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Exhibit 2.1
EXECUTION COPY
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
BY AND BETWEEN
BILLITON INVESTMENT 15 B.V.
("SELLER")
AND
HRI-RAML ACQUISITION LLC
("BUYER")
FOR THE SALE AND PURCHASE
OF
THE MEMBERSHIP INTEREST OF
RIO ALGOM MINING LLC
October 12, 2007
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Table of Contents
Page
ARTICLE I
DEFINITIONS
1.1
Definitions..........................................................................1
1.2
Construction.........................................................................9
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTEREST; CLOSING
2.1 Purchase and Sale
..................................................................10
2.2 Purchase
Price......................................................................10
2.3
Closing.............................................................................10
2.4 Allocation of Purchase
Price........................................................10
2.5 Purchase Price Adjustment Based Upon Estimated Closing
Working Capital .............10
2.6 Purchase Price Adjustment Based Upon Construction Cost of
Erosion Barrier ..........11
2.7 Additional
Consideration............................................................12
2.8 Deliveries by SELLER
...............................................................12
2.9 Delivery of
Records.................................................................13
2.10 Deliveries by
BUYER.................................................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1
Organization........................................................................14
3.2
Capitalization......................................................................14
3.3 Authorization
......................................................................15
3.4 Consents and Approvals; No
Violations...............................................15
3.5 Financial Statements of RAML
.......................................................15
3.6 Fee Surface and Fee Mineral
Lands...................................................16
3.7 Conduct of Business and Absence of
Changes..........................................16
3.8 Permits
............................................................................16
3.9 Surface and Mineral
Leases..........................................................17
3.10 Mining Claims
......................................................................17
3.11 Water
Rights........................................................................17
3.12 Personal
Property...................................................................18
3.13 Intellectual
Property...............................................................18
3.14
Litigation..........................................................................18
3.15 Compliance with Applicable Law
.....................................................18
3.16 Material
Contracts..................................................................18
3.17 Employment, Deferred Compensation or Similar Agreements;
Collective
Bargaining Agreements; Employee Benefit
Plan.....................................19
3.18 Labor
Matters.......................................................................22
3.19
Taxes...............................................................................22
3.20 Environmental, Health & Safety
Matters..............................................23
3.21 No Liabilities
.....................................................................24
3.22
Insurance...........................................................................24
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3.23 No Breach of Tronox
PSA.............................................................24
3.24 No Creation of Defenses in Tronox
Litigation........................................24
3.25 Bank Accounts and Powers of
Attorney................................................24
3.26 Transactions with Affiliated
Persons................................................24
3.27 Absence of Certain Business
Practices...............................................25
3.28 Restrictions on Business
Activities.................................................25
3.29 Payables
...........................................................................25
3.30 Receivables
........................................................................25
3.31 Books and Records
..................................................................26
3.32 Rental
Payments.....................................................................26
3.33 Certain Fees
.......................................................................26
3.34 Holding Company Act and Investment Company Act Status
..............................26
3.35 Exemption from
Registration.........................................................26
3.36 Disclosure
.........................................................................26
3.37 No Other Representations or
Warranties..............................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Authorization
......................................................................27
4.2 Consents and Approvals; No
Violations...............................................27
4.3
Litigation..........................................................................27
4.4 Certain Fees
.......................................................................28
4.5 Financial
Capability................................................................28
4.6 Knowledge
..........................................................................28
4.7 BUYER Qualifications
...............................................................28
4.8 Independent
Review..................................................................28
4.9 Investment Intent
..................................................................28
4.10 Accredited Investor; Investment Representations
....................................29
ARTICLE V
PRE-CLOSING COVENANTS OF THE PARTIES
5.1 Conduct of the
Business.............................................................29
5.2 Further
Assurances..................................................................32
5.3 Covenant to Satisfy Conditions
.....................................................33
5.4 Breach
Notice.......................................................................33
5.5 Hart-Scott-Rodino Compliance
.......................................................35
5.6 Exclusivity
........................................................................35
5.7 Termination of Severance
Policy.....................................................36
5.8 Duty to Obtain
Financing............................................................37
5.9 Interim Financial Statements
.......................................................37
5.10 Affiliate
Agreements................................................................37
5.11 Drill
Logs..........................................................................37
5.12 Remediation Trust Fund Amount and Escrow Fund Amount
...............................37
5.13 KGL Associates,
Inc.................................................................37
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ARTICLE VI
POST-CLOSING COVENANTS OF THE PARTIES
6.1 Tax
Matters.........................................................................38
6.2 Preservation of
Records.............................................................40
6.3 Litigation
Support..................................................................40
6.4 SELLER's Insurance
.................................................................41
6.5 Environmental Remediation; Remediation Trust
.......................................41
6.6 RAML Employees
.....................................................................41
6.7 Amounts Recovered in Tronox
Litigation..............................................42
6.8 Service Level
Agreements............................................................42
ARTICLE VII
OTHER AGREEMENTS
7.1 Public Announcements
...............................................................42
7.2 Supplemental Disclosure
............................................................42
7.3 No Ongoing or Transition Services
..................................................43
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Conditions to Each Party's
Obligations..............................................43
8.2 Conditions to Obligations of
SELLER.................................................44
8.3 Conditions to Obligations of BUYER
.................................................44
ARTICLE IX
TERMINATION
9.1
Termination.........................................................................45
9.2 Procedure and Effect of
Termination.................................................46
9.3 Break-Up
Fee........................................................................47
ARTICLE X
INDEMNIFICATION
10.1 Indemnification Obligations of SELLER
..............................................47
10.2 Indemnification Obligations of BUYER
...............................................47
10.3 Indemnification for Fraud and/or Willful Misconduct
................................48
10.4 Indemnification
Procedure...........................................................48
10.5
Survival............................................................................49
10.6 Liability Limits
...................................................................49
10.7 Damage
Exclusions...................................................................51
10.8 Reasonable Steps to
Mitigate........................................................51
10.9 Special Indemnity
..................................................................51
10.10 Exclusive Remedies Following the Closing
Date.......................................51
10.11 Environmental
Remedies..............................................................51
ARTICLE XI
MISCELLANEOUS
11.1 Fees and
Expenses...................................................................52
11.2
Notices.............................................................................52
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11.3
Severability........................................................................53
11.4 Binding
Effect;]Assignment..........................................................53
11.5 No Third Party Beneficiaries
.......................................................53
11.6 Entire
Agreement....................................................................53
11.7 Governing Law
......................................................................54
11.8 Consent to Jurisdiction and Dispute
Resolution......................................54
11.9
Counterparts........................................................................54
11.10 Amendment;
Modification.............................................................54
11.11 Disclosure Schedules
...............................................................54
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Schedules
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Schedule 1.1(a) BUYER's Individuals with Knowledge
Schedule 1.1 (b) SELLER's Individuals with Knowledge
Schedule 2.4 Purchase Price Allocation
Schedule 3.4 Conflicts
Schedule 3.7 Conduct of Business and Absence of Charges
Schedule 3.8 Permits
Schedule 3.11 Water Rights
Schedule 3.12 Personal Property
Schedule 3.13 Intellectual Property
Schedule 3.14 Litigation
Schedule 3.15 Compliance with Applicable Law
Schedule 3.16 Material Contracts
Schedule 3.17 Employee Benefit Plans
Schedule 3.19 Taxes
Schedule 3.20 Environmental, Health & Safety Matters
Schedule 3.21 No Liabilities
Schedule 3.22 Insurance
Schedule 3.23 Tronox PSA
Schedule 3.25 Bank Accounts
Schedule 3.26 Affiliate Transactions
Schedule 3.28 Restrictions on Business Activities
Schedule 3.29 Payables
Schedule 3.30 Receivables
Schedule 3.32 Rental Payments
Schedule 6.5 Closure Requirements
Schedule 8.3(e) Consents, Approvals or Authorizations
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Exhibits
--------
Exhibit A Guarantee
Exhibit B Release, Indemnity and Assumption of
Environmental Liabilities
Exhibit C Fee Surface and Fee Mineral Lands
Exhibit D Leased Surface and Leased Mineral Lands
Exhibit E Mining Claims
Exhibit F Surface and Mineral Leases
Exhibit G Dispute Resolution Procedures
Exhibit H Remediation Trust
Exhibit I Escrow Agreement
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement"),
dated
as of October 12, 2007 (the "Execution Date"), is made and
entered into by and
between BILLITON INVESTMENT 15 B.V., registration number
27191276, being a
corporation validly existing under the laws of The Netherlands
("SELLER"), and
HRI-RAML ACQUISITION LLC, a Delaware limited liability company
("BUYER"). SELLER
and BUYER are sometimes individually referred to in this
Agreement as a "Party"
and collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, SELLER is the record and beneficial owner of all of
the
membership interest (the "Interest") in Rio Algom Mining LLC, a
Delaware limited
liability company ("RAML"); and
WHEREAS, pursuant to the terms and conditions of this Agreement,
SELLER
desires to sell, transfer, convey and assign to BUYER, and BUYER
desires to
acquire and accept from SELLER, all of the Interest (the
"Acquisition").
NOW, THEREFORE, in consideration of the foregoing premises and
the
respective representations, warranties, covenants, agreements
and conditions
contained in this Agreement, and intending to be legally bound
hereby, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used in this
Agreement,
have the following meanings:
"Acknowledgement, Agreement and Release" means the agreement
between
RAML and each of its employees to be entered into prior to the
Closing, the form
of which has been disclosed to BUYER and agreed to by the
Parties.
"Acquisition" has the meaning set forth in the Recitals.
"Acquisition Proposal" has the meaning set forth in Section
5.6(a).
"Alternative Transaction" has the meaning set forth in Section
5.6(b).
"Afiliate" of any specified Person means any other Person
directly or
indirectly, through one or more intermediaries, Controlling or
Controlled by, or
under common Control with, such specified Person.
"Afiliate Loans" means loans made to any Affiliate of RAML by
RAML.
"Agreement" has the meaning set forth in the Preamble to
this
Agreement.
"Ambrosia Lake Closure Requirements" has the meaning set forth
in
Section 6.5(a).
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"Ancillary Documents" means the SELLER Ancillary Documents and
the
BUYER Ancillary Documents.
"Approval" means an authorization, permit, consent, approval or
waiver
of, clearance by, required notice to or registration or filing
with, a
Governmental Entity and the expiration or termination of all
prescribed waiting
or review periods with respect to any of the foregoing.
"Breach Notice" has the meaning set forth in Section 5.4.
"Break-up Fee" has the meaning set forth in Section 9.3.
"Budget" means RAML's fiscal year 2008 approved budget in the
amount of
US$30.3 million, a copy of which was given to BUYER.
"Business Day" means any day except Saturday, Sunday or any day
on
which banks are generally not open for business in the City of
New York, New
York.
"BUYER" has the meaning set forth in the Preamble to this
Agreement.
"BUYER Ancillary Document" means any public instrument,
certificate,
agreement, document or other instrument, other than this
Agreement, to be
executed and delivered by BUYER or any Affiliate of BUYER in
connection with the
Acquisition.
"BUYER Group" means Uranium Resources, Hydro Resources,
Inc.,
HRI-Churchrock, Inc., and URI, Inc.
"BUYER Group Guarantee" means the Guarantee, in the form of
Exhibit A,
by BUYER Group to SELLER of the due, prompt and faithful
performance of and
compliance with, all agreements of BUYER in this Agreement, the
Environmental
Release and Indemnity Agreement, and all other BUYER Ancillary
Documents.
"BUYER Indemnified Parties" means BUYER, BUYER Group and each of
their
respective Affiliates, officers, directors, managers, employees,
agents and
representatives and each of the heirs, executors, successors and
assigns of any
of the foregoing.
"BUYER Plans" shall mean the employee benefit plans of BUYER
that
provide employee benefits and incentives to its employees after
the Closing.
"Claim Notice" has the meaning set forth in Section 10.6(c).
"Closing" has the meaning set forth in Section 2.3. "Closing
Date" has
the meaning set forth in Section 2.3. "Code" means the Internal
Revenue Code of
1986, as amended.
"Commercially Reasonable Eforts" means the reasonable efforts of
the
performing Party which do not require the performing Party to
expend material
funds or incur material obligations other than expenditures
which are customary
and reasonable in transactions of the kind and
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nature contemplated by this Agreement in order for the
performing Party to
satisfy its obligations hereunder.
"Confidentiality Agreement" means that certain
confidentiality
agreement by and between RAML and Uranium Resources, dated April
2, 2007.
"Control" when used with respect to any specified Person, means
the
power to direct or cause the direction of the management and
policies of such
Person, directly or indirectly, whether through the ownership of
voting
securities, by contract or otherwise.
"Data Room" means the electronic data room established by SELLER
with
IntraLinks, Inc. to assist Persons interested in acquiring the
Interest with an
evaluation of RAML.
"Dispute" has the meaning set forth in Section 11.8. "DOE" means
the
U.S. Department of Energy.
"Employee Benefit Plans" means any plan, fund or program
(including any
practice, policy, contractual commitment, arrangement, or
procedure) sponsored,
maintained by, or contributed to by, RAML, which directly or
indirectly
compensates any current or former employee of RAML or any
dependent of any of
the foregoing, other than through the direct and immediate
payment of wages or
salary. Such term shall specifically include, without
limitation, any severance,
termination pay, deferred compensation, retirement, pension,
bonus awards,
performance awards, retention or other change in control awards,
incentive
compensation, stock or stock-related awards or fringe benefits,
and any
"employee benefit plan" within the meaning of ERISA Section
3(3).
"Environmental, Health & Safety Laws" means any applicable
Law
concerning public health and safety, worker health and safety,
and pollution or
protection of the environment, including those relating to the
presence, use,
production, generation, handling, transportation, treatment,
storage, disposal,
distribution, labeling, testing, processing, discharge, release,
threatened
release, control, or cleanup of any Hazardous Materials,
substances, or wastes,
as such requirements are enacted and in effect on or prior to
the Closing Date.
"Environmental Liabilities" means any and all liabilities
arising in
connection with or in any way relating to RAML's business (as
currently or
previously conducted by RAML or any predecessor-in-interest) or
any activities
or operations occurring or conducted on, off, above or under the
Real Property,
whether accrued, contingent, absolute, determined, determinable
or otherwise,
which arise under or relate to any Environmental, Health &
Safety Laws.
"Environmental Release and Indemnity Agreement" means the
Release,
Indemnity and Assumption of Environmental Liabilities, in the
form of Exhibit B.
"ERISA" means the Employee Retirement Income Security Act of
1974, as
amended.
"ERISA Afiliate" means any organization or person which,
together with
RAML, would be treated as a single employer under Code Sections
4 14(b), (c),
(m) and/or (o) and related U.S. Treasury regulations.
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"Escrow Agreement" means the Escrow Agreement, in the form of
Exhibit
I.
"Escrow Fund Amount" means the estimated dollar amount
determined as of
the Closing Date and agreed to by the Parties of the pension
benefits and other
health care obligations of RAML due RAML's retired employees
under the Employee
Benefit Plans.
"Estimated Closing Working Capital" means an estimate of RAML's
Working
Capital as of the Closing Date.
"Estimated Closing Working Capital Statement" means a
schedule
containing the Estimated Closing Working Capital.
"Execution Date" has the meaning set forth in the Preamble to
this
Agreement.
"Fee Surface and Fee Mineral Lands" means the lands described
at
Exhibit C attached hereto.
"Financial Statements" means, collectively, the audited balance
sheets
of RAML as of the fiscal years ended June 30, 2005, June 30,
2006 and June 30,
2007, and the related audited statements of income and cash
flows for such
fiscal years and accompanying notes.
"Financing Condition" has the meaning set forth in Section
8.3(g)
hereof.
"GAAP" means generally accepted accounting principles as in
effect in
the United States as of the date of this Agreement.
"Governmental Entity" means the U.S., any U.S. State or
Commonwealth,
and any local or other political subdivision thereof, or any
court,
administrative or regulatory agency, department,
instrumentality, body or
commission or other governmental authority or agency, domestic
or foreign.
"Hazardous Materials" means any waste or other substance that
is
listed, defined, designated or classified as, or otherwise
determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant
under or
pursuant to any applicable Law, including any admixture or
solution thereof, and
specifically including uranium and all derivatives thereof,
petroleum and all
derivatives thereof or synthetic substitutes therefor, and
asbestos or asbestos
containing materials.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of
1976, as amended, and the rules and regulations promulgated
thereunder.
"IFRS" means the International Financial Reporting Standards in
effect
as of the date of this Agreement.
"IRS" means the Internal Revenue Service.
"Indemnification Obligations" means the respective
indemnification
obligations of SELLER and BUYER pursuant to ARTICLE X.
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"Indemnified Party" means a BUYER Indemnified Party or
SELLER
Indemnified Party, as applicable.
"Indemnifying Party" has the meaning set forth in Section
10.4(a).
"Interest" has the meaning set forth in the Recitals. "KGL" has
the
meaning set forth in Section 5.13.
"Knowledge of BUYER" and "BUYER 's Knowledge" mean the extent of
the
actual knowledge as of the Execution Date (or, with respect to
the certificate
delivered pursuant to Section 2.10(c), the Closing Date) of any
of the
individuals listed on Schedule 1.1(a), without independent
inquiry.
"Knowledge of SELLER" and "SELLER 's Knowledge" mean the extent
of the
actual knowledge as of the Execution Date (or, with respect to
the certificate
delivered pursuant to Section 2.8(d), the Closing Date) of any
of the
individuals listed on Schedule 1.1(b), after reasonable inquiry
of other
officers and employees of RAML or its Affiliates who have
day-to-day operational
responsibility for such matters.
"Law" means any laws, statutes, permits, rules, codes, civil
codes,
regulations, ordinances, orders, or decrees, of, or issued by,
Governmental
Entities or rules of common law.
"Leased Surface and Leased Mineral Lands" means the lands
identified at
Exhibit D attached hereto.
"Liens" means material mortgages, liens, pledges, security
interests,
charges, claims, restrictions and other encumbrances, other than
Permitted
Liens.
"Lisbon Closure Requirements" has the meaning set forth in
Section
6.5(a).
"Loss" has the meaning set forth in Section 10.1.
"Material Adverse Efect" means any event, change, fact or
circumstance
that has a material adverse effect on the business, operations,
assets
(financial or otherwise), or liabilities of RAML (taken as a
whole); provided,
however, that none of the following shall be taken into account
in determining
whether there has been or would be a "Material Adverse Effect":
(i) any adverse
change resulting from conditions affecting any nation's economy
generally, (ii)
any adverse change resulting from or relating to financial,
banking or
securities markets (including any disruption thereof and any
decline in the
price of any security or any market index), (iii) any adverse
change in
applicable Laws or the interpretation thereof other than (a) a
change that
substantially prevents the issuance of new Permits to RAML or an
amendment to
the existing Permits of RAML that would allow the recommencement
of mining or
milling operations on the Real Property or (b) the total loss of
RAML's License
No. SUA-1473 issued by the United States Nuclear Regulatory
Commission ("NRC"),
(iv) any adverse change arising primarily out of, or resulting
primarily from,
actions taken in connection with (but not in breach of) this
Agreement and the
transactions contemplated hereunder, or which are primarily
attributable to the
announcement of this Agreement and the Acquisition (including
any litigation,
employee
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attrition or any loss or postponement of business resulting from
termination or
modification of any vendor, customer or other business
relationships, delay of
customer order or otherwise and any corresponding change in the
margins,
profitability or financial condition of a Party), (v) a decrease
in the price of
uranium on any listed or published commodities exchange or
trading market, (vi)
war or the outbreak of hostilities, (vii) acts of terrorism,
(viii) acts of God,
insurrections, strikes, floods, fires, explosions or other
catastrophes beyond
the control and without the fault of a Party, and (ix) any
material adverse
change in RAML's business that is cured (including by the
payment of money), to
the extent curable, by RAML or SELLER before the earlier of (a)
the Closing
Date, or (b) the date on which this Agreement is terminated
pursuant to ARTICLE
IX.
"Material Contracts" has the meaning set forth in Section
3.16(a)
hereof.
"Mining Claims" means the unpatented mining claims described at
Exhibit
E.
"Neutral Accountant" means a nationally or regionally recognized
firm
of certified public accountants selected jointly by SELLER and
BUYER, and,
unless the Parties agree otherwise, not employed by either of
them during the
two (2) years prior to the Closing Date.
"Objection Statement" has the meaning set forth in Section
2.5(c)
hereof.
"Organizational Documents" with respect to any Person means (a)
the
articles or certificate of incorporation and the bylaws of a
corporation; (b)
the articles of organization and the limited liability company
or operating
agreement of a limited liability company; (c) the partnership
agreement or
statement of partnership of a partnership; (d) any charter,
shareholder
agreement, member agreement or similar document adopted or filed
in connection
with the creation, formation, or organization of a Person; and
(e) any amendment
to any of the foregoing.
"Outstanding Royalty Interests" means Royalty Interests that are
both:
(i) owned by Persons other than RAML, and (ii) identified on
Exhibit C, D, E
and/or F.
"Party" and "Parties" have the meaning set forth in the Preamble
to
this Agreement.
"PBGC" has the meaning set forth in Section 3.17(k).
"Permits" means any and all permits, licenses,
registrations,
qualifications, certifications, and other approvals that a
Person is required to
obtain under applicable Laws from a Governmental Entity in
connection with that
Person's business or that Person's ownership, use or operation
of property.
"Permitted Liens" means (i) Liens for Taxes not yet due and
payable or
the validity of which is being contested in good faith by
appropriate
proceedings (and as to which appropriate reserves (to the extent
required by
GAAP) have been established in the books and records of RAML),
(ii) statutory
Liens and Liens of carriers, warehousemen, mechanics,
materialmen, repairmen and
similar Persons or the validity of which is being contested in
good faith by
appropriate proceedings (and as to which appropriate reserves
(to the extent
required by GAAP) have been established in the books and records
of RAML), (iii)
matters of public record, (iv) zoning, building or other
restrictions,
variances, covenants, rights-of-way, encumbrances,
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easements and other similar irregularities in title and other
title defects, all
of which do not or would not materially impair the use or
occupancy of any of
the Real Property, (v) all exceptions, restrictions, easements,
charges,
rights-of-way and monetary and non-monetary encumbrances which
are set forth in
any permit or license applicable to RAML, (vi) purchase money
security interests
in respect of personal property arising or incurred in the
ordinary course of
business, (vii) Liens with respect to RAML created by or
resulting from the acts
or omissions of BUYER, (viii) pledges or deposits made in the
ordinary course of
business to secure performance of bids, tenders, contracts
(other than for
repayment of borrowed money), leases, or surety, appeal,
indemnity, performance
or other similar bonds required in the ordinary course of
business, (ix) the
Outstanding Royalty Interests, and (x) the Repurchase
Rights.
"Person" means any individual, partnership, joint venture,
corporation,
trust, limited liability company, unincorporated organization or
association or
other entity, trust, trustee, executor, administrator, or other
legal or
personal representative, or any Governmental Entity.
"Pre-Closing Tax Period" has the meaning set forth in Section
6.1(a).
"Post-Closing Tax Period" has the meaning set forth in Section
6.1(a).
"Purchase Price" has the meaning set forth in Section 2.2
hereof.
"RAML" has the meaning set forth in the Recitals.
"Real Property" means the real property interests described at
Exhibits
C, D and/or E.
"Records" shall mean and include all originals and copies
(except where
the context indicates that only originals or copies are being
referred to) of
minute books, agreements, documents, computer files and tapes,
maps, books,
records, accounts and files in the possession or control of RAML
or SELLER and
relating to RAML or any pending litigation including the Tronox
Litigation.
"Reference Rate" means the prime rate of interest (as published
in the
"Money Rates" table of The Wall Street Journal on the Closing
Date).
"Regulatory Law" has the meaning set forth in Section
5.2(b).
"Remediation Trust" has the meaning set forth in Section
6.5(b).
"Remediation Trust Fund Amount" means the estimated dollar
amount
determined as of the Closing Date based upon the Budget and
agreed to by the
Parties necessary to complete the outstanding remediation
obligations as set
forth in the Budget.
"Repurchase Rights" means the rights set forth on Exhibit C of
certain
Persons to repurchase the surface and/or mineral ownership of
the Fee Surface
and Fee Mineral Lands.
"Required Approval" has the meaning set forth in Section
5.2(a).
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"Royalty Interest" means any right to take or receive any form
of
mineral or to take or receive any part of the proceeds or
profits realized
through the sale of any form of mineral, or any right to take or
receive any
payment in an amount which is determined, established or
measured by reference
to the volume or value of any form of mineral, including,
without limitation,
gross production royalties, net smelter royalties, production
payments,
overriding royalty interests, net profits interests or net
proceeds royalties.
The term "Royalty Interest" shall also include all annual
rentals, minimum
annual royalties, production payments, or prepayments of
royalties, whether or
not to be recouped out of subsequent production and whether or
not based on
volume or value of any form of mineral. No right of any
Governmental Entity to
levy Taxes, charges or fees shall constitute a Royalty
Interest.
"Securities Act" means the Securities Act of 1933, as
amended.
"SELLER" has the meaning set forth in the Preamble to this
Agreement.
"SELLER Ancillary Document" means any deed, public
instrument,
certificate, agreement, document or other instrument, other than
this Agreement,
to be executed and delivered by SELLER or any Affiliate of
SELLER in connection
with the Acquisition.
"SELLER Indemnified Parties" means SELLER and its Affiliates
(including
parent and sister companies), each of their respective officers,
directors,
managers, employees, agents and representatives and each of the
heirs,
executors, successors and assigns of any of the foregoing.
"Straddle Period" has the meaning set forth in Section
6.1(b).
"Strathmore" has the meaning set forth in Section 5.11.
"Surface and Mineral Leases" means the surface and mineral
leases,
usage rights, and agreements described or referenced at Exhibit
F.
"Target Working Capital" shall mean Five Million Dollars
(US$5,000,000.00).
"Tax" or "Taxes" means all taxes, assessments, charges, duties,
fees,
levies or other governmental charges (including interest,
penalties or additions
associated therewith), including, without limitation, income,
franchise,
capital, profits, license, property, tangible, withholding,
employment, payroll,
social security, social contribution, unemployment compensation,
disability,
transfer taxes, sales, use, ad valorem, excise, severance, gross
receipts,
value-added, and all other taxes, customs duties, fees,
assessments or charges
of any kind imposed by any Governmental Entity, whether disputed
or not, and any
material charges, interest or penalties imposed by any
Governmental Entity.
"Tax Return" means any material report, return, declaration or
other
information required to be supplied to a Governmental Entity in
connection with
Taxes, including material estimated returns and reports with
respect to Taxes.
"Third Party" has the meaning set forth in Section 5.6(b).
"Transfer Taxes" has the meaning set forth in Section
6.1(g).
8
<PAGE>
"Tronox" has the meaning set forth in Section 6.7.
"Tronox Litigation" means any and all claims, defenses and
counterclaims asserted in the case styled Rio Algom Mining LLC
v. Tronox
Worldwide LLC, Case No. CV-06-0052 MCA/WDS pending in the United
States District
Court for the District of New Mexico.
"Tronox PSA" means the Purchase and Sale Agreement between Rio
Algom
Mining Corp., as Purchaser, and Kerr-McGee Corporation, as
Seller, dated
December 19, 1988 that is the subject of the Tronox
Litigation.
"United States" or "U.S." means the United States of
America.
"Uranium Resources" shall have the meaning set forth in Section
8.3(g).
"U.S. Dollars" or "US$" means the lawful currency of the
U.S.
"Water Rights" has the meaning set forth in Section 3.11.
"Working Capital" means, as of any date, (i) the amount of the
current
assets, after deducting cash and any portion of accounts
receivable accounted
for as an allowance for a doubtful account under GAAP, of RAML
as of such date
minus (ii) the amount of the current liabilities of RAML as of
such date in each
case determined in accordance with GAAP, consistently
applied.
1.2 Construction.
(a) Unless the context of this Agreement otherwise clearly
requires,
(i) references to the plural include the singular, and
references to the
singular include the plural, (ii) references to one gender
include the other
gender, (iii) the words "include," "includes" and "including" do
not limit the
preceding terms or words and shall be deemed to be followed by
the words
"without limitation", (iv) the terms "hereof", "herein",
"hereunder", "hereto"
and similar terms in this Agreement refer to this Agreement as a
whole and not
to any particular provision of this Agreement, (v) "or" is used
in the inclusive
sense of "and/or", (vi) the terms "day" and "days" mean and
refer to calendar
day(s), (vii) the terms "year" and "years" mean and refer to
calendar year(s),
(viii) the phrases "ordinary course of business" and "ordinary
course of
business consistent with past practice" refer to the past
business and practice
of RAML (including with respect to quantity and frequency), and
(ix) the table
of contents and headings contained in this Agreement are for
reference purposes
only and shall not affect in any way the meaning or
interpretation of this
Agreement.
(b) Unless otherwise set forth in this Agreement, references in
this
Agreement to any document, instrument or agreement (including
this Agreement)
(i) includes and incorporates all Exhibits, Schedules and other
attachments
thereto, (ii) includes all documents, instruments or agreements
issued or
executed in replacement thereof and (iii) means such document,
instrument or
agreement, or replacement or predecessor thereto, as amended,
modified or
supplemented from time to time in accordance with its terms and
in effect at any
given time. All Article, Section, Exhibit and Schedule
9
<PAGE>
references herein are to Articles, Sections, Exhibits and
Schedules of
this Agreement, unless otherwise specified.
(c) This Agreement shall not be construed as if prepared by one
of the
Parties, but rather according to its fair meaning as a whole, as
if all Parties
had prepared it.
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTEREST; CLOSING
2.1 Purchase and Sale. Subject to the terms and conditions set
forth
in this Agreement and in consideration of the covenants made,
and deliveries to
be made by BUYER and SELLER hereunder, SELLER hereby agrees at
the Closing to
sell, transfer, convey and assign to BUYER the Interest and,
subject to the
terms and conditions set forth in this Agreement, BUYER hereby
agrees at the
Closing to accept the Interest.
2.2 Purchase Price. The aggregate consideration payable by BUYER
to
SELLER for the Interest (the "Purchase Price") shall be
US$110,000,000.00 cash.
The Purchase Price shall be subject to adjustment pursuant to
Sections 2.5 and
2.6 below. The Purchase Price shall be paid and satisfied at
Closing via a
payment by BUYER of the Purchase Price by wire transfer of
immediately available
U.S. Dollars to those bank account(s) designated by SELLER at
least three (3)
Business Days prior to Closing; provided, however, that BUYER
may deduct and
withhold from the Purchase Price any amount required by
applicable Law.
2.3 Closing. The closing of the Acquisition (the "Closing")
shall
occur as promptly as possible, and in any event no later than
five (5) Business
Days, following the satisfaction or waiver of the conditions set
forth in
ARTICLE VIII that are contemplated to be satisfied prior to the
Closing Date, or
on such other date as the Parties may agree. The date of the
Closing shall be
referred to herein as the "Closing Date." The Closing shall take
place at the
offices of Bryan Cave LLP, Two North Central Avenue, Suite 2200,
Phoenix,
Arizona 85004 at 10:00 a.m. on the Closing Date, or at such
other place as the
Parties may agree.
2.4 Allocation of Purchase Price. The Purchase Price and the
other
capitalized costs, including without limitation any liabilities
of RAML, shall
be allocated to the assets and the liabilities of RAML agreed to
by the Parties
at Closing and set forth on Schedule 2.4. Such allocation will
be in accordance
with and comply with Code Section 1060. BUYER and SELLER each
agree to report
the transaction under this Agreement on IRS Form 8594 (Asset
Acquisition
Statement under Code Section 1060), and on any other applicable
Tax Return in
accordance with the allocation set forth on Schedule 2.4. BUYER
and SELLER each
agree to provide the other promptly with any cooperation or
information required
to complete this allocation.
2.5 Purchase Price Adjustment Based Upon Estimated Closing
Working
Capital.
(a) The Purchase Price shall be adjusted downward by the amount
that
the Estimated Closing Working Capital is less than the Target
Working Capital.
(b) At least three (3) Business Days prior to the Closing Date,
SELLER
will provide to BUYER an Estimated Closing Working Capital
Statement. Subject to
10
<PAGE>
Sections 2.5(c), (d) and (e), to the extent that the Estimated
Closing
Working Capital Statement reflects a number less than the
Target
Working Capital, the Purchase Price shall be reduced by such
amount.
(c) BUYER shall have the right to review the Estimated Closing
Working
Capital Statement after the Closing Date, and within sixty (60)
days thereof,
provide written notice of its reasonable good faith objection to
the Estimated
Closing Working Capital Statement. If BUYER fails to provide
written notice of
such objection, which notice shall include the basis of such
objection and the
amount disputed (an "Objection Statement"), then the Estimated
Closing Working
Capital Statement shall be considered accepted by all Parties
and may not be
disputed on any grounds.
(d) If, however, BUYER does provide an Objection Statement, then
the
Parties shall endeavor in good faith to settle the objection
within the
following thirty (30) days. If settled by agreement, and the
agreed upon
Estimated Closing Working Capital is less than the Target
Working Capital,
SELLER shall promptly make any payment required by the
settlement as a reduction
to the Purchase Price in the amount of any proposed
adjustment.
(e) If SELLER and BUYER do not reach a final resolution within
thirty
(30) days after the delivery of the Objection Statement, SELLER
and BUYER shall
submit the dispute to a Neutral Accountant. If SELLER and BUYER
cannot agree on
a Neutral Accountant within five (5) Business Days after the end
of the
aforementioned thirty (30) day period, the Neutral Accountant
shall be selected
jointly by SELLER's accountants and BUYER's accountants. The
resolution of the
objections by the Neutral Accountant shall be final, binding on
and
non-appealable by the Parties hereto. The Neutral Accountant
shall be instructed
that, in resolving such objections, it must select a position
that is exactly
BUYER's position or exactly SELLER's position with respect to
the Estimated
Closing Working Capital. The costs and expenses of the Neutral
Accountant shall
be paid equally by BUYER and SELLER. Upon resolution by the
Neutral Accountant,
and if the final determined Estimated Closing Working Capital is
less than the
Target Working Capital, SELLER shall promptly make any required
payment to BUYER
as a reduction to the Purchase Price.
2.6 Purchase Price Adjustment Based Upon Construction Cost of
Erosion
Barrier. The Purchase Price shall be subject to reduction based
upon the
estimated cost agreed to by BUYER and SELLER prior to the
Closing Date for the
cost to construct an erosion barrier required by the DOE under
the Arroyo del
Puerto Realignment Plan (as disclosed as Item 4 on Schedule 3.7)
around the
tailings area located at RAML's Ambrosia Lake facility. The
agreed upon
construction cost amount that is deducted from the Purchase
Price shall be
placed in the Remediation Trust and shall be in addition to the
Remediation
Trust Fund Amount. Following the Closing Date, BUYER shall or
shall cause RAML
to remit to SELLER any funds recovered from Tronox or the DOE as
reimbursement
for the construction cost of the erosion barrier; provided that
the amount of
such remitted funds shall not exceed the agreed upon
construction cost amount
that is deducted from the Purchase Price.
11
<PAGE>
2.7 Additional Consideration. Subject to the conditions set
forth
below, BUYER shall make the following additional payments to
SELLER post Closing
as additional consideration for the Interest:
(a) To the extent that the Estimated Closing Working Capital
Statement
reflects a number greater than the Target Working Capital on the
Closing Date
(subject to the provisions of Sections 2.5(c), (d) and (e)),
BUYER covenants and
agrees to pay to SELLER the amount of any monies collected by
RAML or BUYER
after the Closing Date on (i) any accounts receivable from the
DOE (excluding
any amounts under the DOE accounts receivable that are due to
Tronox pursuant to
the terms of the Tronox PSA), and (ii) any accounts receivable
from Tronox
(excluding amounts that are disputed in the Tronox Litigation),
in each case
arising from expenditures made by RAML between the Execution
Date and the
Closing Date, as such monies are collected by BUYER.
(b) In the event that RAML obtains an amendment to its existing
License
No. SUA-1473 issued by the NRC or a new license from the NRC at
any time after
the Closing Date which amendment or new license allows RAML to
construct and
operate a conventional acid leach-SX uranium mill facility and
associated
tailings at the Ambrosia Lake site in McKinley County, New
Mexico, BUYER shall
pay to SELLER an additional cash payment of US$16,500,000
(subject to any tax
withholding required by applicable Law) by wire transfer of
immediately
available U.S. Dollars to a bank account designated by SELLER
within forty-five
(45) days of the date on which the NRC approves such amendment
or new license.
2.8 Deliveries by SELLER. At the Closing, SELLER will deliver or
cause
to be delivered to BUYER (unless delivered previously) the
following:
(a) a Membership Interest Assignment with respect to the
Interest;
(b) resignations, effective as of the Closing Date, of each
member of
the board of managers of RAML;
(c) the company record book and minute book of RAML, subject to
Section
2.9 hereof;
(d) a certificate dated as of the Closing Date and signed by
SELLER's
Executive Director or authorized agent (i) to the effect that
the conditions
specified in Sections 8.3(a), 8.3(b) and 8.3(f) have been
fulfilled, and (ii)
certifying the accuracy and completeness of the copies of, as
well as the
current effectiveness of, the resolutions to be attached thereto
of the
Management Board of SELLER authorizing the execution, delivery
and performance
of this Agreement and the consummation of the Acquisition, as
well as to the
incumbency of the Executive Director or authority of the
authorized agent
executing this Agreement on behalf of SELLER and any documents
to be executed
and delivered by SELLER at Closing;
(e) the Environmental Release and Indemnity Agreement, duly
executed by
SELLER;
12
<PAGE>
(f) the Remediation Trust, duly executed by SELLER and RAML;
(g) the BUYER Group Guarantee, duly executed by SELLER;
(h) the Escrow Agreement duly executed by the SELLER; and
(i) such other instruments and documents of the type or nature
that are
customarily provided by selling parties in connection with
transactions of the
type contemplated hereby and which BUYER reasonably deems to be
necessary for
the Closing.
2.9 Delivery of Records. On the Closing Date, SELLER shall
deliver or
cause to be delivered to BUYER all Records to the extent the
same are not
already in the possession of BUYER and/or RAML, subject to the
following
provisions:
(a) SELLER may retain copies of all Records that contain
information
relating to RAML; provided, however, that except as and to the
extent required
by applicable Law, in which case SELLER will provide BUYER with
prompt prior
written notice so that BUYER, at its expense, may seek (with the
cooperation of
the SELLER, if so requested by BUYER) a protective order or
other appropriate
remedy, SELLER shall not disclose or use, and shall cause its
employees, agents
and representatives, as well as its Affiliates and its
Affiliates' employees,
agents and representatives not to disclose or use, any Records
that contain
confidential information relating to RAML except as contemplated
by this
Agreement or as is reasonably necessary in connection with
SELLER concluding its
involvement in RAML's business for the period prior to the
Closing Date; and
(b) SELLER may retain all Records prepared in connection with
the sale
of the Interest, including offers received from prospective
purchasers of the
Interest and any information relating to such offers, and need
not deliver to
BUYER or grant BUYER access to any such Records containing
information prepared
in connection with the sale of the Interest.
2.10 Deliveries by BUYER. At the Closing, BUYER will deliver or
cause
to be delivered (unless previously delivered) the following:
(a) the Purchase Price;
(b) a certificate executed by an authorized representative of
BUYER,
certifying and attaching all requisite resolutions or actions of
BUYER's board
of directors or managers approving the execution and delivery of
this Agreement
and the consummation of the Acquisition;
(c) a certificate dated as of the Closing Date and signed by
(i)
BUYER's Chairman, President or any Vice President, to the effect
that the
conditions specified in Sections 8.2(a) and 8.2(b) have been
fulfilled, and (ii)
BUYER's Secretary or any Assistant Secretary, certifying the
accuracy and
completeness of the copies of, as well as the current
effectiveness of, the
resolutions to be attached thereto of the board of directors
13
<PAGE>
or managers (or any committee thereof) of BUYER authorizing
the
execution, delivery and performance of this Agreement and
the
consummation of the Acquisition, as well as to the incumbency of
the
officers executing this Agreement on behalf of BUYER and any
documents
to be executed and delivered by BUYER at the Closing;
(d) the Environmental Release and Indemnity Agreement, duly
executed by
BUYER;
(e) the Remediation Trust, duly executed by BUYER;
(f) the BUYER Group Guarantee, duly executed by BUYER Group with
proof
of authority of each officer or other representative signing on
behalf of each
member of the BUYER Group;
(g) the Escrow Agreement duly executed by BUYER;
(h) subject to Section 5.12, the Remediation Trust Fund
Amount;
(i) subject to Section 5.12, the Escrow Fund Amount; and
(j) such other instruments and documents of the type or nature
that are
customarily provided by purchasing parties in connection with
transactions of
the type contemplated hereby and which SELLER reasonably deems
to be necessary
for the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the terms, conditions and limitations set forth in
this
Agreement, SELLER hereby represents and warrants to BUYER as
follows:
3.1 Organization. RAML is a limited liability company, duly
organized,
validly existing, and in good standing under the Laws of the
State of Delaware,
has the requisite power and authority to own, lease and operate
the assets that
it owns, and to carry on its business as now being conducted,
and is duly
qualified to do business and is in good standing in each
jurisdiction where the
conduct of its business or ownership of its properties requires
such
qualification, except where the failure to qualify would not
have a Material
Adverse Effect. Copies of the Organizational Documents
(including, certificate
of formation and operating agreement) of RAML have been
delivered to BUYER and
are true, complete and accurate in all respects. The membership
interest records
and minutes of RAML have been made available to BUYER and are
true, complete,
and accurate in all material respects.
3.2 Capitalization. SELLER owns all of the membership interest
in RAML
which constitutes all of the issued and outstanding equity
interest in RAML.
SELLER holds of record and owns beneficially the Interest, free
and clear of all
Liens and has valid and marketable title to the Interest and has
the right to
transfer the Interest to BUYER. The Interest has been legally
and validly issued
and is fully paid and non-assessable. There exist no options,
warrants, purchase
rights, or other contracts or commitments, rights or privileges,
that could
require
14
<PAGE>
SELLER to sell, transfer, or otherwise dispose of any membership
interest of
RAML (other than this Agreement). There are not outstanding any
securities
convertible into, exchangeable for, or carrying the right to
acquire, equity
securities of RAML. Upon consummation of the Acquisition at the
Closing, BUYER
shall receive all of the issued and outstanding membership
interest in RAML.
None of the issued and outstanding membership interest of RAML
has been issued
in violation of any rights of any Person or in violation of
registration rights
of any applicable securities Laws. RAML does not own, directly
or indirectly,
any capital stock or any other equity or debt securities of any
Person.
3.3 Authorization. SELLER is a private limited company
validly
existing and in good standing under the Laws of the jurisdiction
of its
incorporation, and has the requisite power and authority to
execute and deliver
this Agreement and each SELLER Ancillary Document, and to
perform its
obligations hereunder and thereunder. This Agreement has been,
and the SELLER
Ancillary Documents shall be as of the Closing Date, duly
authorized, executed
and delivered by SELLER and do or shall, as the case may be,
when duly executed
by all parties and delivered by SELLER, constitute the valid and
binding
agreements of SELLER, enforceable against SELLER in accordance
with their
respective terms, subject to applicable bankruptcy, insolvency
and other similar
Laws affecting the enforceability of creditors' rights
generally, general
equitable principles and the discretion of courts in granting
equitable
remedies.
3.4 Consents and Approvals; No Violations. Except as set forth
on
Schedule 3.4, neither the execution and delivery of this
Agreement or the SELLER
Ancillary Documents by SELLER nor the consummation of the
transactions
contemplated hereby or thereby, will, with or without notice or
lapse of time,
directly or indirectly, (i) conflict with or result in any
breach of any
provision of the Organizational Documents of RAML or SELLER;
(ii) require (other
than approval under the HSR Act) the consent or Approval of, or
any notice to,
or filing by SELLER or RAML with any Governmental Entity; (iii)
violate,
conflict with or require the consent or approval of, or any
notice to, any third
party, result in the breach of any term of, result in the
acceleration of
performance of any obligation under, constitute a default (or
any event which,
with notice or lapse of time or both, would constitute a
default) under, or give
any Person the right to terminate, cancel, or accelerate any of
the terms,
conditions or provisions of any note, mortgage, deed of trust,
other evidence of
indebtedness, guarantee, license, agreement, lease or other
contract, instrument
or obligation to which RAML or SELLER is a party or by which any
of their
respective assets are or may be bound; (iv) violate or conflict
with any Law
applicable to RAML or SELLER; or (v) conflict with or violate
any existing
judgment, order, decree, or ruling against RAML or SELLER;
excluding from the
foregoing clauses (ii), (iii), (iv) and (v) such requirements,
violations,
conflicts, defaults or rights which become applicable as a
result of the
business or activities in which BUYER is or proposes to be
engaged or as a
result of any acts or omissions by, or the status of or any
facts pertaining to,
BUYER.
3.5 Financial Statements of RAML. SELLER has delivered the
Financial
Statements to BUYER. The Financial Statements have been prepared
from the books
and records of RAML. The Financial Statements have been prepared
in accordance
with GAAP, applied on a consistent basis, and present fairly, in
all material
respects, the financial position of RAML as of their respective
dates and the
results of RAML's operations and cash flows for the periods
covered thereby,
except for unaudited Financial Statements, which were prepared
in accordance
with IFRS and are subject to normal year end adjustments and the
absence of
footnote disclosure.
15
<PAGE>
3.6 Fee Surface and Fee Mineral Lands. RAML holds title to the
Fee
Surface Lands and the Fee Mineral Lands pursuant to the deed or
other conveyance
instrument as set forth on Exhibit C, which to SELLER's
Knowledge lists all such
lands owned by RAML. To SELLER's Knowledge and except as
otherwise set forth on
Exhibit C, RAML holds (i) title to the Fee Surface Lands and the
Fee Mineral
Lands free and clear of all Liens and adverse claims other than
Permitted Liens,
and (ii) good and marketable title to the Fee Surface Lands
within the Long-Term
Surveillance and Monitoring area, which area is designated on
the land ownership
map disclosed to BUYER by SELLER in item 17.02 of the Data Room,
at RAML's
Ambrosia Lake site in McKinley County, New Mexico.
3.7 Conduct of Business and Absence of Changes. Except as
disclosed in
Schedule 3.7, since June 30, 2007, RAML has conducted its
operations in the
ordinary course of business and has not (a) suffered any
Material Adverse
Effect; (b) declared, set aside, made or paid any cash dividend
or distribution
or purchased, issued or sold any membership interest; (c)
incurred any
indebtedness in excess of US$50,000; (d) instituted any material
increase in the
compensation payable or to become payable to any officers or
employees of RAML
or any material changes in personnel policies or employee
benefits, except for
increases in employee compensation in the ordinary course of
business; (e)
amended or otherwise modified its Organizational Documents or
altered, through
merger, liquidation, reorganization, restructuring or in any
other fashion its
company structure or ownership; (f) instituted or settled any
litigation or any
legal, administrative or arbitration action or proceeding before
any court or
Governmental Entity relating to it or any of its properties or
assets; (g)
suffered any damage or destruction to, loss of, or condemnation
or eminent
domain proceeding relating to any of its tangible properties or
assets (whether
or not covered by insurance) which has had or would reasonably
be likely to have
a Material Adverse Effect; (h) changed its method of accounting
or its
accounting principles or practices, including any policies or
practices with
respect to the establishment of reserves for work-in-process and
accounts
receivable, utilized in the preparation of the Financial
Statements, other than
as required by GAAP or IFRS, as applicable; (i) entered into any
agreements,
commitments or contracts, except those made in the ordinary
course of business
and in a commercially reasonable manner; (j) entered into any
agreements or
commitments to merge or consolidate with, or to purchase a
substantial equity
interest in or a substantial portion of the assets of, or to
acquire by any
other manner, any business entity or division thereof; (k) made
any settlements
or new elections or changed any current elections with respect
to Taxes; or (l)
entered into any agreement or commitment to do any of the
foregoing.
3.8 Permits. RAML has duly obtained all Permits required by
applicable
Law in connection with its current business and ownership of,
and operations at,
the Real Property. Schedule 3.8 sets forth the Permits currently
held by RAML.
Except as set forth in Schedule 3.8, those Permits are in full
force and effect
in accordance with their respective terms and, since January 1,
2001, RAML has
complied in all material respects with the terms of those
Permits. There is no
proceeding pending or, to SELLER's Knowledge, threatened that
could reasonably
be expected to result in the revocation, termination,
suspension, cancellation
or modification in any material adverse manner of any of those
Permits. To the
Knowledge of SELLER, there exists no state of facts that could
cause any
Governmental Entity to limit, suspend, revoke, cancel, modify or
fail to renew
any Permit related to or in connection with RAML's business.
16
<PAGE>
3.9 Surface and Mineral Leases. Except as provided or referenced
at
Exhibit F, (i) the Surface and Mineral Leases are legal, valid
and binding and
are in full force and effect in accordance with their respective
terms, (ii)
RAML has complied in all material respects with the terms and
provisions of the
Surface and Mineral Leases, and (iii) to SELLER'S Knowledge,
RAML has not
received any notification of any unresolved violation or
noncompliance with the
terms of the Surface and Mineral Leases. Except as set forth on
Exhibit F, to
SELLER's Knowledge, the Surface and Mineral Leases referenced at
Exhibit F are
all of such leases held by RAML.
3.10 Mining Claims. Except as provided at Exhibit E, (i) the
Mining
Claims are legal, valid and binding and are in full force and
effect in
accordance with their respective terms, (ii) RAML has complied
in all material
respects with the terms and provisions of the Mining Claims,
(iii) to SELLER's
Knowledge, RAML has not received any notification of any
unresolved violation or
noncompliance with the terms of the Mining Claims, and (iv) RAML
has made all
filings and paid all maintenance fees with the appropriate
Governmental Entity
necessary to keep the Mining Claims in full force and effect
under applicable
Law. To SELLER's Knowledge, the Mining Claims described at
Exhibit E are all of
the Mining Claims held by RAML.
3.11 Water Rights.
(a) RAML is the sole owner of the water rights set forth in
Schedule
3.11(a) (the "Water Rights"), including but not limited to B-993
and B-993-S and
B-994 through B-994-S-6 in the declared amount of 9,673 AFY. The
Water Rights
are evidenced by filings in the Office of the State Engineer of
the State of New
Mexico as set forth in Schedule 3.11(a), and have not been sold
or assigned in
whole or in part. Except as set forth on Schedule 3.11(a), RAML
has good and
marketable title to the Water Rights pursuant to the instruments
set forth on
Schedule 3.11(a), free and clear of all Liens other than
Permitted Liens. In
connection with RAML's operations at its Ambrosia Lake site, the
maximum
beneficial use of the Water Rights was 9,673 AFY.
(b) Except as set forth on Schedule 3.11(b), to SELLER's
Knowledge,
RAML is, and has been since January 1, 2004, in material
compliance with all
Laws applicable to the Water Rights. RAML has not received any
written notice
that use of the Water Rights violates any Laws of any
Governmental Entity having
jurisdiction over the Water Rights.
(c) Except as set forth on Schedule 3.11(c), there is no action
or
proceeding pending, or to SELLER's Knowledge, threatened against
RAML, or any
part of the Water Rights, which, if determined adversely to
RAML, would
materially impact RAML's ownership or use of the Water
Rights.
(d) Except as set forth on Schedule 3.11(d), RAML has not
received
notice of and to SELLER's Knowledge, is not aware of any Law
applicable to the
Water Rights or of any pending or contemplated change in any
such Law, which
would in any material way limit or impede RAML's continued use
and ownership of
the Water Rights.
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(e) To SELLER's Knowledge, RAML has not undertaken any action
to
affirmatively abandon the Water Rights. RAML has neither
abandoned, nor intended
to abandon, nor, to SELLER's Knowledge, forfeited any of the
Water Rights.
(f) With respect to the Water Rights described on Schedule
3.11(a),
there have been no unauthorized: (i) changes in points of
diversion; (ii)
storage of water; (iii) changes in places of use; or (iv)
changes in purpose of
use.
3.12 Personal Property.
(a) Schedule 3.12(a) sets forth a complete and accurate list of
all
personal property material to the conduct of RAML's operations
as presently
conducted. Except as disclosed in Schedule 3.12(a), (i) RAML has
valid, good and
marketable title to or a valid and enforceable lease, license or
other interest
(coupled with a right to use) in all tangible personal property
material to the
conduct of RAML's operations as presently conducted, and (ii)
the tangible
personal property owned by RAML is owned free and clear of Liens
other than
Permitted Liens.
(b) Except as disclosed in Schedule 3.12(b), the equipment and
other
tangible assets material to the conduct of RAML's operations as
presently
conducted are in good operating condition and repair, ordinary
wear and tear
excepted, and are suitable for their present use by RAML.
3.13 Intellectual Property. Schedule 3.13 lists all trademarks,
trade
names, service marks, service names, logos, assumed names,
copyrights, patents
or registrations and applications therefor and software and
other licenses
(other than "shrink-wrapped" or off-theshelf" software licenses
licensed by the
Company) which RAML owns or has a right to use.
3.14 Litigation. Except as set forth on Schedule 3.14, there is
no
lawsuit, governmental investigation or legal, administrative or
arbitration
action or proceeding pending or, to the Knowledge of SELLER,
threatened against
(i) RAML or any of its properties or assets, or any director,
officer or
employee of RAML, in his or her capacity as such, or (ii) SELLER
or of any of
its properties or assets, or any director, officer or employee
of SELLER, in his
or her capacity as such, that would prevent or restrict the
ability of SELLER to
consummate the Acquisition. Except as set forth on Schedule
3.14, RAML is not
identified as a party subject to any restrictions or limitations
under any
action, suit, proceeding, hearing, judgment, order or decree of
any Governmental
Entity.
3.15 Compliance with Applicable Law. Except as disclosed in
Schedule
3.15, RAML is, and has been since January 1, 2003, in material
compliance with
all applicable Laws. Except as disclosed in Schedule 3.15, RAML
has received no
notice that the business of RAML is being conducted in violation
of any
applicable Laws and to the Knowledge of SELLER, no such
violation is threatened.
This Section 3.15 shall not apply to Water Rights (which is
exclusively the
subject to Section 3.11) or to Environmental Health & Safety
Laws (which is
exclusively the subject of Section 3.20).
3.16 Material Contracts.
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<PAGE>
(a) Schedule 3.16 lists and describes all written or oral
contracts,
agreements or arrangements (collectively, the "Material
Contracts") to which
RAML is a party or bound:
(i) for the purchase or sale of services at an annual amount in
excess
of US$20,000, or with an unexpired term as of the Closing Date
in excess of one
(1) year;
(ii) for the employment of any person as an officer,
employee,
consultant or otherwise;
(iii) for borrowing, lending or to make any borrowing or lending
of
money;
(iv) for the lease of personal property or other assets by RAML,
at an
annual amount in excess of US$20,000;
(v) any partnership or joint venture agreement;
(vi) any other contract which provides for the receipt or
expenditure
by RAML of more than US$25,000, individually, or US$50,000 in
the aggregate; or
(vii) any other contract material to the operations, business or
assets
of RAML.
(b) The contracts set forth on Schedule 3.16 are all of the
Material
Contracts to which RAML is a party or by which RAML or any of
its assets or
properties are bound. All Material Contracts are legal, valid,
and binding and
in full force and effect and are enforceable by RAML in
accordance with their
respective terms, except as such enforceability may be limited
by bankruptcy,
insolvency, moratorium, and other similar Laws affecting
creditors' rights
generally or by general principles of equity. There does not
exist under any
Material Contract any event of default or event or condition
that, after notice
or lapse of time or both, would constitute a violation, breach
or event of
default thereunder on the part of RAML. Except as set forth on
Schedule 3.16, to
the Knowledge of SELLER, no counterparty to any Material
Contract is in material
breach or material default under any Material Contract.
3.17 Employment, Deferred Compensation or Similar
Agreements;
Collective Bargaining Agreements; Employee Benefit Plan.
(a) RAML is not a party to any collective bargaining agreement,
and at
least since December 31, 2000, has not been a party to any
collective bargaining
agreement.
(b) Schedule 3.17(b) contains a complete list of all Employee
Benefit
Plans sponsored, maintained, or contributed to by RAML which
would constitute a
binding obligation of RAML after the Closing. With respect to
each such Employee
Benefit Plan being sponsored, maintained or contributed to by
RAML as of the
date of this Agreement, SELLER or RAML has provided to BUYER a
true, correct and
complete
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copy of: (i) the current plan document and amendments thereto;
(ii) the current
trust agreements, insurance contracts and policies,
administrative and service
agreements, and administrative policies and procedures which
pertain to the
administration of such Employee Benefit Plan; (iii) as
applicable, the most
recent IRS Form 5500s (and any financial statements and other
schedules attached
thereto); (iv) the summary plan description currently in effect
for such
Employee Benefit Plan, together with any and all summaries of
material
modifications which have been published since the issuance of
such summary plan
description; (v) the most recent IRS determination letter (if
such Employee
Benefit Plan is intended to be "qualified" under Code Section
401(a) and related
Code sections); and (vi) the most recent actuarial valuation
report for such
Employee Benefit Plan (if such Employee Benefit Plan constitutes
a "defined
benefit plan" within the meaning of ERISA Section 3(35)).
(c) With regard to each Employee Benefit Plan sponsored,
maintained, or
contributed to by RAML as of the date of this Agreement, which
is intended to be
"qualified" under Code Section 401(a), (i) RAML either (A) has
received a
determination letter from the IRS since December 31, 2004,
indicating that such
Employee Benefit Plan is qualified and that any trust related
thereto is exempt
from federal income taxes, under Code Sections 401(a) and
501(a), respectively;
or (B) is in possession of a determination letter from the IRS
which predates
January 1, 2005, which indicates that such Employee Benefit Plan
is qualified
and that any trust related thereto is exempt from federal income
taxes, under
Code Sections 401(a) and 501(a), respectively, and the period
for obtaining a
more recent determination letter has not yet closed; and (ii) to
the Knowledge
of SELLER, no fact or event has occurred which could adversely
affect the
qualified status of such Employee Benefit Plan or the exempt
status of any
related trust.
(d) With respect to each Employee Benefit Plan currently
sponsored,
maintained, or contributed to by RAML and except as specifically
disclosed on
Schedule 3.17(d): (i) all contributions required to be made
under the terms of
such Employee Benefit Plan have been timely made or, if not yet
due, have been
properly accrued as liabilities on RAML's financial statements;
(ii) all
benefits determined to be properly payable from and under such
Employee Benefit
Plan have been timely paid; (iii) to the Knowledge of SELLER,
RAML is in
material compliance with, and such Employee Benefit Plan has
materially
conformed in fo
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