Document:

Exhibit 10.22

 

Execution Version

 

 

AMENDED AND RESTATED TAX SHARING AGREEMENT

 

This Amended and Restated Tax Sharing
Agreement (the “Agreement”) dated as of January 30, 2004 is between The
Renco Group, Inc., a New York corporation (“Renco”), and The Doe Run Resources
Corporation, a New York corporation (“DoeRun” or the “Company”) (sometimes
referred to herein individually as “Party”, or together, as “Parties”).

 

WHEREAS, Renco and its stockholders have
elected to file “S Corporation” (“S Election”) income tax returns
permitted by Section 1362(a) of the Internal Revenue Code of 1986, as
amended (the “Code”) and similar laws of other jurisdictions; and

 

WHEREAS, Renco has elected to make DoeRun a
qualified sub-chapter S subsidiary (QSSS, as defined below) together with its
domestic subsidiaries permitted by Section 1361(b)(3)(B) (ii) of the Code
and similar laws of other jurisdictions; and

 

WHEREAS, Renco, if not for the S Election, is
the common parent corporation of an affiliated group of corporations (the “Renco
Consolidated Return Group”) within the meaning of Section 1504(a) of the
Code; and

 

WHEREAS, DoeRun, if not for the QSSS
election, is a member of the affiliated group of corporations with respect to
which Renco is the common parent corporation; and

 

WHEREAS, the Renco Consolidated Return Group
has filed in the past and may file in the future consolidated income tax
returns permitted by Section 1501 of the Code and similar laws of other
jurisdictions; and

 

WHEREAS, on October 29, 2002, Renco and
DoeRun entered into that certain Tax Sharing Agreement (the “Existing Tax
Sharing Agreement”), pursuant to which Renco and DoeRun agreed upon a method of
determining the financial consequences to each Party resulting from the filing
of consolidated, combined or “S corporation” income tax returns; and

 

WHEREAS, Renco and DoeRun desire to amend and
restate the provisions of the Existing Tax Sharing Agreement so as to clarify
the intent of the parties thereto;

 

NOW, THEREFORE in consideration of the
premises and mutual covenants herein contained, the Parties hereby agree that
the Existing Tax Sharing Agreement is hereby amended and restated to read as
follows:

 

1.                                       Definitions.  For the purposes of this Agreement, the
terms set forth below shall have the following meanings.

 

“Combined State Tax” means, with respect to
each state or local taxing jurisdiction, any income or franchise tax payable to
such state or local taxing jurisdiction in which a member of the Doe-Run Group,
as defined below, files tax returns with a member of a Renco Consolidated
Return Group that is not also a member of the DoeRun Group on a consolidated,
combined or unitary basis for purposes of such income or franchise tax.

 

 

“DoeRun Combined State Tax Liability” shall
mean, with respect to any taxable year, an amount of Combined State Taxes,
including any interest, penalties and other additions to such taxes for such
taxable year determined by taking the total separately computed state income or
franchise tax liabilities of the DoeRun Group.

 

“DoeRun Current Combined State Income Tax
Provision” shall mean, with respect to any financial statement year, the sum of
the DoeRun Group’s current combined state income tax provision determined in
accordance with U.S. Generally Accepted Accounting Principles (“GAAP”),
recorded on the DoeRun Group’s books and records and reported in the DoeRun
Group’s published financial statements.

 

“DoeRun Current Federal Income Tax Provision”
shall mean, with respect to any financial statement year, the sum of the DoeRun
Group’s current federal income tax provision determined in accordance with U.S.
Generally Accepted Accounting Principles (“GAAP”), recorded on the DoeRun
Group’s books and records and reported in the DoeRun Group’s published
financial statements.

 

“DoeRun Federal Built-in Gain Tax” shall
mean, with respect to any taxable year, an amount calculated using the DoeRun
Net Recognized Built-in Gain multiplied by the rate defined in
section 1374(b)(1) of the Code.

 

“DoeRun Federal Income Tax Dividend” shall
mean, with respect to any taxable year that DoeRun is a QSSS, the amount
calculated in the manner that the DoeRun Federal Income Tax Liability would be
calculated if DoeRun was a C corporation less the DoeRun Federal Built-in Gains
Tax with respect to such year.

 

“DoeRun Federal Income Tax Liability” shall
mean, with respect to any taxable year or portion thereof, the sum of the
DoeRun Group’s Federal Income Tax liability and any interest, penalties and
other additions to such taxes for such taxable year, computed as if the DoeRun
Group was not and never was part of the Renco Consolidated Return Group, but
rather was a separate affiliated group of corporations filing a consolidated
United States Federal Income Tax return pursuant to Section 1501 of the
Code (provided, however, that transactions with members of the Renco Non-DoeRun
Group, as defined below, shall be reflected on a cash basis and according to
the provisions of the consolidated return regulations promulgated under the
Code governing inter-company transactions). Such computation shall be made: (A)
without regard to the income, deductions (including net operating loss and
capital loss deductions) and credits in any year of any member of the Renco
Consolidated Return Group that is not a member of the DoeRun Group, (B) for any
period in which DoeRun terminates a LIFO election by adding in the DoeRun LLFO
Recapture Amount, (C) with regard to net operating loss carrybacks, capital
loss carryforwards and carrybacks and minimum tax credits from earlier years of
the DoeRun Group, (D) with regard to the DoeRun Net Operating Loss
Carryforward, (E) neither the Company nor any of its subsidiaries shall take
into account (i) any income attributable to the Refinancing COD Income or (ii)
any ancillary effect of any such Refinancing COD Income on the tax basis of the
assets of the Company or of any of its subsidiaries as provided in Sections 108
and/or 1017 of the Code, (F) as though the highest rate of tax specified in
Section 11(b) of the Code were the only rate set forth in that subsection,
and (G) reflecting the positions, elections and accounting methods and
periods used with respect to the DoeRun Group in preparing the Renco 

 

2

 

consolidated Federal Income Tax
return. However, until the obligations of the DoeRun Refinancing are satisfied
the computation under this section will be made as if (a) each of the
DoeRun and its subsidiaries shall be deemed to have become a C corporation
under the Code on the day after the closing date of the DoeRun Refinancing and
(b) the Company shall be deemed to be subject to the taxes imposed on C
corporations by Subtitle A of the Code and similar provisions of state law.

 

“DoeRun Group” shall mean DoeRun and any
direct or indirect corporate subsidiaries of DoeRun that would be eligible,
from time to time, to join with DoeRun, with respect to Federal Income Taxes,
in the filing of a consolidated United States Federal Income Tax return and,
with respect to Combined State Taxes, in the filing of a consolidated, combined
or unitary income or franchise tax return if DoeRun was not a member of the
Renco Consolidated Return Group.

 

“DoeRun Group Tax” means (i) DoeRun Federal
Income Tax Liability; (ii) DoeRun Combined State Tax Liability; (iii) any other
tax imposed on any member of the DoeRun Group with respect to any taxable year,
or, with respect to any taxable year, any other tax imposed on any direct or
indirect subsidiary or affiliate of DoeRun that is not a member of the DoeRun
Group, including but not limited to any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, withholding on amounts paid to or by any
member of the DoeRun Group, payroll, employment, excise, severance, stamp,
capital stock, occupation, property, real property gains, environmental or
windfall profit tax, premium, custom, duty or other tax, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any Taxing
Authority responsible for the imposition of any such tax (United States or
non-United States); and (iv) liability of any member of the DoeRun Group for
the payment of any amounts of the type described in (i), (ii) or (iii) as a
result of any express or implied obligation to indemnify any other person.

 

“DoeRun LIFO Recapture Amount” means that
amount calculated under Section 1363 of the Code not added to DoeRun’s
federal taxable income for tax sharing when Renco elected DoeRun a QSSS.

 

“DoeRun Net Operating Loss Carryforward”
means for (a) any period through the DoeRun Refinancing, the loss created only
by the temporary tax book differences as defined by the Statement of Financial
Accounting Standards Board No. 109; (b) any period starting the day after the
DoeRun Refinancing, the loss as it appears in the DoeRun Pro Forma Federal
Return for federal purposes and in the DoeRun Pro Forma State Return for state
purposes.

 

“DoeRun Net Recognized Built-in Gain” shall
mean, with respect to any taxable year, an amount calculated under
Section 1374 of the Code using only the assets of DoeRun Group.

 

“DoeRun Pro Forma Combined State Return”
means, for each state in which a combined state income tax return may be filed,
either a formal combined state income tax return, or, in the alternative, a
schedule on which the DoeRun Combined State Tax Liability is reflected
together with a detailed schedule of each book/tax difference.

 

3

 

“DoeRun Pro Forma Federal Return” means
either a formal Form 1120, or, in the alternative, a schedule on which the
DoeRun Federal Income Tax Liability is reflected together with a detailed
schedule of each book/tax difference.

 

“DoeRun Pro Forma State Return” means, for
each state in which a State Income Tax return may be filed, either a formal
state income tax return, or, in the alternative, a schedule on which the
DoeRun State Tax Liability is reflected together with a detailed
schedule of each book/tax difference.

 

“DoeRun Refinancing” means (i) that certain
Credit Agreement among DoeRun, the lenders thereunder and Regiment Capital
Advisors, L.L.C. as Agent, pursuant to which DoeRun may borrow up to
$35,500,000, (ii) the Warrants issued pursuant to that certain Warrant
Agreement between Doe-Run and State Street Bank and Trust Company, as Warrant
Agent and (iii) the 11 3⁄4 Exchange Notes due 2008 of DoeRun.

 

“DoeRun State Built-in Gain Tax” shall mean,
with respect to any taxable year and for each state or locality, an amount
calculated using the DoeRun Net Recognized Built-in Gain multiplied by the
appropriate tax rate.

 

“DoeRun State Income Tax Dividend” shall
mean, with respect to any taxable year that Doe-Run is a QSSS, the amount
calculated in the manner that the DoeRun State Income Tax Liability would be
calculated if DoeRun was a C corporation less the DoeRun State Built-in Gains
Tax with respect to such year.

 

“DoeRun State Income Tax Liability” shall
mean, for each state or locality with respect to any taxable year, the sum of
the DoeRun Group’s State Income Tax liability and any interest, penalties and
other additions to such taxes for such taxable year, computed as if the DoeRun
Group was not and never was part of the Renco Consolidated Return Group, but
rather was a separate affiliated group of corporations filing a consolidated
United States Federal Income Tax return pursuant to Section 1501 of the
Code (provided, however, that transactions with members of the Renco Non-DoeRun
Group, as defined below, shall be reflected on a cash basis and according to
the provisions of the consolidated return regulations promulgated under the
Code governing inter-company transactions). Such computation shall be made: (A)
without regard to the income, deductions (including net operating loss and
capital loss deductions) and credits in any year of any member of the Renco
Consolidated Return Group that is not a member of the DoeRun Group, (B) for any
period in which DoeRun terminates a LIFO election by adding in the DoeRun LIFO
Recapture Amount, (C) with regard to net operating loss carrybacks, capital
loss carryforwards and carrybacks and minimum tax credits from earlier years of
the DoeRun Group, (D) with regard to the DoeRun Net Operating Loss
Carryforward, (E) neither the Company nor any of its subsidiaries shall take
into account (i) any income attributable to the Refinancing COD Income or (ii)
any ancillary effect of any such Refinancing COD Income on the tax basis of the
assets of the Company or of any of its subsidiaries as provided in Sections 108
and/or 1017 of the Code, (F) as though the highest rate of tax specified in
Section 11(b) of the Code were the only rate set forth in that
subsection and (G) reflecting the positions, elections and accounting
methods and periods used with respect to the DoeRun Group in preparing the
Renco consolidated Federal Income Tax return. 
However, until the obligations of the DoeRun Refinancing are satisfied
the computation under this section will be made (a) as if each of 

 

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DoeRun and its subsidiaries
shall be deemed to have become a C corporation under the Code on the day after
the closing date of the DoeRun Refinancing and (b) as if the Company shall be
deemed to be subject to the taxes imposed on C corporations by Subtitle A of
the Code and similar provisions of state law.

 

“Federal Income Tax” means any tax imposed
under Subtitle A of the Code.

 

“Final Determination” shall mean (i) with
respect to Federal Income Taxes, a “determination” as defined in
Section 1313(a) of the Code or execution of an Internal Revenue Service
Form 870-AD and, with respect to taxes other than Federal Income Taxes, any
final determination of liability in respect of a tax that, under applicable
law, is not subject to further appeal, review or modification through
proceedings or otherwise (including the expiration of a statute of limitations
or a period for the filing of claims for refunds, amended returns or appeals
from adverse determinations); or (ii) the payment of tax by any member of the
Renco Consolidated Return Group with respect to any item disallowed or adjusted
by a Taxing Authority (as hereinafter defined), provided that Renco determines
that no action should be taken to recoup such payment.

 

“QSSS” means a qualified sub-chapter S
subsidiary as defined in Section 1361 of the Code or a disregarded entity
as defined in Treasury Regulation 301.7701-2.

 

“Refinancing COD Income” means amounts equal
to the forgiveness of indebtedness income which resulted from the transactions
entered into by DoeRun on October 29, 2002, as calculated pursuant to the
applicable sections of the Code and, as such term is used in the definition of
“DoeRun State Income Tax Liability”, such term shall also mean and include all
applicable sections of any state income tax code.

 

“Renco Non-DoeRun Group” means Renco and any
direct or indirect corporate subsidiaries or affiliates of Renco other than the
DoeRun Group.

 

“Renco Non-DoeRun Group Tax” means (i) the
Federal Income Tax liability of the Renco Consolidated Return Group less the
DoeRun Federal Income Tax Liability; (ii) the Renco Combined State Tax
liability less the DoeRun Combined State Tax Liability; (iii) any other tax
imposed on any member of the Renco Non-DoeRun Group, including but not limited
to, any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
license, withholding on amounts paid to or by any member of the Renco
Non-DoeRun Group, payroll, employment, excise, severance, stamp, capital stock,
occupation, property, real property gains, environmental or windfall profit
tax, premium, custom, duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest,
penalty, addition to tax or additional amount imposed by any Taxing Authority
responsible for the imposition of any such tax (United States or non-United
States); and (iv) liability of any member of the Renco Non-DoeRun Group for the
payment of any amounts of the type described in (i), (ii) or (iii) as a result
of any express or implied obligation to indemnify any other person.

 

“State Income Tax” means any Income Tax
imposed on corporations by any State of the United States or by any political
subdivision of any such State.

 

5

 

“Taxing Authority” means any governmental
authority (whether United States or non-United States, and including, without
limitation, any state, municipality, political subdivision or governmental
agency) responsible for the imposition of any tax.

 

2.                                       Tax Sharing.

 

(a)  General.  As specifically provided
for in Sections 2(b) through 2(d) of this Agreement, for each financial
statement year of the Renco Consolidated Return Group ending after the
effective date of this Agreement, during which income, loss or credits against
tax of the DoeRun Group are includible in the United States consolidated
Federal Income Tax return of the Renco Consolidated Return Group or Federal
Form 1120S, DoeRun shall pay to Renco an amount equal to the sum of the DoeRun
Federal Income Tax Liability and the DoeRun Federal Income Tax Dividend for
such taxable year as shown on a DoeRun Pro Forma Federal Return plus a net
amount reasonably determined by Renco to cover DoeRun Federal Income Tax
Liabilities attributable to current or prior years that is not otherwise
reflected in the DoeRun Pro Forma Federal Returns for such years.  For each taxable year of the Renco
Consolidated Return Group, ending after the effective date of this Agreement,
during which income, loss or credits against tax of the DoeRun Group are
includible in a Combined State Tax Return of Renco Consolidated Return Group or
a Renco State Tax Return as a QSSS, DoeRun shall pay to Renco an amount equal
to the DoeRun Combined State Tax Liability and the DoeRun State Income Tax
Dividend for such taxable year as shown on a DoeRun Pro Forma Combined State
Return plus a net amount reasonably determined by Renco to cover DoeRun
Combined State Income Tax Liabilities attributable to current or prior years
that is not otherwise reflected in the DoeRun Pro Forma  Federal Returns for such years.

 

(b)  Payment of Taxes.

 

(i)  Quarterly Payments.  Not
later than fifteen days after the end of each quarter, or in the case of the
last quarter of DoeRun’s financial statement year, immediately prior to the
closing of the books for such financial statement,

 

(A)  if DoeRun is a QSSS, DoeRun
shall identify the DoeRun Current Federal Income Tax Provision and the DoeRun
Current Combined State Income Tax Provision for such quarter, determined in
accordance with United States GAAP, on its books, calculate both the DoeRun
Federal Income Tax Dividend and the DoeRun State Income Tax Dividend and
immediately thereafter transfer such amounts, in cash, to Renco together with
both a DoeRun Pro Forma Federal Return and a DoeRun Pro Forma State Return for
each state in which the Company or its subsidiaries is or would be required to
file a tax return or

 

(B)  if DoeRun is not a QSSS,
DoeRun shall identify the DoeRun Current Federal Income Tax Provision and the
DoeRun Current Combined State Income Tax Provision for such quarter, determined
in accordance with United States GAAP, on its books and immediately thereafter
transfer such amount, in cash, to Renco together 

 

6

 

with both a
DoeRun Pro Forma Federal Return and a DoeRun Pro Forma State Return for each
state in which the Company or its subsidiaries is or would be required to file
a tax return.

 

(ii)  Preparation and Delivery
of Estimated Pro Formas. On the date that is seven business days prior to the
due date (currently January 15th) for the Renco Consolidated Return
Group’s consolidated Federal Income Tax return or the Renco Federal Form 1120S,
DoeRun shall deliver to Renco a DoeRun Pro Forma Federal Return reflecting the
DoeRun Federal Income Tax Liability on an estimated basis. On the date that is
seven business days prior to the due date (generally February 15th)
for each Combined State Tax return, DoeRun shall deliver to Renco a DoeRun Pro
Forma Combined State Return (together with the DoeRun Pro Forma Federal Return,
the “DoeRun Pro Forma Returns”) reflecting the relevant DoeRun Combined State
Tax Liability on an estimated basis. DoeRun’s preparation and delivery of the
DoeRun Pro Forma Federal Return shall include related schedules and returns,
including, but not limited to, preparation of Form 1118 or in the alternative,
a schedule reflecting what is on Form 1118, for purposes of computing any
separate foreign tax credit limitation under Section 904(d) of the Code.

 

(iii)  Preparation and Delivery
of Final Pro Formas. On or before September 1 following the end of the
taxable year of any year for which payments are to be made under this
Agreement, Renco shall deliver to DoeRun a DoeRun Pro Forma Federal Return
reflecting the DoeRun Federal Income Tax Liability. On or before
October 15 following the end of the taxable year of any year for which
payments are to be made under this Agreement, Renco shall deliver to DoeRun a
DoeRun Pro Forma Combined State Return reflecting the relevant DoeRun Combined
State Tax Liability. As with the estimated DoeRun Pro Forma Federal Return
delivered by DoeRun under Section 2(b)(ii) of this Agreement, Renco’s
preparation and delivery of the DoeRun Pro Forma Federal Return hereunder shall
include related schedules and returns, including, but not limited to,
preparation of Form 1118 or in the alternative, a schedule reflecting what
is on Form 1118, for purposes of computing any separate foreign tax credit
limitation under Section 904(d) of the Code.

 

(iv)  Reconciliation of
Payments.  On or before September 1 following the end of the taxable
year of any year for which payments are to be made under this Agreement, DoeRun
shall pay to Renco, or Renco shall apply to the account of DoeRun, to offset
future payments under this Agreement by DoeRun to Renco, as appropriate, an
amount equal to the difference, if any, between:  (x) the DoeRun Federal Income Tax Liability reflected on the
DoeRun Pro Forma Federal Return for such year, plus a net amount reasonably
determined by Renco to cover DoeRun Federal Income Tax Liabilities attributable
to current or prior taxable years that is not otherwise reflected in the DoeRun
Pro Forma Federal Return for such years; and (y) the aggregate amount of the
quarterly payments of the DoeRun Current Federal Income Tax Provision for such
year made pursuant to Section 2(b)(i) of this Agreement. On or before
October 15 following the end 

 

7

 

of the taxable
year of any year for which payments are to be made under this Agreement, DoeRun
shall pay to Renco the DoeRun Combined State Tax Liability as reflected on the
DoeRun Pro Forma Combined State Return.

 

(c)  Treatment of Adjustments.  If any
adjustment is made in a tax return of the Renco Consolidated Return Group,
after the filing thereof, in which income or loss of the DoeRun Group is
included, then at the time of a Final Determination of the adjustment, DoeRun
shall pay to Renco or Renco shall apply to the account of DoeRun (or Renco
shall apply against amounts due from DoeRun under Section 2(b)(iv) of this
Agreement), to offset future payments under this Agreement by DoeRun to Renco,
as the case may be: (i) the difference between (x) all net payments actually
made under Section 2 with respect to the taxable year covered by such tax
return, and (y) all payments that would have been made under Section 2
taking such adjustment into account, together with any penalties actually paid,
plus (ii) interest on such difference for each day, beginning on the due date
of such return without regard to extensions and ending on the date of Final
Determination, calculated at the rate determined, in the case of a payment by
DoeRun, under Section 6621(a)(2) of the Code as modified by
Section 6621(c) of the Code.

 

(d)  Preparation of Returns.  So long
as the DoeRun Group is part of the Renco Consolidated Return Group, Renco shall
prepare and file such returns and any other returns, documents or statements
required to be filed with the Internal Revenue Service with respect to the
determination of the Federal Income Tax liability of the Renco Consolidated
Return Group and with the appropriate Taxing Authorities with respect to the
determination of the Combined State Tax liability of the Renco Consolidated
Return Group. With respect to such return preparation, Renco shall not
discriminate among any members of the Renco Consolidated Return Group. Renco
shall have the right with respect to any consolidated Federal Income Tax
returns or Combined State Tax returns that it has filed or will file to
determine (i) the manner in which such returns, documents or statements shall
be prepared and filed, including, without limitation, the manner in which any
item of income, gain, loss, deduction or credit shall be reported; (ii) whether
any extensions should be requested; and (iii) the elections that will be made
by any member of the Renco Consolidated Return Group. Renco shall not take any
unreasonable position in preparing the DoeRun Pro Forma Returns; however, any
dispute with respect to the filing of such consolidated Federal Income Tax
return or Combined State Tax return shall be resolved pursuant to
Section 7 of this Agreement. In addition, Renco shall have the right to
(i) contest, compromise, or settle any adjustment or deficiency proposed,
asserted or assessed as a result of any audit of any consolidated or combined
return filed by the Renco Consolidated Return Group; (ii) file, prosecute,
compromise or settle any claim for refund; and (iii) determine whether any
refunds to which the Renco Consolidated Return Group may be entitled shall be
received by way of refund or credited against the tax liability of the Renco
Consolidated Return Group; provided, however, that Renco shall be obligated to
act in good faith with regard to all members of the Renco Consolidated Return
Group included in the applicable returns. Each member of the DoeRun Group
hereby irrevocably appoints Renco as its agent and attorney-in-fact to take any
action (including the execution of documents) Renco may deem necessary or
appropriate to implement this Section 2(d).

 

8

 

(e)  Notwithstanding any other provision herein
contained, in no event shall DoeRun be liable to Renco, pursuant to the terms
hereunder, for any amount relating to the Refinancing COD Income; provided,
however, that nothing contained herein shall preclude the voluntary payment by
DoeRun to Renco, directly or indirectly, of a dividend equal to such amounts
when the declaration and payment of such a divided by DoeRun would be
permissible pursuant to the terms of applicable law.

 

(f)  Notwithstanding any other provision herein
contained, the Company shall not make any payment hereunder which is violative
of any of the agreements between itself or any subsidiaries with any of its
lending institutions, as in effect on the date hereof.

 

3.                                       The Company (i)
hereby acknowledges that it is currently in breach of this Agreement on account
of its failure to provide Renco with certain reports, schedules and
calculations required pursuant to the terms hereof (“Delinquent Reports”) and
(ii) agrees to provide Renco with all such Delinquent Reports, together with
any other reports, schedules and/or calculations required pursuant to the terms
hereof, no later than May 15, 2004 such that on the date that such Delinquent
Reports and other reports are delivered to Renco, the Company shall be in
compliance with the terms of this Agreement.

 

4.                                       The Company
hereby covenants and agrees with Renco that, at all times when it provides
Renco with any reports, schedules or pro forma returns required pursuant to the
term hereunder, or otherwise at any time Renco so requests, whether or not
otherwise required pursuant to the terms hereof, the Company shall supply Renco
with such calculations, pro forma tax returns, schedules and/or reports (in all
cases, using the tax attributes in effect on the closing day of the Doe Run
Refinancing or, at Renco’s direction, utilizing any other attributes) necessary
so as to enable Renco to include the Company and its subsidiaries as QSSSs in
any tax return it is required to file.

 

5.                                       Term.  This
Agreement shall expire in the event that Renco no longer owns, directly or
indirectly, at least 50 percent of the DoeRun Group; provided, however, that
all rights and obligations arising hereunder shall survive until they are fully
effectuated or performed unless superseded by mutual agreement of the Parties.

 

6.                                       Successors.  This
Agreement shall be binding on and inure to the benefit of any successor, by
merger, acquisition of assets or otherwise, to any of the Parties hereto
(including but not limited to any successor of Renco and DoeRun succeeding to
the tax attributes of such party under Section 381 of the Code), to the
same extent as if such successor had been an original party hereto.

 

7.                                       Dispute
Resolution.  If the Parties hereto are unable to resolve any
disagreement or dispute relating to this Agreement, including the
interpretation or application thereof, within 20 days, KPMG LLP (or if no
longer the auditor for Renco the current auditor of Renco) shall resolve such
disagreement or dispute. Any such resolution shall be binding on the Parties to
this Agreement without further recourse.

 

8.                                       Authorization,
etc.  Each of the Parties hereto hereby represents and warrants that
it has the power and authority to execute, deliver and perform this Agreement;
that this Agreement has 

 

9

 

been duly authorized by all necessary
corporate action on the part of such Party; that this Agreement constitutes a
legal, valid and binding obligation of each such Party; and that the execution,
delivery and performance of this Agreement by such Party does not contravene or
conflict with any provision of law or of its charter or bylaws or any
agreement, instrument or order binding on such Party.

 

9.                                       Section Captions.  Section captions
used in this Agreement are for convenience and underline reference only and
shall not affect the construction of this Agreement.

 

10.                                 Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO LAWS AND
PRINCIPLES RELATING TO CONFLICTS OF LAW.

 

11.                                 Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.

 

12.                                 Waivers and
Amendments.  This Agreement shall not be waived, amended or otherwise
modified except in writing, duly executed by all of the Parties hereto.

 

13.                                 Effective
Date.  This Agreement shall be deemed effective, upon execution
hereof, as of October 30, 2002.

 

IN WITNESS WHEREOF, each of the parties
hereto has caused this agreement to be executed by a duly authorized officer as
of the date first above written.

 

	
  THE RENCO GROUP, INC.

  	
  THE DOE RUN RESOURCES CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/John A. Siegel, Jr.

  	
   

  	
  By:

  	
   

  	
  /s/ MK Kaiser

  	
   

  	
   

  
	
  Name:

  	
   

  	
  John A. Siegel, Jr.

  	
   

  	
  Name:

  	
   

  	
  MK Kaiser

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Vice President, Accounting

  	
   

  	
  Title:

  	
   

  	
  EVP & CFO

  	
   

  	
   

  
													

 

10Exhibit
10.23.1

 

	
  US$139,062,500.00

  	
  September 12, 2002

  

 

SUBORDINATED
PROMISSORY NOTE

 

For value
received, DOE RUN PERU S.R.L., with. Taxpayer Registration Number 20376303811,
with domicile in Avenida Víctor Audrés Belaunde 147, Via Principal 155, Centro
Empresarial Real, Torre Real Tres, Piso 9, San Isidro, duly represented by
Kenneth Ernest Hecker, identified with Identity Card for Residents Non
Immigrants N-100471, and Anthony Wayne Worcester, identified with Identity Card
for Residents Non Immigrants N-97937, with power of attorney registered
in the Electronic Act N. 11015369 of the Mercantile Companies Book of the Lima
Registry of Legal Entities (the “Borrower”), hereby promises to pay to or to
the order of The Doe Run Resources Corporation, a company organized under the
laws of the State of New York and with offices and domicile at 1801 Park 270
Drive Suite 300, St. Louis, MO 63146 United States of America (the “Holder”) or
at such other location as the Holder shall have designated from time to time in
writing, in lawful money of the United States of America and in immediately
available funds, the principal sum of One hundred thirty-nine million,
sixty-two thousand, five hundred and no/100 U.S. Dollars (U.S.$ 139,062,500.00)
or such lesser principal amount as may then be outstanding hereunder. The
Outstanding Principal Amount shall hear no interest until the Initial Due Date,
as defined below. If the same is not paid on or prior to the Initial Due Date,
such Outstanding Principal Amount shall thereafter bear interest at a floating
rate of interest per annum equal to the sum of (a) the rate (i) as quoted to
the Borrower by Citibank, N.A., New York office or other major New York or
London commercial bank designated by the Borrower front time to time, at which
such hank is offered U.S dollar deposits in. the London Interbank Eurodollar
Market in an amount equal to the principal amount to which such rate shall be
applied, for one week borrowings. or (ii) as obtained by the Borrower from the
display that appears as page “LIBOR” on the Reuters Monitor Money Rates Service
(or such other page as may replace the LIBOR page on that service for the
purpose of displaying London Interbank Offered Rates of major banks) as of
11:00 am. London, England time (“LIBOR”) plus (b) 4%, calculated in arrears on
the basis of a 360-day year for the actual number of days involved and shall be
paid in arrears semi-annually calculated from the Initial Due Date, or upon
payment in full, whichever comes first. Except for such prepayments as are
specifically permitted pursuant to the terms of this Note, the Outstanding
Principal Amount shall be repaid on The Initial Due Date or at any time during
the 359-day period following the Initial Due Date, on demand. The “Initial Due
Date” shall be October 1, 2005 or such later date as extended by application of
the provisions of Section 2(a)(ii).

 

For purposes of
this Note, the term “Outstanding Principal Amount” at any time shall mean the
amount of U.S.$ 139,062,500.00, less the amount of any principal repaid
pursuant to the provisions of this Note.

 

Application of
Payments under this Note is set forth in Section 1. This Note is subordinated
as provided in Section 2. The Outstanding Principal Amount may be reduced
as provided in Section 1. Events of Default are set out in Section 4.
Responsibility for withholding taxes is set out in Section 5. Miscellaneous
provisions are set out in Sections 6, 7 and 8.

 

 

Presentation,
demand, protest and notice of dishonor are hereby waived by the Borrower.

 

1.             Application of
Payments.  All payments received by
the Holder pursuant to this Note shall be applied in the following manner:

 

(a)                                  firstly,
if an Event of Default, as defined in Section 4, has occurred, to all costs and
expenses of the Holder or its agents, including legal fees and disbursements,
arising as a result thereof;

 

(b)                                 secondly,
to current interest accrued on any amount being paid; and

 

(c)                                  thirdly,
to reduce the Outstanding Principal Amount.

 

2.             Subordination.

 

(a)                                  The
Borrower agrees, and the Holder by accepting this Note agrees, that the
indebtedness evidenced by this Note:

 

(i)                  is
expressly subordinated and subject in right of payment as to all amounts
payable hereunder to the prior payment in full of all Senior Debt, except to
the extent and in the manner set forth in this Section 2;

 

(ii)               that
in case of renewal or extension of the Senior Debt, the interest-free term of
this Note shall be automatically extended for the same period as such renewal
or extension;

 

(iii)            that
the subordination set out in this Section 2 is for the benefit of the holders
of the Senior Debt; and

 

(iv)           so long
as any Senior Debt is outstanding, no payment of principal or interest under
this Note shall be made except from Cash Flows Available for Distribution, as
the same is defined in the Senior Debt.

 

(b)                                 The
Holder agrees that it will not ask, demand, sue for, take, receive or retain
from the Borrower, by set-off or in any other manner, payment of all or any
part of the Outstanding Principal Amount., any interest, or any other amount
payable in respect of this Note, other than payments made at the times, in the
amounts and to the extent permitted under the provisions hereof, unless and
until all of the Senior Debt has been paid in full or unless the holders of
Senior Debt provide written consent to such payment or unless such payment is
made from Cash Flows Available for Distribution as provided above. The Holder
directs the Borrower to make, and the Borrower agrees to make, such prior
payment of the Senior Debt in priority to any payments due hereunder. The
Holder will not request or accept any security from the Borrower in respect of
the obligations of the Borrower under this Note unless the holders of the
Senior Debt provide written Consent to such security. The Holder unconditionally
waives notice of the incurring of Senior Debt or any part thereof.

 

2

 

(c)                                  For
purposes of this Note, the term “Senior Debt” shall mean the principal of and
interest on, and other payments arising under (including any interest accruing
after the filing of a petition in bankruptcy or the commencement of any
insolvency or bankruptcy proceedings with respect to the Borrower), and all
commissions, fees, indemnities, premiums and other amounts payable in respect
of, any amounts now or hereafter owing by the Borrower under that certain
Working Capital Facility between the Borrower and Banco de Credito del Peru
(‘BCP”) and its successors and assigns, together with any extension,
modification or renewal of the same.

 

(d)                                 In
the event of:

 

(i)                                     any
insolvency or bankruptcy case or proceedings, or any receivership, liquidation,
reorganization, moratorium or other similar case or proceeding in connection
therewith, relative to the Borrower, or to its assets;

 

(ii)                                  any
liquidation, dissolution or other winding up of the Borrower. whether partial
or complete and whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy; or

 

(iii)                               any
general assignment by the Borrower for the benefit of its creditors or any
other general marshalling of assets and liabilities of the Borrower,

 

then and in any
such event the holders of Senior Debt, shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior Debt
before the Holder of this Note shall be entitled to receive any payment of any
kind or character on account of this Note, whether in cash, property or
securities.

 

(e)                                  In
the event and during the continuation of any default in the payment when due of
any amount payable in respect of any Senior Debt, or in the event that any
event of default under any Senior Debt (or any event or condition that, with
the giving of notice or lapse of time, or both, would constitute an event of
default under any Senior Debt) shall have occurred and be continuing, unless
and until payment in full of the Senior Debt shall have been made or such event
of default under any Senior Debt (or any event or condition that, with the
giving of notice or lapse of time, or both, would constitute an event of
default under any Senior Debt) shall not be continuing, as the case may be,
then no payment shall be made by the Borrower on or in respect of this Note.

 

(f)                                    Whether
or not any default in payment shall exist under any Senior Debt or any event of
default under any Senior Debt (or any event or condition that, with the giving
of notice or lapse of time, or both, would constitute an event of default under
any Senior Debt) shall have occurred, the Holder shall not, without the prior
written consent of the holders of the outstanding Senior Debt, take any
collateral security for this Note.

 

(g)                                 No
failure on the part of the holders of Senior Debt, and no delay in exercising
any right, remedy or power hereunder shall operate as a waiver thereof by the

 

3

 

holders of Senior
Debt, nor shall any single or partial exercise by the holders of Senior Debt of
any right, remedy or power hereunder preclude any other or future exercise of
any other right, remedy or power. Each and every right, remedy and power hereby
granted to the holders of Senior Debt, or allowed to the holders of Senior Debt
by law or other agreement shall be cumulative and not exclusive the one of the
other.

 

(h)                                 Without
in any way limiting the generality of the foregoing Subsection, the holders of
Senior Debt may, at any time and from time to time, without the consent of or
notice to the Holder, without incurring responsibility to the Holder, and
without impairing or releasing the subordination provided herein or the
obligations hereunder of the Holder, do any one or more of the following:

 

(i)                                     change
the manner, place or terms of payment of or extend the time of payment of, or
increase, renew or alter, the Senior Debt, or otherwise amend or supplement in
any manner the Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding;

 

(ii)                                  sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing any Senior Debt:

 

(iii)                               release
any person liable in any manner for the Senior Debt; and

 

(iv)                              exercise
or refrain from exercising any rights against the Borrower and any other
person.

 

(i)                                     Upon
payment in full of all Senior Debt, the Holder shall be subrogated to the
rights of the holders of Senior Debt to receive any distribution of remaining
assets of the Borrower, or payments by or on behalf of the Borrower, made on
the Senior Debt, until this Note shall be paid in full.

 

(j)                                     These
subordination provisions are intended solely to define the relative rights of
the Holder and its successors and assigns on the one hand and the holders of
Senior Debt and their respective successors and assigns on the other hand.

 

3.             Endorsement of
Annex.  The Holder shall endorse on
Annex A attached hereto all payments of Outstanding Principal Amount. Such
endorsements shall be presumptive evidence as to the Outstanding Principal
Amount from time to time, but the failure to make such endorsements shall not
affect the obligations of the Borrower hereunder.

 

4.             Events of Default
and Remedies.

 

(a)                                  Each
of the following events shall be an “Event of Default”:

 

(i)                                     if
default occurs in the payment of the Outstanding Principal Amount or on
interest or any other amount on this Note when due and payable, and

 

4

 

such default
continues for a period of five Banking Days, whether or not the Holder gives
notice of such default;

 

(ii)                                  if
the Borrower commences a proceeding under the Bankruptcy Law of Peru, as now or
hereafter amended (which as of the date of this Note is referred to as “Texto
Unico Ordinado de la Ley de Reestructuración Patrimonial”) or under any other
insolvency or similar law (whether now or hereafter in effect) of any jurisdiction
relating to the Borrower, or there is commenced against the Borrower any such
proceeding which remains undismissed for the period of time permitted for
denial under the applicable law, if any, or if the Borrower is adjudged
bankrupt or insolvent: or

 

(iii)                               the
Borrower resolves to dissolve or is dissolved or makes a general assignment for
the benefit of creditors, or any action is taken by the Borrower for the
purpose of effecting any of the foregoing (other than a merger or consolidation
as permitted under the terms of the Senior Debt); or

 

(iv)                              a
receiver or trustee or other officer or representative of a court or of
creditors, or any court or governmental agency, shall under color of legal
authority take and hold possession of any substantial part of the property or
assets of the Borrower for a period in excess of 180 days; or

 

(v)                                 an
event of default occurs pursuant to the Senior Debt (but in all cases, any
payment of this Note shall be subject to the subordination in favor of such
Senior Debt as set out in Section 2).

 

(b)                                 If
any Event of Default occurs and is continuing, then the Holder may declare the
principal amount of the Note to be due and payable immediately, by written
notice to the Borrower, and upon any such declaration, such Outstanding
Principal Amount shall become immediately due and payable as specified in the
first paragraph of this Note, all of the foregoing subject always to the
subordination set out in Section 2. At any time after such a declaration of
acceleration has been made and before a judgment or decree for payment of the
money due has been obtained the Holder may, by written notice to the Borrower,
rescind and annul such declaration and its consequences. No such rescission
shall affect any subsequent default or impair any right consequent thereon.

 

(c)                                  The
Borrower covenants that if the Holder declares that repayment of the
Outstanding Principal Amount is accelerated, the Borrower will, upon demand of
the Holder, but subject to Section 2, pay to the Holder the whole amount then
due and payable on this Note, and henceforth interest shall accrue not only on
the Outstanding Principal Amount but, to the extent that payment of such
interest shall be legally enforceable, also upon any overdue installments of
interest, at the rate of interest set out in this Note. The Borrower further
covenants and agrees to pay, upon any Event of Default and in addition to the
foregoing, such further 

 

5

 

amounts as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Folder,
its agents and counsel.

 

(d)                                 The
Holder may waive any past default hereunder and its consequences, and, upon any
such waiver, such default shall be deemed not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Note, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

 

5.                                       Withholding
Taxes.  The Outstanding Principal
Amount and any interest on this Note shall be payable without deduction or
withholding for or on account of any present or future taxes, duties, fees or
other charges levied or imposed on this Note or the Holder by the Republic of
Peru or any political subdivision or taxing authority thereof or therein. If
the Borrower is required by law to make any such deduction or withholding, it
will pay such additional amounts as may be necessary so that the net payment of
the Outstanding Principal Amount to the Holder and every net payment of
interest on this Note paid to the Holder will not be less than the amount
provided for herein to be then due and payable, provided that if the Holder is
otherwise liable to taxation in the Republic of Peru by reason of any
relationship with or activity within the Republic of Peru other than its
ownership of this Note, and the Borrower is required to withhold or deduct
taxes solely by reason of such relationship or activity, the Borrower shall not
be obliged to pay to the Holder additional amounts equal to the withheld
amounts. To the extent that the Holder receives any reimbursement or other
amount on account of taxes remitted on the Holder’s behalf by the Borrower such
that the Holder makes double recovery, such reimbursement or other amount shall
be applied by the Holder to the repayment of monies owning under this Note.

 

6.                                       Binding
Effect; Assignments.  This Note
shall be binding upon the successors and assigns of the Borrower and shall
inure to the benefit of the successors and assigns of the Holder.

 

7.                                       Certain
Definitions.  For the purposes of
this Note, the term ‘Banking Day” shall mean any day on which banks are
generally open for business in both New York, New York, United States of
America, and Lima, Peru. As used in this Note, the terms “Borrower” and
“Holder” shall be deemed to include their respective successors and assigns

 

6

 

8.                                       Governing
Law.  This Note and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of New York, U.S.A., other than
principles of conflicts of law, and the Borrower hereby undertakes and agrees
that this Note may be enforced in any state or federal district court in the
Borough of Manhattan.  With respect to
this Note and the enforcement thereof, the Borrower irrevocably submits to the
non-exclusive jurisdiction of the state and/or federal district courts of the
Borough of Manhattan and irrevocably waives any objection which it may have now
or hereafter to such jurisdiction and agrees not to claim that any such court
is not a convenient or appropriate forum.

 

	
   

  	
  DOE RUN PERU
  S.R.L.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth
  Ernest Hecker

  
	
   

  	
   

  	
  Kenneth Ernest
  Hecker

  
	
   

  	
   

  	
  Date: September
  12, 2002

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony
  Wayne Worcester

  
	
   

  	
   

  	
  Anthony Wayne
  Worcester

  
	
   

  	
   

  	
  Date: September
  12, 2002

  

 

7

 

ANNEX
ONE

 

OUTSTANDING
PRINCIPAL

 

	
  Payment Date:

  	
   

  	
  Principal Payment 

  Amount

  	
   

  	
  Remaining Principal 

  Amount

  	
   

  	
  Notes:

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