EXHIBIT 10.1
TERMINATION AND RELEASE
AGREEMENT
This Termination and Release
Agreement (the “ Agreement ”) is entered into as
of June 27, 2008, by and between:
APEX SILVER MINES
LIMITED , an exempted
company limited by shares duly incorporated and validly existing
under the laws of the Cayman Islands, British West Indies (“
Apex Limited ”), with its registered office at the
offices of Walkers SPV Limited, P.O. Box 908GT, Walker House, Mary
Street, George Town, Grand Cayman, Cayman Islands, British West
Indies; and
SUMITOMO CORPORATION, a corporation
duly organized and validly existing under the laws of Japan
(“ Sumitomo ”), with its headquarters at 1-8-11,
Harumi, Chuo-ku Tokyo 104-8610, Japan.
Apex Limited and Sumitomo are
sometimes referred to herein individually as a “ Party
” and collectively as the “ Parties
.”
RECITALS
A. Apex Silver Mines Sweden AB, a
privat aktiebolag duly organized and validly existing under
the laws of the Kingdom of Sweden, and an indirect wholly-owned
subsidiary of Apex Limited (“ Apex Sweden ”) and
Sumitomo entered into that certain Deferred Payments Agreement
dated September 25, 2006 (the “ Deferred Payments
Agreement ”). Capitalized terms used but not otherwise
defined in this Agreement have the respective meanings ascribed
thereto in the Deferred Payments Agreement.
B. Pursuant to Section 6.10(b)
of the Deferred Payments Agreement, (i) Apex Sweden assigned
its rights and obligations under the Deferred Payments Agreement to
Apex Luxembourg S.a.r.l., a société à
responsabilité limitée organized under the Laws of
the Grand Duchy of Luxembourg and a direct wholly-owned subsidiary
of Apex Limited (“ Apex Luxembourg ”), and
(ii) Apex Luxembourg assigned its rights and obligations under
the Deferred Payments Agreement to Apex Limited.
C. Apex Limited and Sumitomo desire
to enter into this Agreement in order to terminate the Deferred
Payments Agreement on the terms and conditions set forth
herein.
AGREEMENT
In consideration of the mutual
promises, covenants, and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as
follows:
1. Termination of Deferred
Payments Agreement . Subject to the receipt of amounts set
forth in Section 2 and the other terms and conditions hereof,
each Party agrees that Sumitomo’s obligation to pay and Apex
Limited’s right to receive payments under the
Deferred Payments Agreement shall be deemed
fully satisfied, duly discharged and shall terminate on and as of
the date hereof. On the date that the last of (i) the Silver
Adjustment Amount (if any), relating to the Quarterly Silver
Payment for the quarter ended June 30, 2008, (ii) the
Zinc Adjustment Amount (if any) relating to the Quarterly Zinc
Payment for the quarter ended June 30, 2008 and (iii) the
termination payment described in Section 2 below, shall have
been paid in accordance with the terms of this Agreement (such
date, the “ Final Termination Date ”), the
Deferred Payments Agreement and all rights, obligations and
liabilities of the Parties thereunder shall be deemed fully
satisfied, duly discharged and shall terminate automatically and
shall be of no further force or effect. The Confidentiality
Agreement between Apex Limited and Sumitomo, dated
September 8, 2005, shall survive the termination of the
Deferred Payments Agreement and continue in full force and effect
in accordance with its terms.
2. Termination Payment . On
June 30, 2008 Sumitomo shall pay to Apex Limited
US$70,000,000.00 (seventy million Dollars) by wire transfer of
immediately available funds to an account specified in writing by
Apex Limited to Sumitomo prior to the date thereof.
3. Second Quarter Payment .
Notwithstanding the termination of the Deferred Payments Agreement
pursuant to Section 1 hereof, Sumitomo hereby agrees to make
the Quarterly Silver Payment and the Quarterly Zinc Payment for the
quarter ended June 30, 2008 (together, the “ Second
Quarter Payment ”) in accordance with the terms set forth
in Article II and Article III, respectively, of the Deferred
Payments Agreement. The Second Quarter Payment will be increased or
decreased, as applicable, in accordance with Sections 2.5 and 3.3
of the Deferred Payments Agreement; provided, however, that,
notwithstanding the last sentence of Section 2.5 and the last
sentence of Section 3.3 of the Deferred Payments Agreement, if
the Second Quarter Payment is increased, Sumitomo shall make
payment of the Silver Adjustment Amount and/or the Zinc Adjustment
Amount, as the case may be, promptly following receipt from Apex
Limited of the Silver Payment Adjustment Notice and/or the Zinc
Payment Adjustment Notice, as the case may be.
4. Release of Claims .
Effective on the Final Termination Date, each Party (on their own
behalf and on behalf of all of its Affiliates, subsidiaries,
assigns and successors) fully, unconditionally and irrevocably
releases each other Party and its respective officers, directors,
agents, sto
