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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is
entered into as of January 28, 1999, between Sunshine Mining
and Refining Company, a Delaware corporation with offices at
000 Xxxx Xxxx Xxxxxx, Xxxxx, Xxxxx 00000 (the "Company") and
each of the entities listed under "Investors" on the signature
page hereto (each an "Investor" and collectively the
"Investors"), each with offices at the address listed in
Section 13(c).
W I T N E S S E T H:
Whereas, pursuant to that certain Convertible Note
Investment Agreement, dated as of January 27, 1999 by and
between the Company and the Investors (the "Purchase
Agreement"), the Company has agreed to sell and issue to the
Investors, and the Investors have agreed to purchase from the
Company, $6,000,000 principal amount of Convertible Notes due
January 28, 2001 (the "Notes ") subject to the terms and
conditions set forth therein; and
Whereas, the Purchase Agreement contemplates that the
Notes will be convertible into shares (the "Common Shares") of
common stock, par value $0.01, of the Company ("Common Stock")
pursuant to the terms and conditions set forth in the Notes ;
Now, Therefore, in consideration of the mutual
promises, representations, warranties, covenants and
conditions set forth in the Purchase Agreement and this
Agreement, the Company and the Investors agree as follows:
1. Certain Definitions. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Purchase
Agreement or the Notes. As used in this Agreement, the following terms shall
have the following respective meanings:
"Closing" and "Closing Date" shall have the meanings
ascribed to such terms in the Purchase Agreement.
"Commission" or "SEC" shall mean the Securities and
Exchange Commission or any other federal agency at the time
administering the Securities Act.
"Holder" and "Holders" shall include an Investor or
the Investors, respectively, and any transferee of the Notes,
Common Shares or Registrable Securities which have not been
sold to the public to whom
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the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement and the Purchase
Agreement.
The terms "register", "registered" and "registration"
shall refer to a registration effected by preparing and filing
a registration statement in compliance with the Securities Act
and applicable rules and regulations thereunder, and the
declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean: (i) the Common
Shares (up to the Maximum Amount, as such term is defined in
the Notes) or other securities issued or issuable to each
Holder or its permitted transferee or designee upon conversion
of the Notes; (ii) securities issued or issuable upon any
stock split, stock dividend, recapitalization or similar event
with respect to such Common Shares; and (iii) any other
security issued as a dividend or other distribution with
respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses.
"Registration Expenses" shall mean all expenses to be
incurred by the Company in connection with each Holder's
registration rights under this Agreement, including, without
limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company,
blue sky fees and expenses, reasonable fees and disbursements
of counsel to Holders (using a single counsel selected by a
majority in interest of the Holders) for a "due diligence"
examination of the Company and review of the Registration
Statement and related documents, and the expense of any
special audits incident to or required by any such
registration (but excluding the compensation of regular
employees of the Company, which shall be paid in any event by
the Company).
"Registration Statement" shall have the meaning set
forth in Section 2(a) herein.
"Securities Act" or "Act" shall mean the Securities
Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to the sale of
Registrable Securities and all fees and disbursements of
counsel for Holders not included within "Registration
Expenses".
2. Registration Requirements. The Company shall use its best
efforts to effect the registration of the Registrable Securities (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the
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sale or distribution of all the Registrable Securities in the manner (including
manner of sale) contemplated herein and in all states. Such best efforts by the
Company shall include, without limitation, the following:
(a) The Company shall, as expeditiously as possible
after the Closing Date:
i) But in any event within 45 days of the Closing,
prepare and file a registration statement with the Commission
pursuant to Rule 415 under the Securities Act on Form S-3
under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act) covering resales by
the Holders of the Registrable Securities ("Registration
Statement"), which Registration Statement, to the extent
allowable under the Securities Act and the rules promulgated
thereunder (including Rule 416), shall state that such
Registration Statement also covers such indeterminate number
of additional shares of Common Stock as may become issuable
upon conversion of the Notes. The number of shares of Common
Stock initially included in such Registration Statement shall
be no less than the Maximum Amount (as defined in the Notes).
Nothing in the preceding sentence will limit the Company's
obligations to reserve shares of Common Stock pursuant to
Section 3.8 of the Purchase Agreement. Thereafter the Company
shall use its best efforts to cause such Registration
Statement and other filings to be declared effective as soon
as possible, and in any event prior to 90 days following the
Closing Date. Without limiting the foregoing, the Company will
promptly respond to all SEC comments, inquiries and requests,
and shall request acceleration of effectiveness at the
earliest possible date. The Company shall provide the Holders
reasonable opportunity to review any such Registration
Statement or amendment or supplement thereto prior to filing.
ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus
used in connection with such Registration Statement as may be
necessary to comply with the provisions of the Act with
respect to the disposition of all securities covered by such
Registration Statement in accordance with the intended method
or methods of distribution provided from time to time by
Holders for inclusion in the Registration Statement or
supplement to Prospectus and notify the Holders of the filing
and effectiveness of such Registration Statement and any
amendments or supplements.
iii) Furnish to each Holder such numbers of copies of
a current prospectus conforming with the requirements of the
Act, copies of the Registration Statement, any amendment or
supplement thereto and any documents incorporated by reference
therein and such other documents as such Holder may reasonably
require in order to facilitate the disposition of Registrable
Securities owned by such Holder in accordance with the
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intended method or methods of distribution provided by Holders
for inclusion in the Registration Statement or supplement to
the Prospectus.
iv) Register and qualify the securities covered by
such Registration Statement under the securities or "Blue Sky"
laws of all domestic jurisdictions provided that the Company
shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a
general consent to service of process in any such states or
jurisdictions.
v) Notify each Holder immediately of the happening of
any event (but not the substance or details of any such events
unless specifically requested by a Holder) as a result of
which the prospectus (including any supplements thereto or
thereof) included in such Registration Statement, as then in
effect, includes an untrue statement of material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances then existing, and use its best
efforts to promptly update and/or correct such prospectus.
vi) Notify each Holder immediately of the issuance by
the Commission or any state securities commission or agency of
any stop order suspending the effectiveness of the
Registration Statement or the threat or initiation of any
proceedings for that purpose. The Company shall use its best
efforts to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the
earliest possible time.
vii) Permit counsel to the Holders to review the
Registration Statement and all amendments and supplements
thereto within a reasonable period of time (but not less than
5 business days) prior to each filing, and shall not file any
document in a form to which such counsel reasonably objects
and will not request acceleration of the Registration
Statement without prior notice to such counsel.
viii) List the Registrable Securities covered by such
Registration Statement with all securities exchange(s) and/or
markets on which the Common Stock is then listed and prepare
and file any required filings with the New York Stock Exchange
or any exchange or market where the Common Shares are traded.
ix) Take all steps necessary to enable Holders to
avail themselves of the prospectus delivery mechanism set
forth in Rule 153 (or successor thereto) under the Act.
(b) Set forth below in this Section 2(b) are (I)
events that may arise that the Investors consider will interfere with the full
enjoyment of their rights under
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this Agreement, the Purchase Agreement and the Notes (the "Interfering Events"),
and (II) certain remedies applicable in each of these events.
i) Delay in Effectiveness of Registration Statement.
(A) In the event that the Registration
Statement has not been declared effective within 90
days from the Closing Date, then the Company shall
pay each Holder Monthly Delay Payments (as defined
and described below).
(B) As used in this Agreement, a "Monthly
Delay Payment" shall be a cash payment equal to 1% of
the principal amount of the Notes held by a Holder
for the first 30 day period (or portion thereof) that
the specified condition in this Section 2(b) has not
been fulfilled or the specified deficiency has not
been remedied, 2% of such principal amount for the
next 30 day period (or portion thereof) that the
specified condition has not been fulfilled or the
specified deficiency has not been remedied, and 3% of
such principal amount for each subsequent 30 day
period (or portion thereof) that the specified
condition has not been fulfilled or the specified
deficiency has not been remedied. Payment of the
foregoing cash amounts shall be due and payable from
the Company to such Holder within 5 business days of
demand therefor. At the option of the Holder, Monthly
Delay Payments may be added to the principal amount
of the Notes held by it. If a Holder becomes entitled
to receive Monthly Delay Payments at any given time
under more than one provision of this Section 2(b),
the Company shall only be obligated to make Monthly
Delay Payments under one provision of this Section
2(b).
(C) Notwithstanding the foregoing, there
shall be excluded from the calculation of the number
of days that the Registration Statement has not been
declared effective the delays which are solely
attributable to delays in the Holders providing
Requisite Information required for the Registration
Statement.
ii) No Listing; Suspensions.
(A) In the event that the Company fails,
refuses or for any other reason is unable to cause:
(i) the Common Stock as a class to be listed with the
New York Stock Exchange or one of the other Approved
Markets (as defined in the Purchase Agreement) at all
times during the period following the Closing Date
until such time as all of the Notes shall have been
paid in full or subject to mandatory conversion
pursuant to the terms of the Notes (the "Listing
Period") and (ii) the Registrable Securities covered
by the Registration Statement to be listed with the
New York Stock
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Exchange or on another Approved Market at all times
during the period from the earlier of the 90th day
following the Closing Date (provided that if the
Registration Statement has not been declared
effective by such time, the Registrable Securities
shall have been listed, subject to such
effectiveness) or the effectiveness of the
Registration Statement until such time as all of the
Notes shall have been paid in full or subject to
mandatory conversion pursuant to the terms of the
Notes, then the Maximum Amount, as defined in Section
5(k)(ii) of the Notes, shall be increased by 75%,
subject to the adjustments set forth in such
provision.
(B) In the event that shares of Common Stock
are suspended from trading on an Approved Market at
any time then each Holder shall have the right to
Monthly Delay Payment(s) on the terms set forth in
Section 2(b)(i)(B) above. Notwithstanding the
foregoing, in the event that following such
suspension (i) the Common Stock shall be listed on an
Approved Market, the Nasdaq Small Cap Market or the
Nasdaq Bulletin Board; (ii) the Maximum Amount shall
have been increased pursuant to Section 2(b)(ii)(A)
above; and (iii) Effective Registration (as defined
in the Purchase Agreement) shall have otherwise
occurred, then the Monthly Delay Payments pursuant to
this Section 2(b)(ii)(B) shall cease to accrue.
iii) Blackout Periods. In the event any Holder's
ability to sell Registrable Securities under the Registration
Statement is suspended (without being succeeded on the same
day by a post-effective amendment to the Registration
Statement that is immediately declared effective by the
Commission) for more than (i) five (5) consecutive days or
(ii) twenty (20) days in any calendar year ("Suspension Grace
Period"), including without limitation by reason of any
suspension or stop order with respect to the Registration
Statement or the fact that an event has occurred as a result
of which the prospectus (including any supplements thereto)
included in such Registration Statement then in effect
includes an untrue statement of material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances then existing (a "Blackout"), then
the Company shall provide to each Holder a Monthly Delay
Payment for each 30 day period or portion thereof from and
after the expiration of the Suspension Grace Period, on the
terms set forth in Section 2(b)(i)(B) above.
iv) Redemption for Conversion Deficiency. In the
event that the Company does not have a sufficient number of
Common Shares authorized and reserved for issuance to satisfy
the Company's obligations to any Holder upon receipt of a
Conversion Notice (as defined in the Notes) to issue up to the
Maximum Amount of Common Shares or is otherwise unable or
unwilling for any reason to issue such Common Shares (each, a
"Conversion Deficiency") in accordance with the terms of
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the Notes for any reason (other than failure of the Holder to
comply with the notice and delivery requirements of Section
5(a) of the Notes or because the Company has issued the
Maximum Amount of Common Shares upon conversion of Notes)
after receipt of a Conversion Notice from any Holder, then:
(A) The Company shall provide to each Holder
a Monthly Delay Payment for each 30 day period or
portion thereof following the Conversion Deficiency,
on the terms set forth in Section 2(b)(i)(B) above.
(B) At any time five days after the
commencement of the running of the first 30-day
period described above in clause (A) of this
paragraph (iv), at the request of any Holder, the
Company promptly shall purchase from such Holder, all
of such Holder's Notes, for consideration (the
"Mandatory Repurchase Price") equal to the greater of
(x) 120% of the principal amount of all such Notes
being sold to the Company, or (y) the principal
amount, together with all accrued interest under the
Notes being sold to the Company divided by the then
applicable Conversion Price multiplied by the last
closing price of the Common Stock on (i) the date a
Holder exercises its option pursuant to require
repurchase of Notes or (ii) the date on which the
event triggering Holder's remedies first occurred, in
each case payable in cash and on the terms set forth
in Section 2(b)(i)(B) above.
v) Mandatory Purchase Price for Defaults. In the
event that the Company fails to pay any Monthly Delay Payment
within 5 business days of written demand therefor, each Holder
shall have the right to sell to the Company any or all of its
Notes at the Mandatory Repurchase Price on the terms set forth
in Section 2(b)(iv)(B) above.
vi) Cumulative Remedies. The Monthly Delay Payments
and mandatory purchases provided for above are in addition to
and not in lieu or limitation of any other rights the Holders
may have at law, in equity or under the terms of the Notes,
the Purchase Agreement or this Agreement, including without
limitation the right to monetary contract damages and specific
performance. Each Holder shall be entitled to specific
performance of any and all obligations of the Company in
connection with the rights of the Holders hereunder.
Notwithstanding the foregoing, no Holder may xxx the Company
for money damages in excess of the Monthly Delay Payments
unless: (i) the Holder shall have provided the Company written
notice of default or breach under this Agreement; and (ii)
such default or breach shall not have been cured within 15
(fifteen) days of the Company's receipt of such notice. The
foregoing sentence shall not apply to the rights of Holders to
have Notes repurchased at the Mandatory Repurchase Price.
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vii) Remedies for Registrable Securities. In any case
in which a Holder of Notes has the right to cause the purchase
of its Notes under this Section 2(b), such Holder shall also
have the right to cause the purchase of the Registrable
Securities that it owns as follows: such shares shall be
purchased at the Mandatory Repurchase Price of the Notes which
were converted into Common Shares. Notwithstanding the
foregoing, no Holder shall have the right to cause the
repurchase of Registrable Securities provided in this Section
2(b)(vii) if such Registrable Securities are subject to
Effective Registration (as defined in the Purchase Agreement).
In the case in which a Holder of Notes would have
the right to receive Monthly Delay Payments with respect to
Notes under Section 2(b), it shall also have the right to
receive payments with respect to Registrable Securities owned
by it in an amount at the rates set forth in Section 2(b)(i)
above on the principal amount of the Notes converted into
Common Shares.
(c) The Company shall take all such reasonable actions
reasonably requested by the Holders in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities and, subject to
Section 2(g) below, in such connection, if requested by the Holders:
i) cause to be delivered to the sellers of
Registrable Securities opinions of independent counsel to the
Company, on and dated as of the effective day of the
Registration Statement, and within ninety (90) days following
the end of each fiscal year thereafter, which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to the Holders, and their counsel and covering,
without limitation, such matters as the due authorization and
issuance of the securities being registered and compliance
with securities laws by the Company in connection with the
authorization, issuance and registration thereof and other
matters that are customarily given to underwriters in
underwritten offerings, addressed to the Holders;
ii) cause to be delivered, immediately prior to the
effectiveness of the Registration Statement, and at the
beginning of each fiscal year following a year during which
the Company's independent certified public accountants shall
have reviewed any of the Company's books or records, a
"comfort" letter from the Company's independent certified
public accountants addressed to the Holders, stating that such
accountants are independent public accountants within the
meaning of the Securities Act and the applicable published
rules and regulations thereunder, and otherwise in customary
form and covering such financial and accounting matters as are
customarily covered by letters of the independent certified
public accountants delivered in connection with secondary
offerings; such accountants shall have undertaken in each such
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letter to update the same during each such fiscal year in
which such books or records are being reviewed so that each
such letter shall remain current, correct and complete
throughout such fiscal year; and each such letter and update
thereof, if any, shall be reasonably satisfactory to the
Holders; and
iii) Upon the filing by the Company of any report
pursuant to the Exchange Act which is incorporated by
reference into the Registration Statement, cause to be
delivered, promptly following such filing: (i) an update to
the opinion referred to in Subsection 2(c)(i) above and (ii)
an update to the "comfort" letter referred to in Subsection
2(c)(ii) above.
(d) Subject to Section 2(g) below, the Company shall make
available for inspection by the Holders, representative(s) of all the Holders
together, and any attorney or accountant retained by any Holder, all financial
and other records customary for purposes of the Holders' due diligence
examination of the Company and review of any Registration Statement, all SEC
Documents (as defined in the Purchase Agreement) filed subsequent to the
Closing, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement, provided that such
parties agree to keep such information confidential.
(e) Subject to Section 2(b) above, the Company may suspend the
use of any prospectus used in connection with the Registration Statement only in
the event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission. The Company will use its best efforts
to cause such suspension to terminate at the earliest possible date.
(f) Upon receipt by a Holder of any notice from the Company
under Section 2(a)(v) or of the suspension of the use of any prospectus used in
connection with the Registration Statement, such Holder shall stop selling or
offering for sale under the Registration Statement any Registrable Securities
until such Holder's receipt of the copies of an updated and/or corrected
prospectus as contemplated by Section 2(a)(v), or until it receives advice in
writing from the Company that the use of the prospectus used in connection with
the Registration Statement may be resumed.
(g) Notwithstanding the provisions of Sections 2(c) and 2(d)
above, the Holders shall not request that the Company cause to be delivered the
opinions of independent counsel to the Company or "comfort" letter from the
Company's independent certified public accountants described in Section 2(c) or
conduct the due diligence review contemplated by Section 2(d) unless the SEC has
indicated, whether pursuant to review of the Registration Statement or pursuant
to an interpretive release or no-action letter, that it considers any Holder to
be an underwriter for purposes of the Securities Act. Any delay in the
effectiveness of the Registration Statement occasioned by a request by the
Holders for due diligence materials under Section 2(d) above shall not be
counted for purposes of a deadline in Section 2(a)(i) or the Monthly Delay
Payments in Section 2(b)(i) provided that: (i) the Company shall have filed the
Registration
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Statement on or before the 45th day following the Closing Date; (ii) the Company
shall have complied with Sections 2(a)(i), 2(a)(ii), 2(a)(iii) and 2(a)(vii)
above; (iii) the Holders' due diligence request shall not have resulted in a
material change in the Registration Statement; and (iv) the Holders' due
diligence request shall not have been in response to a material change in the
text of the Registration Statement after it is initially filed (other than the
SEC determining that any Holder is an "underwriter" for purposes of the
Securities Act).
(h) The Company may require each Holder to furnish to the
Company within five business days after request therefrom and thereafter
promptly as any relevant additional information becomes known to such Holder,
such information regarding the Holder and the distribution of such Holder's
Registrable Securities as is required by law to be disclosed in the Registration
Statement (the "Requisite Information"). If any information furnished to the
Company by a Holder for inclusion in the Registration Statement or any
prospectus used thereunder becomes materially misleading, such Holder agrees:
(i) to furnish promptly to the Company all information required to be included
in the Registration Statement or such prospectus in order to make the
information previously furnished to the Company not materially misleading and
(ii) to stop selling or offering for sale under the Registration Statement any
Registrable Securities until such Holder's receipt of copies of a supplemented
or amended prospectus that contains the information described in clause (i). No
Holder shall be entitled to receive the payments provided for in Sections
2(b)(i)(A), 2(b)(ii) or 2(b)(iii) (but only to the extent that such Holder is
not included as a Selling Security Holder in the Registration Statement) for any
time period in which such Holder fails to supply the Company the information
required to be supplied by this Section 2(h).
(i) The Company shall file a Registration Statement with
respect to any newly authorized and/or reserved Registrable Securities
consisting of Common Shares described in clause (i) of the definition of
Registrable Securities within five (5) business days of any stockholders meeting
authorizing same and shall use its best efforts to cause such Registration
Statement to become effective within sixty (60) days of such stockholders
meeting. If the Holders become entitled, pursuant to an event described in
clause (ii) of the definition of Registrable Securities, to receive any
securities in respect of Registrable Securities that were already included in a
Registration Statement, subsequent to the date such Registration Statement is
declared effective, and the Company is unable under the securities laws to add
such securities to the then effective Registration Statement, the Company shall
promptly file, in accordance with the procedures set forth herein, an additional
Registration Statement with respect to such newly Registrable Securities. The
Company shall use its best efforts to (i) cause any such additional Registration
Statement, when filed, to become effective under the Securities Act, and (ii)
keep such additional Registration Statement effective during the period
described in Section 5 below and cause such Registration Statement to become
effective within 60 days of that date that the need to file the Registration
Statement arose. All of the registration rights and remedies under this
Agreement shall apply to the registration of such newly reserved shares and such
new Registrable Securities, including without limitation the provisions
providing for default payments and mandatory redemptions contained herein.
Without limiting the generality of the foregoing, in the event that
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pursuant to Section 2(b)(ii) herein, Section 3.15 of the Purchase Agreement or
otherwise pursuant to Section 5(k)(ii) of the Notes, the Maximum Amount is
increased, then, concurrently with effecting the action triggering such increase
in the Maximum Amount (A) the Company shall cause the additional number of
Common Shares represented by such increase (the "Additional Common Shares") to
be duly reserved for issuance; (B) the Company shall file a Registration
Statement covering such Additional Common Shares, which in the case of an
increase due to Section 3.15 of the Purchase Agreement or Section 5(k)(ii) of
the Notes shall be declared effective within 30 days of the date such increase
is effective and in the case of an increase due to Section 2(b)(ii) herein,
shall be declared effective within 60 days of the date such increase is
effective; and (C) the Company shall apply to have such Additional Common Shares
listed on the New York Stock Exchange (or other Approved Markets) and such
listing shall be effective within 30 days of such increase in the Maximum Amount
(provided that if the Registration Statement is not effective by such time, such
listing may be subject to such effectiveness). The Monthly Delay Payment
provisions of Section 2(b) herein shall apply, based on the value of the
securities that are not subject to Effective Registration, to the extent that
the action to be taken under paragraphs (B) and (C) above are not taken on a
timely basis
3. Expenses of Registration. All Registration Expenses in connection
with any registration, qualification or compliance with registration pursuant to
this Agreement shall be borne by the Company, and all Selling Expenses of a
Holder shall be borne by such Holder.
4. Registration on Form S-3. The Company shall use its best efforts to
remain qualified for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act.
5. Registration Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such Registration Statement effective until all the Holders have completed
the sales or distribution described in the Registration Statement relating
thereto or, if earlier, until such Registrable Securities may be sold by Holders
that are not affiliates of the Company under Rule 144(k) (provided that the
Company's transfer agent has accepted an instruction from the Company to such
effect).
6. Holder Undertakings. Each Holder covenants with the Company as
follows:
(a) Prospectus Delivery. To the extent not exempted by Rule
153 under the Securities Act, each Holder shall comply with the prospectus
delivery requirement under the Securities Act.
(b) Transaction Information. Each Holder shall report promptly
to the Company upon completion of the distribution of such Holder's Registrable
Securities pursuant to any Registration Statement.
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(c) Exchange Act Compliance. Each Holder shall, at any time
such Holder is engaged in a distribution of the Registrable Securities under any
Registration Statement, comply to the extent required with Regulation M (as
currently in effect or as amended or any successor or similar provisions)
promulgated under the Exchange Act and shall distribute the Registrable
Securities solely in the manner described in any Registration Statement.
7. Indemnification.
(a) Company Indemnity. The Company will indemnify each Holder,
each of its officers, directors, agents and partners, and each person
controlling each of the foregoing (the "Holder Indemnified Parties"), within the
meaning of Section 15 of the Securities Act and the rules and regulations
thereunder against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus incident to any
Registration Statement prepared pursuant to the terms of this Agreement, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, or any
violation by the Company of the Securities Act or any state securities law or in
either case, any rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such Registration Statement, qualification or compliance, and will reimburse
each Holder Indemnified Party, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder Indemnified Party to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by a Holder
and stated to be specifically for use therein and provided further that the
foregoing indemnity shall not inure to the benefit of any Holder Indemnified
Party if the person asserting such claim, loss, damage, liability or expense (i)
purchased a Registrable Security and the Holder Indemnified Party, or someone
acting on the Holder Indemnified Party's behalf, did not, to the extent
required, deliver to such person at or prior to the written confirmation of the
sale of such Registrable Security a prospectus prepared for use under the
Registration Statement (as then amended or supplemented, if the Company
furnishes any amendments or supplements thereto to the Holders) and if such
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such claim, loss, damage, liability or expense; or (ii) received such a
prospectus or amendment or supplement thereto in violation of Section 2(f) of
this Agreement, if such violation caused such claim, loss, damage, liability or
expense. The indemnity agreement contained in this Section 7(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such Registration Statement is being effected, indemnify the Company,
any person controlling
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the Company (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the respective directors, officers, partners,
employees, representatives and agents of each such person (the "Company
Indemnified Parties"), each other Holder (if any), and each of their officers,
directors and partners, and each person controlling such other Holder(s) against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus incident to any Registration
Statement prepared pursuant to the terms of this Agreement, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and will reimburse the
Company Indemnified Parties and such other Holder(s) and their directors,
officers and partners, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such prospectus or
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by such Holder for use therein, and
provided the maximum amount for which such Holder shall be liable under this
indemnity shall not exceed the net proceeds received by such Holder from the
sale of the Registrable Securities pursuant to the Registration Statement in
question. The indemnity agreement contained in this Section 7(b) shall not apply
to amounts paid in settlement of any such claims, losses, damages or liabilities
if such settlement is effected without the consent of such Holder (which consent
shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under
this Section 7 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at its own expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 7 except to
the extent that the Indemnifying Party is materially and adversely affected by
such failure to provide notice. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
non-privileged information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
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8. Contribution. If the indemnification provided for in Section 7
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 8 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 7(a) or 7(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraphs.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraphs shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder shall be required to
contribute any amount in excess of the amount by which the net proceeds received
by such Holder from the sale of Registrable Securities pursuant to the
Registration Statement in question exceeds the amount of any damages that such
Holder or underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
9. Survival. The indemnity and contribution agreements contained in
Sections 7 and 8 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement or the Purchase Agreement, (ii) any
investigation made by or on behalf of any Indemnified Party or by or on behalf
of the Company, and (iii) the consummation of the sale or successive resales of
the Registrable Securities.
10. Information by Holders. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution and/or sale proposed
by such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance
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referred to in this Agreement. The intended method or methods of disposition
and/or sale ("Plan of Distribution") of such securities as so provided by such
Investor shall be included without alteration in the Registration Statement
covering the Registrable Securities and shall not be changed without written
consent of such Holder.
11. Replacement Certificates. The certificate(s) representing the
Common Shares held by any Investor (or then Holder) may be exchanged by such
Investor (or such Holder) at any time and from time to time for certificates
with different denominations representing an equal aggregate number of Common
Shares, as reasonably requested by such Investor (or such Holder) upon
surrendering the same. No service charge will be made for such registration or
transfer or exchange.
12. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Notes or Registrable Securities and all other rights granted to
the Investors by the Company hereunder may be transferred or assigned to any
transferee or assignee of any Notes or Registrable Securities; provided that (i)
such transfer or assignment, if not to an affiliate of an Investor, shall be
subject to the written consent of the Company (which shall not be unreasonably
withheld) and (ii) such transfer or assignment shall be subject to compliance
with applicable law and provided further that the transferee or assignee of such
rights agrees in writing to be bound by the registration provisions of this
Agreement.
13. Miscellaneous.
(a) Remedies. The Company and the Investors acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
(b) Jurisdiction. The Company and each of the Investors (i)
hereby irrevocably submits to the exclusive jurisdiction of the State and
federal courts in the State of Delaware for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement and (ii) hereby waives,
and agrees not to assert in any such suit action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and each of the
Investors consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
paragraph shall affect or limit any right to serve process in any other manner
permitted by law.
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(c) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be: to the Company:
Sunshine Mining and Refining Company
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx
with copies to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
to the Investors:
c/o Stonington Management Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx
with copies to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Any party hereto may from time to time change its address for notices by giving
written notice of such changed address to the other parties hereto.
(d) Indemnity. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees)
incurred as a result of such parties' breach of any representation, warranty,
covenant or agreement in this Agreement.
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(e) Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
(f) Execution in Counterpart. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.
(g) Publicity. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Investor
without its consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. The
Company agrees to deliver a copy of any public announcement regarding the
matters covered by this Agreement or any agreement or document executed herewith
to each Investor and any public announcement including the name of an Investor
to such Investor, prior to the publication of such announcements.
(h) Entire Agreement; Amendment. This Agreement, together with
the Purchase Agreement, the Notes and the agreements and documents contemplated
hereby and thereby, contains the entire understanding and agreement of the
parties, and this Agreement may not be amended, modified or terminated except by
a written agreement signed by the Company plus the Holders of two-thirds of the
principal amount of Notes issued under the Purchase Agreement to that date;
provided that for the purposes of this Section 13(h) the Holders of Common
Shares still entitled to registration rights under this Agreement will be deemed
to still be Holders of that number of Notes which were converted into such
number of Common Shares issued upon conversion which are then held by them.
(i) Governing Law. This Agreement and the validity and
performance of the terms hereof shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed and to
be performed entirely within such state, except to the extent that the law of
the State of Delaware regulates the Company's issuance of securities.
(j) Severability. The parties acknowledge and agree that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warranties, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
(k) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY.
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(l) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
(m) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party.
[Signature page follows]
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In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SUNSHINE MINING AND REFINING COMPANY
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X. Xxxxx
Executive Vice President
WESTGATE INTERNATIONAL, L.P.
By: Martley International, Inc.
Attorney-In-Fact
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
President
XXXXXXX ASSOCIATES, L.P.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Xxxx X. Xxxxxx
General Partner
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