EXHIBIT 10.28
BOARD DESIGNATION AGREEMENT
This BOARD DESIGNATION AGREEMENT, dated as of October 28, 1997, among
Silver Holdings LDC, a Cayman Islands limited duration company (the "Silver
Holdings"), Apex Silver Mines Limited, a Cayman Islands company (the "Company"),
Xxxxxx X. Xxxxxx ("Xxxxxx"), Argentum LLC ("Argentum"), Aurum LLC ("Aurum"),
Litani Capital Management LDC ("Litani") and Consolidated Commodities Ltd.
("Consolidated", and collectively with Aurum and Litani, the "Other Investors").
W I T N E S S E T H :
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WHEREAS, Silver Holdings owns Ordinary Shares of Apex Silver Mines
LDC, par value $.01 per share (the "Sub Shares")
WHEREAS, in connection with the Buy-Sell Agreement, dated as of August
6, 1996, by and among the Company, Apex Silver Mines LDC and Litani Capital
Management LDC (the "Buy-Sell Agreement"), Silver Holdings may receive Ordinary
Shares of the Company, par value $.01 per share (the "Shares");
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Designation of Director.
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(a) For so long as Silver Holdings continues to beneficially own
Shares (or Sub Shares which may be issued for Shares pursuant to the Buy-Sell
Agreement), representing not less than 1% of the issued and outstanding Shares
(the "Minimum Shares"), the Company will take all action necessary to cause its
Board of Directors to nominate and support the nomination of two individual
designated by Silver Holdings for election as a director of the Company and to
solicit proxies in favor of (and otherwise recommend to its shareholders) the
election of such nominee as director. For so long as Silver Holdings continues
to beneficially own the Minimum Shares, each of the Other Investors agrees that
it will vote all Shares it has voting power over, and will otherwise support the
election of the individuals designated by Silver Holdings for election as a
director of the Company.
(b) If, on any date during the term of office of any director
of the Company elected following his or her designation by Silver Holdings under
the terms of this Agreement, Silver Holdings shall cease to beneficially own the
Minimum Shares, Silver Holdings will, at the request of the Company, take all
reasonable actions necessary to cause such director to resign promptly from the
Board of Directors of the Company.
(c) In the event of the death, resignation or removal of a
director designated for nomination by Silver Holdings, the Company shall cause
another person designated by Silver Holdings to be elected as a director to fill
the
resulting vacancy on the Board of Directors of the Company (which may include
the election of such replacement director by the remaining directors then in
office); provided, however, that any director of the Company designated for
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nomination by Silver Holdings may be removed when (and only when) (i) such
removal is requested by Silver Holdings or (ii) as provided in the Company's
Memorandum and Articles of Association.
2. Adjustment Upon Changes in Capitalization. If at any time there
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is a change in the number of outstanding Shares or the class of Shares, by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment or if a stock dividend thereon is declared
with a record date prior to the termination of this Agreement, then the number
of Shares comprising the Minimum Shares shall be appropriately and equitably
adjusted.
3. Benefits of this Agreement; Transfers. Nothing in this Agreement
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shall be construed to give to any person or entity, other than the parties
hereto, any legal or equitable right, remedy, or claim under this Agreement.
This Agreement is for the sole and exclusive benefit of, and shall be binding
upon, the parties hereto and their respective heirs, personal representatives,
successors and assigns. No transfer of Shares (or Sub Shares) by any Other
Investor shall be permitted (other than transfers to the general public) unless
such transferee agrees to be bound by the provisions of this Agreement.
4. Governing Law. The corporate law of the Cayman Islands will
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govern all issues concerning the relative rights of the Company and its
stockholders. All other issues concerning this Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law applicable to agreements made and to be
performed wholly within such jurisdiction.
5. Invalid Provisions. If any provision of this Agreement is held
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to be invalid or unenforceable, such provision shall be automatically severed
from this Agreement and there shall be added to this Agreement a provision as
similar as possible to such severed provision as may be valid and enforceable,
and the validity and enforceability of the other provisions of this Agreement
shall not be affected thereby.
6. Captions. The captions, headings, and arrangements used in this
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Agreement are for convenience only and do not in any way limit or amplify the
terms and provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.
SILVER HOLDINGS LDC
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Director
APEX SILVER MINES LIMITED
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman
By: Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
ARGENTUM LLC
By: Caledonian Bank & Trust Limited,
as Secratary
By: /s/ Vijayabalan Muregesu
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Name: Vijayabalan Muregesu
Title: Manager-Banking
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AURUM LLC
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Trustee
LITANI CAPITAL MANAGEMENT LDC
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title:
CONSOLIDATED COMMODITIES LTD.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President
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