1
Exhibit 10.10
PURCHASE & SALE AGREEMENT
BETWEEN
HECLA MINING COMPANY
AND
XXXXXX CHEMICALS, INC.
DATED: AUGUST 2, 1995
2
PURCHASE & SALE AGREEMENT
BETWEEN
HECLA MINING COMPANY
AND
XXXXXX CHEMICALS, INC.
INDEX
SECTION PAGE
RECITALS and DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
1. PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. ASSETS SUBJECT TO AGREEMENT . . . . . . . . . . . . . . . . . . . . . 2
3. ASSUMPTION OF OBLIGATIONS AND LIABILITIES BY PURCHASER . . . . . . . . 3
4. PURCHASE PRICE AND ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . 4
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Reclamation Expense. . . . . . . . . . . . . . . . . . . . . . . 5
5. POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. REPRESENTATIONS AND WARRANTIES OF HECLA . . . . . . . . . . . . . . . 6
(a) Organization . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Authorization and Approval of Agreement . . . . . . . . . . . . . 6
(d) Ability to Carry Out Agreement . . . . . . . . . . . . . . . . . 7
(e) Legal Proceedings; Compliance with Laws . . . . . . . . . . . . . 8
(f) Broker's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(g) Real Property Leases . . . . . . . . . . . . . . . . . . . . . . 8
(h) Material Personal Property Leases . . . . . . . . . . . . . . . . 9
(i) Machinery and Equipment . . . . . . . . . . . . . . . . . . . . . 9
(j) Material Agreements and Instruments . . . . . . . . . . . . . . 10
(k) Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(l) Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . 10
(m) Environmental Compliance . . . . . . . . . . . . . . . . . . . 10
(n) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(o) Patents and Technology . . . . . . . . . . . . . . . . . . . . 11
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . 12
(a) Organization . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Qualification . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Authorization and Approval of Agreement . . . . . . . . . . . . 12
(d) Ability to Carry Out Agreement . . . . . . . . . . . . . . . . 13
(e) Broker's Fee . . . . . . . . . . . . . . . . . . . . . . . . . 14
(f) Due Diligence Investigation . . . . . . . . . . . . . . . . . . 14
(g) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3
8. COVENANTS OF HECLA . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Conduct of Business . . . . . . . . . . . . . . . . . . . . . . 15
(b) Operation in Ordinary Course . . . . . . . . . . . . . . . . . 15
(c) Maintenance of Property . . . . . . . . . . . . . . . . . . . . 16
(d) Access to Properties, Books and Records . . . . . . . . . . . . 16
(e) Further Assurances . . . . . . . . . . . . . . . . . . . . . . 16
(f) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Closing Letter . . . . . . . . . . . . . . . . . . . . . . . . 18
(h) Press Releases . . . . . . . . . . . . . . . . . . . . . . . . 18
(i) Employees at the Apex Unit . . . . . . . . . . . . . . . . . . 18
9. COVENANTS OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Further Assurances . . . . . . . . . . . . . . . . . . . . . . 20
(c) Press Releases . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 20
10. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11. TRANSFERS AND DELIVERIES BY PURCHASER AT CLOSING . . . . . . . . . . 22
(a) The Purchase Price . . . . . . . . . . . . . . . . . . . . . . 22
(b) Written opinion . . . . . . . . . . . . . . . . . . . . . . . . 23
(c) Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12. TRANSFERS AND DELIVERIES BY HECLA . . . . . . . . . . . . . . . . . 24
(a) Physical Possession . . . . . . . . . . . . . . . . . . . . . 24
(b) Xxxx of Sale . . . . . . . . . . . . . . . . . . . . . . . . . 24
(c) Written Opinion . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) Closing Letter . . . . . . . . . . . . . . . . . . . . . . . . 26
13. CLOSING REPORTS: ADJUSTMENTS TO PURCHASE PRICE . . . . . . . . . . 26
14. CLOSING PRORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Ad Valorem Taxes . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Other Proratable Expenses . . . . . . . . . . . . . . . . . . . 30
15. CONDITION TO OBLIGATIONS OF PURCHASER . . . . . . . . . . . . . . . 30
(a) New Lease Agreement . . . . . . . . . . . . . . . . . . . . . . 30
(b) Representations and Warranties Correct . . . . . . . . . . . . 31
(c) Interim Reclamation Program . . . . . . . . . . . . . . . . . . 31
(d) Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(e) Receipt of Title Insurance on the Closing Date . . . . . . . . 32
(f) Release of Royalty Interest . . . . . . . . . . . . . . . . . . 32
(g) Receipt of Survey . . . . . . . . . . . . . . . . . . . . . . . 32
16. CONDITIONS TO OBLIGATIONS OF HECLA . . . . . . . . . . . . . . . . . 32
(a) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) Representations and Warranties Correct . . . . . . . . . . . . 33
(c) Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(d) New Lease Agreement . . . . . . . . . . . . . . . . . . . . . . 34
17. BOOKS, RECORDS, AND MISCELLANEOUS . . . . . . . . . . . . . . . . . 34
4
18. TAXES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) Taxes and Fees . . . . . . . . . . . . . . . . . . . . . . . . 35
(b) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS 36
(a) Representations and Warranties . . . . . . . . . . . . . . . . 36
(b) Covenants, Conditions and Agreements . . . . . . . . . . . . . 36
20. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 36
21. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . 39
(a) Hecla Environmental Indemnity . . . . . . . . . . . . . . . . . 39
(b) Purchaser Environmental Indemnity . . . . . . . . . . . . . . . 40
(c) Apportionment . . . . . . . . . . . . . . . . . . . . . . . . . 41
(d) Reclamation Program . . . . . . . . . . . . . . . . . . . . . . 42
(e) Under this Agreement . . . . . . . . . . . . . . . . . . . . . 42
22. TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 43
23. LIABILITY ON TERMINATION . . . . . . . . . . . . . . . . . . . . . . 44
24. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . 45
(b) No Assignment, Successors, Assigns, Etc . . . . . . . . . . . . 45
(c) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 46
(d) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 46
(e) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(f) Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(g) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 47
(h) Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(i) The prevailing party . . . . . . . . . . . . . . . . . . . . . 47
5
PURCHASE & SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (hereinafter referred to as
"Agreement") is made and effective this 2ND day of AUGUST, 1995, between
Hecla Mining Company, a Delaware corporation ("Hecla"), and Xxxxxx Chemicals,
Inc., a corporation ("Purchaser").
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RECITALS and DEFINITIONS
WHEREAS, Hecla is the owner of certain facilities and properties
consisting of that certain Lease Agreement dated November 21, 1983, among St.
Xxxxxx Mining Corporation and the Shivwits-Paiute Band; as amended April 4,
1985; as assigned to Hecla March 22, 1989; and as further amended July 16,
1991 (hereinafter referred to, as amended and assigned, as the "Lease
Agreement"), together with certain plant, equipment and facilities associated
therewith, all located on the Shivwits-Paiute Indian Reservation in
Washington County, Utah; and
WHEREAS, Purchaser desires to purchase from Hecla and Hecla desires to
sell and assign to Purchaser the above-described assets upon the terms and
subject to the conditions set forth in this Agreement;
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NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants and conditions herein contained, the parties hereto agree
as follows:
1. PURCHASE AND SALE. Upon the terms and subject to the conditions set
forth herein, Hecla hereby agrees to sell, convey, assign, transfer and
deliver to Purchaser, all Hecla's right, title and interest in and to
the Apex Unit, as defined in Section 2 hereof, and Purchaser hereby
agrees to purchase, acquire, assume and accept all Hecla's right, title
and interest in and to the Apex Unit from Hecla, as of 12:01 a.m. PST
(the "Effective Time") on the Closing Date, as defined in Section 10 of
this Agreement.
2. ASSETS SUBJECT TO AGREEMENT. The assets to be sold by Hecla to
Purchaser pursuant to this Agreement shall include, without limitation,
all of Hecla's right, title and interest in all property and fixed
assets, real and personal, and all other improvements located on the
real property generally described in Exhibit A attached hereto and by
this reference incorporated herein (the "Property"), including the
vehicles, machinery, equipment, fixtures and other tangible operating
assets described in Exhibit B, attached hereto and by reference
incorporated herein, and books and records located on the Property,
intellectual property and know-how regarding cobalt recovery and
processing used at the Apex Unit (hereinafter
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referred to as the "Personalty") and all inventory, supplies and
consumables of the business being operated from and associated with the
Property as a going business concern. The values of inventory, supplies
and consumables and certain obligations associated therewith are more
specifically described in the schedule attached hereto as Exhibit D,
incorporated herein by this reference (the "Working Capital") (all
Property, Personalty and Working Capital is collectively referred to
herein as the "Apex Unit") Specifically excluded from this Agreement
are Hecla's leasehold interest in the real property on which the Apex
Unit is located, and all Accounts Receivable (as that term is defined by
Generally Accepted Accounting Principles) associated with the Apex Unit,
which Hecla shall collect and retain from and after the Closing Date.
3. ASSUMPTION OF OBLIGATIONS AND LIABILITIES BY PURCHASER. As of the
Effective Time, Purchaser shall assume specified obligations,
liabilities and/or risks of Hecla described in Exhibit D hereto. Except
as set forth in Exhibit D, Purchaser shall not assume or be responsible
for any obligation or liability of Hecla, whether fixed or contingent,
known or unknown, between Hecla and another party or parties. Purchaser
shall be entitled to claim and assert any defense by way of
counterclaim, off-set, statute of limitations, or otherwise, or any
other rights of Hecla with respect to any and all such
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debts, obligations and liabilities of Hecla assumed by Purchaser, to the
same extent as Hecla would be entitled to do absent the assumption
thereof by Purchaser.
4. PURCHASE PRICE AND ADJUSTMENTS.
(a) PURCHASE PRICE. The purchase price payable by Purchaser to Hecla
as consideration for the sale of the Apex Unit shall be:
(i) For the Property and Personalty, eight million dollars
($8,000,000) (the "Property Purchase Price"), paid in the
following installment amounts: (A) three million dollars
($3,000,000) in immediately available funds at Closing; (B)
three million dollars ($3,000,000), together with simple
interest accrued on the entire balance of the Property
Purchase Price outstanding at the prime rate of interest
offered to Hecla by Nationsbank, N.A. (the "Prime Rate"), in
immediately available funds on the first anniversary of the
Closing Date; and (C) two million dollars ($2,000,000),
together with simple interest accrued on the entire balance of
the Property Purchase Price outstanding at the Prime Rate plus
one percent (1%), in immediately available funds on the second
anniversary of the Closing Date. Purchaser shall have the
right to prepay any or all of the above-described
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amounts at any time prior to the dates specified herein.
(ii) For the Working Capital, one million three hundred ninety
thousand eight hundred ten dollars, ($1,390,810) paid in
immediately available funds at Closing.
(b) ADJUSTMENTS. As soon as practicable after Closing in accordance
with the procedure established in Section 13, the Adjustment Amount
(as that term is defined in Section 13), shall be paid by Hecla to
Purchaser or to Hecla by Purchaser, as appropriate.
(c) RECLAMATION EXPENSE. As soon as practicable following Hecla's
completion of repairs to the pond 3A liner, more specifically
described in Exhibit E to this Agreement, Purchaser shall reimburse
Hecla in an amount which shall be the lesser of (i) fifty thousand
dollars ($50,000) or (ii) the actual cost incurred by Hecla in
making such repairs. Hecla shall supply Purchaser with supporting
documentation regarding the costs incurred in making such repairs.
5. POSSESSION. Purchaser shall be entitled to immediate possession of the
Apex Unit upon the completion of the Closing
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of this Agreement, subject to Hecla's rights specified in Section 21(d)
of this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF HECLA. Hecla represents and warrants
to Purchaser that:
(a) ORGANIZATION. Hecla is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority (corporate and
other) to own, use or deal in the Apex Unit.
(b) QUALIFICATION. Hecla is duly qualified to do business and is in
good standing in those states or other jurisdictions where
qualification is required in connection with the ownership of, use
of, or dealing in the Apex Unit.
(c) AUTHORIZATION AND APPROVAL OF AGREEMENT. The execution, delivery
and performance by Hecla of this Agreement and all documents
contemplated hereby have been duly and effectively authorized by
all necessary corporate action on the part of Hecla, and no
additional consent, approval or other action by its Board of
Directors or stockholders is required by Hecla's Certificate of
Incorporation, By-Laws or otherwise.
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(d) ABILITY TO CARRY OUT AGREEMENT. Hecla is not a party to, subject
to or bound by any judgment, order, writ, injunction or decree of
any court or governmental body which would (i) prevent the carrying
out of this Agreement, or (ii) materially adversely affect its
ownership and use of the Apex Unit. Neither the execution and
delivery of this Agreement by Hecla, nor the performance of Hecla's
obligations hereunder, will constitute a violation of, or be in
conflict with, or result in the breach of, or constitute a default
under, or create (or cause the acceleration of the maturity of) any
debt, obligation or liability pursuant to, or result in the
creation or imposition of any security interest, lien or other
encumbrance upon the Property, Personalty or the Working Capital
under (i) any term or provision of the Certificate of Incorporation
or By-Laws of Hecla, (ii) any obligation of Hecla under any loan or
financing agreement, lease or other agreement or instrument of any
kind to which Hecla is a party. No consent or approval of any
Federal, state or local authority is required for the consummation
or validity of the purchase of the Apex Unit, other than the
approval of a lease of real property to Purchaser and an amendment
of Hecla's Lease Agreement from the Shivwits-Paiute Band by the
United States Department of the Interior, Bureau of Indian Affairs
(hereinafter referred to as the "BIA").
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(e) LEGAL PROCEEDINGS; COMPLIANCE WITH LAWS. There are no lawsuits,
proceedings or governmental investigations pending or, to the
knowledge of a principal officer of Hecla or Hecla, threatened with
respect to Hecla or the Apex Unit, nor is Hecla operating under or
subject to, or in default with respect to, any order, writ,
injunction, or decree of any court or governmental agency or body
as of the date of this Agreement. To the best of Hecla's
knowledge, it has substantially complied with all laws, rules and
regulations, federal, state and local, which affect the Apex Unit.
(f) BROKER'S FEE. Hecla has not caused to be incurred for or by
Purchaser any liability for any fee or commission in the nature of
a finder's, originator's or broker's fee in connection with the
subject matter of this Agreement.
(g) REAL PROPERTY LEASES. Other than the Lease Agreement, there are no
leases or agreements pursuant to which a third party is lessor or
lessee of real property owned or held by Hecla used or held for use
in connection with the operations of the Apex Unit. Hecla is the
holder of the leasehold estates and related interests purported to
be granted by the Lease Agreement. The Lease Agreement is in full
force and effect and is enforceable in accordance with its terms
and the leasehold it purports to grant is
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free and clear of all liens, security interests, restrictions,
covenants, claims, charges or other encumbrances by, through and
under Hecla. Neither Hecla, nor, to best of Hecla's knowledge, the
Lessor under the Lease Agreement, is in default, in any material
respect, under any of the foregoing, and no event has occurred
which, with the lapse of time or the giving of notice, or both,
would constitute such a default.
(h) MATERIAL PERSONAL PROPERTY LEASES. There are no material leases,
or agreements pursuant to which Hecla is lessee of or holds,
manages or operates any personal property as part of its
operations; there are no material leases or agreements pursuant to
which a third party is lessee of or holds, claims, manages or
operates any personal property owned or held by Hecla as part of
its operations at the Apex Unit or in relation thereto.
(i) MACHINERY AND EQUIPMENT. Hecla holds good title to all Personalty.
Such Personalty shall be sold in the condition existing at the
Effective Time. Hecla makes NO WARRANTY OR REPRESENTATION, EXPRESS
OR IMPLIED, AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
OR OTHERWISE REGARDING THE PERSONALTY.
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(j) MATERIAL AGREEMENTS AND INSTRUMENTS. Except as set forth herein,
there are no material contracts, indentures, guarantees,
agreements, or other instruments relating to the Apex Unit to which
Hecla is a party as of the date hereof.
(k) INVENTORY. Items comprising the raw materials, work in progress
and finished goods inventory of the Apex Unit, the value of which
is specified in Exhibit D to this Agreement, were, as of the date
Exhibit D was prepared, and shall be at the Effective Time,
processable by the facilities at the Apex Unit so as to be rendered
saleable in the ordinary course of the Apex Unit's business.
(l) ACCOUNTS PAYABLE. The accounts payable summarized in Exhibit D to
this Agreement as of the Closing Date will have been incurred in
the ordinary course of the Apex Unit's business.
(m) ENVIRONMENTAL COMPLIANCE. Hecla has made available to Purchaser
copies of all notices, data, reports or other information in
Hecla's possession or control respecting any Hazardous Substances
as defined in Section 21 of this Agreement ("Environmental Data")
used or generated in connection with the Apex Unit, or disposed of
or from the Property prior to the Closing Date. Hecla does not
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warrant the accuracy or completeness of any Environmental Data
supplied to Purchaser, although Hecla is not aware of material
inaccuracies in such Environmental Data.
(n) LIENS. There are no mortgages, liens (except liens, if any, for
taxes not yet due and inchoate liens of materialmen, mechanics,
workmen, repairmen, employees or other similar liens arising in the
ordinary course of business which are not delinquent or which are
bonded, all of which it agrees to discharge in due course prior to
the Closing unless such are to be assumed by Purchaser as provided
herein), security interests or encumbrances on the Apex Unit or its
properties except such mortgages, liens, security interests, or
encumbrances to be assumed by the Purchaser or to which the Apex
Unit are to remain subject as provided in this Agreement, or any
Exhibit attached hereto.
(o) PATENTS AND TECHNOLOGY. There are no patents, trade names or
trademarks used by Hecla in the conduct of the business of the
Apex Unit. Hecla has granted no license or other rights to persons
or entities with respect to patents, trade names, trademarks or any
other technology or proprietary rights used with respect to the
Apex Unit. To the best of Hecla's knowledge, (i) the business of
the Apex Unit as presently conducted does not infringe upon
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any patent, trade name, trademarks, or other proprietary rights of
third parties, (ii) there is no pending or threatened litigation
against Hecla involving any patent, trade name, trademark or other
proprietary right, and (iii) no third party is infringing upon any
patent, trade name or trademark of Hecla used in the conduct of the
business of the Apex Unit.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Hecla that:
(a) ORGANIZATION. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, and has all requisite power and authority (corporate and
other) to carry on its business as now being conducted.
(b) QUALIFICATION. Purchaser is duly qualified to do business and is
in good standing in those states or other jurisdictions where
qualification is required in connection with the ownership of, use
of, or dealing in the Apex Unit.
(c) AUTHORIZATION AND APPROVAL OF AGREEMENT. The execution, delivery
and performance by Purchaser of this Agreement and all documents
contemplated hereby have been duly and
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effectively authorized by all necessary corporate action on the
part of Purchaser, and no additional consent, approval or other
action by its Board of Directors or stockholders is required by
Purchaser's Certificate of Incorporation, By-Laws or otherwise.
(d) ABILITY TO CARRY OUT AGREEMENT. Purchaser is not a party to,
subject to, or bound by any judgment, order, writ, injunction, or
decree of any court or governmental body which would prevent the
carrying out of this Agreement. Neither the execution and delivery
of this Agreement nor the performance of Purchaser's obligations
hereunder will constitute a violation of, or be in conflict with,
or result in the breach of, or constitute a default under (i) any
term or provision of the Certificate of Incorporation or By-Laws of
Purchaser, (ii) any obligation of Purchaser under any loan or
financing agreement, lease or other agreement or instrument of any
kind to which Purchaser is a party, or (iii) any statute or law.
No consent or approval of any Federal, state or local authority is
required for the consummation or validity of the purchase of the
Apex Unit, other than the approval of a lease of real property to
Purchaser and an amendment of Hecla's Lease Agreement from the
Shivwits-Paiute Band by the BIA.
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(e) BROKER'S FEE. Purchaser has not caused to be incurred for or by
Hecla any liability for any fee or commission in the nature of a
finder's, originator's or broker's fee in connection with the
subject matter of this Agreement.
(f) DUE DILIGENCE INVESTIGATION. Purchaser has conducted a due
diligence investigation of the Apex Unit and its associated
business operations, and acknowledges that Hecla has provided and
made available to Purchaser all information, records, and persons
associated with the Apex Unit and its associated business
operations requested by Purchaser.
(g) CONSENTS. Prior to the Effective Time, and as soon as practicable
following execution of this Agreement, Purchaser shall have made
application and submitted all documents and materials necessary for
the issuance of the consent of the Shivwits-Paiute Band to Hecla's
Amendment of Lease and Purchaser's New Lease (as those terms are
herein defined) with the Shivwits-Paiute Band, and of the consent
of the BIA to Hecla's Amendment to Lease and Purchaser's Lease
Agreement with the Shivwits-Paiute Band.
8. COVENANTS OF HECLA. It is covenanted and agreed that between the date
hereof and the Closing Date:
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(a) CONDUCT OF BUSINESS. Hecla shall not, without the prior written
consent of Purchaser:
(i) enter into any agreement (other than agreements entered into
in the ordinary course of business) which will become an obligation
of Purchaser or would otherwise affect the Apex Unit;
(ii) lease, mortgage, or otherwise encumber any of the Apex Unit;
or
(iii) enter into discussions or negotiations with any third party
concerning the sale of any of the Apex Unit prior to the Closing
Date, or grant options or rights, or enter into any contract or
commitment to sell any of the Apex Unit other than in the ordinary
course of business of Hecla.
(b) OPERATION IN ORDINARY COURSE. Hecla shall conduct operations at
the Apex Unit only in the ordinary course of its business
consistent with past practice. Hecla shall consult with Purchaser
with respect to any significant operational, financial or other
business issues relating to the Apex Unit.
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(c) MAINTENANCE OF PROPERTY. Hecla shall take or cause to be taken
such steps as shall be necessary to maintain the Property in good
standing, including, but not limited to the payment of rentals,
royalties and all taxes, fees or other governmental charges of
whatever nature imposed or levied upon the Property.
(d) ACCESS TO PROPERTIES, BOOKS AND RECORDS. Hecla has made and will,
during normal business hours and subject to reasonable notification
by Purchaser to Hecla, and subject to Hecla's reasonable
requirements and rules, permit Purchaser and Purchaser's authorized
officers, employees, attorneys, engineers, accountants and other
agents and representatives to have access to the properties, books
and records, and documents relating to the Apex Unit. Hecla shall
have the right, in lieu thereof, where such information is included
within Hecla's other corporate records, to make copies of or
provide such information from such books and records and documents
as Purchaser may from time to time reasonably request.
(e) FURTHER ASSURANCES. Hecla will diligently prepare, execute and
deliver such instruments and take such action as Purchaser may
reasonably request in order to effect the transactions contemplated
by this Agreement and to satisfy
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each of the conditions set forth in Section 15 of this Agreement.
(f) CONSENTS. Prior to the Effective Time, and as soon as practicable
following execution of this Agreement, Hecla shall make application
and submit all documents and materials necessary for the issuance
of the consent of the BIA and the Shivwits-Paiute Band to amend
Hecla's Lease Agreement to provide for: (i) Hecla's Amendment of
Lease Agreement (hereinafter referred to as the "Amendment") with
respect to a portion of the Property; (ii) Hecla's retention of
certain real and personal property subject to its Lease Agreement;
and (iii) Hecla's ongoing activities thereon, including, but not
limited to, reclamation operations specified in Exhibit E, attached
hereto and incorporated herein by this reference; all on terms
satisfactory to Hecla in its reasonable discretion. Hecla shall
cooperate and otherwise assist Purchaser with obtaining a lease
agreement, substantially in the form of Exhibit F for Purchaser's
operation of the Apex Unit (hereinafter referred to as the "New
Lease"), with the Shivwits-Paiute Band, and the consent of the BIA
thereto, and shall be deemed by Purchaser to have satisfied its
obligations with respect to the transfer of the property subject to
the Lease Agreement. In no event will Hecla be
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required to underwrite or in any way guarantee payment or
performance by the Purchaser of its lease agreement or any other
arrangement, contract, indenture, guarantee, agreement or other
instrument which Purchaser enters into with the Shivwits-Paiute
Band.
(g) CLOSING LETTER. Hecla shall provide Purchaser a letter from the
President or a Vice President of Hecla at Closing to the effect
that from the date of signing this Agreement to the Effective Time
there has been no material change in respect to the Apex Unit,
except for changes resulting from the ordinary course of business,
and that all disclosures in the Exhibits to this Agreement are
current as of the Effective Time.
(h) PRESS RELEASES. Hecla will consult and cooperate with Purchaser
and use all reasonable efforts to agree upon the terms and
substance of all press releases, announcements and public
statements with respect to the transactions contemplated herein
prior to the Effective Time, provided that such consultation and
cooperation shall not interfere with any obligation of Hecla to
disclose any information as required by applicable law.
(i) EMPLOYEES AT THE APEX UNIT. Hecla shall, effective immediately
prior to the Closing Date, terminate, or
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transfer, in its sole discretion, those employees which it employs
at the Apex Unit, and Purchaser shall be free, in its sole
discretion, to hire those persons which it may thereafter wish to
employ.
9. COVENANTS OF PURCHASER. It is covenanted and agreed that between the
date hereof and the Closing Date:
(a) CONSENTS. Prior to the Effective Time, and as soon as practicable
following execution of this Agreement, Purchaser shall make
application and submit all documents and materials to the BIA and
the Shivwits-Paiute Band to obtain a lease agreement with the
Shivwits-Paiute Band on terms reasonably necessary for Purchaser's
operation of the Apex Unit, in a manner consistent with the
transactions contemplated herein. Purchaser shall cooperate and
otherwise assist Hecla with obtaining an amendment to Hecla's Lease
Agreement, on such terms as are customary and reasonably necessary
for Hecla's continuing activities adjacent to the Apex Unit, as
specified in Section 8(f) of this Agreement, and the consent of the
BIA thereto. In no event will Purchaser be required to underwrite
or in any way guarantee payment or performance by Hecla of its
obligations pursuant to the amendment to Hecla's Lease Agreement,
or any other arrangement, contract, indenture, guarantee, agreement
or other
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instrument which Hecla enters into with the Shivwits-Paiute Band.
(b) FURTHER ASSURANCES. Purchaser will diligently prepare, execute and
deliver such instruments and take such action as Hecla may
reasonably request in order to effect the transactions contemplated
by this Agreement and to satisfy each of the conditions set forth
in Section 16 of this Agreement.
(c) PRESS RELEASES. Purchaser will consult and cooperate with Hecla
and use all reasonable efforts to agree upon the terms and
substance of all press releases, announcements and public
statements with respect to the transactions contemplated herein
prior to the Effective Time, provided that such consultation and
cooperation shall not interfere with any obligation of Purchaser to
disclose any information as required by applicable law.
(d) CONFIDENTIALITY. In the event of the termination of this
Agreement, Purchaser shall promptly return to Hecla all documents,
work papers, and other material obtained by Purchaser or on its
behalf from Hecla or Hecla's representatives as a result of this
Agreement or in connection herewith, whether so obtained before or
after the execution hereof, and Purchaser shall not retain any
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copy or other reflection of any such documents, work papers and
other material. Purchaser shall at all times prior to the Closing
Date, and in the event of termination of this Agreement, cause any
information so obtained to be kept confidential and will not use,
or permit the use of, such documents, work papers and other
materials in its business or in any other manner or for any other
purpose, unless such information (i) becomes generally available to
the public other than as a result of a disclosure by Hecla or its
representatives, (ii) was available to Purchaser on a non-
confidential basis prior to its disclosure to Purchaser by Hecla or
its representatives, or (iii) becomes available to Purchaser on a
non-confidential basis from a source other than Hecla or its
representatives, provided that such source is not bound by a
confidentiality agreement with Hecla or its representatives;
provided, further, that to the extent information obtained by
Purchaser as a result of this Agreement, whether so obtained before
or after the execution hereof, relates to Hecla, Hecla's operations
other than the Apex Unit, or any affiliate, Purchaser's obligation
hereunder shall survive for a period of three years from the date
of this Agreement and shall not terminate on the Closing Date or
upon termination of this Agreement.
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10. CLOSING. Closing shall take place on or before 12:01 p.m., local time,
on the last business day of the calendar month in which both: (a) BIA's
approval of both (i) Hecla's Amendment and (ii) Purchaser's New Lease
with the Shivwits-Paiute Band; and (b) the satisfaction of all
conditions precedent specified in Sections 15 and 16 of this Agreement
are met or waived in writing by the party whose obligations are
conditioned thereon; or on such other date mutually agreed upon in
writing by the parties hereto (the "Closing Date"); Closing shall occur
in the offices of OMG located at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxx,
00000, or at such other place mutually agreed upon in writing by the
parties hereto. Closing must occur prior to September 30, 1995, unless
extended by mutual written agreement. If Closing has not occurred by
the close of business on September 30, 1995, this Agreement may be
terminated in accordance with Section 22 hereof.
11. TRANSFERS AND DELIVERIES BY PURCHASER AT CLOSING. Purchaser shall
execute, where applicable, and deliver to Hecla at the Closing the
following:
(a) THE PURCHASE PRICE provided for in Sections 4(a) and 4(b) hereof
consisting of the dollar amounts specified in Sections 4(a) and
4(b), in cash or immediately available funds;
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(b) WRITTEN OPINION of the General Counsel of Purchaser, dated as of
the Closing Date, substantially stating, in his opinion, that
Purchaser's corporate existence and good standing are as
represented in Section 7 hereof; that Purchaser has taken all
corporate action necessary to authorize the execution and
performance of this Agreement; that this Agreement and the
instruments delivered by Purchaser to Hecla pursuant to or in
connection with this Agreement have been duly executed and
delivered by Purchaser and are valid, binding and enforceable
against Purchaser in accordance with their respective terms (except
to the extent that enforcement is affected by laws pertaining to
bankruptcy, reorganization, insolvency and creditors' rights and by
the availability of injunctive relief and specific performance);
that neither the execution and delivery by Purchaser of this
Agreement nor its compliance herewith, will conflict with
Purchaser's Certificate of Incorporation or By-Laws, or to his
knowledge will result in a default under or breach of the terms,
conditions or provisions of any agreement or instrument to which
Purchaser is a party or by which it may be bound; and that neither
the execution and delivery of this Agreement by Purchaser nor its
compliance herewith will result in a violation of any statute,
regulation, law, ordinance, or, to the best of his knowledge,
order,
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writ, judgment or decree of any court, agency or governmental
authority, other than as expressly provided for in this Agreement;
that Purchaser is not a party to or affected by any pending legal,
administrative or other action which materially affects Purchaser's
execution, delivery and performance of this Agreement.
(c) GUARANTY of Purchaser's obligations substantially in the format of
Exhibit H, attached hereto and incorporated herein by this
reference.
12. TRANSFERS AND DELIVERIES BY HECLA. Hecla shall execute, where
applicable, and deliver to Purchaser at the Closing, unless otherwise
provided herein, the following:
(a) PHYSICAL POSSESSION of all tangible property constituting part of
the Apex Unit.
(b) XXXX OF SALE for the Property, Personalty and the Working Capital
requiring a transfer of title to Purchaser.
(c) WRITTEN OPINION of legal counsel for Hecla, dated as of the Closing
Date, substantially stating, in his opinion, that Hecla's corporate
existence and good standing are as stated in Section 6 hereof; that
Hecla has taken all corporate action necessary to authorize the
execution and
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performance of this Agreement; that this Agreement and the
instruments delivered by Hecla to Purchaser pursuant to or in
connection with this Agreement have been duly executed and
delivered by Hecla and are valid, binding and enforceable against
Hecla in accordance with their terms (except to the extent that
enforcement is affected by laws pertaining to bankruptcy,
reorganization, insolvency and creditors' rights and by the
availability of injunctive relief and specific performance); that
neither the execution and delivery by Hecla of this Agreement nor
its compliance herewith will conflict with Hecla's Certificate of
Incorporation or By-Laws or result in the creation or imposition of
any lien, charge or encumbrance upon the Property or, to the best
of his knowledge, result in a default under, or a breach of the
terms, conditions or provisions of, any agreement or instrument
affecting ownership and use of the Apex Unit to which Hecla is a
party or by which it is bound; that Hecla is not a party to, nor
subject to or bound by, any judgment, injunction or decree of any
court or governmental authority which may restrict or interfere
with the performance of this Agreement or such other instruments
and documents; that except as set forth in this Agreement or any of
the Exhibits hereto, to the best of his knowledge, Hecla is not a
party to, or affected by, any pending legal,
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administrative or other action, which materially adversely affects
the Apex Unit or Hecla;
(d) CLOSING LETTER as provided for in Section 8(g).
13. CLOSING REPORTS: ADJUSTMENTS TO PURCHASE PRICE.
(a) As soon as practicable, and in any event within 10 business days
following the Closing Date, the parties shall jointly conduct an
inventory of the Apex Unit, and Hecla shall prepare and deliver to
Purchaser a schedule of the value of certain current assets and
certain current liabilities of the Apex Unit as of the Closing Date
prepared in accordance with Generally Accepted Accounting
Principles with Inventory valued on an average costing method, all
prepared on a basis consistent with the Schedule of Certain Current
Assets and Certain Current Liabilities attached hereto as Exhibit D
(the "Book Value") together with a report of Hecla thereon (the
"Closing Date Report") containing (i) a schedule setting forth the
Book Value of certain current assets and certain current
liabilities described on Exhibit D, in each case as the same
existed as at the Closing (the "Closing Schedule"), and (ii)
Hecla's determination of the Adjustment Amount (as that term is
hereinafter defined) based on such Closing Schedule. The
"Adjustment Amount"
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shall mean the arithmetic number obtained when the Book Value of
the Inventories and Prepaid Expenses less the Book Value of the
Current Liabilities as shown on the Closing Date Report, is
subtracted from the Book Value of the Inventories and Prepaid
Expenses as set forth in the schedule attached hereto as Exhibit D.
If the Adjustment Amount so obtained is negative, then Hecla shall
pay to Purchaser, or if the number so obtained is positive, then
Purchaser shall pay to Hecla, in immediately available funds, an
amount equal to the Adjustment Amount plus interest thereon at the
Prime Rate of interest per annum by Nationsbank, N.A. as its
reference rate of interest for demand commercial loans on the
Closing Date, calculated from and including the Closing Date, but
excluding the date such payment is made.
(b) Hecla's determination of the Adjustment Amount shall be final and
binding on the parties unless, within 30 days after delivery
thereof, a written notice of objection is given by Purchaser to
Hecla setting out Purchaser's objections to the Closing Schedule
and Closing Date Report and including Purchaser's determination of
the Adjustment Amount. During the 30 day period, Purchaser shall
have the opportunity to (i) examine the working papers, schedules
and other documents prepared by Hecla in
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connection with the determination and preparation of the Closing
Schedule and the Closing Date Report; and (ii) ask questions of and
have discussions with Hecla in connection with the foregoing.
Hecla and Purchaser shall consult with each other with respect to
Purchaser's objections. If Hecla and Purchaser are unable to agree
on the Adjustment Amount within 20 days after Hecla's receipt of
Purchaser's notice of objection, the Adjustment Amount shall be
determined expeditiously by a nationally recognized firm of
certified public accountants who are not auditors for any of the
parties hereto or any of their respective Affiliates (the
"Accountants") agreed to by Hecla and Purchaser within 15 days
after the notice of objection has been given or, failing agreement
thereon, selected forthwith by Purchaser's external auditors and
Hecla's external auditors. Each of Hecla and Purchaser shall
submit to the Accountants their respective final determinations of
the Adjustment Amount as revised to the date of submission,
together with such supporting data as the Accountants consider
necessary or appropriate. The resolution of the dispute by the
Accountants will be final and binding on the parties. The fees and
expenses of the Accountants shall be borne by the party whose final
determination of the Adjustment Amount was further from the
Adjustment Amount determined by the Accountants. If
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the determination of the Adjustment Amount by each of Purchaser and
Hecla is equally distant from the Adjustment Amount determined by
the Accountants, then the fees and expenses of the Accountants
shall be borne equally by Hecla and Purchaser.
(c) Either Hecla or Purchaser may prepay all or any portion of the
Adjustment Amount and thereafter no interest shall be payable on
the amount prepaid. If such prepayment exceeds the amount payable
as the Adjustment Amount, no interest shall be payable to the payor
of such prepayment on such overpayment, but the amount of the
overpayment shall be refunded to the payor on the Adjustment Date.
Purchaser shall give Hecla such assistance and access to the
assets, books, records and employees of the Apex Unit as Hecla may
reasonably require in order to enable Hecla to prepare the Closing
Schedule and Closing Date Report and for all matters relating to
the final determination of the Adjustment Amount.
14. CLOSING PRORATIONS. Expenses which will require proration will be
prorated as follows:
(a) AD VALOREM TAXES. All ad valorem taxes (both real and personal
property) shall be prorated between the parties
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as of the Closing Date and cash settlement therefore shall be made
promptly after Closing.
(b) UTILITIES. Hecla will request that utility companies take meter
readings or follow similar procedures to invoice Hecla for services
provided through the Effective Time, which invoices shall be paid
by Hecla. Other utility bills received after the Effective Time
which require proration will be paid by Purchaser. Purchaser will
invoice Hecla for its pro rata share of such invoices and will be
promptly reimbursed by Hecla.
(c) OTHER PRORATABLE EXPENSES. Invoices received after the Effective
Time for other proratable expenses will be paid by Purchaser.
Purchaser will invoice Hecla for its pro rata share of such
invoices and will be promptly reimbursed by Hecla.
15. CONDITION TO OBLIGATIONS OF PURCHASER. The obligation of Purchaser to
close under this Agreement is subject to the satisfaction at or prior to
the Closing Date of the following conditions precedent, unless waived by
Purchaser:
(a) NEW LEASE AGREEMENT. Purchaser shall have received: (i) the
executed and delivered New Lease specified in Section 8(f) of this
Agreement, and (ii) the consent of
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the Bureau of Indian Affairs to the New Lease specified in Section
8(f) of this Agreement.
(b) REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties of Hecla contained in Section 6 of this Agreement shall
be true and correct on and as of the Closing Date in all material
respects; Hecla shall have performed and complied in all material
respects with all of Hecla's obligations to Closing pursuant to
agreements and conditions required by Sections 6, 8 and 15 of this
Agreement to be performed or complied with by it prior to or on the
Closing Date and Purchaser shall be furnished with a certificate or
certificates in the form attached as Exhibit C of appropriate
officers of Hecla, dated as of the Closing Date, certifying to the
fulfillment of the foregoing conditions.
(c) INTERIM RECLAMATION PROGRAM. Hecla shall have completed that
portion of the reclamation program specified in Exhibit E which is
designated for completion prior to Closing.
(d) AMENDMENT. Hecla shall have received, in a form and substantively,
reasonably necessary to Hecla's activities, the Amendment described
in Section 16(a).
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(e) RECEIPT OF TITLE INSURANCE ON THE CLOSING DATE. Purchaser shall
have received a commitment for title insurance policy issued by
Commonwealth Land Title Insurance as Owners Policy Form B, in the
amount of $8,000,000,showing that the title to the real estate is
in the Tribe, containing only the exceptions listed on Exhibit I
hereto. Purchaser shall have satisfied itself that the exceptions
to the title to the real estate listed on Exhibit I do not
interfere with Purchaser's proposed used of the real property.
(f) RELEASE OF ROYALTY INTEREST. Hecla shall have received a full and
unconditional release of any and all interest in the Apex Unit and
operations conducted there described in that certain Royalty
Agreement dated March 22, 1989, between Hecla and St. Xxxxxx Mining
Company.
(g) RECEIPT OF SURVEY. Before closing, Purchaser shall have received a
survey of the real estate which shall identify all recorded
easements and encroachments and all improvements on the property
and shall not show any violations of building or set-back lines.
16. CONDITIONS TO OBLIGATIONS OF HECLA. The obligation of Hecla to close
under this Agreement is subject to the satisfaction
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at or prior to the Closing Date of each of the following conditions
precedent, unless waived by Hecla:
(a) CONSENTS. Hecla shall have received, executed and delivered the
Amendment substantially in the form attached hereto as Exhibit G
from the Shivwits-Paiute Band, together with the consent of the BIA
thereto, and with such other terms as are substantively, reasonably
necessary to Hecla's ongoing activities at the Apex Unit, in a
manner consistent with the transactions contemplated herein.
(b) REPRESENTATIONS AND WARRANTIES CORRECT. All representations and
warranties of Purchaser contained in Section 7 of this Agreement
shall be true and correct on and as of the Closing Date in all
material respects; Purchaser shall have performed and complied in
all material respects with all of Purchaser's obligations prior to
Closing pursuant to agreements and conditions required by Sections
7, 9 and 16 of this Agreement to be performed or complied with by
it prior to or on the Closing Date, and Hecla shall be furnished
with a certificate or certificates in the form attached as Exhibit
C of appropriate officers of Purchaser, dated as of the Closing
Date, certifying to the fulfillment of the foregoing conditions.
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(c) GUARANTY. Purchaser shall have delivered an executed guaranty by
its shareholder and all affiliates of its shareholder in the form
attached hereto as Exhibit H. "Affiliates" of any party hereto
means all persons or companies that directly, or indirectly through
one or more intermediaries, control, or are controlled by, or are
under common control with, the party, all within the meaning of
subsection (a)(1) of SEC Rule 144 under the Securities Act of 1933,
except natural persons, companies in which the shareholder or
affiliate only hold a minority interest, and persons domiciled
outside or organized under laws other than the United States of
America.
(d) NEW LEASE AGREEMENT. Purchaser shall have received: (i) the
executed and delivered New Lease specified in Section 8(f) of this
Agreement; and (ii) the consent of the Bureau of Indian Affairs to
the New Lease specified in Section 8(f) of this Agreement.
17. BOOKS, RECORDS, AND MISCELLANEOUS. On the Closing Date, or as soon
thereafter as is practicable, Hecla shall turn over to Purchaser all of
the books, records, maps, personal property tax returns and files, or
copies thereof (the "Documents") which relate solely to the Apex Unit.
Both prior to and after the Closing Date, Hecla agrees to make its books
and records
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relating to the Apex Unit available for inspection by Purchaser at any
reasonable time upon reasonable request, or, in lieu thereof and at
Hecla's option, shall make such copies or provide such information from
such books and records as Purchaser may from time to time reasonably
request. After the Closing Date, the Documents will be retained by
Purchaser in part for Hecla's benefit and will be available for review
and copying by Hecla for any proper purpose upon reasonable notice
during Purchaser's normal business hours. Hecla or Purchaser, as the
case may be, shall use their best efforts not to destroy any documents
or documents respectively, without 30 days prior written notice to the
other, for a period of 5 years after the Closing Date.
18. TAXES AND EXPENSES.
(a) TAXES AND FEES. Hecla shall pay all transfer and documentary stamp
taxes payable in connection with the purchase and sale hereunder.
Purchaser shall pay all recordation and filing fees.
(b) EXPENSES. Each of the parties hereto will pay its own expenses
incident to the preparation and carrying out of this Agreement and
the expenses and fees involved in the preparation and delivery of
all documents, reports and opinions required to be delivered by or
on behalf of it
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hereunder, whether or not the transactions contemplated hereby are
consummated.
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS.
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in Sections 6 and 7 shall survive the Closing Date from
the Effective Time until 12 months after Closing, at which time
they shall automatically terminate and shall not merge into any of
the deeds, assignments, xxxx of sale or other instruments delivered
at Closing.
(b) COVENANTS, CONDITIONS AND AGREEMENTS. The Covenants and Conditions
set forth in Sections 8 and 9 [except for Sections 8(e), 9(b) and
9(d)], 15 and 16 shall terminate as of and shall not survive the
Closing Date. The agreements set forth in Sections 4, 20 and 21
shall survive the Closing Date.
20. INDEMNIFICATION. Except with respect to matters specified in Section 21
of this Agreement, the parties hereto shall be indemnified as follows:
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(a) Hecla shall defend, indemnify and hold harmless the Purchaser, its
officers, directors, successors and assigns against all damages,
claims, losses, liabilities (except liabilities assumed by
Purchaser), costs and expenses which arise out of Hecla's Apex Unit
operations or associated with Hecla's Apex Unit employees, prior to
the Closing Time and obligations or liabilities of Hecla related to
the Apex Unit not specifically assumed by Purchaser or the
obligation of Purchaser pursuant to this Agreement and the breach
of the representations and warranties, the covenants and agreements
which survive the Closing pursuant to Section 19 except for loss of
profits; consequential, incidental or special damages.
(b) Purchaser shall defend, indemnify and hold harmless Hecla, its
officers, directors, successors and assigns against all damages,
claims, losses, liabilities, costs and expenses which it assumed
pursuant to the terms of this Agreement and which arise out of the
conduct of operations at the Apex Unit subsequent to the Closing
Time, and the breach of the representations and warranties, the
covenants and agreements which survive the Closing pursuant to
Section 19 except for loss of profits; consequential, incidental or
special damages.
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(c) The right of either party to indemnification hereunder is
contingent on receipt by the indemnifying party of a promptly
delivered written notice of a claim for indemnification from the
party seeking such indemnification.
(d) Upon receipt of a notice claiming indemnification the indemnifying
party shall proceed to assume the defense with respect to any third
party litigation then pending with respect to such claims.
(e) The party seeking indemnification for any third party claims
pursuant to this Section shall have the right, at its sole cost and
expense, to participate in any legal action in respect of which
indemnification is sought, provided, however, that the party from
whom indemnification is sought shall have the sole right to settle
or otherwise dispose of such legal action in any manner it deems
appropriate without the consent of the other party.
(f) In the event that, after receipt of notice under Section 20(c)
above, the indemnifying party fails to assume the defense of any
action brought by a third party where the obligation to defend is
owed to the party seeking indemnification, then the party seeking
indemnification
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shall be entitled to its reasonable attorney's fees in addition to
recoveries allowed under this Section.
21. ENVIRONMENTAL MATTERS. Purchaser acknowledges that Hecla has advised
Purchaser that: (i) the Apex Unit was used by Hecla and previous owners
or lessees for mining activities; and (ii) due to the past and present
use of the Property, there may be Hazardous Substances associated with
the Property. Subject to Sections 6(m) and 21 of this Agreement, Hecla
makes no warranty or representation of any type or character, written or
implied, regarding Hazardous Substances situated on or environmental
conditions associated with the Property, or that Hecla has complete
knowledge or information about these matters and Purchaser hereby agrees
to accept the Apex Unit in an "as is" condition.
(a) HECLA ENVIRONMENTAL INDEMNITY. Without limiting the scope of
Hecla's indemnity obligations in Section 20, Hecla shall be responsible
for, and agrees to protect, indemnify, defend and hold harmless
Purchaser, its officers, partners, employees and agents and their
respective successors and assigns, from, against and in respect of any
Losses arising out of or relating to the following:
(i) the matters set forth or referred to in Schedule E;
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(ii) any violation or alleged violation of any Environmental Law or any
license or permit pertaining to any Environmental Law attributable
to the ownership or operation of the Apex Unit by Hecla or others
prior to the Closing Date;
(iii) the generation, transport, treatment, recycling, storage or
disposal of Hazardous Substances, or arrangement therefor prior
to the Closing Date, at or from the Apex Unit by Hecla or its
predecessors;
(iv) any release or disposal of Hazardous Substances on, under or from
the Property to the extent attributable to the ownership or
operation of the Property by Hecla or others prior to the Closing
Date (including any spreading of such substances after the Closing
Date, to the extent such spreading was not caused or contributed to
by Purchaser, its agents, employees or representatives);
(v) any Losses incurred by Purchaser in connection with Hecla's
reclamation program referenced in Section 21(b) of this Agreement.
(b) PURCHASER ENVIRONMENTAL INDEMNITY. Purchaser shall be responsible
for, and agrees to protect, indemnify, defend and hold harmless Hecla,
its officers, partners, employees and
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agents, and their respective successors and assigns, from, against and in
respect of any Losses arising out of or relating to (i) any violation or
alleged violation of any Environmental Law or any license or permit
pertaining to any Environmental Law that is attributed to the ownership
and operation of the Apex Unit by Purchaser or its successors after the
Closing Date; (ii) any release or disposal of any Hazardous Substance
on, under or from the Property to the extent attributed to the ownership
and operation of the Property by Purchaser, its successors after the
Effective Time; (iii) the generation, transport, treatment, recycling,
storage or disposal of Hazardous Substances, or arrangement therefor
after the Closing Date, at the Apex Unit by Purchaser or its successors.
(c) APPORTIONMENT. Hecla and Purchaser acknowledge that various
Hazardous Substances are on the Property. If a Loss results both from
Hazardous Substances in existence before the Closing Date and from the
new release of Hazardous Substances following closing, liability between
Hecla and Purchaser shall be apportioned on the basis of the respective
causal contributions to the Losses of new releases of Hazardous
Substances following the Closing Date compared to environmental
conditions in existence prior to the Effective Time.
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Any indemnification sought under this Section 21 shall be governed in
applicable part by the provisions of Section 20(c) - (f).
(d) RECLAMATION PROGRAM. Hecla agrees, at its sole cost and expense,
promptly to undertake a reclamation program to reclaim certain
portions of the Property and relocate materials from the Property to
an off-site location, which location will be controlled by Hecla.
The reclamation program herein is more specifically described in
Exhibit E hereto. Hecla agrees to commence the reclamation program
promptly upon Hecla obtaining a release of the royalty interest
specified in Section 15(f) of this Agreement, and shall diligently
pursue the completion of the program as soon as reasonably possible.
To the extent that the reclamation program continues following
Closing, Purchaser agrees to grant Hecla necessary access to the
Property to complete its program, and Hecla shall conduct its program
so as not to unreasonably interfere with Purchaser's operations at
the Apex Unit.
(e) Under this Agreement:
(i) "Losses" means any and all losses, claims, liabilities,
deficiencies, penalties, fines, costs, damages and expenses
whatsoever, including without limitation reasonable
professional fees and costs of
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investigation, litigation, settlement, judgment and interest.
(ii) "Hazardous Substances" means and includes any substances,
chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum and petroleum products which are defined as
"hazardous substances", "hazardous wastes", "toxic substances",
or "pollutants", or which are regulated or addressed, under any
Environmental Law.
(iii) "Environmental Law" means any applicable federal, state or
local law, statute or regulation now existing, or hereafter
arising or from time to time amended, relating to health,
safety or the environment, including without limitation the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 ET
SEQ. ("CERCLA"); the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901, ET SEQ.; and the Federal
Water Pollution Control Act ("FWPCA") 33 U.S.C. Section 1251 ET
SEQ.
22. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby will terminate as follows:
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(a) On September 30, 1995, if the Closing shall not have taken place,
unless such date is extended by mutual agreement.
(b) On the Closing Date by Purchaser if the conditions set forth in
Section 15 shall not have been met or waived;
(c) On the Closing Date by Hecla if the conditions set forth in Section
16 shall not have been met or waived; or
(d) At any time, by mutual consent of the parties hereto.
23. LIABILITY ON TERMINATION. In the event of termination of this Agreement
pursuant to Section 22, the parties hereto shall, in addition to any and
all other rights and remedies available to them, (i) return all books,
records and documents furnished by Hecla by the other party, (ii) remain
bound by the confidentiality provisions contained herein in Section 9(f)
hereof, and (iii) Purchaser shall reimburse Hecla for reclamation or
other environmental response costs incurred by it in anticipation of the
consummation of the transactions contemplated herein as specified in
Exhibit E in the event that all of Purchaser's Conditions of Closing
specified in Section 15 are fulfilled, and Purchaser fails to close the
transactions contemplated herein under circumstances which are or would
be, with the exercise of reasonably prudent business judgment,
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within their control, and through no fault or failure in Hecla's
performance.
24. MISCELLANEOUS
(a) EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached to this
Agreement shall be deemed part of this Agreement and incorporated
herein, where applicable, as if fully set forth herein.
(b) NO ASSIGNMENT, SUCCESSORS, ASSIGNS, ETC. The terms and conditions of
this Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto, their respective successors and approved
assigns; provided, however, that this Agreement shall not be assigned
or conveyed by any party to any person or entity without the prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld. For purposes of this Section OMG Apex, Inc.,
a Utah corporation, wholly owned subsidiary of Xxxxxx Chemicals,
Inc., is an approved assignee. In the event of an assignment, the
assigning party shall not be relieved of any of its obligations and
undertakings contracted for herein and the assignee, shareholders of
the assignee, and all affiliates thereof shall deliver a guaranty
substantially in the form attached hereto as Exhibit H.
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(c) GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed by, the law of the state of Utah applicable to
agreements made and to be performed wholly within this jurisdiction.
Venue to enforce any claim arising from any provision of this
Agreement shall lie in Kootenai County, Idaho.
(d) COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same instrument.
(e) NOTICES. Any notices or other communications shall be in writing and
shall be considered to have been duly given on the earlier of (1) the
date of actual receipt or (2) three days after deposit in the
first-class certified U.S. mail, postage prepaid, return receipt
requested:
If to Hecla, to:
Hecla Mining Company
0000 Xxxxxxx Xxxxx
Xxxxx x'Xxxxx, Xxxxx 00000-0000
Attn: Vice President - Industrial Minerals
If to Purchaser, to:
Xxxxxx Chemicals, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxxx Xxxxx, Esq.
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(f) AMENDMENT. This Agreement may be amended at any time prior to
Closing by written instrument executed by the parties hereto.
(g) ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto relating to the subject matter herein.
(h) WAIVER. Any default, misrepresentation or breach of any covenant or
warranty by a party in connection with this Agreement may be waived
in writing by the other party. No such waiver shall be deemed to
extend to any prior or subsequent default, misrepresentation or
breach of any covenant or warranty, or affect any rights arising by
virtue of any prior or subsequent default, misrepresentation or
breach of any covenant or warranty.
(i) The prevailing party in any dispute arising under this Agreement
shall be entitled to an award of its reasonable attorneys fees, costs
and expenses.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
HECLA MINING COMPANY XXXXXX CHEMICALS, INC.
By: /s/ J. Gary Childress By: /s/ Xxxxxx X. Xxxxxxx
-------------------------- ---------------------------
Attest: Attest:
/s/ Xxxxxxxxx X. Xxxxx /s/ X. Xxxxx
----------------------------- ------------------------------
Assistant Secretary Secretary
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