Environmental Compliance And Indemnity Agreement

Exhibit 10.19.8


ENVIRONMENTAL COMPLIANCE AND INDEMNITY AGREEMENT


This Environmental Compliance and Indemnity Agreement (" this Agreement" ) is made as of October 29 , 2002 and is given pursuant to that certain Credit Agreement of even date herewith (the " Credit Agreement" ) by and among The Doe Run Resources Corporation, a New York corporation (the " Borrower" ), The Buick Resource Recycling Facility, LLC, a Delaware limited liability company (" Buick" ; Buick and Borrower are each sometimes referred to herein individually as an " Indemnitor" and collectively as " Indemnitors" ) and Regiment Capital Advisors, L.L.C. (the " Agent" ) in its capacity as agent for the Lenders from time to time party to the Credit Agreement (the " Lenders" ).


As used herein:


A. The term " Buick Property" shall mean the Buick Resources Recycling Facility and the former Cominco Mill (as more particularly described in Exhibit A attached hereto), including all buildings and other improvements from time to tune located thereon.


B. The term " Buick Permits" means those permits and permit applications described on Schedule I , attached hereto.


C. The term " Buick RCRA Permit" shall mean that certain hazardous waste management facility permit effective September 27, 1989, along with the pending renewal application, as issued, revised or renewed pursuant to applicable state and federal regulations authorizing Buick to perform certain treatment, storage, disposal and corrective measures.


D. The term " Deed of Trust" shall mean the Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents of even date herewith, executed by Buick in favor of Lisa M. Haines, Trustee and Agent, as Beneficiary.


E. The term " Environmental Enforcement Action" shall mean all actions, orders, requirements or liens instituted, threatened in writing, required, imposed or placed by any government authority and all written demands or claims made or threatened by any other Person against or with respect to all or any portion of the Buick Property or any present or past owner or occupant thereof of which Buick or Doe Run is notified, arising out of or in connection with the alleged violation of any of the Environmental Laws, any environmental condition, or the assessment, monitoring, clean-up, containment, remediation or removal of, or damages caused or alleged to be caused by, any Hazardous Materials (i) located on or under all or any portion of the Property, (ii) emanating from any portion of the Property or (iii) generated, stored, transported, utilized, disposed, managed or released by an Indemnitor on or from any portion of the Property. Notwithstanding the foregoing, such term shall not include any written or oral communications in connection with any permit or permit application not involving an alleged violation of such permit or Environmental Laws.


F. The term " Environmental Laws" shall mean all applicable federal, state and local laws, rules, regulations, ordinances, consent decrees, permits (including the Buick RCRA permit) and permit applications currently pending and other enforceable requirements relating to: (a) releases or threatened releases of Hazardous Materials, (b) pollution or protection of public


health or the environment or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Materials; but taking into account any applicable exception for high volume low toxicity wastes.


G. The term " Environmental Report" shall mean the written product of an Environmental Assessment described in Section 4.3.


H. The terms " generated" , " stored" , " transported" , " utilized" , " disposed" , " managed" , " released" and " threat of release" , and all conjugates thereof, shall have the meanings and definitions and exceptions as set forth in the Environmental Laws.


I. The term " Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.


J. The term " Hazardous Materials" shall mean any pollutant, contaminant, petroleum or any fraction thereof, hazardous, toxic or dangerous waste, substance or material defined as such under any Environmental Laws, taking into account any applicable exceptions.


K. The term " Indemnified Party" shall mean: (i) each Lender, the Agent and each of the Lenders' and the Agent' s directors, officers, employees, agents, attorneys, consultants and Affiliates; and (ii) any subsequent owner of all or any portion of the Property following the exercise by Agent of its rights under any of the Credit Documents including, but not limited to, a foreclosure sale or acceptance of a deed in lieu thereof.


L. The term " knowledge" means the actual knowledge without due inquiry of the senior officers of the Indemnitors, which senior officers include any Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, General Manager or any Vice President, or persons serving in such capacities from time to time.


M. The term " Mortgaged Property" shall have the meaning ascribed to such term in the Deed of Trust.


N. The term " Property" shall mean all of the real property owned by Buick from time to time and including the Mortgaged Property.


O. The term " Surrounding Property" shall mean any real property (other than mineral rights) located within one-half mile of the perimeter of any portion of the Property.


P. All capitalized terms used in this Agreement which are not otherwise specifically defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.


FOR VALUE RECEIVED, and in order to induce Lenders to provide the Loan and the Discretionary Credits, Indemnitors hereby jointly and severally represent, warrant and unconditionally agree as follows:


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1. Warranties and Representations . Indemnitors jointly and severally represent and warrant to Agent and the Lenders, the same to be true as of the date hereof and throughout the period that any of the Credit Documents shall remain in force and effect, that except as specifically disclosed in Schedule II attached hereto:


1.1. No Hazardous Materials at Property . To Indemnitors' knowledge, and except as used in the ordinary course of Indemnitors' business in material compliance with all applicable Environmental Laws, no Hazardous Materials have been or are currently generated or stored, transported, utilized, disposed of, released, including, without limitation, from any septic, sewage or other waste disposal systems servicing any portion of the Property, or located on, under or from any portion of the Buick Property, or m any manner introduced onto any portion of the Property;


1.2. No Violations Claimed re Property or Indemnitors . Except for any written notices with respect to which appropriate corrective actions have been taken, Indemnitors have not received any written notice from any Governmental Authority claiming (i) that any of the Buick Property or any use thereof violates, in any material respect, any of the applicable Environmental Laws or (ii) that Indemnitors or any of Indemnitors' employees, invitees, lessees, licensees or agents have violated, in any material respect, any of the applicable Environmental Laws with respect to any portion of the Buick Property or any Surrounding Property;


1.3. No Liability to Governmental Authorities . With respect to the Buick Property, Indemnitors have not incurred any liability to any Governmental Authority under any of the applicable Environmental Laws, except as set forth in the relevant Buick Permits;


1.4. No Lien on Property . No lien against any portion of the Buick Property has arisen under or related to any of the Environmental Laws, except as shown in the Buick Permits;


1.5. No Enforcement Actions . There are no Environmental Enforcement Actions pending with respect to any portion of the Buick Property, or to the best of Indemnitors' knowledge, threatened;


1.6. No Knowledge of Violations re Surrounding Property . With respect to the Buick Property, and except as shown in the Buick Permits, Indemnitors have no knowledge of any action or order instituted or threatened by any Person or Governmental Authority rising out of or in connection with the Environmental Laws involving the assessment, monitoring, clean-up, containment, remediation or removal of or damages caused or alleged to be caused by any Hazardous Materials emanating or migrating, or threatening to emanate or migrate, from the Property to the Surrounding Property.


2. Compliance with Environmental Laws .


2.1. Compliance . As long as any Credit Obligation remains outstanding, Indemnitors will comply in all material respects with all applicable Environmental Laws applicable to any portion of the Property, and Indemnitors will take all remedial action


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necessary to avoid any liability of Indemnitors, Agent, Lenders or any subsequent owner of all or any portion of the Property and to avoid the imposition of, or to discharge, any liens on all or any portion of the Property, as a result of any failure to comply with any applicable Environmental Laws applicable to all or any portion of the Property.


2.2. Prohibitions . Without limitation of the generality of the foregoing, Indemnitors agree that they shall not:


(a) except in material compliance with all applicable Environmental Laws (including as permitted by the Buick Permits), release or permit any release or threat of release of any Hazardous Materials on any portion of the Property;


(b) except in material compliance with all applicable Environmental Laws (including as permitted by the Buick Permits), generate or permit any Hazardous Materials to be generated on any portion of the Property;


(c) except in material compliance with all applicable Environmental Laws (including as permitted by the Buick Permits), store or utilize or permit any Hazardous Materials to be stored or utilized on any portion of the Property;


(d) except in material compliance with all applicable Environmental Laws (including as permitted by the Buick Permits), dispose of or permit any Hazardous Materials to be disposed of on any portion of the Property;


(e) fail to operate, maintain, repair or use all or any portion of the Property in material compliance with applicable Environmental Laws (including as permitted by the Buick Permits); or


(f) allow, permit or suffer any other Person to operate, maintain, repair or use all or any portion of the Property except in material compliance with all applicable Environmental Laws (including as permitted by the Buick Permits).


3. Notice of Conditions . As promptly as reasonably possible, but in no event later than ten (10) Business Days after Indemnitors obtain knowledge thereof, Indemnitors will provide to the Agent written notice of any of the following conditions: (i) the presence, release or threat of release of any Hazardous Materials on, under or from any portion of the Mortgaged Property, whether or not caused by Indemnitors that may constitute a material violation of any of the applicable Environmental Laws; (ii) any Environmental Enforcement Action instituted or threatened with respect to the Mortgaged Property; or (iii) any condition or occurrence on all or any portion of the Mortgaged Property that may constitute a material violation of any of the applicable Environmental Laws.


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4. Indemnitors' Agreement to take Remedial Actions .


4.1. Remedial Actions . Upon an Indemnitor becoming aware of the violation of any applicable Environmental Laws related to all or any portion of the Property or the presence or any release or any threat of release of any Hazardous Materials on, under or from all or any portion of the Property in violation of any applicable Environmental Laws, Indemnitors shall, subject to the rights to contest set forth in Section 7 below, promptly take all actions reasonably necessary to cure or eliminate any such violation of any such applicable Environmental Laws and, where applicable, to arrange for such assessment, monitoring, clean-up, containment, removal, remediation or restoration of each portion of the Property and (if applicable and only to the extent that Indemnitors have the legal obligation to do so) the Surrounding Property as are required pursuant to any applicable Environmental Laws.


4.2. Security for Costs . If the potential costs associated with the actions required in Section 4.1, the release of any unpermitted lien against all or any portion of the Property and/or the release or other satisfaction of the liability, if any, of Indemnitors with respect to all or any portion of the Property arising under or related to any of the applicable Environmental Laws or any Environmental Enforcement Action are determined by Agent, in good faith, to exceed $1,000,000.00, Agent shall have the right (in addition to any other right or remedy) to require Indemnitors to provide, and Indemnitors shall provide within thirty (30) days after written request therefor, a bond, letter of credit or other similar financial assurance, in form, amount and substance reasonably satisfactory to Agent, in its good faith judgment based on the reasonably estimated costs for such matter, evidencing to Agent' s reasonable satisfaction that the necessary financial resources will be unconditionally available to pay for all of the foregoing.


4.3. Environmental Assessments . Without limitation of the provisions of Section 5 below, Agent shall have the right to require Indemnitors, at Indemnitors' own cost and expense, to obtain a professional environmental assessment of each portion of the Mortgaged Property in accordance with Agent' s then standard environmental assessment requirements and sufficient in scope to comply with the requirements of Section 5.1 upon the occurrence of an Event of Default.


5. Agent' s Rights to Inspect the Property and Take Remedial Actions .


5.1. Assessments . In addition to, and not in limitation of any of its other rights and remedies under this Agreement, as long as any Credit Obligation remains outstanding, so long as any Event of Default has occurred and is continuing, Agent shall have the right, but not the obligation, through such representatives or independent contractors as it may designate, to enter upon the Mortgaged Property or any of same and to expend funds (provided, however, Agent shall use reasonable efforts to minimize (a) any disruption to Indemnitors' business operations at the Mortgaged Property, and (b) all costs associated with each such assessment) to cause one or more environmental assessments of all or any portion of the Mortgaged Property to be undertaken, if Agent in


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its reasonable and good faith discretion at any reasonable time and upon reasonable notice to Indemnitors, and from time to time at reasonable intervals and upon reasonable notice to Indemnitors, determines that Hazardous Materials may exist at the Mortgaged Property in amounts or under circumstances that could give rise to a material liability under applicable Environmental Laws, which determination may be based on regulatory requirements and/or internal guidelines now or hereafter affecting Agent or any Lender. Such environmental assessments may include, without limitation, (i) detailed visual inspections of any or all of the Mortgaged Property, including, without limitation, all storage areas, storage tanks, drains, drywells and leaching areas; (ii) the taking of soil samples and surface and sub-surface water samples; (iii) the performance of soils and ground water analyses; and (iv) the performance of such other investigations or analyses as are necessary or appropriate and consistent with sound professional environmental engineering practice in order for Agent to obtain a complete assessment of the compliance of any or all of the Mortgaged Property and the use thereof with all Environmental Laws and to make a determination as to whether or not there is any risk of contamination (x) to any of the Mortgaged Property resulting from Hazardous Materials originating on, under or from any Surrounding Property or (y) with respect to the Mortgaged Property to any Surrounding Property resulting from Hazardous Materials originating on, under or from any portion of the Mortgaged Property.


5.2. Other Rights of Agent . In addition to, and not in limitation of any of its other rights and remedies under this Agreement or any of the other Credit Documents, upon the occurrence of any Event of Default, Agent shall have the right, but not the obligation, through such representatives or independent contractors as it may designate, to enter upon any or all of the Mortgaged Property and to expend funds (provided, however, Agent shall use reasonable efforts to minimize (a) any disruption to Indemnitors' business operations at the Mortgaged Property, and (b) all costs associated with each such assessment) to:


5.2.1. Cure . Cure any breach of the representations, warranties, covenants and conditions made by or imposed upon Indemnitors under this Agreement, including, without limitation, any violation by Indemnitors or by any of the Mortgaged Property of any of the Environmental Laws applicable to any of the Mortgaged Property;


5.2.2. Prevention and Precaution . Take all actions as are reasonably necessary to (i) prevent the migration of Hazardous Materials on, under or from any of the Mortgaged Property to any other property; (ii) clean up, contain, remediate or remove any Hazardous Materials on, under or from any other property, which Hazardous Materials originated on, under or from any of the Mortgaged Property; or (iii) (to the extent there is a legal right so to do) prevent the migration of any Hazardous Materials on, under or from any other property to any of the Mortgaged Property;


5.2.3. Environmental Enforcement Actions . Comply with, settle or otherwise satisfy any Environmental Enforcement Action, including, but not limited to, the payment of any fines or penalties imposed by any governmental


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authority and the payment of all amounts required to remove any lien or threat of lien on or affecting any of the Mortgaged Property; and


5.2.4. General . Comply with or otherwise satisfy any Environmental Law and correct or abate any environmental condition on, or which threatens, any of the Mortgaged Property and which could cause damage or injury to any of the Mortgaged Property or, with respect to the Mortgaged Property, to the Surrounding Property or to any Person.


5.3. Recovery of Costs . Any amounts paid or advanced by Agent and all costs and expenditures incurred in connection with any action taken pursuant to the terms of this Agreement, including but not limited to environmental consultants, and experts' fees and expenses, reasonable attorneys' fees and expenses, court costs and all costs of assessment, monitoring, clean-up, containment, remediation, removal and restoration, with interest thereon at the default rate provided for in the Credit Agreement, shall be a joint and several demand obligation of Indenmitors to Agent, shall be added to the obligations secured by the Credit Agreement and shall be secured by the lien of the Deed of Trust as fully and as effectively and with the same priority as every other obligation secured thereby.


5.4. Agent and Lenders Not Responsible . The exercise by Agent and/or Lenders of any one or more of the rights and remedies set forth in this Section 5 shall not operate or be deemed (a) to place upon Agent any responsibility for the operation, control, care, service, management, maintenance or repair of any of the Property or (b) to make Agent the " owner" or " operator" of any of the Property or a " responsible party" within the meaning of any of the Environmental Laws.


5.5. Agent' s Subrogation . Furthermore, Agent by making any such payment or incurring any such costs shall be subrogated to all rights of Indemnitors or any other occupant of any of the Property to seek reimbursement from any other Person including, without limitation, any predecessor owner or occupant of any of the Property who may be a " responsible party" under any of the Environmental Laws in connection with the presence of Hazardous Materials on or under or which emanated from any of the Property.


5.6. Agent May Stop . Without limiting the generality of the other provisions of this Agreement, any partial exercise by Agent of any one or more of the rights and remedies set forth in this Section 5 including, without limitation, any partial undertaking on the part of Agent to cure any failure of Indemnitors or of any of the Mortgaged Property, or of any other occupant, prior occupant or prior owner thereof, to comply with any of the Environmental Laws shall not obligate Agent to complete such actions taken or require Agent to expend further sums to cure such non-compliance.


6. Indenmification by Indemnitors . Indemnitors hereby agree that at all times, both before and after the repayment and discharge of the Credit Obligations, Indemnitors shall at their sole cost and expense, severally for the period prior to the transfer of the Buick Property to Borrower, and following such transfer, jointly and severally (and subject to their right of


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contribution against any of their predecessors or former owners or operators of the Buick Property or the Surrounding Property), indemnify, defend, exonerate, protect and save harmless each Indemnified Party against and from any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements and expenses of any kind or nature whatsoever, including, without limitation, reasonable attorneys' and experts' fees and disbursements, which may at any time be imposed upon, incurred by or asserted or awarded against any Indemnified Party arising from or out of:


6.1. Hazardous Materials . Any Hazardous Materials on, in, under or affecting all or any portion of the Property or emanating or migrating, or threatening to emanate or migrate, from the Property to the Surrounding Property on or before the date hereof, or which may hereafter affect all or any portion of the Property or any Surrounding Property, whenever discovered and whether or not disclosed in the Environmental Reports and whether or not now known to Indemnitors and/or Agent;


6.2. Environmental Laws . The violation of any applicable Environmental Law by an Indemnitor or with respect to any of the Property or any Surrounding Property (but, as to Surrounding Property, only to the extent that any Hazardous Materials on such Surrounding Property have migrated to any of the Property or constitute a threat of release at any of the Property) existing on or before the date hereof or which may so exist in the future, whenever discovered and whether or not disclosed in the Environmental Reports;


6.3. Breach of Warranty, Representation or Covenant . Any breach of warranty or representation or covenant made by an Indenmitor under or pursuant to this Agreement; and/or


6.4. General . The enforcement of this Agreement, whether any of such matters arise before or after foreclosure of the Deed of Trust or other taking of title to or possession of all or any portion of the Mortgaged Property by Agent or by any other Indemnified Party, and specifically including therein, without limitation, the following: (i) reasonable costs incurred for any of the matters set forth in Section 5 of this Agreement; and (ii) reasonable costs and expenses incurred in ascertaining the existence or extent of any asserted violation of any applicable Environmental Laws relating to any of the Mortgaged Property and any remedial action reasonably taken on account thereof including, without limitation, the reasonable costs, fees and expenses of engineers, geologists, chemists, other scientists, attorneys, surveyors, and other professionals, or testing and analyses performed in connection therewith.


Notwithstanding the foregoing, the indemnity contained in this Section 6 expressly excludes any loss, liability, damage or expense resulting from a release of Hazardous Materials if both of the following criteria are met: (i) the circumstances giving rise to such loss, liability, damage or expense occur only after foreclosure of the Deed of Trust or acceptance by Agent of a deed in lieu of foreclosure of the Deed of Trust or following and during the continuance of entry by Agent as a mortgagee-in-possession with respect to the Mortgaged Property and (ii) the circumstances giving rise to such loss, liability damage or expense do not result in any manner from actions taken or circumstances existing on any of the Mortgaged Property prior to such


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foreclosure, acceptance of a deed in lieu or entry, other than any such action taken by Agent, its agents or employees which constitutes negligence or willful misconduct.


7. No Waiver . In addition, nothing herein shall be deemed to be a waiver of any right of contribution or offset with respect to any prior owner or operator of the Buick Property or the Surrounding Property that either or both of the Indemnitors may now or hereafter be able to assert. In addition, any liability or property insurance proceeds from any insurance policy (or expired insurance policy) of the Indemnitors, or their predecessors in interest, or a third party, that may now or hereafter be available to the Indemnitors may be used by such Indemnitors to comply with their obligations hereunder.


8. Right to Contest . Indemnitors may contest in good faith any claim, demand, levy or assessment under any Environmental Laws, including, but not limited to, any claim with respect to Hazardous Materials, by any Person, but only if and for so long as:


8.1. Material Question in Good Faith . The contest is based upon a material question of law or fact raised by Indemnitors in good faith; and


8.2. Diligent Pursuit . Indemnitors properly commence and thereafter diligently pursues the contest to completion; and


8.3. No Impairment . The contest will not materially impair the taking of any remedial action with respect to such claim, demand, levy or assessment required to protect against further damage to any of the Property or the Surrounding Property; and


8.4. Adequate Resources . Indemnitors demonstrate to Agent' s reasonable satisfaction that Indemnitors have the financial capability to undertake and pay for such contest and any remedial action then or thereafter necessary; and


8.5. No Event of Default . No Event of Default exists under the Credit Agreement or any of the other Credit Documents.


9. Waivers . Indemnitors hereby waive and relinquish to the fullest extent now or hereafter not prohibited by applicable law:


9.1. Marshalling . Any right or claim of right to cause a marshalling of Indemnitors' assets or of any security or to cause Agent to proceed against any of the collateral for the obligations secured by the Deed of Trust before proceeding under this Agreement against Indemnitors; and


9.2. Notice . Notice of the acceptance hereof, presentment, demand for payment, protest, notice of protest, and any and all notices of nonpayment, nonperformance, nonobservance or default.


10. Cumulative Rights . Agent' s rights under this Agreement sh ...