EXHIBIT 10.1
EARLY CONVERSION AGREEMENT
This EARLY CONVERSION AGREEMENT (this "Agreement"), dated as of July ___,
2003, is made and entered into by and among Coeur d'Xxxxx Xxxxx Corporation, an
Idaho corporation (the "Company"), and each of the persons signatory and listed
on Annex A hereto (each, a "Holder" and collectively, the "Holders").
RECITALS
WHEREAS, each Holder is a holder of the Company's 9% Convertible Senior
Subordinated Notes due February 26, 2007 (the "Notes"), which Notes were issued
under that certain Indenture, dated as of February 26, 2003 (as amended by the
Amendments (as hereinafter defined), the "Indenture"), between the Company and
The Bank of New York, a New York banking corporation, as trustee (the
"Trustee");
WHEREAS, the Company and certain holders of the Notes entered into that
certain Waiver and Amendment dated as of May 19, 2003 (the "First Waiver and
Amendment");
WHEREAS, immediately prior hereto, the Company and the Holders entered
into that certain Waiver and Amendment, attached hereto as Exhibit A (the
"Second Waiver and Amendment" and, together with the First Waiver and Amendment,
the "Amendments"), dated as of the date hereof.
WHEREAS, the Notes are convertible, at the option of each holder of the
Notes, into shares of common stock, par value $1.00 per share, of the Company
(the "Common Stock"), in accordance with the terms of the Indenture;
WHEREAS, each Holder desires, on the terms and conditions set forth herein
and in the Indenture, to exercise its option to convert a portion of the
principal amount of the Notes held by such Holder into shares of Common Stock;
and
WHEREAS, the Second Amendment and Waiver, in part, increased the number of
shares of Common Stock issuable as Additional Voluntary Conversion Interest (as
such term was previously defined in the Indenture prior to the Amendments) upon
the early conversion of a portion of the Notes (such increase in the number of
shares of Common Stock issuable as Additional Voluntary Conversion Interest due
to the effect of the Second Amendment and Waiver, the "Extra Shares"), in
consideration for which the Holders have agreed to enter into this Agreement to
effect the early conversion of a portion of the Notes held by such Holders.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. CONVERSION OF NOTES. On the terms and subject to the conditions of this
Agreement and the Indenture, each Holder hereby agrees to convert into Common
Stock the principal amount of Notes set forth with respect to such Holder on
Annex A hereto under the
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column entitled "Principal Amount of Notes to be Converted." Each Holder will
effect such conversion under the terms of the Indenture by the delivery to the
Company a properly completed and executed Election To Convert, the form of which
was attached as part of Exhibit A to the Indenture. For information purposes
only, the number of shares of Common Stock to be issued by the Company under the
terms of the Indenture as a result of such Election To Convert is set forth with
respect to such Holder on Annex A hereto under the column entitled "Conversion
Shares" (collectively, the "Conversion Shares").
2. CLOSING. The Company shall, immediately upon, and subject to, the
receipt of (i) a fully executed copy of this Agreement, (ii) a properly
completed and executed Election To Convert, and (iii) a fully executed Second
Waiver and Amendment, in each case from each Holder and each other holder of
outstanding Notes as of the date hereof, transmit to the Trustee a properly
executed Officers' Certificate of the Company pursuant to the Indenture, a form
of which is attached hereto as Exhibit B. Subject to compliance with the terms
of the Notes, immediately upon confirmation of receipt of the Officers'
Certificate by the Trustee, the Company shall deliver to each Holder the
Conversion Shares. The Company shall deliver all such Conversion Shares
electronically to each such Holder in accordance with written instructions from
each such Holder.
3. REGISTRATION STATEMENT. Immediately after the issuance of the Shares to
the Holders, the Company shall file a Form S-3 registration statement (the "462
Registration Statement") pursuant to Rule 462(b) and General Instruction IV to
Form S-3, both as promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Company's effective, current Form S-3 "shelf"
registration statement (file no. 333-101434) (as amended and supplemented, and
together with the 462 Registration Statement, the "Registration Statement") on
file with the Securities and Exchange Commission, in order to register the
resale by the Holders of the Extra Shares thereunder. Concurrent with such
filing, the Company shall also prepare and file an additional prospectus
supplement (subject to reasonable approval and comment by the Holders and their
counsel) for use by the Holders with respect to the Registration Statement.
4. LIMITATION ON SALES OF COMMON STOCK BY HOLDERS. Each Holder hereby
agrees not to knowingly sell to a single purchaser or group of affiliated
purchasers more than 2 million shares of Common Stock registered by the
Registration Statement in a single transaction or a series of related
transactions.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Holders that:
(a) Due Organization and Good Standing. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Idaho, with all requisite power and authority under such
laws to own, lease and operate its properties, to conduct its business as now
being conducted and to enter into and perform its obligations under this
Agreement.
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(b) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement is limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally or by general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) (collectively,
the "Enforceability Exceptions").
(c) Valid Issuance of Common Stock. The Shares, when issued and
delivered in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid and nonassessable,
will have the rights, preferences, privileges and restrictions described in the
Company's Certificate of Incorporation, and will be free of restrictions on
transfer other than restrictions on transfer under this Agreement and under
applicable state and federal securities laws. Subject to applicable restrictions
on transfer, the issuance and delivery of the Shares are not subject to any
preemptive or other similar rights or any security interest, mortgage, liens,
encumbrances or equitable right except as specifically set forth in the
Company's Certificate of Incorporation or this Agreement.
(d) Absence of Conflicts. The execution, delivery and performance of
this Agreement and compliance by the Company with the terms of this Agreement do
not and will not, whether with or without the giving of notice or passage of
time or both, violate, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien upon any properties
or assets of the Company or any of its subsidiaries and the Company need not
give any notice, make any filing, or obtain any authorization, consent or
approval in order to consummate the transactions contemplated herein, except for
the required consent set forth on Schedule 5(d), which such consent has been
received by the Company as of the date hereof.
(e) Non-public Information. The Company has not disclosed to the
Holders, orally or in writing, any information (including information contained
in this Agreement or any schedule to this Agreement) of which the Company's
directors or officers are aware, that has not been disclosed to the public in
any reports required to be filed by the Company with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, including
pursuant to Section 13(a) or 15(d) thereof, which the Company considers to be
material to the financial condition, operating results or assets of the Company
or that it considers material to purchasers and sellers of the Company's Common
Stock.
6. REPRESENTATIONS AND WARRANTIES OF THE HOLDERS. Each Holder represents
and warrants to the Company that:
(a) Investment Intent. The Holder is acquiring the Shares pursuant
to this Agreement with its own funds or property for its own account and not as
a nominee or agent for the account of any other person. The Holder is acquiring
the Shares for investment purposes and not with a view to the sale or
distribution of any Shares in contravention of the Securities Act.
(b) No Public Offering. The Holder is able to bear the economic risk
of its investment in the Shares. The Holder is aware that it must be prepared to
hold the Shares for an
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indefinite period and that the Shares have not been, and when issued will not
be, registered under the Securities Act or registered or qualified under any
state securities law, on the ground that the Shares are being issued by the
Company without any public offering within the meaning of Section 4(2) of the
Securities Act. The Holder understands that the Company's reliance on such
exemption is predicated on the Holder's representations set forth herein;
provided, however, that by making the representations herein, such Holder does
not agree to hold any of the Shares for any minimum or other specific term and
reserves the right to dispose of the Shares at any time in accordance with or
pursuant to a registration statement or an exemption under the Securities Act.
(c) Receipt of Information. The Holder has had an opportunity to
discuss the terms and conditions of the offering of the Shares and the Company's
business, management and financial affairs with the Company's management and to
obtain additional information necessary to verify the accuracy of any
information furnished to the Holder or to which the Holder had access. The
Holder is not subscribing for the Shares as a result of any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio or any solicitation of a
subscription by any person not previously known to the Holder in connection with
investments in securities generally.
(d) Securities will be "Restricted Securities". The Holder
understands that the Shares will be "restricted securities" as that term is
defined in Rule 144 promulgated under the Securities Act and, accordingly, that
the Shares may not be sold, transferred or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. The Holder understands and agrees that, except as
provided herein, the Company is not under any obligation to register the Shares
under the Securities Act. The Holder is aware that the Shares may not be sold
pursuant to Rule 144 promulgated under the Securities Act unless the conditions
of that Rule are met or such rule is no longer applicable.
(e) Accredited Investor. The Holder has been advised or is aware of
the provisions of Regulation D under the Securities Act relating to the
accreditation of Holders, and the Holder is an "accredited investor" as defined
in Rule 501 of Regulation D promulgated under the Securities Act.
(f) Sophistication of the Holder. The Holder has such knowledge and
experience in financial and business matters that the Holder is capable of
evaluating the merits and risks of the investment contemplated by this Agreement
and has the capacity to protect its own interests. The Holder acknowledges that
investment in the Shares is highly speculative and involves a substantial and
high degree of risk of loss of the Holder's entire investment. The Holder has
adequate means of providing for current and anticipated financial needs and
contingencies, is able to bear the economic risk of the investment for an
indefinite period of time and could afford complete loss of such investment.
(g) Brokers' Fees. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Holder.
(h) Due Organization and Good Standing of the Holder. The Holder has
been duly organized and is validly existing as an entity in good standing under
the laws of the state of
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its organization, with all requisite power and authority under such laws to
enter into and perform its obligations under this Agreement.
(i) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Holder and constitutes a valid and
legally binding agreement of the Holder, enforceable against the Holder in
accordance with its terms, except as enforcement is limited by the
Enforceability Exceptions.
7. INDEMNIFICATION AND CONTRIBUTION.
7.1 Indemnification.
(a) The Company (the "Indemnifying Party") hereby agrees to
indemnify each Holder and its agents and affiliates (collectively, the
"Indemnified Parties") against, and hold them harmless from, all losses, claims,
damages, liabilities, costs (including the costs of preparation and reasonable
attorneys' fees and expenses) (collectively, "Losses") incurred by them and
arising out of or related to the transactions contemplated by this Agreement as
a result of (i) any breach of any representation, warranty, agreement or
covenant of the Company contained herein, (ii) any allegations, claims or
investigations by shareholders or governmental entities of a breach of fiduciary
duty or other misconduct by the Company's officers or directors, and (iii) any
other shareholder derivative actions (it being understood that Losses shall
exclude any monetary loss resulting from the resale, or other decline in value,
of any Common Stock issued pursuant to this Agreement provided that such
exclusion shall not prevent the Indemnified Parties from seeking indemnification
or damages from the Indemnifying Party under any other applicable provision of
this Agreement), other than to the extent, and only to the extent, that any
Losses directly result from action on the part of any Indemnified Party which is
finally judicially determined to constitute either gross negligence or willful
misconduct. The Indemnifying Party agrees to reimburse any Indemnified Party for
all such Losses promptly after such Losses are finally judicially determined to
be subject to indemnification hereunder. The obligations of the Indemnifying
Party to each Indemnified Party hereunder shall be separate obligations and the
Indemnifying Party's liability to any such Indemnified Party hereunder shall not
be extinguished solely because any other Indemnified Party is not entitled to
indemnity hereunder.
(b) The obligations of the Indemnifying Party under this Section 7.1
shall survive the termination of this Agreement; provided that the warranties
and representations of the Company and each Holder contained in or made pursuant
to this Agreement shall expire and terminate on the date that is eighteen (18)
months following the closing as set forth in Section 2 hereof (the "Closing");
provided further that such representations and warranties shall survive for the
duration of a claim, if any, for indemnification alleging a breach of such
representations or warranties that is made during such eighteen (18) months
following the Closing.
(c) In case any action shall be brought against any Indemnified
Party with respect to which indemnity may be sought against the Indemnifying
Party hereunder, such Indemnified Party shall promptly notify the Indemnifying
Party in writing and the Indemnifying Party shall, if it so desires, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Indemnifying Party shall not affect any obligation the
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Indemnifying Party may have to any Indemnified Party under this Agreement or
otherwise unless the Indemnifying Party is materially adversely affected by such
failure. Each Indemnified Party shall have the right to employ separate counsel
in such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of the Indemnified Party unless: (i) the
Indemnifying Party has agreed in writing (other than pursuant to this Agreement)
to pay such expenses; or (ii) the Indemnifying Party, after timely notice of
such claim, has failed to assume the defense and employ counsel or (iii) the
named parties to any such action (including any impleaded parties) include any
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been reasonably advised by outside counsel that there may be one or more
legal defenses available to it which are inconsistent with or additional to
those available to the Indemnifying Party, provided that, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel in the circumstances described in clauses (i), (ii) or (iii)
above, the Indemnifying Party shall not have the right to assume the defense of
such action or proceeding; provided, however, that the Indemnifying Party shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be responsible
hereunder for the fees and expenses of more than one such firm of separate
counsel (in addition to any necessary local counsel), which counsel shall be
designated by such Indemnified Party. The Indemnifying Party shall not be liable
for any settlement of any such action effected without its written consent
(which shall not be unreasonably withheld). The Indemnifying Party agrees that
it will not, without the Indemnified Parties' prior written consent (which shall
not be unreasonably withheld) settle or compromise any pending or threatened
claim, action or suit in respect of which indemnification or contribution may be
sought hereunder unless the foregoing contains an unconditional release of the
Indemnified Parties from all liability and obligation arising therefrom.
7.2 Contribution.
If the indemnification provided for in Section 7.1 is unavailable to
any Indemnified Party in respect of any Losses referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall have
an obligation to contribute to the amount paid or payable by such Indemnified
Party as a result of such Losses in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party, its subsidiaries and/or any other
entity or person (other than the Holders and the other Indemnified Parties) and
such Indemnified Party in connection with the actions which resulted in such
Losses as well as any other relevant equitable considerations. The amount paid
or payable as a result of the Losses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7.1, any legal or other
fees or expenses reasonably incurred by such Indemnified Party in connection
with any investigation, lawsuit or legal or administrative action or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.2 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. No
party guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any party
who was not guilty of such fraudulent misrepresentation.
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8. EXPENSES. The Company shall be responsible for all of its expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and delivery to the Holders of this Agreement, the
Conversion Shares, the 462 Registration Statement and such other documents as
may be required in connection with this Agreement, (ii) the fees and
disbursements of the Company's counsel, accountants and other advisors and (iii)
the fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee. In addition, the Company agrees to promptly reimburse
each Holder for the reasonable fees and expenses of Xxxxxx & Xxxxxxx LLP,
counsel for the Holders, in connection with the transactions contemplated
hereby, including all work done prior to the date hereof with respect to the
circumstances surrounding the Waiver and Amendment, upon submission of
reasonable invoices for the services of Xxxxxx & Xxxxxxx LLP (subject to
maintenance of the attorney-client privilege between Xxxxxx & Xxxxxxx LLP and
each Holder).
9. MISCELLANEOUS.
(a) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to any Holder shall be
directed to the name and address of such Holder as set forth on Annex A attached
hereto, with a copy to Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, Esq., and notices to the
Company shall be directed to Coeur d'Xxxxx Xxxxx Corporation, 000 Xxxxx Xxxxxx,
X.X. Xxx X, Xxxxx x'Xxxxx, Xxxxx 00000-0000, Attention: General Counsel, with a
copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Esq.
(b) Assignment. Neither the Company nor any Holder may assign or
delegate (whether by contract or operation of law, it being agreed that a merger
(other than a merger that does not constitute a "Change of Control" as defined
in the Indenture) shall be deemed to constitute an assignment) its rights,
duties or obligations under this Agreement without the prior written consent of
the other party hereto. Any attempted or purported assignment or delegation in
violation of the preceding sentence shall be void.
(c) Amendment. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and each of the Holders.
(d) Counterparts; Facsimile. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, and
signature pages may be delivered by facsimile, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAWS PERTAINING TO CONFLICTS
OR CHOICE OF LAW, OF THE STATE OF NEW YORK.
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(f) Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
(g) Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable under applicable law, such
provision shall be replaced with a provision that accomplishes, to the extent
possible, the original business purpose of such provision in a valid and
enforceable manner, and the balance of the Agreement shall be interpreted as if
such provision were so modified and shall be enforceable in accordance with its
terms.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date above first written.
COEUR D'XXXXX XXXXX CORPORATION
By:
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Name:
Title:
HOLDERS:
[NAME OF HOLDER]
By:
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Name:
Title:
[signature page to Early Conversion Agreement]
ANNEX A
HOLDER Principal Amount
of Notes to be Total Shares to be
Converted Indenture Shares 1 Received
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$
[Name of Holder]
Address of Holder:
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Attn:
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Facsimile:
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1 For informational purposes only.
A-1
