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COEUR D'XXXXX XXXXX CORPORATION
7% Convertible Subordinated Debentures Due 2002
STANDBY AGREEMENT
November 15, 1995
UBS Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
Dear Sirs:
Coeur d'Xxxxx Xxxxx Corporation (the "Company") proposes to
redeem on December 15, 1995 (the "Redemption Date"), all of its outstanding 7%
Convertible Subordinated Debentures Due 2002 (the "Debentures") at a redemption
price of $1,070.00 for each $1,000 principal amount, plus accrued and unpaid
interest from June 15, 1995, to the Redemption Date of $35.00 per $1,000
principal amount, for a total redemption price of $1,105.00 (the "Redemption
Price"). The Debentures are convertible into shares of the Company's Common
Stock, par value $1.00 per share (the "Common Stock"). The right to convert
the Debentures into Common Stock will terminate at the close of business on
December 14, 1995 (the "Final Conversion Date").
In order to assure the availability of funds to redeem the
Debentures not converted on or prior to the Final Conversion Date, the Company
desires to make arrangements pursuant to which the shares of its Common Stock
issuable on the Redemption Date on conversion of Debentures not surrendered for
conversion by the close of business on the Final Conversion Date will be
purchased on the Redemption Date from the Company by you (the "Purchaser").
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Purchaser as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (g)
hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act")
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and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on such Form for the
registration under the Act of the sale by the Purchaser of any shares
of Common Stock that may be acquired by it upon conversion of
Debentures or purchased pursuant to Section 2(a) of this Agreement.
The Company proposes to file with the Commission a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4). The Company has
included in such registration statement, as amended at the Effective
Date, all information (other than Rule 430A information) required by
the Act and the rules thereunder to be included in the Prospectus with
respect to the Common Stock registered pursuant to the Registration
Statement and the offering thereof. As filed, such final prospectus
shall contain all Rule 430A information, together with all other such
required information, with respect to the Common Stock registered
pursuant to the Registration Statement and the offering thereof and,
except to the extent the Purchaser shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond those contained in
the latest Preliminary Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did,
and, when the Prospectus is first filed (if required) in accordance
with Rule 424(b), on the Final Conversion Date, on the Redemption Date
and on the Closing Date, the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements
of the Act and the Securities Exchange Act of 1934 (the "Exchange
Act") and the respective rules thereunder; on the Effective Date, the
Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b), on the Final
Conversion Date, on the
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Redemption Date and on the Closing Date, the Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Purchaser through the Purchaser specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(c) The Debentures are convertible into Common Stock at a
conversion price of $15.41 of principal amount of Debentures per share
of Common Stock or approximately 64.9 shares of Common Stock for each
$1,000 principal amount of Debentures. At the Execution Time, there
were $74,957,000 principal amount of Debentures outstanding; the
redemption of all the outstanding Debentures had been duly authorized
by the Company; by the close of business on the date of execution
hereof, all the Debentures shall have been duly called for redemption
in accordance with the Indenture between the Company and Bankers Trust
Company (the "Paying Agent") dated as of December 1, 1992 (the
"Indenture"), and the right to convert the Debentures into shares of
Common Stock will, as a result of such call, expire at 5:00 p.m.,
Eastern Standard Time, on the Final Conversion Date. A copy of the
form of notice of redemption and the related letter of transmittal
(collectively, the "Notice of Redemption") has been heretofore
delivered to the Purchaser. The Debentures have been duly and validly
authorized and issued and are fully enforceable in accordance with
their terms.
(d) The Company has neither taken nor will take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or that might reasonably be expected to cause or result
in, stabilization or manipulation of the price of any security of the
Company to facilitate the conversion of the Debentures.
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(e) The Company has neither paid nor given, nor will pay or
give, directly or indirectly, any commission or other remuneration for
soliciting the conversion of any Debentures into Common Stock and
cash.
(f) Neither the issue and sale of the Standby Shares, nor the
consummation of any other of the transactions herein contemplated, nor
fulfillment of the terms hereof will conflict with, result in a breach
or violation of, or constitute a default under, any law or the charter
or bylaws of the Company or the terms of any indenture or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or is bound or any judgment, order or decree
applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries.
(g) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "Effective Date" shall
mean each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective and each
date after the date hereof on which a document incorporated by
reference in the Registration Statement is filed. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in paragraph (a) above and any
preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A information. "Prospectus" shall
mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean
the registration statement referred to in paragraph (a) above,
including incorporated documents, exhibits and financial statements,
as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective), and,
in the event any post-effective amendment thereto becomes effective
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prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended. Such term shall include
any Rule 430A Information deemed to be included therein at the
Effective Date as provided in Rule 430A. "Rule 415", "Rule 424",
"Rule 430A" and "Regulation S-K" refer to such rules or regulation
under the Act. "Rule 430A Information" means information with respect
to the Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after
the Effective Date of the Registration Statement, or the issue date of
the Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be incorporated therein by reference. "Standby Shares"
shall mean the shares of Common Stock to be purchased from the Company
pursuant to Section 2(a) hereof.
2. Purchase of Standby Shares. Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth:
(a) In the event that less than all the outstanding
Debentures are surrendered for conversion at or prior to 5:00 p.m.,
Eastern Standard Time, on the Final Conversion Date, the Company
agrees to sell to the Purchaser, and the Purchaser agrees to purchase
from the Company, at a purchase price of $16.49 per share, such whole
number of additional shares of Common Stock as would have been
issuable upon the conversion of such of the Debentures which shall not
have been surrendered for conversion prior to the Redemption Date.
The Company shall notify the Purchaser of such number of shares as
soon as practicable after the expiration of convertibility of the
Debentures on the
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Final Conversion Date and in no event later than 9:00 a.m., Eastern
Standard Time, on the business day following the Final Conversion
Date.
(b) It is understood that the Purchaser intends to resell the
Standby Shares from time to time at prices prevailing in the open
market. With respect to any Standby Shares, the Purchaser, on or
prior to January 15, 1996, shall remit to the Company 50% of the
excess, if any, of the aggregate proceeds received by the Purchaser
from the sale of such Standby Shares (net of selling concessions,
transfer taxes and other expenses of sale) over an amount equal to $
16.49 multiplied by the number of such Standby Shares sold by such
Purchaser. Upon completion of the sale of the Standby Shares, the
Purchaser shall furnish to the Company a statement setting forth the
aggregate proceeds received on the sale thereof and the applicable
selling concessions, transfer taxes and other expenses of sale. For
purposes of the foregoing determination, any Standby Shares not sold
by or for the account of the Purchaser prior to the close of business
on January 10, 1996, shall be deemed to have been sold on such day for
an amount equal to the last reported sale price of the Common Stock on
the New York Stock Exchange on such day. Nothing contained herein
shall limit the right of the Purchaser, in its discretion, to
determine the price or prices at which, or the time or times when, any
Standby Shares shall be sold, whether or not prior to the Redemption
Date and whether or not for long or short account.
(c) Delivery of any payment for the Standby Shares shall be
made at 10:00 a.m., Eastern Standard Time, on December 19, 1995 (two
business days after the Redemption Date), or such other date as the
Purchaser and the Company may agree (such date and time of delivery
and payment for the Standby Shares being herein called the "Closing
Date"). Delivery of the Standby Shares shall be made to the Purchaser
against payment by the Purchaser of the purchase price thereof to or
upon the order of the Company by wire transfer of immediately
available funds. Delivery of the Standby Shares shall be made at such
location as the Purchaser shall reasonably designate at least one
business day in advance of the Closing Date and payment for the
Standby Shares shall be made at the offices of Cravath,
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Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, X.X.
00000. Certificates for the Standby Shares shall be registered in
such names and in such denominations as the Purchaser may request.
The Company agrees to have the Standby Shares available for
inspection, checking and packaging by the Purchaser in New York, New
York, prior to the Closing Date.
Unless the Company waives its right to receive immediately
available funds at the Closing Date and agrees to accept next-day
funds in lieu thereof, the Company shall pay to the Purchaser promptly
following the Closing Date an amount equal to the Purchaser's
overnight cost of funds on the purchase price payable by the Purchaser
at the Closing Date.
3. Compensation. As compensation for the commitment of the
Purchaser hereunder, the Company will pay to the Purchaser an amount equal to
the sum of (i) the Standby Fee (as defined in paragraph (a) of this Section 3)
plus (ii) the Take-up Fee (as defined in paragraph (b) of this Section 3).
(a) The "Standby Fee" shall be equal to:
(i) 1.00% of the Standby Commitment if the Cushion is
less than .1500;
(ii) 0.75% of the Standby Commitment if the Cushion
is equal to or greater than .1500 but less than .2000;
(iii) 0.50% of the Standby Commitment if the Cushion
is equal to or greater than .2000 but less than .2500; or
(iv) 0.25% of the Standby Commitment if the Cushion
is equal to or greater than .2500.
The "Standby Commitment" shall be equal to $80,203,990.00.
The "Cushion" shall be the fraction (expressed as a decimal)
having the difference of the Common Stock Price
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minus the Breakeven Price as its numerator and the Common Stock Price as its
denominator.
The "Common Stock Price" shall be an amount equal to the last
reported sale price on the New York Stock Exchange of the Common Stock on the
day immediately preceding the day of the Company's redemption announcement,
provided that such announcement is made before 5:00 p.m. New York City time.
If the Company's redemption announcement is made later than 5:00 p.m. New York
City time, then the Common Stock Price shall be equal to the last reported sale
price on the New York Stock Exchange of the Common Stock on the day of such
announcement.
The "Breakeven Price" shall be equal to $16.489.
(b) The "Take-up Fee" shall be an amount equal to the
Take-up Percentage multiplied by the Breakeven Price multiplied
by the number of Standby Shares.
(i) if the Cushion is greater than or equal to .1500,
then the "Take-up Percentage" shall be equal to:
(A) .0225 if the number of Standby Shares is
less than 486,418;
(B) .0300 if the number of Standby Shares is
equal to or greater than 486,418 but less than
1,459,254;
(C) .0375 if the number of Standby Shares is
equal to or greater than 1,459,254 but less than
2,432,090; or
(D) .0500 if the number of Standby Shares is
equal to or greater than 2,432,090.
(ii) if the Cushion is less than .1500, then the
Take-up Percentage shall be equal to:
(A) .0275 if the number of Standby Shares is
less than 486,418;
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(B) .0375 if the number of Standby Shares is
equal to or greater than 486,418 but less than
1,459,254;
(C) .0475 if the number of Standby Shares is
equal to or greater than 1,459,254 but less than
2,432,090; or
(D) .0600 if the number of Standby Shares is
equal to or greater than 2,432,090.
Such compensation shall be paid to the Purchaser by wire
transfer of immediately available funds on (i) if the Purchaser is required to
purchase any Standby Shares, the Closing Date, or (ii) otherwise, as soon as
practicable after the Final Conversion Date (but in no event later than two
business days thereafter).
4. Additional Purchases. On or after the date hereof, the
Purchaser may (but will not be obligated to) purchase Debentures, in the open
market or otherwise, in such amounts and at such prices as the Purchaser may
deem advisable. Any Common Stock acquired by the Purchaser upon conversion of
any Debentures acquired pursuant to this Section 4 may be sold at any time or
from time to time by the Purchaser. It is understood that, for the purpose of
stabilizing the price of the Common Stock or otherwise, the Purchaser may (but
will not be obligated to) make purchases and sales of Common Stock or
Debentures, in the open market or otherwise, for long or short account, on
such terms as it may deem advisable and it may overallot in arranging sales.
5. Agreements. Each of the parties agrees with the other
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the Purchaser with a copy
for its review prior to filing and will not file any such proposed
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amendment or supplement to which the Purchaser may reasonably object.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto
to be filed with the Commission pursuant to the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Purchaser of such timely filing. The
Company will promptly advise the Purchaser (i) when the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and
any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or becomes effective, (iv) of any
request by the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Standby
Shares is required to be delivered under the Act, any event occurs as
a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, or if
it shall be necessary to amend the Registration Statement or
supplement the Prospectus to comply with the Act or the Exchange Act
or the respective rules thereunder, the Company promptly will (i)
prepare and file with the
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Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (ii) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Purchaser an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Purchaser and counsel for
the Purchaser, without charge, signed copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by a Purchaser or dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Purchaser may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the transactions contemplated hereby. The
Company will also pay all reasonable out-of-pocket expenses of the
Purchaser, including the fees and disbursements of Purchaser's
counsel, and the fees and disbursements of the Paying Agent.
(e) The Company will arrange for the qualification of the
Standby Shares for sale under the laws of such jurisdictions as the
Purchaser may designate and will maintain such qualifications in
effect so long as required for the distribution of the Standby Shares;
provided, however, that the Company will not be required to do so in
any jurisdiction where such qualification would require the Company to
register to do business as a foreign corporation, would subject the
Company to taxation as doing business or would require the Company to
file a consent to general service of process therein, in any case
where it would not otherwise be so required or subject.
(f) The Company will mail or cause to be mailed on the date
of execution hereof the Notice of Redemption by first-class mail to
the registered
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holders of the Debentures, which mailing will conform to the
requirements of the Indenture.
(g) The Company will direct the Paying Agent to advise the
Purchaser daily of the amount of Debentures surrendered on the
previous day for redemption or for conversion.
(h) The Company will not take any action the effect of which
would be to require an adjustment in the conversion price of the
Debentures.
(i) The Company will not, prior to the Final Conversion Date
and for a period of 90 days following the Final Conversion Date,
without the prior written consent of the Purchaser, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce, or file for the registration of, the offering of, any other
shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however, that the
Company may issue and sell or register Common Stock (a) in connection
with a business combination transaction approved by the Company's
shareholders, (b) pursuant to any employee stock option or other
benefit plan of the Company maintained for its officers, directors and
employees and in effect at the Execution Time and (c) upon the
conversion of securities outstanding at the Execution Time; and
provided further that the Company will no longer be bound by this
provision if the Purchaser does not acquire any Standby Shares
pursuant to Section 2(a) hereof.
(j) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business With
Cuba, and the Company further agrees that, if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Securities and Exchange Commission or
with the Florida Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or
with any
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person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change,
as appropriate, in a form acceptable to the Department.
(k) The Purchaser agrees that in the event the Trustee should
require from the Company any deposit of funds pursuant to Section 1106
of the Indenture, the Purchaser shall advance such funds to the
Company and deposit such funds with the Trustee on behalf of the
Company (such advance and deposit a "Trustee Deposit"). The Company
agrees to repay or to cause the Trustee to repay to the Purchaser any
such Trustee Deposit as soon as the Trustee no longer requires such
funds to be deposited with it pursuant to Section 1106 of the
Indenture. The Company agrees further to reimburse the Purchaser on
the Closing Date in an amount equal to the Purchaser's cost of funds
on any such Trustee Deposit from the date of such deposit through the
Closing Date.
(l) The Company will waive any defect or irregularity with
respect to the transmittal of any Debenture submitted for conversion
into Common Stock, so long as any such waiver will not have adverse
financial consequences for the Company.
6. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser hereunder to purchase any Standby Shares shall be
subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time, each Effective Date
occurring after the Execution Time, the Final Conversion Date, the Redemption
Date and the Closing Date, to the accuracy of the statements of the Company
made in any certificates pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) Unless the Purchaser agrees in writing to a later time,
the Registration Statement shall become effective not later than 5:00
p.m., Eastern Standard Time, on the date of this Agreement; if filing
of the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Prospectus, and any such supplement, shall be filed
in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration
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Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) On the date of this Agreement and on the Closing Date,
the Company shall have furnished to the Purchaser the opinion of
Freedman, Levy, Xxxxx & Xxxxxxx, counsel for the Company, dated as of
the date of this Agreement and as of the Closing Date, respectively,
to the effect that:
(i) each of the Company, Coeur Alaska, Inc., Coeur
Rochester, Inc., CDE Chilean Mining Corporation, Xxxxxxxx
Mining Corporation, Coeur New Zealand, Inc. and Silver Valley
Resources Corporation (individually a "Material Subsidiary"
and collectively the "Material Subsidiaries") has been duly
incorporated or organized and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and
conduct its business as described or incorporated in the
Prospectus, and is duly qualified to do business as a foreign
corporation in and is in good standing under the laws of each
jurisdiction listed on an exhibit to such opinion;
(ii) all the outstanding shares of capital stock of
each Material Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except
as otherwise set forth or incorporated in the Prospectus, all
outstanding shares of capital stock of the Material
Subsidiaries other than directors' qualifying shares are owned
of record, and, to such counsel's knowledge, beneficially, by
the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth or incorporated in the Prospectus; the capital
stock of the Company conforms in all material respects to the
description thereof contained or incorporated in
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the Prospectus; the outstanding shares of Common Stock have
been duly and validly authorized and issued and are fully paid
and nonassessable; the Standby Shares have been duly and
validly authorized and, when issued and delivered to and paid
for by the Purchaser pursuant to this Agreement, will be fully
paid and nonassessable; the shares of Common Stock issuable
upon the conversion of the Debentures have been duly and
validly authorized and, when issued and delivered upon
conversion of the Debentures, will be fully paid and
nonassessable; the shares of Common Stock issuable upon the
conversion of the Debentures and the Standby Shares have been
duly authorized for trading, subject to official notice of
issuance, on the New York Stock Exchange; the form of the
certificate for the Common Stock is in valid and sufficient
form; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights
to subscribe for the Standby Shares or for the shares of
Common Stock issuable upon conversion of the Debentures;
(iv) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed or incorporated in
the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or incorporated or filed as
required;
(v) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
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instituted or threatened; and the Registration Statement and
the Prospectus (other than the financial statements and
related notes, the financial statement schedules and other
financial and statistical information contained or
incorporated by reference therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Standby Shares by the Purchaser and such other
approvals (specified in such opinion) as have been obtained;
(viii) the Debentures have been duly and validly
called for redemption on December 15, 1995; neither the call
of the Debentures for redemption, the conversion or redemption
thereof, the issue and sale of the Standby Shares, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach of, or constitute a default
under the charter or bylaws of the Company or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the Company or any of the Material
Subsidiaries is a party or by which it is bound, or any
judgment, order or decree known to such counsel to be
applicable to the Company or any of the subsidiaries of the
Company of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of the Material Subsidiaries;
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(ix) neither the call of the Debentures for
redemption, the conversion or redemption thereof, the issue
and sale of the Standby Shares by the Company nor the
consummation of any of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with,
result in a breach of, or constitute a default under any
United States statute;
(x) upon the Company taking the specific actions
enumerated in such counsel's opinion, notice of redemption of
the Debentures will have been duly and lawfully given, all the
outstanding Debentures will have been duly called for
redemption on the Redemption Date and the right to convert the
Debentures will expire on the Final Conversion Date; and
(xi) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement which have not heretofore been waived
in writing.
In addition, such counsel shall state that they have participated in
conferences with directors, officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the Purchaser and counsel for the
Purchaser, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed, and,
although such counsel have not independently verified and are not
passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except to the extent
specified elsewhere in such opinion or with reference to such
counsel), no facts have come to such counsel's attention that lead
such counsel to believe that, at the Effective Date, the Registration
Statement included any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state any material fact necessary to make
the statements therein, in light of the
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circumstances under which they were made, not misleading (it being
understood that such counsel express no view with respect to the
financial statements and related notes, the financial statement
schedules or other financial, statistical and accounting information
contained or incorporated by reference in the Registration Statement
or Prospectus).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Idaho or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Purchaser and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company or its subsidiaries and public officials.
References to the Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(c) On the date of this Agreement and on the Closing Date,
the Purchaser shall have received from Cravath, Swaine & Xxxxx,
counsel for the Purchaser, such opinion or opinions, dated the date of
this Agreement and the Closing Date, respectively, with respect to the
issuance and sale of the Standby Shares, the Registration Statement,
the Prospectus (together with any supplement thereto) and other
related matters as the Purchaser may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) On the date of this Agreement, and on each Effective Date
occurring after the Execution Time and on the Closing Date, the
Company shall have furnished to the Purchaser a certificate of the
Company, signed by the Chairman of the Board and the principal
financial or accounting officer of the Company, dated the date of
delivery, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
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(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the date of such certificate as if made
on the date of such certificate and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the date
of such certificate;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, have been threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth or contemplated in the Prospectus
(exclusive of any supplement thereto).
(e) At the Execution Time, and on each Effective Date
occurring after the Execution Time on which financial information is
included or incorporated in the Registration Statement or the
Prospectus and on the Closing Date, Ernst & Young shall have delivered
to the Purchaser a letter or letters, dated as of the date of
delivery, in form and substance satisfactory to the Purchaser,
confirming that they are independent public accountants with respect
to the Company within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder,
and stating in effect that:
(i) in their opinion, the audited financial
statements of the Company for the year ended December 31, 1994
included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
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(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders and directors of the Company
and their Material Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters of the Company and its subsidiaries as
to transactions and events subsequent to December 31, 1994,
nothing came to their attention which caused them to believe
that:
(1) the unaudited financial statements of the
Company included or incorporated in the Registration
Statement and the Prospectus do not comply in form in
all material respects with applicable accounting
requirements and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus; or
(2) with respect to the period subsequent to
September 30, 1995, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the capital stock,
short-term debt or long-term debt of the Company or
decreases in the net current assets or shareholders'
equity of the Company as compared with the amounts
shown on the most recent consolidated balance sheet
included or incorporated in the Registration
Statement and the Prospectus, or for the period from
September 30, 1995, to such specified date
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there were any decreases, as compared with the
corresponding period in the preceding year in
consolidated net sales, except in all instances for
changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Purchaser;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including the information for
the year ended December 31, 1994 included in Items 1, 2, 6, 7
and 11 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statement and the Prospectus,
and the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included or incorporated in any of the Company's Quarterly
Reports on Form 10-Q or any Current Reports on Form 8-K
incorporated in the Registration Statement and the Prospectus,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation;
and
(iv) on the basis of a reading of any unaudited pro
forma financial statements included or incorporated in the
Registration Statement and the Prospectus (the "pro forma
financial statements"), carrying out certain specified
procedures, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters, and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the
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applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(e) of this Section 6 or (ii) any change, or any development involving
a prospectus change, in or affecting the business or properties of the
Company and its subsidiaries the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the judgment of the Purchaser,
so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Standby Shares as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(g) The Company shall have furnished to the Purchaser such
further information, certificates and documents as the Purchaser may
reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its counsel, this
Agreement and all obligations of the Purchaser hereunder may be cancelled at,
or at any time prior to, the Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
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The documents required to be delivered by this Section 6 shall
be delivered to the offices of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000
Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, on the date of this Agreement or on the
Closing Date, as applicable.
7. Reimbursement of Purchaser's Expenses. If the sale of the
Standby Shares provided for herein is not consummated because any condition to
the obligations of the Purchaser set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Purchaser, the Company will reimburse the Purchaser upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Standby Shares.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Purchaser and each person, if any, who controls the Purchaser within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (or actions in
respect thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or defending
or preparing to defend or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action, as such expenses are
incurred) arising out of or based on any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or caused by 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, except insofar as such
losses, claims, damages, liabilities or expenses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon the
following information furnished to the Company by you in (i) the third
paragraph of text on the cover page of the Prospectus concerning the terms of
the standby arrangements with the Purchaser and (ii) the first three paragraphs
of text under the caption "Standby Arrangements" in the Prospectus (all of the
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foregoing the "Purchaser's Information"). This indemnity agreement will be in
addition to any liability which the Company may otherwise have to the persons
referred to above in this Section 8(a).
(b) The Purchaser agrees to indemnify and hold harmless the
Company, the directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities (or
actions in respect thereof) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or caused by 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, but only with
reference to the Purchaser's Information. This indemnity agreement will be in
addition to any liability which the Purchaser may otherwise have to the persons
referred to above in this Section 8(b).
(c) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (hereinafter called the
indemnified party) shall promptly notify the person against whom such indemnity
may be sought (hereinafter called the indemnifying party) in writing; however,
the omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the two preceding paragraphs only to the extent
prejudiced thereby. The indemnifying party, upon request of the indemnified
party, shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others that the indemnifying party may designate and shall pay
the fees and disbursements of such counsel related to such proceeding. In any
such action or proceeding any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include
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both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Purchaser and all persons, if any, who control the Purchaser within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act; and
(b) the reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Purchaser and such control persons of the Purchaser, such
firm shall be designated in writing by the Purchaser.
(d) If the indemnification provided for in this Section 8 is
insufficient or unavailable to an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchaser on the other from the offering of
the Standby Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law or if the indemnified party shall have failed
to the prejudice of the indemnifying party to give the notice required by
Section 8(c), in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Purchaser on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
shall be deemed to be equal to the sum of the net amount paid by the Purchaser
to the Company on the Closing Date and the relevant benefits received by the
Purchaser on the other
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hand shall be deemed to be equal to the total fees payable by the Company to
the Purchaser pursuant to Section 3 hereof. The relative fault of the Company
on the one hand and the Purchaser on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Purchaser and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Purchaser agree that it would not be
just and equitable if contribution pursuant to Section 8(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in the immediately preceding paragraph shall be deemed to
include 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 Section 8(d), in no event shall the Purchaser
be required to contribute any amount in excess of the amount by which the total
price at which the Standby Shares distributed to the public were offered to the
public exceeds the amount of any damages which the Purchaser 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
9. Soliciting Conversions. The Purchaser may assist the
Company in soliciting conversion of the Debentures by the holders thereof but
shall not be entitled to compensation by the Company for any such assistance.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by notice given to the
Company at any time prior to the Closing Date, if prior to such time (i) there
has been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any
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material adverse change in the condition, financial or otherwise, earnings,
business or prospects of the Company and its subsidiaries considered as a
whole, whether or not arising in the ordinary course of business or (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there has occurred any outbreak or escalation of
hostilities or other calamity or crisis or material change in existing national
or international financial, political, economic or securities market
conditions, the effect of which is such as to make it, in the judgment of the
Purchaser, impracticable or inadvisable to market the Standby Shares in the
manner contemplated in the Prospectus or enforce contracts for the sale of the
Standby Shares or (iv) trading in the Common Stock of the Company has been
suspended by the Commission or the New York Stock Exchange, or trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said exchanges or by order of the Commission or any other governmental
authority.
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Purchaser set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchaser or the
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive the conversion of any Debentures and the
delivery of and payment for any Standby Shares. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered or telegraphed and confirmed to it at 000 Xxxx Xxxxxx, 0xx xxxxx, Xxx
Xxxx, XX 00000-0000, Attention: Xxxxxxx X. Xxxxxxx, with a copy separately
delivered to Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention of: Xxxxx X. Xxxxxx, Esq.; or, if sent to the Company, will
be mailed, delivered or telegraphed and confirmed to it at 000 Xxxxx Xxxxxx,
X.X. Xxx X, Xxxxx x'Xxxxx, XX 00000, with a copy separately delivered to
Freedman, Levy, Xxxxx & Xxxxxxx,
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0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, XX 00000-0000, Attention:
Xxxxxx Xxxxxxxx, Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which when taken together shall constitute but one
contract.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Purchaser.
Very truly yours,
COEUR D'XXXXX XXXXX CORPORATION
By:
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
UBS SECURITIES INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
