REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
February ___, 2001 between Sunshine Mining and Refining Company, a Delaware
corporation, with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(the "Company") and each of the entities listed under "Investors" on the
signature page hereto (each an "Investor" and collectively the "Investors"),
each with offices at the address listed under such Investor's name on Schedule I
hereto.
W I T N E S S E T H:
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WHEREAS, pursuant to a Plan of Reorganization, dated as of August 23, 2000
filed by the Company, as subsequently amended and which became effective on
February 5, 2001, certain affiliates of the Company and the Investors with the
federal bankruptcy court in Delaware (the "Plan of Reorganization"); and
WHEREAS, the Company and the investors desire that all shares of the
Company's common stock, par value $0.01 per share ("Common Stock") issued to the
Investors pursuant to the Plan of Reorganization (the "Reorganization Shares")
be subject to the registration rights contained herein;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in and this Agreement, the
Company and the Investors agrees as follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Plan of Reorganization.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Approved Market" shall mean the New York Stock Exchange, the American
Stock Exchange, the NASDAQ National Market, the NASDAQ Small Cap Market or the
NASDAQ OTC Bulletin Board.
"Closing Date" shall refer to the Effective Date of the Plan of
Reorganization.
"Commission" or "SEC" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning set forth in the preamble.
"Default Payment" shall have the meaning set forth in Section 2(b)(i).
"Deficiency" shall have the meaning set forth in Section 2(b)(iv).
"Holder" and "Holders" shall mean the Investor or the Investors,
respectively, and any transferee of the Registrable Securities which have not
been sold to the public to whom
the registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.
"Indemnified Party" shall have the meaning set forth in Section 6(c).
"Indemnifying Party" shall have the meaning set forth in Section 6(c).
"Interfering Events" shall have the meaning set forth in Section 2(b).
"Listing Period" shall have the meaning set forth in Section 2(b)(ii)(A).
"Market Price"" shall mean the price of one share of Common Stock
determined as follows:
(i) if the Common Stock is listed on the New York Stock
Exchange or the American Stock Exchange, the closing price
on such exchange on the date of valuation;
(ii) if (i) does not apply and the Common Stock is listed on the
NASDAQ National Market System, the NASDAQ Small-Cap Market
or the NASDAQ OTC Bulletin Board, the last reported bid
price on the date of valuation;
(iii) If neither (i) nor (ii) apply but the Common Stock is
quoted in the over-the-counter market, another recognized
exchange or on the pink sheets, the last reported bid price
on the date of valuation; and
(iv) If neither clause (i), (ii) or (iii) above applies, the
good faith determination of the Board of Directors, with
the concurrence and participation of an investment banking
firm acceptable to the Holders.
"Mandatory Repurchase Price" shall have the meaning set forth in Section
2(b)(i)(B).
"Put Notice" shall have the meaning set forth in Section 2(b)(i)(B).
"Registrable Securities" shall mean (i) the Reorganization Shares; (ii) any
securities of the Company issued or issuable to the Investors or their permitted
transferees upon any stock split, stock dividend, recapitalization or similar
event with respect to the aforementioned securities; and (iii) any securities of
the Company issued as a dividend or other distribution with respect to,
conversion or exchange of, or in replacement of, Registrable Securities.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities
Act and applicable rules and regulations thereunder, and the declaration or
ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, "Blue Sky"
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by a majority in interest of the Holders) for a
"due diligence" examination of the Company and review of the Registration
Statement and related documents, and the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
"Registration Statement" shall have the meaning set forth in Section 2(a)
herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".
"Suspension Grace Period" shall have the meaning set forth in Section
2(b)(iii).
2. Registration Requirements. The Company shall use its best efforts to
effect the registration of the Investors' Registrable Securities (including
without limitation the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable "Blue Sky" or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the sale or distribution
of all the Registrable Securities in the manner (including manner of sale)
designated by the Holder and in all U.S. jurisdictions. Such best efforts by the
Company shall include the following:
(a) The Company shall, as expeditiously as reasonably possible after
the Effective Date (as defined in the Plan of Reorganization) (the "Closing
Date"):
(i) But in any event by March 20, 2001 (the "Filing Date")
prepare and file a registration statement with the Commission pursuant
to Rule 415 under the Securities Act on Form S-3 under the Securities
Act (or in the event that the Company is ineligible to use such form,
such other form as the Company is eligible to use under the Securities
Act) covering the Registrable Securities (such registration statement,
including any amendments or supplements thereto and prospectuses
contained therein, is referred to herein as the "Registration
Statement"), which Registration Statement, to the extent allowable
under the Securities Act and the rules
promulgated thereunder (including Rule 416), shall state that such
Registration Statement also covers such number of additional shares of
Common Stock as may become issuable to prevent dilution resulting from
stock splits, stock dividends or similar events. The number of shares
of Common Stock initially included in such Registration Statement
shall be no less than the number of shares of Common Stock that are as
of the date of this Agreement issued or issuable to the Investors.
Thereafter, the Company shall use its best efforts to cause such
Registration Statement to be declared effective as soon as
practicable, and in any event prior to 60 days following the Filing
Date. The Company shall provide Holders and their legal counsel
reasonable opportunity to review any such Registration Statement or
amendment or supplement thereto prior to filing.
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in
connection with such Registration Statement as may be necessary to
comply with the provisions of the Act with respect to the disposition
of all securities covered by such Registration Statement in accordance
with the intended methods of disposition by the seller thereof as set
forth in the Registration Statement and notify the Holders of the
filing and effectiveness of such Registration Statement and any
amendments or supplements.
(iii) Furnish to each Holder such numbers of copies of a current
prospectus conforming with the requirements of the Act, copies of the
Registration Statement, any amendment or supplement thereto and any
documents incorporated by reference therein and such other documents
as such Holder may reasonably require in order to facilitate the
disposition of Registrable Securities owned by such Holder.
(iv) Register and qualify the securities covered by such
Registration Statement under the securities or "Blue Sky" laws of all
U.S. jurisdictions; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions.
(v) Notify each Holder immediately of the happening of any
event as a result of which the prospectus (including any supplements
thereto or thereof and any information incorporated or deemed to be
incorporated by reference therein) included in such Registration
Statement, as then in effect, includes an untrue statement of material
fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances then existing, and use its best efforts to promptly
update and/or correct such prospectus.
(vi) Notify each Holder immediately of the issuance by the
Commission or any state securities commission or agency of any stop
order suspending the effectiveness of the Registration Statement or
the initiation of
any proceedings for that purpose. The Company shall use its best
efforts to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible time.
(vii) Permit the Holders of the Registrable Securities included
in the Registration Statement to review the Registration Statement and
all amendments and supplements thereto within a reasonable period of
time prior to each filing, and shall not file any document in a form
to which such counsel reasonably objects.
(viii) List the Registrable Securities covered by such
Registration Statement with all securities exchange(s) and/or markets
on which the Common Stock is then listed and prepare and file any
required filings with the New York Stock Exchange, the National
Association of Securities Dealers, Inc. or any exchange or market
where the Common Stock is then traded.
(ix) If applicable, take all steps necessary to enable Holders
to avail themselves of the prospectus delivery mechanism set forth in
Rule 153 (or successor thereto) under the Act.
(x) Upon the effectiveness of the Registration Statement, cause
any restrictive legend placed on the certificates representing
Registrable Securities to be removed promptly.
(b) Set forth below in this Section 2(b) are (I) events that may
arise that the Investors consider will interfere with the full enjoyment of
their rights under the Transaction Documents (the "Interfering Events"), and
(II) certain remedies applicable in each of these events.
(i) Delay in Effectiveness of Registration Statement.
(A) In the event that the Registration Statement has not
been declared effective within 60 calendar days from the Filing Date
and provided that such Holder is not able to freely transfer the
Registrable Securities pursuant to Rule 144(k) of the Act, then the
Company shall pay to each Holder (in cash or shares of Common Stock,
at the option of each Holder as provided in Section 2(b)(iv)), a
default payment for each 30-day period (or portion thereof) that the
effectiveness of the Registration Statement has not been declared
effective or failure to issue such unlegended Registrable Securities
persists, equal to 1% of the value of the outstanding Registrable
Securities held by such Holder, based upon the Market Price determined
on the last day of each such 30-day period (a "Default Payment").
(B) If the Registration Statement has not been declared
effective within 120 days after the Filing Date and provided that such
Holder
is not able to freely transfer the Registrable Securities pursuant to
Rule 144(k) of the Act, then (x) the Call Options shall become
immediately exercisable and (y) each Holder shall have the right to
sell at any time after the 150th day after the Closing Date any or all
of its Registrable Securities and at the Mandatory Repurchase Price
(as defined below). Each Holder shall exercise such right by providing
the Company with written notice thereof (the "Put Notice"), which such
Put Notice shall include the type and amount of each security that the
Holder seeks to repurchase and a date at least five (5) business days
from the date thereof on which the Holder seeks the repurchase to
occur. The "Mandatory Repurchase Price" shall be equal to, with
respect to the Registrable Securities to be sold in accordance with
this paragraph, (x) the number of such shares multiplied by (y) 115%
of the Market Price on the date the Holder acquires the right to
require the Company to repurchase the shares or the date upon which
the Holder received the shares.
(ii) No Listing; Premium Price Redemption for Delisting of Class
of Shares.
(A) In the event that the Company fails, refuses or is
unable to cause the Registrable Securities covered by the Registration
Statement to be approved for trading subject to issuance with an
Approved Market: (1) at all times during the period ("Listing Period")
commencing the earlier of the effective date of the Registration
Statement or the 60th calendar day following the Filing Date, and
continuing thereafter for so long as the Call Options are outstanding,
then the Company shall pay in cash or Common Stock, as provided in
Section 2(b)(i)(A), to each Holder a Default Payment for each 30-day
period (or portion thereof) during the Listing Period from and after
such failure, refusal or inability to so list the Registrable
Securities until the Registrable Securities are so listed and (2)
within 30 calendar days following the Filing Date, then the Call
Options shall become immediately exercisable.
(B) In the event that shares of Common Stock of the
Company are delisted from, or are no longer approved for trading on,
the Approved Market at any time following the Closing Date and remain
delisted or not approved for trading for 7 consecutive calendar days,
then (1) the Call Options shall become immediately exercisable and (2)
at the option of each Holder and to the extent such Holder so elects,
the Company shall on 2 business days notice either (x) pay in cash or
Common Stock (as provided in Section 2(b)(iv) to such Holder a Default
Payment for each 30-day period that the shares are delisted or (y)
require the Company to repurchase the Registrable Securities held by
such Holder, in whole or in part, at Mandatory Repurchase Price (as
defined above); provided, however, that such Holder may revoke such
request at any time prior to receipt of payment of such Default
Payments or Mandatory Repurchase Price, as the case may be.
(iii) Blackout Periods. In the event any Holder is unable to sell
Registrable Securities under the Registration Statement for more than
(A) ten (10) consecutive days or (B) an aggregate of thirty (30) days
in any 365 day period ("Suspension Grace Period") including without
limitation by reason of a suspension of trading of the Common Stock on
the Approved Market, any suspension or stop order with respect to the
Registration Statement or the fact that an event has occurred as a
result of which the prospectus (including any supplements thereto)
included in such Registration Statement then in effect includes an
untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, or
the number of shares of Common Stock covered by the Registration
Statement is insufficient at such time to make such sales, then the
Call Options shall become immediately exercisable. In addition, the
Company shall pay in cash or Common Stock (as provided in Section
2(b)(iv)) to each Holder a Default Payment for each 30-day period (or
portion thereof) from and after the expiration of the Suspension Grace
Period or, in the alternative, at any time following the expiration of
the Suspension Grace Period, a Holder shall have the right but not the
obligation to have the Company repurchase its Registrable Securities
at the price and on the terms set forth in Section 2(b)(i)(B) above.
(iv) Default Payment Terms; Status of Unpaid Default Payments.
All Default Payments (which payments shall be pro rata on a per diem
basis for any period of less than 30 days) required to be made in
connection with the above provisions shall be paid at any time upon
demand, and whether or not a demand is made, by the tenth (10th) day
of each calendar month for each partial or full 30-day period
occurring prior to that date. Such Default Payments shall be payable
in cash or Common Stock, as determined by each Holder in its sole
discretion. If the Holder elects to be paid in Common Stock, the
Holder shall be entitled to that number of shares of Common Stock, as
shall equal to the amount of such Default Payment multiplied by a
fraction, the numerator of which is one and the denominator of which
is equal to the average of the Market Price for the three (3) business
days prior to, but not including, the date upon which such payments
are due. Unless the Company shall receive written notice to the
contrary from the respective Holder, the Default Payments shall be in
cash.
(v) Mandatory Repurchase Price for Default. In the event that
the Company fails or refuses to pay any Default Payment provided for
in the foregoing paragraphs (i) through (iv) when due, (A) the Call
Options shall become immediately exercisable and (B) at any Holder's
request and option the Company shall purchase all or a portion of the
Registrable Securities held by such Holder (with Default Payments
accruing through the date of such purchase), within five (5) days of
such request, at a purchase price equal to
the Mandatory Repurchase Price; provided that such Holder may revoke
such request at any time prior to receipt of such payment of such
purchase price.
(vi) Cumulative Remedies. Each Default Payment triggered by an
Interfering Event provided for in the foregoing paragraphs (i) through
(iii) shall be in addition to each other Default Payment triggered by
another Interfering Event; provided, however, that in no event shall
the Company be obligated to pay to any Holder Default Payments in an
aggregate amount greater than 1% of the value of the outstanding
Registrable Securities based upon the Market Price for any 30-day
period (or portion thereof). The Default Payments, mandatory
repurchases and the triggering of the ability of the Holders to
exercise Call Options provided for above are in addition to and not in
lieu or limitation of any other rights the Holders may have at law, in
equity or under the terms of the Transaction Documents, including
without limitation the right to specific performance. Each Holder
shall be entitled to specific performance of any and all obligations
of the Company in connection with the registration rights of the
Holders hereunder.
(vii) Certain Acknowledgments. The Company acknowledges that any
failure, refusal or inability by the Company described in the
foregoing paragraphs (i) through (iii) and paragraph (v) will cause
the Holders to suffer damages in an amount that will be difficult to
ascertain, including without limitation damages resulting from the
loss of liquidity in the Registrable Securities and the additional
investment risk in holding the Registrable Securities. Accordingly,
the parties agree that it is appropriate to include in this Agreement
the foregoing provisions for Default Payments, mandatory repurchases
and the triggering of the ability of the Holders to exercise the Call
Options in order to compensate the Holders for such damages. The
parties acknowledge and agree that the Default Payments, mandatory
repurchases and the triggering of ability of the Holders to exercise
of the Call Options set forth above represent the parties' good faith
effort to quantify such damages and, as such, agree that the form and
amount of such Default Payments and mandatory repurchases and the
triggering of the ability of the Holders to exercise of the Call
Options are reasonable and will not constitute a penalty. The parties
agree that the provisions of this clause (vii) consist of certain
acknowledgments and agreements concerning the remedies of the Holders
set forth in clauses (i) through (iii) and paragraph (v) of this
paragraph; nothing in this clause (vii) imposes any additional default
payments and mandatory repurchases for violations under this
Agreement.
(c) If the Holder(s) intend to distribute the Registrable Securities
by means of an underwriting, the Holder(s) shall so advise the Company. Any such
underwriting may only be administered by investment bankers reasonably
satisfactory to the Company.
(d) The Company shall enter into such customary agreements for
secondary offerings (including a customary underwriting agreement with the
underwriter or underwriters, if any) and take all such other reasonable actions
reasonably requested by the Holders in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities. In the event that
the offering in which the Registrable Securities are to be sold is deemed to be
an underwritten offering or an Investor selling Registrable Securities is deemed
to be an underwriter, the Company shall:
(i) make such representations and warranties to the Holders and
the underwriter or underwriters, if any, in form, substance and scope
as are customarily made by issuers to underwriters in secondary
offerings;
(ii) cause to be delivered to the sellers of Registrable
Securities and the underwriter or underwriters, if any, opinions of
independent counsel to the Company, on and dated as of the effective
day (or in the case of an underwritten offering, dated the date of
delivery of any Registrable Securities sold pursuant thereto) of the
Registration Statement, and within ninety (90) days following the end
of each fiscal year thereafter, which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the Holders
and the underwriter(s), if any, and their counsel and covering,
without limitation, such matters as the due authorization and issuance
of the securities being registered and compliance with securities laws
by the Company in connection with the authorization, issuance and
registration thereof and other matters that are customarily given to
underwriters in underwritten offerings, addressed to the Holders and
each underwriter, if any.
(iii) cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto), and at the beginning of each fiscal
year following a year during which the Company's independent certified
public accountants shall have reviewed any of the Company's books or
records, a "comfort" letter from the Company's independent certified
public accountants addressed to the Holders and each underwriter, if
any, stating that such accountants are independent public accountants
within the meaning of the Securities Act and the applicable published
rules and regulations thereunder, and otherwise in customary form and
covering such financial and accounting matters as are customarily
covered by letters of the independent certified public accountants
delivered in connection with secondary offerings; such accountants
shall have undertaken in each such letter to update the same during
each such fiscal year in which such books or records are being
reviewed so that each such letter shall remain current, correct and
complete throughout such fiscal year; and each such letter and update
thereof, if any, shall be reasonably satisfactory to the Holders.
(iv) if an underwriting agreement is entered into, the same
shall include customary indemnification and contribution provisions to
and from the underwriters and procedures for secondary underwritten
offerings;
(v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Registrable Securities
being sold or the managing underwriter or underwriters, if any, to
evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement, if any; and
(vi) deliver to the Holders on the effective day (or in the case
of an underwritten offering, dated the date of delivery of any
Registrable Securities sold pursuant thereto) of the Registration
Statement, and at the beginning of each fiscal quarter thereafter, a
certificate in form and substance as shall be reasonably satisfactory
to the Holders, executed by an executive officer of the Company and to
the effect that all the representations and warranties of the Company
contained in the Purchase Agreement are still true and correct except
as disclosed in such certificate; the Company shall, as to each such
certificate delivered at the beginning of each fiscal quarter, update
or cause to be updated each such certificate during such quarter so
that it shall remain current, complete and correct throughout such
quarter; and such updates received by the Holders during such quarter,
if any, shall have been reasonably satisfactory to the Holders.
(e) The Company shall make available for inspection by the Holders,
representative(s) of all the Holders together, any underwriter participating in
any disposition pursuant to a Registration Statement, and any attorney or
accountant retained by any Holder or underwriter, all financial and other
records customary for purposes of the Holders' due diligence examination of the
Company and review of any Registration Statement, all SEC Documents (as defined
in the Purchase Agreement) filed subsequent to the Closing, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in connection with such
Registration Statement, provided that such parties agree to keep such
information confidential.
(f) The Company shall file a Registration Statement with respect to
any newly authorized and/or reserved shares within thirty (30) business days of
the authorization or reservation of same and shall use its best efforts to cause
such Registration Statement to become effective within ninety (90) days of such
filing. If the Holders become entitled, pursuant to an event described in clause
(ii) or (iii) of the definition of Registrable Securities, to receive any
securities in respect of Registrable Securities that were already included in a
Registration Statement, subsequent to the date such Registration Statement is
declared effective, and the Company is unable under the securities laws to add
such securities to the then effective Registration Statement, the Company shall
promptly file, in accordance with the procedures set forth herein, an additional
Registration Statement with
respect to such newly Registrable Securities. The Company shall use its best
efforts to (i) cause any such additional Registration Statement, when filed, to
become effective under the Securities Act, and (ii) keep such additional
Registration Statement effective during the period described in Section 5 below.
All of the registration rights and remedies under this Agreement shall apply to
the registration of such newly reserved shares and such new Registrable
Securities, including without limitation the provisions providing for Default
Payments contained herein.
3. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3; Other Forms. If eligible to use Form S-3 or
comparable or successor form, the Company shall use such form to register the
Registrable Securities. In the event that the Company is ineligible to use such
form, the Company will use such form as the Company is eligible to use under the
Securities Act.
5. Registration Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration effective until the earlier to occur of (i) sales are
permitted of all Registrable Securities without registration under Rule 144(k)
or (ii) all Registrable Securities shall have been sold pursuant to such
registration.
6. Indemnification.
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(a) The Company Indemnity. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any state
securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors and partners, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by such Holder or the underwriter (if any) therefor and stated to be
specifically for use therein. The indemnity agreement contained in this Section
6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder(s), against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, and will reimburse the Company and such other Holder(s)
and their directors, officers and partners, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
in each case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder and stated to be specifically for use therein, and
provided that the maximum amount for which such Holder shall be liable under
this indemnity shall not exceed the net proceeds received by such Holder from
the sale of the Registrable Securities. The indemnity agreement contained in
this Section 6(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this
Section 6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. Contribution. If the indemnification provided for in Section 6 herein
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying each of such Indemnified Parties, shall contribute to the amount
paid or payable by each such Indemnified Party as a result of such losses,
claims, damages or liabilities as between the Company on the one hand and any
Holder on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and of such Holder in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of any Holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by such
Holder.
In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, or the underwriting
agreement, (ii) any investigation made by or on behalf of any Indemnified Party
or by or on behalf of the Company, and (iii) the consummation of the sale or
successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall reasonably promptly furnish
to the Company such information regarding such Holder and the distribution
and/or sale proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement. The intended method
or methods of disposition and/or sale (Plan of Distribution) of such securities
as so provided by such Investor shall be included without alteration in the
Registration Statement covering the Registrable Securities and shall not be
changed without written consent of such Holder, except that such Holder may not
require an intended method of disposition which violates applicable securities
law.
10. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of such Registrable Securities; provided that such transfer or
assignment shall be for at least .25% of the shares of Common Stock outstanding
and that the rights granted under this Agreement may not be assigned to a
transferee who has acquired the Registrable Securities from an Investor pursuant
to an effective registration statement and who is not an affiliate (as defined
in the Act) of the Company; further provided in each case that the Company must
be given written notice by the such Investor at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights agrees in writing to be
bound by the provisions of this Agreement.
11. Miscellaneous.
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(a) Remedies. The Company and the Investors acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.
(b) Jurisdiction. The Company and each of the Investors (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court, the New York State courts and other courts of the United States sitting
in New York County, New York for the purposes of any suit, action or proceeding
arising out of or relating to this
Agreement and (ii) hereby waives, and agrees not to assert in any such suit
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. The Company and each of the Investors consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this paragraph shall affect or limit any right to serve
process in any other manner permitted by law.
(c) Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing by facsimile, mail or personal
delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Sunshine Mining and Refining Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Prager, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
to the Investors:
To each Investor at the address and/or fax number set forth
on Schedule I of this Agreement
with copies to:
Kleinberg, Kaplan, ▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party hereto may from time to time change its address for notices by
giving at least
10 days' written notice of such changed address to the other parties hereto.
(d) Indemnity. Each party shall indemnify each other party against
any loss, cost or damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty, covenant or
agreement in this Agreement and the enforcement of this indemnity.
(e) Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter. The representations and warranties and the agreements and
covenants of the Company and each Investor contained herein shall survive the
Closing.
(f) Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
(g) Publicity. The Company agrees that it will not disclose, and will
not include in any public announcement, the name of any Investor without its
express written approval, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. The
Company agrees to deliver a copy of any public announcement regarding the
matters covered by this Agreement or any agreement or document executed herewith
to each Investor and any public announcement including the name of an Investor
to such Investor, prior to the publication of such announcements.
(h) Entire Agreement. This Agreement and the agreements and documents
contemplated hereby contain the entire understanding and agreement of the
parties, and may not be modified or terminated except by a written agreement
signed by both parties.
(i) Governing Law. This Agreement and the validity and performance of
the terms hereof shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware applicable to contracts executed
and to be performed entirely in such State.
(j) Severability. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warranties, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
(k) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(l) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
Signature page follows
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SUNSHINE MINING AND REFINING COMPANY
By:---------------------------------
Name:
Title:
INVESTORS:
STONEHILL INSTITUTIONAL PARTNERS, L.P.
By:---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Partner
STONEHILL OFFSHORE PARTNERS LIMITED
By: Stonehill Advisors LLC
By:---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
▇▇▇▇▇▇▇ INTERNATIONAL, L.P.
By: ▇▇▇▇▇▇▇ International Capital
Advisors, Inc.
Attorney-in-Fact
By:---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
THE LIVERPOOL LIMITED PARTNERSHIP
By: Liverpool Associates, Ltd.
General Partner
By:---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Signature page to Sunshine Mining and Refining Company
Registration Rights Agreement
Schedule I
Investors
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Stonehill Institutional Partners, ▇.▇.
▇▇▇▇▇▇▇▇▇ Offshore Partners Limited
c/o Stonehill Capital Management LLC
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Proskauer Rose LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Liverpol Limited Partnership
▇▇▇▇▇▇▇ International, L.P.
c/▇ ▇▇▇▇▇▇▇ Management Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Kleinberg, Kaplan, ▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
