden AB, a privat
aktiebolag organized under the laws of the Kingdom of Sweden  (“Apex Sweden”);

 

WHEREAS, Apex
Sweden, Apex Luxembourg, SC Minerals Aktiebolag (“SC Minerals”) and MSC
are parties to that certain MSC Shareholders Agreement dated as of September 25,
2006 (the
“MSC Shareholders Agreement”);

 

WHEREAS,
Borrower, Lender, Apex Luxembourg, Apex Sweden, Apex Silver Mines Corporation,
ASC Bolivia LDC, Surcursal Bolivia, and SC Minterals are parties to that
certain Purchase and Sale Agreement, dated as of January 12, 2009 (the “Purchase
Agreement”), pursuant to the terms of which Lender and its Affiliates have
agreed to purchase all of Borrower’s indirectly owned Stock and other equity
interests in MSC, AMM and the other assets identified in the Purchase Agreement
(collectively, the “Purchased Properties”) subject to the terms and
conditions set forth in the Purchase Agreement and Bankruptcy Court approval;

 

WHEREAS,
Borrower has guaranteed the performance of Borrower’s Affiliates’ obligations
under the Purchase Agreement;

 

WHEREAS,
Borrower, Lender, the Supporting Senior Lenders (as identified therein), and
certain Supporting Subordinated Noteholders (as identified therein) are parties
to that certain 

 

1

 

Plan Support
Agreement and accompanying Plan Term Sheet, dated as of January 12, 2009
(the “Plan Support Agreement”);

 

WHEREAS,
Borrower has agreed to commence, and seek prompt confirmation of, a
pre-arranged Chapter 11 plan of reorganization upon the terms and subject to
the conditions of the Plan Support Agreement;

 

WHEREAS, prior
to the Petition Date, Borrower, from time to time, funded its pro rata share of
MSC’s working capital requirements through intercompany loans to Apex
Luxembourg and Apex Sweden, such intercompany loans ultimately constituting
Shareholder Loans (as such term is defined in the MSC Shareholders Agreement)
from Apex Sweden to MSC;

 

WHEREAS,
Borrower has requested that Lender provide a senior secured, super-priority
loan facility to Borrower of Thirty-Five Million Dollars (U.S.$35,000,000) (the
“Commitment”) to be used solely to fund MSC Shareholder Funding
Requests;

 

WHEREAS,
Lender is willing to make certain Post-Petition extensions of credit to
Borrower of up to such an amount upon the terms and conditions set forth
herein;

 

WHEREAS,
Borrower acknowledges that the funding to be provided hereunder is necessary to
preserve the value of Borrower’s indirect interest in MSC and the other
Purchased Properties to be acquired by Sumitomo and its Affiliates under the
Purchase Agreement;

 

WHEREAS,
Borrower acknowledges that it will receive substantial direct and indirect
benefits by reason of the making of loans and other financial accommodations to
Borrower as provided in this Agreement;

 

WHEREAS, Borrower
has agreed to secure all of its Obligations under the Loan Documents by
granting to Lender a first priority security interest in and Lien upon
substantially all of Borrower’s assets; and

 

WHEREAS,
Lender’s willingness to extend financial accommodations to Borrower is done
solely as an accommodation to Borrower and at Borrower’s request and in
furtherance of Borrower’s enterprise.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:

 

2

 

1.                                      DEFINITIONS;
RULES OF INTERPRETATION.  Capitalized
terms used in this Agreement and not otherwise defined, including terms in the
Recitals hereto, shall have the meanings ascribed to them in Annex A
and, for purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in Annex A shall govern.  All Annexes, Disclosure Schedules, Exhibits
and other attachments (collectively, “Appendices”) hereto, or expressly
identified to this Agreement, are incorporated herein by reference, and taken
together with this Agreement, shall constitute but a single agreement.

 

2.                                      AMOUNT
AND TERMS OF THE CREDIT FACILITY.

 

2.1                                 The
Loan.

 

(a)                                  Advances.

 

(i)                                     Upon terms and
subject to the conditions hereof, including the provisions of Section 4
below, the Loan shall be available for disbursement to Borrower in one or more
advances (collectively, the “Advances”). 
The Loan may not exceed the Commitment. 
The Commitment shall terminate on the Commitment Termination Date.  Except as otherwise set forth in Section 2.10,
the entire unpaid balance of the Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date.

 

(ii)                                  The date the initial
Advance is made to Borrower is herein referred to as the “Initial
Disbursement Date” and each date a subsequent Advance is made to Borrower
is herein referred to as a “Subsequent Disbursement Date.”

 

(iii)                               When Borrower desires an
Advance hereunder, it shall deliver to Lender a disbursement request in the
form attached as Exhibit B (a “Disbursement Request”)
specifying the amount of the Advance requested to be disbursed on the Initial
Disbursement Date or Subsequent Disbursement Date, as applicable (which shall
be no less than five (5) Business Days following the date on which the
Disbursement Request is received by Lender, unless otherwise agreed by Lender);
certifying the purpose for which the proceeds of such Advance will be used,
referencing the MSC Projected Cash Forecast and the line item of the MSC
Projected Cash Forecast to which such Advance relates and attaching a copy of
the written request of MSC’s board of directors for funding from its
Stockholders (the “MSC Shareholder Funding Request”) that are to be
partly funded with the proceeds of such Advance.

 

(iv)                              All Advances shall be
made on Borrower’s behalf to an MSC account designated by Borrower.

 

(v)                                 Reliance on Notices.  Lender shall be entitled to rely upon, and
shall be fully protected in relying upon, any Disbursement Request or similar
notice believed by Lender to be genuine, absent manifest error.  Lender may assume that each Person executing
and delivering any notice in accordance herewith was duly authorized, unless
the responsible individual acting thereon for Lender has actual knowledge to
the contrary.

 

2.2                                 Reserved.

 

3

 

2.3                                 Payments.

 

(a)                                  Payments.  Borrower shall make each payment under this
Agreement, unconditionally in full without set-off, withholding or
counterclaim, and except as provided in Section 2.3(b), free and
clear of, and without reduction for or on account of, any present and future
taxes or withholdings, or any liabilities with respect thereto.  Each payment shall be made not later than
2:00 p.m. (New York time) on the day when due to Lender in Dollars and in
immediately available funds, or such other funds as shall be separately agreed
upon by Borrower and Lender, in accordance with Lender’s payment
instructions.  For purposes of computing
interest, all payments shall be deemed received on the Business Day on which
immediately available funds thereof are received in the Interest Payment
Account prior to 2:00 p.m. (New York time).  Payments received after 2:00 p.m. (New
York time) on any Business Day or on a day that is not a Business Day shall be
deemed to have been received on the following Business Day.

 

(b)                                 Tax
Deductions.  Any and all payments by
Borrower under this Agreement shall be made without deduction or withholding
for or on account of any tax, levy, impost, duty or other charge, fee,
deduction or withholding of a similar nature (including any penalty or interest
payable in connection with the failure to pay, or delay in paying, any of
these) imposed by the Cayman Islands or any political subdivision or taxing
authority thereof or therein or any other jurisdiction from or through which
Borrower makes payment hereunder (a “Tax Deduction”) unless a Tax
Deduction is required by law.  If a Tax
Deduction is required by law to be made by Borrower, the payment due from
Borrower shall be increased to an amount which (after making any Tax Deduction)
leaves an amount equal to the payment which would have been due if no Tax
Deduction had been required.  Borrower
shall make any Tax Deduction under this Section 2.3(b), and any
payment required in connection with that Tax Deduction, within the time allowed
and for the minimum amount required by law; and shall within 30 days of making
either a Tax Deduction or any payment required in connection with that Tax
Deduction, deliver to Lender evidence reasonably satisfactory to Lender that
the Tax Deduction has been made or any appropriate payment paid to the relevant
Governmental Authority (as applicable).

 

(c)                                  Extension.  Whenever any payment hereunder shall be
stated to be due, or whenever any Interest Payment Date or any other date
specified hereunder would otherwise occur, on a day other than a Business Day,
then, except as otherwise provided herein, such payment shall be made, and such
Interest Payment Date or other date shall occur, on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest hereunder.

 

(d)                                 Application
and Allocation of Payments.

 

(i)            All
payments by Borrower made under this Agreement whether consisting of proceeds
of Collateral or otherwise and received prior to the occurrence and continuance
of an Event of Default shall be applied to the Obligations as designated by
Borrower.  Any amounts so paid shall not
be available for re-borrowing.

 

(ii)           All
payments by Borrower made under this Agreement whether consisting of proceeds of
Collateral or otherwise and received when an Event of Default has 

 

4

 

occurred and is continuing or following the Commitment Termination Date
shall be applied to amounts in the following order:  (1) to Fees and Lender’s expenses
reimbursable hereunder; (2) to interest on the Loan, ratably in proportion
to the interest accrued as to the Loan; (3) to principal payments on the
Loan; (4) to all other Obligations, including expenses of Lender to the
extent reimbursable under Section 2.7; and (5) to Borrower,
its successors and assigns, or as a court of competent jurisdiction may direct.

 

(iii)          After
an Event of Default, Lender is authorized to, and at its sole election may,
charge to the Loan balance on behalf of Borrower and cause to be paid all Fees,
expenses, Charges, costs, interest and principal (other than principal of the
Loan) owing by Borrower under this Agreement or any of the other Loan Documents
if and to the extent Borrower fails to pay promptly any such amounts as and
when due.

 

2.4                                 Right
of Set-Off.  Upon the occurrence and
during the continuance of any Event of Default, Lender hereby is authorized at
any time and from time to time, without notice to Borrower (any such notice
being expressly waived by Borrower), to set off and apply any obligations or
indebtedness at any time owing by Lender to Borrower against any amounts owed
to it by Borrower under this Agreement now or hereafter existing, irrespective
of whether or not Lender shall have made any demand under this Agreement and
although such Advances may be unmatured. 
Lender agrees to promptly notify Borrower after any such set-off and
application made by Lender; provided that the failure to give such notice shall
not affect the validity of such set-off and application and shall not create
any liability of Lender.  The rights of
Lender under this Section 2.4 are in addition to other rights and
remedies (including other rights of set-off) which Lender may have.

 

2.5                                 Use
of Proceeds.

 

(a)                                  Advances
made shall be used solely to fund MSC Shareholder Funding Requests and for no
other purpose.

 

(b)                                 Borrower
shall apply, and shall cause each of Apex Luxembourg, Apex Sweden and MSC to
apply, the proceeds of each Advance as follows: (A) all such proceeds credited
or deemed credited to Borrower shall be used to fund an intercompany loan to
Apex Luxembourg in the amount thereof, and such proceeds shall thereupon be
deemed credited to Apex Luxembourg; (B) all such proceeds credited or
deemed credited to Apex Luxembourg shall be used to fund an intercompany loan
to Apex Sweden in the amount of such proceeds, and such proceeds shall
thereupon be deemed credited to Apex Sweden; (C) all such proceeds
credited or deemed credited to Apex Sweden shall be used to fund Apex Sweden’s
pro-rata share of the MSC Shareholder Funding Request requested by MSC, and
such proceeds shall thereupon be deemed credited to MSC and shall constitute a
Shareholder Loan; and (D) all such proceeds credited or deemed credited to
MSC shall be used solely for working capital purposes in respect of line items
set forth in the MSC Projected Cash Forecast.

 

(c)                                  Absent
Lender’s written consent, Borrower, Apex Luxembourg, Apex Sweden and MSC shall
not be permitted to use the proceeds of any Advance for any other purpose
whatsoever.

 

5

 

2.6                                 Interest
Rate.

 

(a)                                  The
outstanding principal amount of each Advance shall accrue interest at a rate
per annum equal to fifteen percent (15%). 
Interest shall be calculated on the basis of a 360-day year and the
actual number of days elapsed.

 

(b)                                 So
long as an Event of Default has occurred and is continuing, the Advance shall
accrue interest on any unpaid principal from the date such Event of Default
occurred until the date the Event of Default ceased to continue, without the
need of demand, at a rate per annum equal at all times to six percent (6%) per
annum in addition to the Interest Rate, which shall continue to accrue (the “Default
Rate”).  Payment of any such interest
at the rate described in the preceding sentence shall not constitute a waiver
of any Event of Default and shall be without prejudice to the right of Lender
to exercise any of its rights and remedies under this Agreement.

 

(c)                                  Notwithstanding
anything in this Agreement to the contrary, the total liability of Borrower for
the payment of interest under this Agreement shall not exceed the applicable
limit imposed by the usury laws of any applicable jurisdiction.  If Lender receives interest in an amount which
exceeds such limit, such excess amount shall be applied instead to the
reduction of the unpaid principal balance and not to the payment of interest,
or at Lender’s election the surplus shall be remitted to Borrower by Lender,
and Borrower hereby agrees to accept such remittance.

 

2.7                                 Indemnity.  Borrower shall indemnify and hold harmless
Lender and its Affiliates, and each such Person’s respective officers,
directors, employees, attorneys, agents and representatives (each, an “Indemnified
Person”), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys’ fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or
incurred by any such Indemnified Person as a result of the Obligations and
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents and the administration of such credit, and any actions
or failures to act in connection therewith, including any and all documented
legal costs and expenses arising out of or incurred in connection with disputes
between or among any parties to any of the Loan Documents relating to the
foregoing (collectively, “Indemnified Liabilities”); provided
that Borrower shall not be liable for any indemnification to an Indemnified
Person to the extent that any such suit, action, proceeding, claim, damage,
loss, liability or expense arises from that Indemnified Person’s gross
negligence, willful misconduct or breach of this Agreement, the Interim Order
or the Final Order.  No Indemnified
Person shall be responsible or liable to any other party to the Loan Document
(or any successor, assignee or third-party beneficiary of such Person or any
other Person asserting claims derivatively through such party) for indirect,
punitive, exemplary or consequential damages which may be alleged as a result
of the Obligations and credit having been extended, suspended or terminated
under any Loan Document or as a result of any other transaction contemplated
hereunder or thereunder.

 

2.8                                 Single
Loan.  The Loan to Borrower and all
of the other Obligations of Borrower arising under this Agreement and the other
Loan Documents shall constitute one general obligation of Borrower secured,
until the Satisfaction Date, by all of the Collateral.

 

6

 

2.9                                 Super-Priority
Nature of Obligations and Lender’s Liens.

 

(a)                                  The
priority of Lender’s Liens on the Collateral shall be set forth in the Interim
Order and the Final Order.

 

(b)                                 All
Obligations shall constitute administrative expenses of Borrower in the Chapter
11 Case, with administrative priority and senior secured status under
Sections 364(c) and 364(d) of the Bankruptcy Code.  Subject to the Carve-Out Amount, such
administrative claim shall have priority over all other costs and expenses of
the kinds specified in, or ordered pursuant to, Sections 105, 326, 328,
330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1114 or any other
provision of the Bankruptcy Code or otherwise as set forth in the Interim Order
and the Final Order, and shall at all times be senior to the rights of
Borrower, Borrower’s estate, and any successor trustee or estate representative
in the Chapter 11 Case or any subsequent proceeding or case under the
Bankruptcy Code.  The Liens granted to
Lender on the Collateral, and the priorities accorded to the Obligations, shall
have the priority and senior secured status afforded by Sections 364(c) and
364(d)(1) of the Bankruptcy Code (all as more fully set forth in the
Interim Order and Final Order) senior to all claims and interests other than
the Carve-Out Expenses up to the Carve-Out Amount.  The priorities accorded to the Obligations
shall have the priority and senior secured status afforded by Sections 364(c) and
364(d)(1) of the Bankruptcy Code (all as more fully set forth in the
Interim Order and the Final Order) senior to all claims and interests other
than the Carve-Out Expenses up to the Carve-Out Amount.

 

(c)                                  Lender’s
Liens on the Collateral and Lender’s administrative claims under
Sections 364(c)(1) and 364(d) of the Bankruptcy Code afforded
the Obligations shall also have priority over any claims arising under Section 506(c) of
the Bankruptcy Code, provided that Lender’s Lien on the Collateral owned by
Borrower shall be subject and subordinate to the following (hereafter referred
to as the “Carve-Out Expenses”):  (i) the
payment of any unpaid fees payable pursuant to 28 U.S.C. § 1930 (including fees
under 28 U.S.C. § 1930(a)(6)) and interest, if any, (ii) the fees due to
the Clerk of the Court, (iii) the actual fees and expenses incurred by
professionals, for the period prior to the occurrence of an Event of Default (less
the unused portion of retainers held by such professionals), retained by an
order of the Court entered pursuant to Sections 327, 328 or 1103 of the
Bankruptcy Code (the “Case Professionals”), provided they are within the
amounts set forth in the Apex Budget or permitted by Section 5.12 and are
subsequently allowed by the Bankruptcy Court under Sections 330 and 331 of the
Bankruptcy Code; (iv) the payment of, following the occurrence of any
Event of Default, after which Lender elects not to continue to provide Borrower
with the Loan, or otherwise terminates the Loan, allowed professional fees and
disbursements incurred after such Event of Default or termination by all Case
Professionals in an aggregate amount not to exceed $2,000,000 and an additional
amount not to exceed $20,000 for reasonable fees and expenses incurred by a
trustee under section 726(b) of the Bankruptcy Code, if applicable (the “Carve-Out
Amount”).  No portion of the
Carve-Out Amount, any other proceeds of the Loan, the Collateral or any
proceeds thereof, may be used to litigate, object, contest or challenge in any
manner or raise any defenses to the debt or collateral position of (x) Lender
under this Agreement or any other claims related to this Agreement against
Lender or any of the entities owned or controlled by Lender or its Affiliates
or (y) DIP Lender in its capacity as the holder of the Sumitomo Secured
Lender Claim, whether by challenging the validity, extent, amount, perfection,
priority or enforceability of the indebtedness under this Agreement or the
Sumitomo Secured Lender Claim, the validity, 

 

7

 

perfection or
priority of any mortgage, security interest or Lien with respect thereto or any
other rights or interests or replacement Liens with respect thereto or any
other rights, claims or interests of Lender (as Lender or as the holder of the
Sumitomo Secured Lender Claim), or by seeking to subordinate or re-characterize
the Loan, the Sumitomo Secured Lender Claim or disallow any claim, mortgage,
security interest or, Lien by asserting any claims or causes of action,
including any actions under Chapter 5 of the Bankruptcy Code, against Lender or
its Affiliates (including in its capacity as holder of the Sumitomo Secured
Lender Claim), or any of their officers, directors, agents or employees.  In addition, the Carve-Out Amount, any other
proceeds of the Loan, any Collateral and the proceeds thereof, and the Cash
Collateral shall not be used in connection with (1) preventing, hindering
or delaying Lender’s enforcement or realization upon the Collateral or the
collateral pledged as security for the Sumitomo Secured Lender Claim once an
Event of Default has occurred herewith or an event of default under the
Financing Documents (as such term is defined in the Common Security Agreement),
(2) selling or otherwise disposing of the Collateral without the consent
of Lender, or (3) incurring indebtedness senior to Lender’s Liens
hereunder other than as permitted in this Agreement.  Notwithstanding anything to the contrary in
this Section 2.9(c), the Borrower shall be entitled to use up to
US$250,000 of the Carve-Out Amount to pursue any rights or remedies, or take
any actions in respect to such rights or remedies, under the Purchase Agreement
provided Borrower is not in contravention of this Section 2.9(c).  Lender shall not be responsible for the
direct payment or reimbursement of any fees or disbursements of any Case
Professionals incurred in connection with the Chapter 11 Case under any chapter
of the Bankruptcy Code, and nothing herein shall be construed to obligate
Lender in any way to pay compensation to or to reimburse expenses of any Case
Professional, or to guarantee that Borrower have sufficient funds to pay such
compensation or reimbursement.

 

2.10                           Payment
of Obligations.  Upon the maturity
(whether by acceleration or otherwise) of any of the Obligations under this
Agreement or any of the other Loan Documents, Lender shall be entitled to
immediate payment of such Obligations without further application to or order
of the Bankruptcy Court; provided, however, (i) if the
Commitment Termination Date occurs as a consequence of the occurrence of the
effective date of a plan of reorganization consented to by Lender under which
Lender (or one of is affiliates) consummates the purchase of the Purchased
Properties in accordance with the Purchase Agreement, Lender shall waive
and release payment of all Advances outstanding at that time, all interest
accrued thereon and all Fees and Charges due and owing Lender at that time and (ii) if
the Commitment Termination Date occurs as a consequence of Borrower’s
consummation of an Alternative Transaction in accordance with the terms and
conditions of the Purchase Agreement, Borrower shall satisfy in full, in immediately
available funds, the Obligations, the Sumitomo Secured Lender Claim, the
Break-Up Fee and the Reimbursement Amount, within two (2) Business Days
following the consummation of such Alternative Transaction.  Borrower agrees to waive any and all claims
against Apex Luxembourg, and shall cause Apex Luxembourg to waive any and all
claims Apex Luxembourg may have against Apex Sweden, for repayment of
principal, accrued interest and any other related obligations outstanding on
the intercompany loans made pursuant to Section 2.5, in the event
Lender waives the payment of all Advances, accrued interest, Fees and Charges
as described in this Section 2.10. 
Borrower and Lender expressly acknowledge and agree that the waiver and
release by Lender described in this Section 2.10 shall not extend
to any Shareholder Loans made with the proceeds of any Advance (such
Shareholder Loans shall be included among the Purchased Properties).

 

8

 

2.11                           No
Discharge; Survival of Claims. 
Borrower agrees that except as otherwise expressly agreed to by Lender (a) the
Obligations hereunder shall not be discharged by the entry of an order
confirming a plan of reorganization in the Chapter 11 Case (and Borrower
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives
any such discharge) and (ii) the super-priority administrative claim
granted to Lender pursuant to the Interim Order and Final Order and described
in Section 2.9(b) and the Liens granted to Lender pursuant to
the Final Order and described in Section 2.9(c) shall not be
affected in any manner by the entry of an order confirming a plan of
reorganization in the Chapter 11 Case.

 

2.12                           Release.  Borrower hereby acknowledges effective upon
entry of the Final Order, that it has no defense, counterclaim, offset,
recoupment, cross-complaint, claim or demand of any kind or nature whatsoever
that can be asserted to reduce or eliminate all of Borrower’s liability to
repay Lender as provided in this Agreement or to seek affirmative relief or
damages of any kind or nature from Lender (solely in its capacity as Lender
under this Agreement).  Borrower, on
behalf of its bankruptcy estate, and on behalf of its successors, assigns,
Subsidiaries and any Affiliates and any Person acting for and on behalf of, or
claiming through them, hereby fully, finally and forever Releases and
discharges Lender and all of Lender’s past and present officers, directors,
servants, agents, attorneys, assigns, heirs, parents, Subsidiaries, and each
Person acting for or on behalf of any of them (collectively, the “Released
Parties”) of and from any and all past or present actions, causes of
action, demands, suits, claims, liabilities, Liens, lawsuits, adverse
consequences, amounts paid in settlement, costs, damages, debts, deficiencies,
diminution in value, disbursements, expenses, losses and other obligations of
any kind or nature whatsoever, whether in law, equity or otherwise (including
those arising under Sections 541 through 550 of the Bankruptcy Code and
interest or other carrying costs, penalties, legal, accounting and other
professional fees and expenses, and incidental, consequential and punitive
damages payable to third parties), whether known or unknown, fixed or
contingent, direct, indirect, or derivative, asserted or unasserted, foreseen
or unforeseen, suspected or unsuspected, against any of the Released Parties,
whether held in a Personal or representative capacity, and which are based on
any act, fact, event or omission or other matter, cause or thing occurring at
or from any time prior to and including the date hereof in any way, directly or
indirectly arising out of, connected with or relating to this Agreement, the
Interim Order and the Final Order; provided, however, that
nothing herein shall constitute a release of any actions, causes of action,
demands, suits, claims, lawsuits, losses or other obligations of any kind or
nature whatsoever, whether in law, equity or otherwise, arising out of,
connected with or relating to the Purchase Agreement, the Management Services
Agreement (as defined in the Purchase Agreement), the Plan Support Agreement or
the Sumitomo Secured Lender Claim and the Financing Documents (as defined in
the Common Security Agreement).  Borrower
expressly acknowledges that the release provided for hereunder is in addition
to, and shall not limit in any manner, the releases provided to Lender and
Lender’s Affiliates, including, but not limited to, the releases contemplated
by the Plan Support Agreement, under and in accordance with any plan of
reorganization confirmed in the Chapter 11 Case and the Purchase Agreement.

 

2.13                           Waiver
of Any Priming Rights.  Upon the
Closing Date, and for itself and on behalf of its estate, and for so long as
any Obligations shall be outstanding, Borrower hereby irrevocably waives any
right, pursuant to Sections 364(c) or 364(d) of the Bankruptcy
Code or otherwise, to grant any Lien of equal or greater priority than the
Liens securing the Obligations, or to approve a claim of equal or greater
priority than the Obligations.

 

9

 

2.14                           Reserved.

 

3.                                     COLLATERAL

 

3.1                                 Security.  As collateral security for the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations and to induce Lender to make the
Loan available to Borrower in accordance with the terms hereof, Borrower hereby
assigns, creates, grants, conveys, mortgages, pledges, hypothecates and
transfers to Lender for Lender’s benefit, first priority Liens (subject to the
Carve-Out Amount and the cash collateral (in an amount not to exceed $550,000)
in account number 605039224 maintained by HSBC USA National Association and
pledged by Borrower to secure payment of that certain letter of credit (and
reasonable fees, costs and expenses of issuer) issued in the amount of $500,000
issued by HSBC Bank USA National Association in favor of HSBC Chile and
corresponding Boleta de Garantia to Antofagasta Railway Company PLC, dated as
of June 25, 2008 and expiring on May 20, 2009, and with the priority
established by the Interim Order and Final Order), in accordance with Sections
364(c) and (d) of the Bankruptcy Code in all right, title and
interest of Borrower in and to (a) any and all Property, assets and things
of value of every kind or type, tangible, intangible, real, personal and fixed,
whether now owned or hereafter acquired and wherever located, including Real
Estate (including all leasehold interests, mineral Leases, and mineral and
water rights), the Cash Collateral Accounts and all other deposit accounts (and
all deposits contained therein), accounts, chattel paper (including electronic
chattel paper), Instruments, documents (including electronic documents of
title), all of Borrower’s rights and claims relating to all deposits and
reserves held by utilities and trade creditors, inventory, equipment, general
intangibles (including payment intangibles, intellectual property, interests in
partnerships and joint ventures (to the extent not prohibited, in which case
Lender shall have a Lien on the proceeds of such interests)), tax refunds,
letter of credit rights, supporting obligations, commercial tort claims, and
investment property, all pursuant to Section 364(c) and (d) of
the Bankruptcy Code and, to the extent not otherwise included, (b) all
proceeds of each of the foregoing, and (c) all accessions to,
substitutions and replacements (including any Property repaired, rebuilt or
replaced with casualty insurance proceeds and condemnation awards) for, and
insurance and condemnation proceeds, rents, profits and products of each of the
foregoing (all of the foregoing, the “Collateral”).

 

3.2                                 Perfection
of Security Interests.

 

(a)                                  At
the reasonable request of Lender and at Borrower’s expense, Borrower shall (i) execute
and deliver to Lender documentation satisfactory to Lender evidencing the first
priority Liens granted hereby, providing for the perfection of such Liens and
evidencing that the automatic stay provisions of Section 362 of the
Bankruptcy Code have been modified to permit the execution, delivery and filing
of such documentation, and (ii) perform or take any and all steps at any
time necessary to perfect, maintain, protect and enforce Lender’s Lien on the
Collateral; provided, however, that no such documentation shall be required as
a condition to the validity, priority or perfection of any of the Liens created
pursuant to this Agreement which first priority security interests and Liens
shall be deemed valid and properly perfected upon approval by the Bankruptcy
Court of the Interim Order; provided further that no such documentation shall
be filed in any jurisdiction with a mortgage, stamp, intangibles or similar
tax.

 

10

 

(b)                                 Until
all Obligations have been satisfied and paid in full in cash by the Borrower
and the Commitment shall have terminated, Lender’s first priority security
interest in the Collateral as security for such obligations shall continue in
full force and effect.

 

(c)                                  Notwithstanding
the provisions of Section 3.2(a) hereof, or failure on the
part of Borrower or Lender to perfect, maintain, protect or enforce Lender’s
Lien on the Collateral, the Interim Order or the Final Order, as the case may
be, shall automatically, and without further action by any Person, perfect
Lender’s Lien against the Collateral.

 

3.3                                 Cash
Collateral Account.  All Cash
Collateral shall be deposited by Borrower into the accounts identified on Disclosure
Schedule 3.3 subject to Lender’s first priority perfected Lien
(collectively, the “Cash Collateral Accounts”).  Such funds shall
be held in the Cash Collateral Accounts until such time as the amounts held
therein are applied by Borrower to pay normal operating expenses consistent
with the Apex Budget (or permitted by Section 5.12), the Interim
Order and any Final Order.  So long as no Event of Default shall have
occurred and be continuing, amounts held in the Cash Collateral Accounts shall
be made available to Borrower to pay normal operating expenses consistent with
the Apex Budget (or permitted by Section 5.12).  During the
existence of an Event of Default, Lender may apply all amounts held in the Cash
Collateral Accounts as required by the second paragraph of Section 2.3(d).
 Borrower agrees to use its commercially reasonable efforts to execute and
deliver appropriate Control Agreements in respect of the Cash Collateral
Accounts on or prior to the fifth Business Day after the effectiveness of the
Interim Order or such later time as Lender may agree in its sole discretion.
 Lender agrees not to give any direction to the depositary banks in
respect of the Cash Collateral Accounts except during the existence of an Event
of Default.  Lender agrees to terminate the Control Agreements upon the
Satisfaction Date.  Borrower shall
deliver to Lender on Monday of each week, or more frequently if requested by
Lender, copies of account statements for each of the Cash Collateral Accounts.

 

3.4                                 Rights
of Lender.  Lender may at any time on
or after the Commitment Termination Date until the Satisfaction Date, after
three (3) Business Days’ prior written notice to Borrower of its intention
to do so, notify Account Debtors, parties to contracts with Borrower, obligors
on Instruments of Borrower and obligors in respect of chattel paper of Borrower
that the right, title and interest of Borrower in and under such accounts, such
contracts, such Instruments and such chattel paper have been assigned to Lender
and that payments shall be made directly to Lender.  Upon the request of Lender on or after the
Commitment Termination Date and prior to the Satisfaction Date, Borrower will
so notify such Account Debtor, such parties to contracts, obligors on such
Instruments and obligors in respect of such chattel paper.  Upon the occurrence and during the
continuation of a Default or an Event of Default, Lender may in its own name or
in the name of others communicate with such parties to such accounts, such
contracts, such Instruments and such chattel paper to verify with such Persons
to Lender’s satisfaction the existence, amount and terms of any such accounts,
contracts, Instruments or chattel paper.

 

3.5                                 Preservation
of Collateral.  Lender shall not in
any way be responsible for the payment of any costs incurred in connection with
preserving or disposing of Collateral pursuant to Section 506(c) of
the Bankruptcy Code, and the Collateral may not be charged for the incurrence
of any such cost.

 

11

 

3.6                                 Lender’s
Appointment as Attorney-in-Fact.

 

(a)                                  Borrower
hereby irrevocably constitutes and appoints Lender and any officer of Lender,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Borrower and in
the name of Borrower or in Lender’s own name, from time to time in Lender’s
discretion, for the purpose of collecting the Obligations when due in
accordance with the provisions of this Agreement, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments which may be necessary and desirable to accomplish such purpose,
and, without limiting the generality of the foregoing, hereby gives Lender the
power and right, on behalf of Borrower, without notice to or assent from them,
to do the following:

 

(i)            to
ask, demand, collect, receive and give acquittances and receipts for any and
all monies due and to become due under any Collateral and, in the name of
Borrower or Lender’s own name or otherwise, to take possession of and endorse
and collect any checks, drafts, notes, acceptances or other Instruments for the
payment of monies due under any Collateral and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Lender for the purpose of collecting any and all monies due
under any Collateral whenever payable and to file any claims or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Lender for the purpose of collecting any and all such monies due
under any Collateral whenever payable;

 

(ii)           to
pay or discharge taxes, Liens, security interests or other encumbrances levied
or placed on or threatened against the Collateral, to effect any repairs or
procure any insurance called for by the terms of this Agreement and to pay all
or any part of the premiums therefor and the costs thereof, in each case which
are not stayed pursuant to the Chapter 11 Case or which are not being contested
in accordance with this Agreement; and

 

(iii)          (A) to
direct any party liable for any payment under any of the Collateral to make
payment of any and all monies due, and to become due, and to become due
thereunder, directly to Lender or as Lender shall direct; (B) to receive
payment of and receipt for any and all monies, claims and other amounts due and
to become due at any time in respect of or arising out of any Collateral; (C) to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against Borrower, assignments,
verifications and notices in connection with accounts and other documents
constituting or relating to the Collateral; (D) to commence and prosecute
any suits, actions or proceedings at law or equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral; (E) to defend any suit, action
or proceeding brought against Borrower with respect to any Collateral; (F) to
settle, compromise or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or Releases as Lender may
deem appropriate; (G) to license or, to the extent permitted by an
applicable license, sublicense, whether general, special or otherwise, and
whether on an exclusive or non-exclusive basis, any trademark, throughout the
world for such term or terms, on such conditions, and in such manner, as Lender
shall in its sole discretion determine is appropriate to liquidate the
Collateral; and (H) generally to sell, transfer, pledge, make any
agreement with respect to or 

 

12

 

otherwise deal with any of the Collateral as fully and completely as
though Lender were the absolute owner thereof for all purposes, and to do, at
the option of Lender and at Borrower’s expense, at any time, or from time to
time, all acts and things which Lender reasonably deems necessary to protect,
preserve or realize upon the Collateral and Lender’s Lien therein, in order to
effect the intent of this Agreement, all as fully and effectively as Borrower
might do.

 

(b)                                 Lender
agrees that it will forbear from exercising the power of attorney or any rights
granted to it pursuant to this Section 3.6 until after the
Commitment Termination Date and prior to the Satisfaction Date, or upon the
occurrence and during the continuation of an Event of Default.  Borrower hereby ratifies, to the extent
permitted by Applicable Law, all that said attorneys shall lawfully do or cause
to be done by virtue hereof. The power of attorney granted pursuant to this Section is
a power coupled with an interest and shall be irrevocable until the Obligations
are paid in full in cash and the Commitment has terminated.

 

(c)                                  The
powers conferred on Lender hereunder are solely to protect Lender’s interests
in the Collateral and shall not impose any duty upon Lender to exercise any
such powers. Lender shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of
its officers, directors, employees or agents shall be responsible to Borrower
for any act or failure to act, except for its own gross negligence or willful
misconduct.

 

(d)                                 Borrower
also authorizes Lender, at any time and from time to time on and after the
Commitment Termination Date and prior to the Satisfaction Date, or upon the
occurrence and during the continuation of an Event of Default, (i) to
communicate, in the name of Borrower or in Lender’s own name (at Lender’s
option), with any party to any contract with regard to the assignment of the
right, title and interest of Borrower in and under the contracts hereunder and
other matters relating thereto and (ii) to execute any endorsements,
assignments or other Instruments or conveyance or transfer with respect to the
Collateral.

 

4.                                     CONDITIONS
PRECEDENT

 

4.1                                 Conditions
to the Initial Advance.  Lender shall
not be obligated to make the Loan on the Initial Disbursement Date or any
Advance on any Subsequent Disbursement Date, until the following conditions
have been satisfied or provided for in a manner satisfactory to Lender, or
waived in writing by Lender:

 

(a)                                  Credit
Agreement; Loan Documents.  This
Agreement or counterparts hereof shall have been duly executed by Borrower and
delivered to Lender; and Lender shall have received such other documents,
instruments, and agreements as Lender shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including all those listed in the Closing Checklist attached hereto
as Annex B, each in form and substance reasonably satisfactory to
Lender.

 

(b)                                 Purchase
Agreement.  The Purchase Agreement
shall have been duly executed by Borrower and the other parties thereto (other
than Lender), delivered to Borrower and Lender and the other parties thereto,
and remain in full force and effect.  All
documentation 

 

13

 

related to the
Purchase Agreement, including the Management Services Agreement, in form and
substance acceptable to Lender, shall have been completed.

 

(c)                                  Plan
Support Agreement.  The Plan Support
Agreement shall have been executed by Borrower and the other parties thereto
(other than Lender), delivered to Borrower and Lender and the other parties
thereto, and remain in full force and effect.

 

(d)                                 Approvals.  Lender shall have received (i) satisfactory
evidence that Borrower has obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, in connection with
the filing of the Chapter 11 Case and to the execution, delivery and
performance of this Agreement and the other Loan Documents and the payment of
all fees, costs and expenses associated with all of the foregoing and/or (ii) an
officer’s certificate in form and substance satisfactory to Lender affirming
that no such consents or approvals are required.

 

(e)                                  Bankruptcy
Matters.

 

(i)            Interim
Order.  Entry by the Bankruptcy Court
of the Interim Order, by no later than five (5) Business Days following
the Petition Date, in form and substance satisfactory to Lender, among other
things, (x) approving the transactions contemplated hereby, (y) granting
a perfected security interest in all Collateral subject only to the Carve-Out
Amounts and granting the Obligations a super-priority administrative claim
status, and (z) modifying the automatic stay to permit the creation and
perfection of Lender’s Liens and automatically vacating the automatic stay to
permit enforcement of Lender’s default-related rights and remedies under this
Agreement, the other Loan Documents and Applicable Law;

 

(ii)           Fee
Approval and Support Motions. 
Borrower shall have filed the Fee Approval Motion and the Support Motion
(as such terms are defined in the Purchase Agreement), each in form and
substance reasonably satisfactory to the Lender, and in each case no later than
three (3) days after the Petition Date; and

 

(iii)          Plan
of Reorganization.  Borrower shall
have filed a plan of reorganization no later than three (3) days of the
Petition Date, which shall be in form and substance acceptable to Lender.

 

4.2                                 Further
Conditions to the Loan.  Except as
otherwise expressly provided herein, Lender shall not be obligated to fund any
Advance if, as of the date thereof:

 

(a)                                  the
Advance requested would cause the aggregate outstanding amount of the Loan to
exceed the amount then authorized by the Interim Order or the Final Order, as
the case may be, or any order modifying, reversing, staying or vacating such
order shall have been entered, or any appeal of such order shall have been
timely filed;

 

(b)                                 any
representation or warranty by Borrower contained herein or in any other Loan
Document is untrue or incorrect in any material respect as of such date, except
to the extent that such representation or warranty expressly relates to an
earlier date and except for changes therein expressly permitted or expressly
contemplated by this Agreement;

 

14

 

 

(c)                                  any
Default or Event of Default has occurred and is continuing or would result
after giving effect to any Advance;

 

(d)                                 a
Termination Event (as such term is defined in the Purchase Agreement) has
occurred and is continuing; or

 

(e)                                  (i) the
Bankruptcy Court shall not have entered the Final Order on or before the date
that is 30 days after the Petition Date, (ii) the Bankruptcy Court shall
not have entered the Final Order following the expiration of the Interim Order,
(iii) the Interim Order or the Final Order, as the case may be, shall have
been vacated, stayed, reversed, modified or amended without Lender’s consent or
shall otherwise not be in full force and effect, (iv) a motion for
reconsideration of any such order shall have been timely filed or (v) an
appeal of any such order shall have been timely filed and such order in any
respect is the subject of a stay pending appeal.

 

The request
for and acceptance by Borrower of the proceeds of any Advance shall be each
deemed to constitute, as of the date thereof, (i) a representation and
warranty by Borrower that the conditions in this Section 4.2 have
been satisfied, and (ii) a reaffirmation by Borrower of the granting and
continuance of Lender’s Liens, pursuant to the Collateral Documents.

 

5.            REPRESENTATIONS
AND WARRANTIES

 

To induce
Lender to make the Loan, Borrower makes the following representations and
warranties to Lender.  Each of the
representations and warranties made herein are subject to the effect of the
filing of the Chapter 11 Case.

 

5.1                                 Organization;
Powers.  Borrower is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, subject to the entry by the Bankruptcy Court of the Interim Order
(or the Final Order, when applicable), has all requisite power and authority to
carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.

 

5.2                                 Authorization;
Enforceability.  Upon the entry by
the Bankruptcy Court of the Interim Order (or the Final Order, when
applicable), the transactions contemplated hereby and by the other Loan
Documents to be entered into by Borrower are within Borrower’s corporate powers
and have been duly authorized by all necessary corporate and, if required,
Stockholder action.  This Agreement has
been duly executed and delivered by Borrower and subject to the entry by the
Bankruptcy Court of the Interim Order (or the Final Order, when applicable)
constitutes, and each other Loan Document to which Borrower is a party, when
executed and delivered by Borrower will constitute, a legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

5.3                                 Governmental
Approvals; No Conflicts.  Subject to
the entry by the Bankruptcy Court of the Interim Order (or the Final Order,
when applicable), the transactions to be entered 

 

15

 

into pursuant
to the Loan Documents (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority, except for such as have been obtained or made and are in full force
and effect and except filings and recordings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any Applicable Law or the
charter, bylaws or other organizational documents of Borrower, (c) will
not violate or result in a default under any indenture, agreement or other
instrument binding upon Borrower or its assets, or give rise to a right
thereunder to require any payment to be made by Borrower, and (d) will not
result in the creation or imposition of any Lien on any asset of Borrower,
except Liens created under the Loan Documents.

 

5.4                                 Properties.

 

(a)                                  Borrower
has valid property interests in full force and effect with respect to all its
real and Personal property material to its business, except for defects which
would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Borrower
owns, or is licensed to use, all Intellectual Property material to its
business, and the use thereof by Borrower does not infringe upon the rights of
any other Person, except for any such infringements that, individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse
Effect.

 

5.5                                 Legal
Proceedings.  Other than the Chapter
11 Case or as set forth in Schedule 5.5, there are no Legal Proceedings
pending against or, to the knowledge of Borrower, threatened against or
affecting Borrower (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any of the Loan Documents.

 

5.6                                 Compliance
with Applicable Laws and Agreements. 
Borrower is in compliance with all Applicable Law, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.  All material contracts of Borrower are valid
and in full force and effect, and are enforceable by Borrower in accordance
with their terms.  Borrower has not
waived any of its material rights, defenses, setoffs or rights recoupment under
any such contracts.

 

5.7                                 Taxes.  Borrower has timely filed or caused to be
filed all tax returns and reports required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except (a) taxes
that are being contested in good faith by appropriate proceedings diligently
conducted, for which Borrower has set aside on its books adequate reserves, or (b) to
the extent that the failure to do so would not reasonably be expected to result
in a Material Adverse Effect.

 

5.8                                 Disclosure.  Borrower has disclosed to Lender all
agreements, instruments and corporate or other restrictions to which Borrower
and/or MSC is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  None of any of
the reports, financial statements, certificates or other information furnished
by or on behalf of Borrower to Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder 

 

16

 

(as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading in any material respect.

 

5.9                                 Collateral
Documents.  The Collateral Documents
create in favor of Lender, a legal, valid and enforceable security interest in
the Collateral and the Collateral Documents constitute the creation of a fully
perfected first priority Lien on, and security interest, in, all right, title
and interest of Borrower in all other Collateral, prior and superior in right
to any other Person, other than in the case of the Carve-Out Expenses, and the
holders of Permitted Encumbrances having priority over the Lien of Lender by
operation of law or under a purchase money arrangement.

 

5.10                           Reserved.

 

5.11                           MSC
Projected Cash Forecast.

 

(a)                                  Borrower
has prepared and delivered to Lender an initial thirteen (13) week MSC
Projected Cash Forecast, annexed hereto as Exhibit A.  The initial MSC Projected Cash Forecast has
been thoroughly reviewed by Borrower and its management and sets forth for the
periods covered thereby, among other things, MSC’s projected weekly operating
cash receipts and disbursements for each week commencing with the week ending January 16,
2009 (collectively, the “Projected Information”).  In addition to the initial MSC Projected Cash
Forecast, Borrower shall thereafter deliver to Lender an updated MSC Projected
Cash Forecast on a weekly basis.

 

(b)                                 Borrower
hereby confirms, acknowledges and agrees that the failure to deliver the
initial MSC Projected Cash Forecast or any updated MSC Projected Cash Forecast
within the applicable grace period, in form and substance reasonably
satisfactory to Lender, as provided in Section 5.11(a) hereof,
shall constitute an Event of Default. 
Notwithstanding any approval by Lender of the initial MSC Projected Cash
Forecast or any subsequent or amended MSC Projected Cash Forecast, Lender will
not, and shall not be required to, provide any Advances to Borrower pursuant to
the MSC Projected Cash Forecast, but shall only provide the Loan in accordance
with the terms and conditions set forth in this Agreement, the Interim Order
and the Final Order.  Lender is relying
upon Borrower’s delivery of, and compliance with, the MSC Projected Cash
Forecast in accordance with this Section 5.11 in determining to
enter into the Post-Petition financing arrangements provided for herein.

 

5.12                           Apex
Budget.

 

(a)                                  Borrower
has prepared and delivered to Lender an initial thirteen (13) week Apex Budget,
annexed hereto as Exhibit F. 
The initial Apex Budget has been thoroughly reviewed by Borrower and its
management and sets forth for the periods covered thereby, among other things,
Apex’s projected weekly operating cash receipts and disbursements for each week
commencing with the week ending January 16, 2009.  In addition to the initial Apex Budget,
Borrower shall thereafter deliver to Lender updates to the Apex Budget on a
weekly basis (the “Budget Report”).

 

17

 

(b)                                 The
Budget Report shall show (i) the actual receipts and disbursements of the
Borrower during the period from the initial Apex Budget or the preceding Budget
Report; and (ii) a comparison of the actual receipts and disbursements for
the Borrower to the receipts and disbursements shown in the Apex Budget both
for the preceding reporting period and on a cumulative basis for the period
from the Petition Date through the last day of the reporting period in each of
the categories set forth in the Apex Budget.

 

(c)                                  Borrower
hereby confirms, acknowledges and agrees that (i) the failure to deliver
any Apex Budget or any Budget Report within the applicable grace period, in
form and substance reasonably satisfactory to Lender, as provided in this Section 5.12,
or (ii) a variance from the aggregate amount of expenditures set forth in
the Apex Budget that exceeds twenty percent (20%) on a cumulative basis from
the Closing Date until the date of the most recently delivered Apex Budget or
Budget Report, shall constitute an Event of Default.  Notwithstanding any approval by Lender of the
initial Apex Budget or any subsequent or amended Apex Budget, Lender will not,
and shall not be required to, provide any further Advances to Borrower.  Lender is relying upon Borrower’s delivery
of, and compliance with, the Apex Budget in accordance with this Section 5.12
in determining to enter into the Post-Petition financing arrangements provided
for herein.

 

5.13                           Reorganization
Matters.

 

(a)                                  The
Chapter 11 Case was commenced on the Petition Date in accordance with
Applicable Law and proper notice thereof and the proper notice for (x) the
motion seeking approval of the Loan Documents and the Interim Order and Final
Order, (y) the hearing for the approval of the Interim Order, and (z) the
hearing for the approval of the Final Order has been or will be given.  Borrower shall give, on a timely basis as
specified in the Interim Order or the Final Order, as applicable, all notices
required to be given to all parties specified in the Interim Order or Final
Order, as applicable.

 

(b)                                 After
the entry of the Interim Order, and pursuant to and to the extent permitted in
the Interim Order and the Final Order, the Obligations will constitute allowed
administrative expense claims in the Chapter 11 Case having priority over
all administrative expense claims and unsecured claims against Borrower now
existing or hereafter arising, of any kind whatsoever, including all
administrative expense claims of the kind specified in Sections 105, 326,
330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1114 or any other
provision of the Bankruptcy Code or otherwise, as provided under Section 364(c)(1) of
the Bankruptcy Code, subject, as to priority only to the Carve-Out Expenses as
set forth in the Interim Order and the Final Order.

 

(c)                                  After
the entry of the Interim Order and pursuant to and to the extent provided in
the Interim Order and the Final Order, the Obligations will be secured by a
valid and perfected Lien on all Collateral, subject, as to priority, only to
the Carve-Out Expenses up to the Carve-Out Amount as set forth in the Interim
Order and the Final Order.

 

(d)                                 The
Interim Order (with respect to the period prior to entry of the Final Order) or
the Final Order (with respect to the period on and after entry of the Final
Order), as the 

 

18

 

case may be,
is in full force and effect has not been reversed, stayed, modified or amended
(without the express written consent of Lender).

 

(e)                                  Notwithstanding
the provisions of Section 362 of the Bankruptcy Code, and subject to the
applicable provisions of the Interim Order or Final Order, as the case may be,
upon the maturity (whether by acceleration or otherwise) of any of the
Obligations, Lender shall be entitled to immediate payment of such Obligations
and to enforce the remedies provided for hereunder or under Applicable Law,
without further application to or order by the Bankruptcy Court.

 

6.                                     FINANCIAL
STATEMENTS AND INFORMATION

 

6.1                                 Reports
and Notices.  Borrower hereby agrees
that from and after the Closing Date and until the Satisfaction Date, it shall
deliver to Lender the financial statements, notices and other information at
the times, to the Persons and in the manner set forth in Annex C.

 

6.2                                 Communication
with Financial Advisors.  Borrower
authorizes Lender to communicate directly with Borrower’s financial advisors,
investment bankers and consultants, and authorizes and shall instruct those
financial advisors, investment bankers and consultants to communicate to Lender
information relating to Borrower with respect to the business, results of
operations and financial condition of Borrower.

 

7.            AFFIRMATIVE
COVENANTS

 

Borrower agrees that from and after the date hereof and until the
Satisfaction Date:

 

7.1                                 Disclosure
Statement.  Borrower shall file a
disclosure statement with the Bankruptcy Court by January 20, 2009, which
shall be, in form and substance, reasonably satisfactory to the Lender.

 

7.2                                 Information
Regarding Collateral.  Borrower will
furnish to Lender prompt written notice of any change (i) in Borrower’s
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of
Borrower’s chief executive office, its principal place of business, any office
in which it maintains books or records relating to Collateral owned by it or
any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility), (iii) in Borrower’s
corporate structure or jurisdiction of organization, or (iv) in Borrower’s
Federal Taxpayer Identification Number or organizational identification number
assigned to it by its jurisdiction of organization.  Borrower also agrees to promptly notify
Lender if any material portion of the Collateral is damaged or destroyed.

 

7.3                                 Existence;
Conduct of Business.  Except as
occasioned by the Chapter 11 Case, Borrower will do or cause to be done all
things necessary to comply with its respective Governing Documents, and to
preserve, renew and keep in full force and effect its (a) legal existence
and (b) at all times as may be necessary to effectuate the Sale
Transaction, the rights, Licenses, permits, privileges, franchises, Patents,
Copyrights, Trademarks and trade names material to the conduct of its business
or the business of its Subsidiaries.

 

19

 

7.4                                 Payment
of Obligations.  Borrower will pay
its Post-Petition Indebtedness and other obligations in accordance with the
Apex Budget and as permitted by Section 5.12.

 

7.5                                 Maintenance
of Properties.  Borrower will keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear, casualty and condemnation
each excepted.

 

7.6                                 Books
and Records; Inspection Rights. 
Borrower shall cause MSC to keep proper books of record and account
consistent with past practices previously disclosed to Lender and in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities, including its dealings and
transactions with its Subsidiaries. 
Borrower will and will cause MSC to permit any representatives
designated by Lender to visit and inspect its and MSC’s properties, to examine
and make extracts from its and MSC’s books and records, and to discuss its and
MSC’s affairs, finances and condition with its officers and independent
accountants, all at such reasonable times during normal business hours and as
often as reasonably requested.

 

7.7                                 Compliance
with Applicable Laws.  Borrower will
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.

 

7.8                                 Use
of Proceeds.  The proceeds of the
Loan made hereunder will be used only as set forth in Section 2.5.  No part of the proceeds of the Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Federal Reserve Board, including Regulations U
and X.

 

7.9                                 Fee
Approval and Support Motions.  The
Bankruptcy Court shall have entered orders (a) approving the Fee Approval
Motion 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, and (b) approving the Support Motion (x) on an interim
basis within ten (10) days of the Petition Date and (y) on a final
basis within twenty (20) days of the Petition Date, in each case, in form and
substance reasonably acceptable to Lender.

 

7.10                           Further
Assurances.

 

(a)                                  Borrower
will execute any and all further documents, financing statements, agreements
and instruments, and take all such further actions (including the filing and
recording of financing statements and other documents), that may be required
under any Applicable Law, or which Lender may reasonably request, to effectuate
the transactions contemplated by the Loan Documents or to grant, preserve,
protect or perfect the Liens created or intended to be created by the
Collateral Documents or the validity or priority of any such Lien, all at the
expense of Borrower.  Borrower also
agrees to provide to Lender, from time to time upon request, evidence
reasonably satisfactory to Lender as to the perfection and priority of the
Liens created or intended to be created by the Collateral Documents, including
periodic Lien searches as deemed necessary by Lender in its reasonable
discretion.

 

20

 

(b)                                 If
any material assets are acquired by Borrower after the Closing Date (other than
assets constituting Collateral hereunder that become subject to the Lien of
Lender upon acquisition thereof), Borrower will notify Lender thereof, and
Borrower will cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or reasonably
requested by Lender to grant and perfect such Liens, including actions
described in paragraph (a) of this Section 7.10, all at
the expense of Borrower.

 

7.11                           Satisfied
Liens.  Borrower will use its
commercially reasonable efforts to take such steps as are necessary to cause
any existing financing statement, mortgage, deed of trust or similar instrument
evidencing a security interest or lien securing obligations which have been
paid or otherwise satisfied in full to be terminated, released or discharged as
appropriate, including making written requests for appropriate instruments of
termination or release from the relevant secured parties or collateral
agent.  Borrower will provide copies of
any such terminations or releases to Lender.

 

8.                                     NEGATIVE
COVENANTS

 

Borrower agrees that from and after the date hereof until the
Satisfaction Date:

 

8.1                                 Indebtedness
and Other Obligations.

 

(a)                                  Borrower
will not create, incur, assume or permit to exist any Post-Petition
Indebtedness, except:

 

(i)            Indebtedness
created under the Loan Documents;

 

(ii)           Indebtedness which
may be deemed to exist as of the date hereof, pursuant to any guaranties,
performance, surety, statutory appeal or similar obligations incurred in the
ordinary course of business;

 

(iii)          Upon prior notice
to Lender, Indebtedness incurred to finance insurance premiums and owing to the
applicable insurance company providing the applicable policy; and

 

(iv)          other unsecured
Indebtedness at any time outstanding in the ordinary course of business.

 

Furthermore,
no Indebtedness under clauses (ii), (iii) or (iv) shall be
permitted to have an administrative expense claim status under the Bankruptcy
Code senior to or pari  passu with the super-priority administrative
expense claims of Lender, as set forth herein and in the Interim Order and the
Final Order.

 

8.2                                 Liens.  Borrower will not create, incur, assume or
permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:

 

(a)                                  Liens
created under the Loan Documents;

 

21

 

(b)           Permitted
Encumbrances;

 

(c)           Intentionally
deleted.

 

(d)           Liens securing
Indebtedness permitted by Section 8.1(a)(iii) (solely with respect to
such insurance policies and the proceeds thereof);

 

(e)           Liens in the nature
of the right of setoff in favor of counterparties (including depositories) to
contractual agreements with the Borrower in the ordinary course of business;
and

 

(f)            any Lien on any
property or asset of Borrower set forth in Schedule 8.2, provided
that (i) such Lien shall not apply to any other property or asset of
Borrower and (ii) such Lien shall secure only those obligations that it
secures as of the Petition Date, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof.

 

8.3                                 Fundamental
Changes.

 

(a)                                  Borrower
will not merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or liquidate or dissolve.

 

(b)                                 Borrower
will not engage to any material extent in any business other than businesses of
the type conducted by Borrower on the date of execution of this Agreement and
businesses reasonably related, ancillary or complementary thereto.

 

8.4                                 Investments,
Loans, Advances, Guarantees and Acquisitions.  Borrower will not purchase, hold or acquire
(including pursuant to any merger with any Person) any Stock, evidences of
Indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, guarantee any obligations of, or make or permit to exist any
Investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person constituting a business unit, except:

 

(a)                                  Investments
existing on the Closing Date, and set forth on Schedule 8.4;

 

(b)                                 Investments
made in Apex Luxembourg and Apex Sweden pursuant to this Agreement (the
proceeds of which Investments Apex Sweden and Apex Luxembourg shall use in
accordance with Section 2.5);

 

(c)                                  Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;

 

(d)                                 Loans
or advances to employees for the purpose of travel, entertainment or relocation
in the ordinary course of business;

 

22

 

(e)           Investments in Borrower
and its Subsidiaries in accordance with the Apex Budget and as permitted by Section 5.12;

 

(f)            Cash Equivalents; and

 

(g)           Investments consisting
of auction-rate securities made in the ordinary course of business consistent
with past practice.

 

8.5           Asset Sales.  Borrower will not sell, transfer, lease or
otherwise dispose of any asset, including any Stock or other ownership
interest, except sales pursuant to or in connection with the Purchase Agreement
and disposition of Investments permitted by Section 8.4(e) or (f) in
the ordinary course of business.

 

8.6           Restricted Payments;
Certain Payments of Indebtedness.

 

(a)           Borrower will not
declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment.

 

(b)           Borrower will not make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancellation
or termination of any Indebtedness (Pre-Petition or otherwise), except:

 

(i)            payment
of regularly scheduled interest, principal payments and other charges, as and
when due in respect to any Post-Petition Indebtedness permitted hereunder;

 

(ii)           refinancings
of Indebtedness described in clause (i), above, to the extent permitted by
Section 8.1; and

 

(iii)          without
duplication, payments permitted pursuant to the MSC Projected Cash Forecast and
the Apex Budget.

 

8.7           Transactions with
Affiliates.  Borrower will not sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a)  transactions in the
ordinary course of business that are at prices and on terms and conditions not
less favorable to Borrower than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions expressly contemplated by this
Agreement, (c) compensation arrangements for directors, officers and other
employees of Borrower entered into in the ordinary course of business, and (d) transactions
permitted under the Purchase Agreement.

 

8.8           Restrictive
Agreements.  Borrower will not
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon the
ability of Borrower to create, incur or permit to exist any Lien upon any of
its property or assets in favor of Lender, as additional collateral for the
Obligations, or otherwise,

 

23

 

except as
provided for herein below, provided that (i) the foregoing shall
not apply to restrictions and conditions imposed by Applicable Law or by any
Loan Document, (ii) the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness and (iii) the foregoing shall not
apply to customary provisions in Leases restricting the assignment or subleasing
thereof.

 

8.9           Amendment of
Material Documents.  Borrower will
not terminate, amend, modify or waive any of its rights under (a) its
Governing Documents, (b) any Leases the termination of which would result
in a Material Adverse Effect), or (c) any other instruments, documents or
agreements to the extent that such termination, amendment, modification or
waiver of any such instrument, document or agreement would be adverse to the
interests of Lender.

 

8.10         Additional
Subsidiaries.  Borrower will not
create any additional Subsidiary  except
as permitted by the Plan Support Agreement.

 

8.11         Fiscal Year.  Borrower shall not change its fiscal year
without furnishing prior written notice to Lender.

 

8.12         Environmental Laws.  Borrower shall not (a) fail to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law, or (b) become
subject to any Environmental Liability, which, in either event, is reasonably
likely to have a Material Adverse Effect.

 

8.13         Repayment of
Indebtedness.  Except pursuant to a
confirmed reorganization plan and except as specifically permitted hereunder,
Borrower shall not, without the prior written consent of Lender or pursuant to
an order of the Bankruptcy Court after notice and hearing, make any payment or
transfer with respect to any Lien or Indebtedness incurred or arising prior to
the filing of the Chapter 11 Case that is subject to the automatic stay
provisions of the Bankruptcy Code whether by way of “adequate protection” under
the Bankruptcy Code or otherwise.

 

8.14         Chapter 11 Claims.  Borrower shall not incur, create, assume,
suffer to exist or permit any other superpriority administrative claim which is
pari  passu with or senior to the claims of Lender against
Borrower.

 

9.             TERM

 

9.1           Termination.  The Commitment contemplated hereby shall be
available to Borrower until the Commitment Termination Date, and the Loan and
all other Obligations shall be automatically due and payable in full on such
date except as otherwise provided for in Section 2.10.

 

9.2           Survival of
Obligations Upon Termination of Financing Arrangements.  Except as otherwise expressly provided for in
the Loan Documents, no termination or cancellation (regardless of cause or
procedure) of any Commitment under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of Borrower or the rights of
Lender relating to any unpaid portion of the Loan or any other Obligations, due
or not due, liquidated, contingent or unliquidated, or any

 

24

 

transaction or
event occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date.  Except as otherwise expressly provided herein
or in any other Loan Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon Borrower, and all rights of
Lender, all as contained in the Loan Documents, shall not terminate or expire,
but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Satisfaction Date; provided
that the provisions of Section 13, the payment obligations under Section 2.10,
and Borrower’s indemnities contained in the Loan Documents shall survive the
Satisfaction Date.

 

10.          EVENTS OF DEFAULT; RIGHTS AND REMEDIES

 

10.1         Events of Default.  Notwithstanding the provisions of Section 362
of the Bankruptcy Code and without notice, application or motion to, hearing
before, or order of the Bankruptcy Court or any notice to Borrower, and subject
to Section 10.2(b), the occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an “Event
of Default” hereunder:

 

(a)           Borrower (i) fails
to make any payment of principal of, or interest on, Fees owing in respect of,
the Loan or any of the other Obligations within three (3) Business Days of
when due and payable, or (ii) fails to pay or reimburse Lender for any
expense reimbursable hereunder or under any other Loan Document within five (5) days
following Lender’s demand for such reimbursement or payment of expenses.

 

(b)           Borrower fails or
neglects to perform, keep or observe (i) any of the provisions of Sections 2.5,
2.7, 2.9, 2.11, 2.12, 2.13, 3.1, 3.2,
3.3, 5.11, 5.12, 7.1, 7.2, 7.3(a), 7.6,
7.7, 7.8, 7.9, 7.10 or 8. and the same shall
remain unremedied for five (5) Business Days or more.

 

(c)           Borrower fails or
neglects to perform, keep or observe any other provision of this Agreement or
of any of the other Loan Documents (other than any provision embodied in or
covered by any other clause of this Section 10.1) in any material
respect and the same shall remain unremedied for ten (10) days or more.

 

(d)           Except for defaults
occasioned by the filing of the Chapter 11 Case and defaults resulting from
obligations with respect to which the Bankruptcy Code prohibits Borrower from
complying or permits Borrower not to comply, a default or breach occurs under
any other agreement, document or instrument in respect of Indebtedness in a
principal amount exceeding $50,000 entered into either (x) Pre-Petition
and which is affirmed after the Petition Date or is not subject to the
automatic stay provisions of Section 362 of the Bankruptcy Code, or (y) Post-Petition,
to which Borrower is a party that is not cured within any applicable grace
period therefor.

 

(e)           Any material provision
of any Loan Document for any reason ceases to be valid, binding and enforceable
in accordance with its terms (or Borrower shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action or
inaction based on any such assertion, that any provision of any of the Loan
Documents has ceased to be or otherwise is not valid, binding and enforceable
in accordance with its terms), or 

 

25

 

any Lien
created under any Loan Document ceases to be a valid and perfected
first-priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.

 

(f)            Any Change in Control
of Borrower occurs.

 

(g)           The occurrence of any
uninsured loss to any material portion of the Collateral.

 

(h)           The occurrence of any
of the following in the Chapter 11 Case:

 

(i)            the
bringing of a motion, or the execution of a written agreement, or the filing of
any plan of reorganization or disclosure statement attendant thereto by
Borrower in the Chapter 11 Case:  (w) to
obtain additional financing under Section 364(c) or (d) of the
Bankruptcy Code not otherwise permitted pursuant to this Agreement; (x) to
grant any Lien other than Permitted Encumbrances upon or affecting any
Collateral; (y) except as provided in the Interim or Final Order, as the
case may be, to use Cash Collateral of Lender under Section 363(c) of
the Bankruptcy Code without the prior written consent of Lender; or (z) any
other action or actions materially adverse to Lender or its rights and remedies
hereunder or their interest in the Collateral;

 

(ii)           the
filing by Borrower of any plan of reorganization or disclosure statement
attendant thereto, or any direct or indirect amendment to such plan or
disclosure statement, by Borrower or any other Person to which Lender does not
consent or the entry of any order terminating Borrower’s exclusive rights to
file a plan of reorganization;

 

(iii)          the
entry of an order in the Chapter 11 Case confirming a plan or plans of
reorganization that do not contain a provision for termination of the
Commitments and repayment in full in cash of all of the Obligations under this
Agreement, the Sumitomo Secured Lender Claim, and Lender’s Break-Up Fee and
Reimbursement Amount, on or before the effective date of any such plan except
as otherwise agreed to by Lender;

 

(iv)          the
entry of an order amending, supplementing, staying, vacating or otherwise
modifying the Loan Documents or the Interim Order or the Final Order without
the written consent of Lender or the filing of a motion for reconsideration
with respect to the Interim Order or the Final Order;

 

(v)           the
Interim Order is not entered on or before five (5) days after the Petition
Date;

 

(vi)          the
Final Order is not entered on or before thirty (30) days  after the Petition Date;

 

(vii)         the
payment of, or application for authority to pay, any Pre-Petition claim without
Lender’s prior written consent unless otherwise permitted under this Agreement;

 

26

 

(viii)        the
allowance of any claim or claims under Section 506(c) of the
Bankruptcy Code or otherwise against Lender or any of the Collateral;

 

(ix)           the
appointment of an interim or permanent trustee in the Chapter 11 Case or
the appointment of a receiver or an examiner in the Chapter 11 Case;

 

(x)            the
dismissal of the Chapter 11 Case, or the conversion of the Chapter 11 Case from
one under Chapter 11 to one under Chapter 7 of the Bankruptcy Code or Borrower
shall file a motion or other pleading seeking the dismissal of the Chapter 11
Case under Section 1112 of the Bankruptcy Code or otherwise;

 

(xi)           the
entry of an order by the Bankruptcy Court granting relief from or modifying the
automatic stay of Section 362 of the Bankruptcy Code (x) to allow any
creditor to execute upon or enforce a Lien on any Collateral, or (y) with
respect to any Lien of or the granting of any Lien on any Collateral to any
state or local environmental or regulatory agency or authority, which in either
case would have a Material Adverse Effect;

 

(xii)          the
commencement of a suit or action against Lender and, as to any suit or action
brought by any Person other than Borrower, officer or employee of Borrower, the
continuation thereof without dismissal for thirty (30) days after service
thereof on Lender, that asserts or seeks by or on behalf of  Borrower, the U.S. Environmental Protection
Agency, any state environmental protection or health and safety agency, any
official committee in the Chapter 11 Case or any other party in interest in the
Chapter 11 Case, a claim or any legal or equitable remedy that would (a) have
the effect of subordinating (x) any or all of the Obligations or Liens of
Lender under the Loan Documents to any other claim or (y) the Sumitomo
Secured Lender Claim to any other claim or challenging Lender’s security
interest in the collateral securing the Sumitomo Secured Lender Claim, or (b) have
a material adverse effect on the rights and remedies of Lender under any Loan
Document or the collectability of all or any portion of the Obligations;

 

(xiii)         the
entry of an order in the Chapter 11 Case avoiding or requiring repayment of any
portion of the payments made on account of the Obligations owing under this
Agreement or the other Loan Documents;

 

(xiv)        the
failure of Borrower to perform any of its obligations under the Interim Order,
the Final Order or the Fee Approval Order (as such term is defined in the
Purchase Agreement);

 

(xv)         the
Purchase Agreement is terminated by either party thereto for any reason; and

 

(xvi)        the
entry of an order in the Chapter 11 Case granting (i) any other
super-priority administrative claim or (ii) Lien equal or superior to that
granted to Lender, other than the Carve-Out Expenses, in each case as set forth
in the Interim Order and the Final Order.

 

27

 

10.2         Remedies.

 

(a)           If any Event of Default
has occurred and is continuing, Lender may, notwithstanding the provisions of Section 362
of the Bankruptcy Code, without any application, motion or notice to, hearing
before, or order from, the Bankruptcy Court, subject to the Interim Order and
the Final Order, suspend the Loan facility with respect to additional Advances,
whereupon any additional Advances shall be made or incurred in Lender’s sole
discretion so long as such Default or Event of Default is continuing.  If any Event of Default has occurred and is
continuing, Lender may, notwithstanding the provisions of Section 362 of
the Bankruptcy Code, without any application, motion or notice to, hearing
before, or order from, the Bankruptcy Court, except as otherwise expressly
provided herein, increase the rate of interest applicable to the Loan to the
Default Rate.

 

(b)           If any Event of Default
has occurred and is continuing, Lender may, notwithstanding the provisions of Section 362
of the Bankruptcy Code, without any application, motion or notice to, hearing
before, or order from, the Bankruptcy Court: 
(i) terminate the Loan facility with respect to further Advances; (ii) reduce
the Commitment from time to time; (iii) declare all or any portion of the
Obligations, including all or any portion of the Loan to be forthwith due and
payable, all without presentment, demand, protest or further notice of any
kind, all of which are expressly waived by Borrower; or (iv) exercise any
rights and remedies provided to Lender under the Loan Documents or at law or
equity, including all remedies provided under the Code; and pursuant to the
Interim Order and the Final Order, the automatic stay of Section 362 of
the Bankruptcy Code shall be modified and vacated to permit Lender to exercise
its remedies under this Agreement and the Loan Documents, without further
notice, application or motion to, hearing before, or order from, the Bankruptcy
Court, provided, however, notwithstanding anything to the
contrary contained herein, that Lender shall be permitted to exercise any
remedy in the nature of a liquidation of, or foreclosure on, any interest of
Borrower in the Collateral only upon five (5) Business Days’ prior written
notice to Borrower, counsel approved by the Bankruptcy Court for any Committee
appointed in the Chapter 11 Case and the United States Trustee and as set forth
in the Interim Order or the Final Order (when applicable).  Upon the occurrence of an Event of Default
and the exercise by Lender of its rights and remedies under this Agreement and
the other Loan Documents, Borrower shall use commercially reasonable efforts to
assist Lender in effecting a sale or other disposition of the Collateral upon
such terms as are reasonably acceptable to Lender.

 

10.3         Waivers by Borrower.  Except as otherwise provided for in this
Agreement or by Applicable Law, Borrower waives:  (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, Instruments, chattel paper and guaranties at any
time held by Lender on which Borrower may in any way be liable, and hereby
ratifies and confirms whatever Lender may do in this regard, (b) all
rights to notice and a hearing prior to Lender’s taking possession or control
of, or to Lender’s replevy, attachment or levy upon, the Collateral or any bond
or security that might be required by any court prior to allowing Lender to
exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.

 

28

 

11.          RESERVED

 

12.          SUCCESSORS AND ASSIGNS

 

12.1         Successors and Assigns.  This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of Borrower, Lender and
their respective successors and assigns (including, in the case of Borrower, a
Debtor-in-Possession on behalf of Borrower), except as otherwise provided
herein or therein.  Neither Borrower nor
Lender may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of the other party.  Any such purported assignment, transfer,
hypothecation or other conveyance by Borrower or Lender without the prior
express written consent of the other party shall be void.  The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of Borrower
and Lender with respect to the transactions contemplated hereby and no Person
shall be a third-party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.

 

13.          MISCELLANEOUS

 

13.1         Complete Agreement;
Modification of Agreement.  The Loan
Documents and the Purchase Agreement constitute the complete agreement between
the parties with respect to the subject matter thereof and may not be modified,
altered or amended except as set forth in Section 13.2.  Any letter of intent, commitment letter, fee
letter or confidentiality agreement, if any, between Borrower and Lender or any
of their respective Affiliates, predating this Agreement and relating to a
financing of substantially similar form, purpose or effect (other than the
Working Capital Loan Agreement, which shall remain in full force and effect
unaffected by this Agreement or the other Loan Documents), shall be superseded
by this Agreement.

 

13.2         Amendments and Waivers.

 

(a)           Except for actions
expressly permitted to be taken by Lender, no amendment, modification,
termination or waiver of any provision of this Agreement or any other Loan
Document, or any consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender and
Borrower.

 

(b)           Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given.  No amendment, modification, termination or
waiver shall be required for Lender to take additional Collateral pursuant to
any Loan Document.  No notice to or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in similar or other circumstances.

 

(c)           Upon payment in full in
cash and performance of all of the Obligations (other than indemnification
Obligations), termination of the Commitments and a release of all claims
against Lender, and so long as no suits, actions, proceedings or claims are
pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Lender shall deliver to
Borrower termination statements, mortgage Releases and other documents
necessary or appropriate to evidence the termination of the Liens securing
payment of the Obligations.

 

29

 

13.3         No Waiver.  Lender’s failure, at any time or times, to
require strict performance by Borrower of any provision of this Agreement or
any other Loan Document shall not waive, affect or diminish any right of Lender
thereafter to demand strict compliance and performance herewith or
therewith.  Any suspension or waiver of
an Event of Default shall not suspend, waive or affect any other Event of
Default whether the same is prior or subsequent thereto and whether the same or
of a different type.  Subject to the
provisions of Section 13.2, none of the undertakings, agreements,
warranties, covenants and representations of Borrower contained in this
Agreement or any of the other Loan Documents and no Default or Event of Default
by Borrower shall be deemed to have been suspended or waived by Lender, unless
such waiver or suspension is by an instrument in writing signed by or on behalf
of Lender, and directed to Borrower specifying such suspension or waiver.

 

13.4         Remedies.  Lender’s rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Lender may have under any other agreement, including the other Loan
Documents, by operation of Applicable Law or otherwise.  Recourse to the Collateral shall not be
required.

 

13.5         Severability.  Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under Applicable Law, but if any provision of this
Agreement or any other Loan Document shall 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 such provision
or the remaining provisions of this Agreement or such other Loan Document.

 

13.6         Conflict of Terms.  Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, and subject to the immediately
following sentence, if any provision contained in this Agreement conflicts with
any provision in any of the other Loan Documents, the provision contained in
this Agreement shall govern and control. 
NOTWITHSTANDING THE FOREGOING, IF ANY PROVISION IN THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT CONFLICTS WITH ANY PROVISION IN THE INTERIM ORDER OR FINAL
ORDER, THE PROVISION IN THE INTERIM ORDER OR FINAL ORDER SHALL GOVERN AND
CONTROL.

 

13.7         Confidentiality.  Lender agrees to use commercially reasonable
efforts (equivalent to the efforts Lender applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all confidential information provided to them by Borrower and designated as
confidential for a period of two (2) years following receipt thereof
except that Lender may disclose such information (a) to Persons employed
or engaged by Lender; (b) to any bona fide assignee or participant or
potential assignee or participant that has agreed to comply with the covenant
contained in this Section 13.7 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by them as described in clause (a) above);
(c) as required or requested by any Governmental Authority or reasonably
believed by Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Lender’s
counsel, is required by Applicable Law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Legal Proceeding to which Lender is a party; or (f) that ceases to be
confidential through no fault of Lender.

 

30

 

13.8                           GOVERNING
LAW.  EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE
OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN THAT STATE) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA (INCLUDING THE BANKRUPTCY CODE). 
BORROWER HEREBY CONSENTS AND AGREES THAT THE BANKRUPTCY COURT SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND LENDER PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS; PROVIDED THAT LENDER AND BORROWER
ACKNOWLEDGE THAT ANY APPEALS FROM THE BANKRUPTCY COURT MAY HAVE TO BE
HEARD BY A COURT OTHER THAN THE BANKRUPTCY COURT; PROVIDED, FURTHER,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER.  BORROWER EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND BORROWER HEREBY WAIVES ANY OBJECTION THAT BORROWER MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN ANNEX D OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF BORROWER’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.

 

13.9                           Notices.

 

(a)                                  Addresses.  All notices, demands, requests, directions
and other communications required or expressly authorized to be made by this
Agreement shall, whether or not specified to be in writing but unless otherwise
expressly specified to be given by any other means, be given in writing and (i) addressed
to the party to be notified and sent to the address or facsimile number
indicated in Annex D, or (ii) addressed to such other address as
shall be notified in writing to the other parties hereto.  Transmission by electronic mail shall not be
sufficient or effective to transmit any such notice under this clause (a).

 

(b)                                 Effectiveness.  All communications described in clause (a) above
and all other notices, demands, requests and other communications made in
connection with this

 

31

 

Agreement
shall be effective and be deemed to have been received (i) if delivered by
hand, upon Personal delivery, (ii) if delivered by overnight courier
service, one (i) Business Day after delivery to such courier service, (iii) if
delivered by mail, when deposited in the mails, and (iv) if delivered by
facsimile, upon sender’s receipt of confirmation of proper transmission.  Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrower or Lender) designated in Annex D to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other
communication.  The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice.|

 

13.10                     Section Titles.  The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement between the
parties hereto.

 

13.11                     Counterparts.  This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.

 

13.12                     WAIVER
OF JURY TRIAL.  BECAUSE DISPUTES
ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS.  THEREFORE, TO ACHIEVE
THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, AMONG LENDER AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION
WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED THERETO.

 

13.13                     Press
Releases and Related Matters. 
Borrower and Lender 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 respect to this Agreement or the
transactions contemplated hereunder 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.

 

13.14                     Reinstatement.  This Agreement shall remain in full force and
effect and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to Applicable Law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made.  In the event that any payment, or any part
thereof,

 

32

 

is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed,
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.

 

13.15                     Advice
of Counsel.  Each of the parties
represents to each other party hereto that it has discussed this Agreement and,
specifically, the provisions of Sections 13.8 and 13.12,
with its counsel.

 

13.16                     No
Strict Construction.  The parties
hereto 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 hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

 

13.17                     Parties
Including Trustees; Bankruptcy Court Proceedings.  This Agreement, the other Loan Documents, and
all Liens and other rights and privileges created hereby or pursuant hereto or
to any other Loan Document shall be binding upon Borrower, the estate of
Borrower, and any trustee, other estate representative or any successor in
interest of Borrower in the Chapter 11 Case or any subsequent case commenced
under Chapter 7 of the Bankruptcy Code, and shall not be subject to Section 365
of the Bankruptcy Code.  This Agreement
and the other Loan Documents shall be binding upon, and inure to the benefit
of, the successors of Lender and their respective assigns, transferees and
endorsees.  The Liens created by this
Agreement and the other Loan Documents shall be and remain valid and perfected
in the event of the substantive consolidation or conversion of the Chapter 11
Case or any other bankruptcy case of Borrower to a case under Chapter 7 of the
Bankruptcy Code or in the event of dismissal of the Chapter 11 Case or the
release of any Collateral from the jurisdiction of the Bankruptcy Court for any
reason, without the necessity that Lender file financing statements or
otherwise perfect its Liens under Applicable Law.

 

13.18                     USA
PATRIOT Act Notice.  To the extent
that Lender is subject to the Patriot Act (as hereinafter defined), Lender
hereby notifies Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow Lender, as applicable, to identify Borrower in
accordance with the Patriot Act.

 

13.19                     Lender
Standstill.  Notwithstanding anything
to the contrary set forth herein, from the date hereof until the Commitment
Termination Date, Lender shall and hereby agrees, and shall cause its
subsidiaries and Affiliates, to forbear from exercising any rights or remedies,
as applicable under the Working Capital Loan Agreement, the Common Security
Agreement, the Senior Loan Agreements (as defined in the Common Security
Agreement) or any other Financing Document (as defined in the Common Security
Agreement) or applicable non-bankruptcy law in respect of any Event of Default
(as defined in the Common Security Agreement) under the Common Security
Agreement, any and all other defaults under any of the Financing Documents and
any and all defaults under the Working Capital Loan Agreement, provided,
however, that nothing contained herein shall prevent or otherwise limit
Sumitomo or its affiliates from (i) accelerating and sending a notice
declaring that the Senior Loans have accelerated and are due and payable,
making a written demand for payment of the Guaranteed

 

33

 

Obligations (as such term is defined in the Completion Agreement)
pursuant to the Completion Agreement or filing and prosecuting the Sumitomo
Senior Lender Claim in the Bankruptcy Court in a manner consistent with the
Plan Support Agreement; (ii) now and in the future taking such steps or
actions as it or they deem necessary in order to exercise rights and remedies
available to Sumitomo under the Senior Loans, the Common Security Agreement,
the Sponsor and Pledge Agreement, the Completion Agreement, any other Financing
Document, and the Working Capital Loan Agreement following the termination of
this Agreement; or (iii) taking any and all steps or actions necessary to
protect and preserve its or their security interest in any and all collateral
pledged to secure the Senior Loans, the Working Capital Loan Agreement or the
Obligations, including, without limitation the perfection or continuation of
perfection of its or their liens therein.

 

34

 

IN WITNESS
WHEREOF, the parties hereto have caused this Secured, Super-Priority
Debtor-in-Possession Credit and Security Agreement to be duly executed and
delivered as of the date first above written.

 

	
   

  	
  APEX SILVER MINES LIMITED,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert P. Vogels

  
	
   

  	
   

  	
  Name: Robert P. Vogels

  
	
   

  	
   

  	
  Title: Vice President and Controller

  

 

 

	
   

  	
  SUMITOMO CORPORATION,

  
	
   

  	
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tatsumi Kohara

  
	
   

  	
   

  	
  Name:

  	
  Tatsumi Kohara

  
	
   

  	
   

  	
  Title: 

  	
  General Manager, Project and

  
	
   

  	
   

  	
   

  	
  Structured Finance Dept.

  
					

 

 

ANNEX A (RECITALS)

TO

CREDIT AGREEMENT

DEFINITIONS

 

Capitalized
terms used in the Loan Documents shall have (unless otherwise provided
elsewhere in the Loan Documents) the following respective meanings, and all
references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to
this Agreement:

 

“Account
Debtor” means any Person obligated to make payment on any monetary
obligation, now or hereafter owing to the Borrower, evidenced by accounts,
Instruments, Chattel Paper, payment intangibles or general intangibles.

 

“Advance”
has the meaning ascribed thereto in Section 2.1(a)(i).

 

“Affiliate”
means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian
or other fiduciary, 10% or more of the Stock having ordinary voting power in
the election of directors of such Person, and (b) each Person that
controls, is controlled by or is under common control with such Person.  For the purposes of this definition, “control”
of a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise; provided, however,
that with respect to Borrower, the term “Affiliate” shall specifically
exclude Lender.

 

“Agreement”
has the meaning ascribed thereto in the preamble hereto.

 

“Alternative
Transaction” has the meaning ascribed thereto in the Purchase Agreement.

 

“AMM”
has the meaning ascribed thereto in the Recitals.

 

“Apex”
has the meaning ascribed thereto in the preamble to this Agreement.

 

“Apex
Budget” means the budget prepared by Borrower (or restructuring advisors
acceptable to Lender) and attached hereto as Exhibit F, as modified
or supplemented from time to time by additional budgets (covering any time
period covered by a prior budget or covering additional time periods) which
modifications or supplements shall not have been rejected in writing by Lender
in its sole discretion and in each case as to the initial Budget or subsequent
modifications or supplements, with such supporting documentation as reasonably
requested by Lender in its sole discretion.

 

“Apex
Luxembourg” has the meaning ascribed thereto in the Recitals.

 

“Apex
Sweden” has the meaning ascribed thereto in the Recitals.

 

“Applicable
Law” means as to any Person:  (a) all
statutes, rules, regulations, orders, or other requirements having the force of
law and applicable to such Person, and (b) all court orders and
injunctions, and/or similar rulings and applicable to such Person, in each
instance ((a) and (b))

 

A-1

 

of or by any
Governmental Authority, or court, or tribunal which has jurisdiction over such
Person, or any property of such Person including the Bankruptcy Code.

 

“Bankruptcy
Code” has the meaning ascribed thereto in the Recitals.

 

“Bankruptcy
Court” has the meaning ascribed thereto in the Recitals.

 

“Bankruptcy
Rules” shall mean the Federal Rules of Bankruptcy Procedure, as the
same may from time to time be in effect and applicable to the Chapter 11 Case.

 

“Borrower”
has the meaning ascribed thereto in the preamble to this Agreement.

 

“Break-Up
Fee” has the meaning ascribed thereto in the Purchase Agreement.

 

“Budget
Report” has the meaning ascribed thereto in Section 5.12(a).

 

“Business
Day” means any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in New York, New York or Tokyo, Japan.

 

“Carve-Out
Amount” has the meaning ascribed thereto in Section 2.9(c).

 

“Carve-Out
Expenses” has the meaning ascribed thereto in Section 2.9(c).

 

“Case
Professionals” has the meaning ascribed thereto in Section 2.9(c).

 

“Cash
Collateral” means the cash collateral (within the meaning of Section 363
of the Bankruptcy Code) subject to the Liens securing the Obligations or any
portion thereof.

 

“Cash
Collateral Account” has the meaning ascribed thereto in Section 3.3.

 

“Cash
Equivalents” means, as at any date of determination, (a) any evidence
of Indebtedness with a maturity date of ninety (90) days or less issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof; provided, that, the full faith
and credit of the United States of America is pledged in support thereof; (b) certificates
of deposit or bankers’ acceptances with a maturity of ninety (90) days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$1,000,000,000; (c) commercial paper (including variable rate demand
notes) with a maturity of ninety (90) days or less issued by a corporation
(except an Affiliate of Borrower) organized under the laws of any State of the
United States of America or the District of Columbia and rated at least A-1 by
S & P or at least P-1 by Moody’s; (d) repurchase obligations with
a term of not more than thirty (30) days for underlying securities of the types
described in clause (a) above entered into with any financial institution
having combined capital and surplus and undivided profits of not less than
$1,000,000,000; (e) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any governmental agency
thereof and backed by the full faith and credit of the United States of
America, in each case maturing within ninety (90) days or less from the date of
acquisition provided, that, the terms of such agreements comply
with the guidelines set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by

 

A-2

 

the
Comptroller of the Currency on October 31, 1985; and (f) investments
in money market funds and mutual funds which invest substantially all of their
assets in securities of the type described in clauses (a) through (e) above.

 

“Chapter 11
Case” has the meaning ascribed thereto in the recitals to this Agreement.

 

“Charges”
means all federal, state, county, city, municipal, local, foreign or other
governmental taxes, levies, assessments, charges, Liens, claims or encumbrances
upon or relating to (a) the Collateral, (b) the Obligations, (c) the
employees, payroll, income or gross receipts of Borrower, (d) Borrower’s
ownership or use of any properties or other assets, or (e) any other
aspect of Borrower’s business.

 

“Chattel
Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by
Borrower.

 

“Change in
Control” means, at any time, (a) occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Borrower by Persons
who were neither (i) nominated by the board of directors of the Borrower
nor (ii) appointed by directors so nominated; or (b) any person
(within the meaning of the Securities and Exchange Act of 1934, as amended) is
or becomes the beneficial owner (with the meaning of Rule 13d-3 and 13d-5
of the Securities and Exchange Act of 1934, as amended), directly or
indirectly, of fifty percent (50%) or more of the aggregate voting power
represented by the outstanding capital stock of the Borrower on a fully diluted
basis, whether as a result of the issuance of securities of the Borrower, any
merger, consolidation, or otherwise.

 

“Closing
Date” means the date of this Agreement.

 

“Closing
Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement, the other Loan Documents and the transactions contemplated
thereunder, substantially in the form attached hereto as Annex B.

 

“Code”
means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided, further, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Lender’s Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term “Code” shall
mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions.

 

“Collateral”
has the meaning ascribed thereto in Section 3.1.

 

“Collateral
Documents” means all agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.

 

A-3

 

“Commitment”
means the aggregate commitment of Lender to make Advances, which aggregate
commitment shall be thirty-five million Dollars ($35,000,000) on the Closing
Date, as such amount may be adjusted, if at all, from time to time in
accordance with this Agreement.

 

“Commitment
Termination Date” means the earliest of (a) March 31, 2009, (b) the
date of termination of Lender’s obligations to make Advances or permit the Loan
to remain outstanding pursuant to Section 10.2, (c) thirty day  (30) days after the Petition Date if the
Final Order has not been entered by the Bankruptcy Court by such date, (d) the
date of entry of an order of the Bankruptcy Court confirming a plan of
reorganization consented to by Lender consistent with the Plan Support
Agreement under which Lender or its affiliate consummates the purchase of the
Purchased Properties in accordance with the Purchase Agreement, and (e) Borrower’s
or its affiliates’ entry into definitive documentation to consummate an
Alternative Transaction.

 

“Committees”
means collectively, the official committee of unsecured creditors and any other
committee formed, appointed, or approved in the Chapter 11 Case and each of
such committees shall be referred to herein as a Committee.

 

“Common
Security Agreement” means that certain Common Security Agreement, dated as
of December 1, 2005 (as amended from time to time), among MSC, Borrower,
Apex Sweden, Apex Luxembourg, Apex Silver Finance, Ltd., AMM, Lender, SC
Minerals, Comercial Merales Blancos AB, BNP Paribas, Barclays Capital,
Corporacion Andina De Fomento, JPMorgan Chase Bank, N.A. and the other parties
thereto.

 

“Completion
Agreement” means that certain Completion Agreement, dated as of December 1,
2005, as amended, among ASML, Barclays Capital, BNP Paribas and JPMorgan Chase
Bank, N.A..

 

“Compliance
Certificate” has the meaning ascribed thereto in Exhibit E.

 

“Control
Agreement” means with respect to “Securities Accounts” or “Deposit Accounts”
(as each is defined in the Code), an agreement, in form and substance
satisfactory to the Lender, which effectively gives “control” (as defined in
the UCC) to the Lender in such Securities Account and all Investment contained
therein or such Deposit Account and all funds contained therein.

 

“Copyright
License” means any and all rights now owned or hereafter acquired by any
Borrower under any written agreement granting any right to use any Copyright or
Copyright registration.

 

“Copyrights”
means all of the following now owned or hereafter adopted or acquired by
Borrower:  (a) all copyrights and
General Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof; and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.

 

 “Default” means any event that, with
the passage of time or notice or both, would, unless cured or waived, become an
Event of Default.

 

A-4

 

“Default
Rate” has the meaning ascribed thereto in Section 2.6(b).

 

“Disbursement
Request” has the meaning ascribed thereto in Section 2.1(a)(iii).

 

“Disclosure
Schedules” means the Schedules prepared by Borrower and denominated as Schedules 3.3,
5.5, 8.1, 8.2, and 8.4 in this Agreement.

 

“Dollars”
or “$” means lawful currency of the United States of America.

 

“Environmental
Laws” means all applicable federal, state, local and foreign laws,
statutes, ordinances, codes, rules, standards and regulations, now or hereafter
in effect, and any applicable judicial or administrative interpretation thereof
including any applicable judicial or administrative order, consent decree,
order or judgment, imposing liability or standards of conduct for or relating
to the regulation and protection of human health, safety, the environment and
natural resources (including ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic species and vegetation).

 

“Environmental
Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute or common law, including any
arising under or related to any Environmental Laws, Environmental Permits, or
in connection with any Release or threatened Release or presence of a hazardous
material whether on, at, in, under, from or about or in the vicinity of any
real or Personal property.

 

“Environmental
Permits” means all permits, licenses, authorizations, certificates,
approvals or registrations required by any Governmental Authority under any
Environmental Laws.

 

“Equipment”
means all “equipment,” as such term is defined in the Code, now owned or
hereafter acquired by Borrower, wherever located and, in any event, including
all Borrower’s machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling Stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of Real Estate, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.

 

“Event of
Default” has the meaning ascribed thereto in Section 10.1.

 

“Federal
Reserve Board” means the Board of Governors of the Federal Reserve System.

 

A-5

 

“Fees”
means any and all fees payable to Lender pursuant to this Agreement or any of
the other Loan Documents.

 

“Final
Order” means, collectively, the order of the Bankruptcy Court entered in
the Chapter 11 Case after a final hearing under Bankruptcy Rule 4001(c)(2) or
such other procedures as approved by the Bankruptcy Court, which order shall be
satisfactory in form and substance to Lender, and from which no appeal or
motion to reconsider has been timely filed, or if timely filed, such appeal or
motion to reconsider has been dismissed or denied unless Lender waives such
requirement, together with all extensions, modifications and amendments
thereto, in form and substance satisfactory to Lender, which, among other
matters but not by way of limitation, authorizes Borrower to obtain credit,
incur Indebtedness, and grant Liens under this Agreement and the other Loan
Documents, as the case may be, and provides for the super priority of Lender’s
claims, substantially in the form of Exhibit D.

 

“Financial
Officer” means, with respect to Borrower, the chief financial officer, vice
president of finance, director of finance, treasurer, controller or assistant
controller of Borrower.

 

“Fixtures”
means all “fixtures” as such term is defined in the Code, now owned or
hereafter acquired by Borrower.

 

“GAAP”
means generally accepted accounting principles in the United States of America
consistently applied.

 

“Governing
Documents” means, with respect to any Person, the certificate or articles
of incorporation, by-laws, or other organizational or governing documents of
such Person.

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

 

“Indebtedness”
means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property, payment for which is deferred six (6) months or more,
but excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than three (3) months
unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers’ acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes,
bonds, debentures or similar instruments, (d) and (d) with respect to
Borrower, the Obligations.

 

“Indemnified
Liabilities” has the meaning ascribed thereto in Section 2.7.

 

“Indemnified
Person” has the meaning ascribed thereto in Section 2.7.

 

“Initial
Disbursement Date” has the meaning ascribed thereto in Section 2.1(a)(ii).

 

“Instruments”
means all “instruments,” as such term is defined in the Code, now owned or
hereafter acquired by Borrower, wherever located, and, in any event, including
all certificated securities, all certificates of deposit, and all promissory
notes and other evidences of indebtedness,

 

A-6

 

other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.

 

“Intellectual
Property” means any and all Licenses, Patents, Copyrights, Trademarks, and
the goodwill associated with such Trademarks.

 

“Interest
Payment Account” means such account as specified in writing by Lender as
the “Interest Payment Account.”

 

“Interest
Payment Date” means each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y) the
Commitment Termination Date shall be deemed to be an “Interest Payment Date”
with respect to any interest that has then accrued under the Agreement.

 

“Interest
Rate” means the rate of interest set forth in Section 2.6(a),
together with any applicable increases thereon.

 

“Interim
Order” means, collectively, the order of the Bankruptcy Court entered in
the Chapter 11 Case after an interim hearing (assuming satisfaction of the
standards prescribed in Section 364 of the Bankruptcy Code and Bankruptcy Rule 4001
and other Applicable Law), together with all extension, modifications, and
amendments thereto, in form and substance satisfactory to Lender, which, among
other matters but not by way of limitation, authorizes, on an interim basis,
Borrower to execute and perform under the terms of this Agreement and the other
Loan Documents, substantially in the form of Exhibit C.

 

“Investment”
means (a) any Stock, evidence of Indebtedness or other security of another
Person, (b) any loan, advance, contribution to capital, extension of
credit (except for current trade and customer accounts receivable in the
ordinary course of business and payable in accordance with customary trade
terms) to another Person, (c) any purchase of (i) Stock or other
securities of another Person, or (ii) any business or undertaking of any
Person (whether by purchase of assets or securities), (d) any commitment
or option to make any such purchase, or (e) any other investment, in all
cases whether now existing or hereafter made.

 

“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.

 

“Lease”
means any agreement, whether written or oral, no matter how styled or
structured, pursuant to which Borrower is entitled to the use or occupancy of
any space in a structure, land, improvement or premise for any period of time.

 

“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.

 

“Lender”
has the meaning set forth in the preamble to this Agreement.

 

“License”
means any Copyright License, Patent License, Trademark License or other license
of rights or interests now held or hereafter acquired by Borrower.

 

A-7

 

“Lien”
means any mortgage or deed of trust, pledge, hypothecation, lien, charge,
security interest, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing).

 

“Loan”
means, at any time, the aggregate amount of Advances outstanding to Borrower.

 

“Loan
Documents” means this Agreement, the Collateral Documents, and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, Lender and including all
other pledges, powers of attorney, consents, assignments, contracts, notices,
letter of credit agreements and all other written matter whether heretofore,
now or hereafter executed by or on behalf of Borrower or any employee of
Borrower, and delivered to Lender in connection with this Agreement or the
transactions contemplated thereby, including the Interim Order and the Final
Order; provided, however, that the Purchase Agreement shall not
be included in such definition.  Any
reference in this Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Loan Document as the same may be in effect at any and
all times such reference becomes operative.

 

“Margin
Stock” has the meaning ascribed to such term in Regulation U.

 

“Material
Adverse Effect” means a material adverse effect, other than the filing of
the Chapter 11 Case, on (a) the business, assets, operations, or financial
or other condition of Borrower considered as a whole, (b) Borrower’s
ability to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement, (c) the Collateral or Lender’s Liens on
the Collateral or the priority of such Liens, or (d) Lender’s rights and
remedies under the Agreement and the other Loan Documents.  In determining whether any individual event
would result in a Material Adverse Effect, notwithstanding that such event in
and of itself does not have such effect, a Material Adverse Effect shall be
deemed to have occurred if the cumulative effect of such event and all other
then-existing events, other than the filing of the Chapter 11 Case, would
result in a Material Adverse Effect.  The
definition shall exclude any effect resulting from general economic conditions.

 

“MSC”
has the meaning ascribed thereto in the Recitals.

 

“MSC
Projected Cash Forecast” means the cash flow forecast prepared by Borrower
in respect of MSC and attached hereto as Exhibit A, as modified or
supplemented from time to time by additional cash flow forecasts (covering any
time period covered by a prior MSC Projected Cash Forecast or covering
additional time periods) which modifications or supplements shall not have been
rejected in writing by Lender in its sole discretion and in each case as to the
initial MSC Projected Cash Forecast or subsequent modifications or supplements,
with such supporting documentation as reasonably requested by Lender in its
sole discretion.

 

“MSC
Shareholder Funding Request” has the meaning ascribed thereto in Section 2.1(a).

 

A-8

 

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

 

“Obligations”
means all loans, advances, debts, liabilities and obligations for the
performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such
amounts are liquidated or determinable) owing by Borrower to Lender (or any of
its respective Affiliates), and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement, letter of credit agreement or other instrument, arising
under this Agreement or any of the other Loan Documents.  This term includes all principal, interest
(including all interest that accrues after the commencement of any case or
proceeding by or against Borrower in bankruptcy, whether or not allowed in such
case or proceeding), Fees, expenses, attorneys’ fees, and any other sum
chargeable to Borrower under this Agreement or any of the other Loan Documents.

 

“Patent
License” means rights under any written agreement now owned or hereafter
acquired by Borrower granting any right with respect to any invention on which
a Patent is in existence.

 

“Patents”
means all of the following in which Borrower now holds or hereafter acquires
any interest:  (a) all letters
patent of the United States or of any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or of any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State, or any other country, and (b) all
reissues, continuations, continuations-in-part or extensions thereof.

 

“Patriot
Act” has the meaning ascribed thereto in Section 13.18.

 

“Permitted
Encumbrances” means the following encumbrances:  (a) Liens for taxes or assessments or
other governmental Charges not yet due and payable or which are being contested
in accordance with Section 5.7 or to the extent that Borrower does
not take any action (including by way of motion or application to the
Bankruptcy Court) to pay, and are permitted under the Bankruptcy Code to not
pay, such charges; (b) pledges or deposits of money securing statutory
obligations under workmen’s compensation, wage, vacation pay, old-age pension,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the repayment
of borrowed money) or Leases to which Borrower is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers’,
mechanics’ or similar Liens arising in the ordinary course of business, so long
as such Liens attach only to Equipment, Fixtures and/or Real Estate; (e) deposits
securing, or in lieu of, surety, appeal, performance or customs bonds in
proceedings to which Borrower is a party; (f) any attachment or judgment
Lien not constituting an Event of Default under Section 10.1(h)(i);
(g) zoning restrictions, easements, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (h)  purported Liens evidenced by the
filing of precautionary UCC and PPSA financing statements relating solely to
operating leases or the consignment of personal property entered into in the
ordinary course of business; (i) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in connection

 

A-9

 

with the
importation of goods and securing obligations that are not overdue by more than
30 days; and (j) any Lien primed pursuant to the Interim Order or Final
Order or otherwise junior to the Liens granted hereunder.

 

“Person”
means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).

 

“Petition
Date” has the meaning ascribed thereto in the recitals to this Agreement.

 

“Plan
Support Agreement” has the meaning ascribed thereto in the recitals to this
Agreement.

 

“Post-Petition”
means the time period beginning immediately upon the filing of the Chapter 11
Case.

 

“Pre-Petition”
means the time period ending immediately prior to the filing of the Chapter 11
Case.

 

“Project
Finance Lenders” means BNP Paribas, Barclays Bank PLC, Australia and New
Zealand Banking Group Limited, KfW, Natixis, Caterpillar Financial Services
(UK) Ltd., N M Rothschild & Sons Limited, Export Development Canada,
Fortis Capital Corp., Nordkap Bank AG, Firstrand (Dublin) PLC, and Corporación
Andina de Fomento.

 

“Projected
Information” has the meaning ascribed thereto in Section 5.11(a).

 

“Property”
means to any Person, all types of real, personal, tangible, intangible or mixed
property owned by such Person whether or not included in the most recent
balance sheet of such Person and its Subsidiaries under GAAP.

 

“Purchase
Agreement” has the meaning ascribed thereto in the Recitals.

 

“Purchased
Properties” has the meaning ascribed thereto in the Recitals.

 

“Real
Estate” means all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned by Borrower,
including all easements, rights-of-way, and similar rights relating thereto and
all Leases, tenancies, and occupancies thereof.

 

“Regulation
U” means Regulation U of the Federal Reserve Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation
X” means Regulation X of the Federal Reserve Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Reimbursement
Amount” has the meaning ascribed thereto in the Purchase Agreement.

 

A-10

 

“Release”
means any release, threatened release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Material in the indoor
or outdoor environment, including the movement of Hazardous Material through or
in the air, soil, surface water, ground water or property.

 

“Released
Parties” has the meaning ascribed thereto in Section 2.12.

 

“Restricted
Payment” means, with respect to Borrower, (a) the payment of any
dividend or the making of any other payment or distribution of cash or other
property or assets in respect of Stock; (b) any payment on account of the
purchase, redemption, defeasance, sinking fund or other retirement of such
Borrower’s Stock or any other payment or distribution made in respect thereof,
either directly or indirectly; (c) any payment or prepayment of principal
of premium, if any, or interest, fees or other charges on or with respect to,
and any redemption, purchase, retirement, defeasance, sinking fund or similar
payment and any claim for rescission with respect to, any Subordinated Debt; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Stock of such Borrower now or hereafter outstanding; (e) any payment of a
claim for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any shares of such Borrower’s Stock or of
a claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment,
loan, contribution, or other transfer of funds or other property to any
Stockholder of such Borrower other than payment of compensation in the ordinary
course of business to Stockholders who are employees or directors of such
Person; and (g) any payment of management fees (or other fees of a similar
nature) by such Borrower to any Stockholder of Borrower or its Subsidiaries.

 

“Sale
Transaction” means the transaction contemplated pursuant to the Purchase
Agreement or any Alternative Transaction.

 

“Satisfaction
Date” means the date on which (i) Lender has waived payment of all
then outstanding Advances, accrued interest, Fees and charges pursuant to Section 2.10
or (ii) (a) the Loan has been indefeasibly repaid in full in cash, (b) all
other Obligations under this Agreement and the other Loan Documents have been completely
discharged (other than indemnification Obligations not yet due and payable),
and (c) Borrower shall have no further right to borrow any monies under
this Agreement.

 

“Senior
Loans” means, collectively, the loans made under that certain (i) Loan
Agreement, dated as of December 1, 2005, with BNP Paribas, Barclays Bank
PLC and certain Senior Lenders and (ii) Senior Loan Agreement, dated as of
December 1, 2005, with Corporación Andina de Fomento.

 

“Sponsor
and Pledge Agreement” means that certain Sponsor and Pledge Agreement,
dated as of December 1, 2005, as amended, by and among ASML and JPMorgan
Chase Bank, N.A.

 

“Stock”
means all shares, options, warrants, general or limited partnership interests,
membership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company or equivalent entity
whether voting or nonvoting, including

 

A-11

 

common Stock, preferred Stock
or any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).

 

“Stockholder”
means, with respect to any Person, each holder of Stock of such Person.

 

“Subordinated
Debt” means any Indebtedness of Borrower subordinated to the Obligations in
a manner and form satisfactory to Lender in its sole discretion, as to right
and time of payment and as to any other rights and remedies thereunder.

 

“Subsequent
Disbursement Date” has the meaning ascribed thereto in Section 2.1(a).

 

“Subsidiary”
means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person
is a general partner or may exercise the powers of a general partner.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of Borrower.

 

“Sumitomo
Secured Lender Claim” means Sumitomo’s claim under the Completion Agreement
that has been secured by, amongst other collateral, Borrower’s equity interest
in Apex Luxembourg, inclusive of the claims assigned to it by the Project
Finance Lenders.

 

“Support
Motion” has the meaning ascribed thereto in the Purchase Agreement.

 

“Tax Deduction”
has the meaning ascribed thereto in Section 2.3(b).

 

“Taxes”
means taxes, levies, imposts, deductions, Charges or withholdings, and all
liabilities with respect thereto, excluding taxes or Charges imposed on or
measured by the net income of Lender by the jurisdictions under the laws of
which Lender is organized or conduct business or any political subdivision
thereof.

 

“Trademark
License” means rights under any written agreement now owned or hereafter
acquired by Borrower granting any right to use any Trademark.

 

“Trademarks”
means all of the following now owned or hereafter existing or adopted or
acquired by Borrower:  (a) all
trademarks, trade names, corporate names, business names, trade styles, service
marks, logos, other source or business identifiers, prints and labels on which
any of the foregoing have appeared or appear, designs and general intangibles
of like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including
registrations, recordings and applications in the United States

 

A-12

 

Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated
with or symbolized by any of the foregoing.

 

“Working
Capital Loan Agreement” means that certain Loan Agreement, dated as of August 11,
2008, by and between MSC 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.

 

All undefined
terms contained in any of the Loan Documents shall, unless the context
indicates otherwise, have the meanings provided for by the Code to the extent
the same are used or defined therein; in the event that any term is defined
differently in different Articles of the Code, the definition in Article 9
shall control.  Unless otherwise
specified, references in this Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained
in this Agreement.  The words “herein,” “hereof”
and “hereunder” and other words of similar import refer to this Agreement as a
whole, including all Annexes, Exhibits and Schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in this Agreement or any
such Annex, Exhibit or Schedule.

 

Wherever from
the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, feminine and
neuter genders.  The words “including,” “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
the word “or” is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations.  References to
any agreement, document, or instrument shall be construed at a particular time
to refer to such agreement, document or instrument as the same may have been
amended, modified, supplemented or replaced as of such time pursuant to the
terms thereof.  Whenever any provision in
any Loan Document refers to the knowledge (or an analogous phrase) of Borrower,
such words are intended to signify that Borrower have actual knowledge or
awareness of a particular fact or circumstance or that Borrower, if it had
exercised reasonable diligence, would have known or been aware of such fact or
circumstance.

 

A-13

 

ANNEX B (SECTION 4.1(A))

TO

CREDIT AGREEMENT

CLOSING CHECKLIST

 

In addition
to, and not in limitation of, the conditions described in Section 4
of this Agreement, pursuant to Section 4.1, the following items
must be received by Lender in form and substance reasonably satisfactory to
Lender on or prior to the date of the initial Advance (each capitalized term
used but not otherwise defined herein shall have the meaning ascribed thereto
in Annex A to this Agreement):

 

A.            Appendices.  All Appendices to this Agreement, in form and
substance reasonably satisfactory to Lender.

 

B.            Security Interests.  Evidence satisfactory to Lender that Lender
has a valid and perfected security interest in the Collateral.

 

C.            Governing Documents and Bylaws.  Governing Documents, including bylaws or the
equivalent thereof, together with all amendments thereto, for Borrower.

 

D.            Good Standings and Resolutions.  For Borrower, (a) (i) good standing
certificates in its jurisdiction of incorporation, and (b) resolutions of
its Board of Directors, approving and authorizing the execution, delivery and
performance of the Loan Documents to which Borrower is a party and the transactions
to be consummated in connection therewith, certified as of the Closing Date by
Borrower’s corporate secretary or an assistant secretary as being in full force
and effect without any modification or amendment.

 

E.             Incumbency Certificates.  For Borrower, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents, certified as of the Closing Date by such Person’s corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.

 

F.             Officer’s Certificate.  Lender shall have received duly executed
originals of a certificate of a Financial Officer of Borrower, dated the
Closing Date, stating that, except for the commencement of the Chapter 11 Case
and since the date Borrower filed its last financial statement with the
Securities and Exchange Commission (the “SEC”): (i) no Legal
Proceedings has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by this
Agreement and the other Loan Documents; and (ii) there have been no
material Restricted Payments made by Borrower.

 

G.            MSC Projected Cash Forecast.  Lender shall have received the initial MSC
Projected Cash Forecast described in Section 5.11.

 

H.            Apex Budget.  Lender shall have received the initial Apex
Budget described in Section 5.12.

 

B-1

 

Lender may in
its sole discretion defer, and thereby waive as a funding condition hereunder,
the execution and delivery of one or more of the foregoing items or any other
Loan Document or Disclosure Schedule or the execution, delivery or provision any
of the documents or other items to be executed and delivered or provided
pursuant to this Annex B and the satisfaction of any condition related
thereto.  In the event of such a deferral
and waiver as to any Loan Document, Disclosure Schedule or other document or
item, Borrower agrees to execute and deliver such Loan Document or Disclosure
Schedule or, as the case may be, execute and deliver or provide such other
document or item, in each case, in form and substance satisfactory to Lender,
as soon as practicable, but in any event not later than ten (10) days
following the date of the Initial Advance, or such later date as Lender may
agree.

 

B-2

 

ANNEX C (SECTION 6.1)

TO

CREDIT AGREEMENT

FINANCIAL STATEMENTS– REPORTING

 

(a)           Financial Statements and Other
Information:  Borrower will promptly
furnish to Lender the following:

 

(i)            any annual or
quarterly financial statements prepared in the ordinary course of business (it
being understood that if Borrower files annual or quarterly reports with the
SEC on Form 10-K or 10-Q, as the case may be, the filing of such report
with the SEC shall satisfy the requirements of this clause (i));

 

(ii)           concurrently with
any delivery of financial statements under clauses (i) above, a
certificate of a Financial Officer of Borrower in the form of Exhibit E
(a “Compliance Certificate”) certifying, to the best of his or her
knowledge, as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken
with respect thereto; and

 

(iii)          promptly following
any request therefor, such other information regarding the operations, business
affairs and financial condition of Borrower and MSC, or compliance with the
terms of any Loan Document, as Lender may reasonably request.

 

(b)           Notices of
Material Events.  Borrower will
furnish to Lender prompt written notice of the following:

 

(i)            the occurrence of
any Default or Event of Default;

 

(ii)           the filing or
commencement of any action, suit or proceeding by or before any arbitrator or
Governmental Authority against or affecting Borrower or any Affiliate thereof
that, if adversely determined, would reasonably be expected to result in a
Material Adverse Effect;

 

(iii)          any other
development that results in, or would reasonably be expected to result in, a
Material Adverse Effect;

 

(iv)          any change in
Borrower’ executive officers;

 

(v)           any failure by
Borrower to pay rent accruing Post-Petition at any of Borrower’ locations,
which failure continues for more than ten (10) days following the day on
which such rent first came due;

 

(vi)          the discharge by
Borrower of its present independent accountants or any withdrawal or
resignation by such independent accountants; and

 

(vii)         the filing of any
Lien for unpaid taxes against Borrower.

 

C-1

 

Each notice delivered under this Annex C shall be accompanied by
a statement of a Financial Officer or other executive officer of Borrower
setting forth the details of the event or development requiring such notice
and, if applicable, any action taken or proposed to be taken with respect
thereto.

 

(c)           Bankruptcy
Matters.  Borrower will furnish to
Lender copies of all monthly reports, projections, or other information
respecting Borrower’s business or financial condition or prospects as well as
all pleadings, motions, applications and judicial information filed by or on
behalf of Borrower with the Bankruptcy Court (including any documents filed
under seal with the Bankruptcy Court) or provided by or to the U.S. Trustee (or
any monitor or interim receiver, if any, appointed in the Chapter 11 Case) or
the Committee, promptly after the time such document is filed with the
Bankruptcy Court, or provided by or to the U.S. Trustee (or any monitor or
interim receiver, if any, appointed in the Chapter 11 Case) or the
Committee.  Notice of any such motion,
pleading or application provided to Lender, shall satisfy any other applicable
notice requirements hereunder.

 

(d)           MSC
Projected Cash Forecast.  From and
after the Closing Date, Borrower shall furnish Lender with an updated MSC
Projected Cash Forecast at least every week. 
By no later than 5:00 p.m. (Eastern time) on the Tuesday (or, if
not a Business Day, on the next Business Day thereafter) of each week
commencing on the week prior to the first Loan Advance Date, Borrower shall
furnish to Lender, in form and substance reasonably satisfactory to Lender, a
report that sets forth for the immediately preceding period back to the Closing
Date, the actual cash disbursements in comparison to the Projected Information
for such periods set forth in the MSC Projected Cash Forecast on a cumulative,
roll-forward basis.

 

C-2

 

ANNEX D (SECTION 13.9)

TO

CREDIT AGREEMENT

NOTICE ADDRESSES

 

	
  (A)

  	
  If to
  Lender, at:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sumitomo Corporation

  	
   

  
	
   

  	
  8-11, Harumi, 1-chome

  	
   

  
	
   

  	
  Chuo-ku, Tokyo, 104-8610

  	
   

  
	
   

  	
  Japan

  	
   

  
	
   

  	
  Tel:

  	
  +81-3-5166-4319

  	
   

  
	
   

  	
  Fax:

  	
  +81-3-5166-6423

  	
   

  
	
   

  	
  Attn:

  	
  Attn:
  General Manager, San Cristobal Project Dept.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Copy: 

  	
  Morrison &
  Foerster LLP

  	
   

  
	
   

  	
   

  	
  1290 Avenue
  of the Americas

  	
   

  
	
   

  	
   

  	
  New York, NY
  10104

  	
   

  
	
   

  	
   

  	
  Attn:
  Michael Graffagna, Norman S. Rosenbaum

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to
  Borrower, at:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Apex Silver Mines Limited

  	
   

  
	
   

  	
  1700 Lincoln
  Street, Suite 3050

  	
   

  
	
   

  	
  Denver,
  Colorado  80203

  	
   

  
	
   

  	
  Facsimile: 
  (303) 839-5907

  	
   

  
	
   

  	
  Attn:

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Copy:

  	
  Cleary
  Gottlieb Steen & Hamilton LLP

  	
   

  
	
   

  	
   

  	
  One Liberty
  Plaza

  	
   

  
	
   

  	
   

  	
  New York, NY
  10006

  	
   

  
	
   

  	
   

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

  	
   

  

 

D-1

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