EXHIBIT 10.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of May 13, 2002 (this "Agreement"), 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 (collectively, the "Purchasers" and each, a "Purchaser").
RECITALS
WHEREAS, the Company has proposed to create and issue a new series of
debt securities (the "New Notes") with economic terms and conditions
substantially similar to the Company's currently outstanding 13 3/8% Convertible
Senior Subordinated Notes due 2003 (the "13 3/8% Notes");
WHEREAS, the Company and each Purchaser desire, on the terms and
conditions set forth herein, that each Purchaser shall purchase an amount of New
Notes.
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:
SECTION 1. PURCHASE OF NEW NOTES FOR CASH
1.1 Purchase. Subject to the terms and conditions hereof, each Purchaser
agrees severally and not jointly to purchase at the Closing (as defined below)
and the Company agrees to sell and issue to each Purchaser at the Closing the
principal amount of New Notes as set forth opposite such Purchaser's name on
Annex A hereto. The aggregate principal amount of the New Notes to be issued
hereunder is $21,479,000. In consideration for the issuance of such New Notes,
each Purchaser shall pay to the Company at Closing the dollar amount set forth
opposite such Purchaser's name on Annex A hereto. The Purchasers shall pay an
aggregate of $16,000,160.90 for the New Notes issued hereunder.
1.2 Terms of New Notes; Indenture. The economic terms and conditions of
the New Notes will be substantially similar to the terms and conditions of the
13 3/8% Notes. The New Notes will be issued pursuant to an Indenture to be dated
as of the Closing Date, in form and substance reasonably acceptable to the
Company and the Purchasers (the "Indenture") between the Company and The Bank of
New York (or another trustee as agreed by the Company and the Purchasers), as
trustee (the "Trustee"), which Indenture will be substantially similar to the
Indenture, dated as of August 1, 2001, between the Company, as issuer, and The
Bank of New York, as trustee, with respect to the 13 3/8% Notes.
(Notwithstanding the foregoing, for purposes of the Indenture governing the New
Notes, the term "Additional Interest" shall be defined to mean the sum of (i)
$200.625 and (ii) the amount of interest payable per $1,000 principal amount of
New Notes from the Closing Date to June 30, 2002, and less any interest
actually paid or provided for with respect to such New Notes prior to the
conversion date. In addition, a holder of New Notes shall be entitled to receive
such Additional Interest if such New Notes are converted to Common Stock on or
prior to December 31, 2003). In addition, the Indenture shall contain provisions
reasonably satisfactory to the Company and the Purchasers to the effect that:
(a) during the period beginning on the Closing Date and ending
nine months after the Closing Date, the Company shall not (and shall
cause its subsidiaries not to), without the prior written consent of the
holders of sixty percent (60%) of the then outstanding principal amount
of New Notes, (i) incur or guarantee any indebtedness that is senior to
or pari passu with the New Notes in right of payment if the
consideration for such issuance is other than cash or (ii) issue for
cash consideration any indebtedness that is senior to or pari passu with
the New Notes in right of payment if the proceeds of such consideration
are to be used, directly or indirectly, to pay, redeem or retire any of
the Company's 6 3/8% Convertible Subordinated Debentures due 2004, any
of the Company's 7 1/4% Convertible Subordinated Debentures due 2005 or
any of the Company's 13 3/8% Convertible Senior Subordinated Notes due
2003 (or any refinancings thereof);
(b) during the period beginning on the Closing Date and ending
upon the effectiveness of the Shelf Registration Statement (subject to
the re-commencement of such period if such registration statement ceases
to be effective or usable by the Purchasers for any reason for periods
other than the mutually-agreed blackout periods contemplated by the
Registration Rights Agreement), the Company shall not (and shall cause
its subsidiaries not to), without the prior written consent of the
Purchasers, incur or guarantee any indebtedness or issue any equity
securities, except for issuances of equity pursuant to the existing
requirements of the Company's obligations under (i) the Company's
convertible debt securities outstanding on the date hereof; (ii) the
Company's employee benefit plans existing on the date hereof; and (iii)
the New Notes; and
(c) that if the Company effectuates a reverse stock split of the
Company's common stock, par value $1.00 per share (the "Common Stock")
prior to 90 days after the Securities and Exchange Commission (the
"SEC") has declared effective the Shelf Registration Statement (as
defined below), the conversion price related to the New Notes shall be
adjusted on the 15th day following the expiration of the Pricing Period
(as defined below) by multiplying the existing conversion price by a
fraction, the numerator of which shall be the volume weighted average
price of the Common Stock for the period beginning on the 11th trading
day following the effective date of the reverse stock split and ending
on the 30th trading day following the effective date of the reverse
stock split (such period being the "Pricing Period") and the denominator
of which shall be the volume weighted average price of the Common Stock
for the five trading day period ending on the earlier of (i) the date
that the Company publicly discloses its intention to effectuate (or
consider) such reverse stock split through a press release, proxy
materials or other means or (ii) the date that the Company publicly
discloses that it has received any notice or other communication from
the New York Stock Exchange to the effect that the Common Stock will be
de-listed.
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Notwithstanding the foregoing, nothing in the Indenture shall prohibit or
restrict the Company (or any subsidiary) from entering into one or more senior
secured credit facilities and granting liens against the assets of the Company
and its subsidiaries, provided that the proceeds of any such senior secured
credit facility may not be used, directly or indirectly, to pay, redeem or
retire any of the Company's 6 3/8% Convertible Subordinated Debentures due 2004,
any of the Company's 7 1/4% Convertible Subordinated Debentures due 2005 or any
of the Company's 13 3/8% Convertible Senior Subordinated Notes due 2003 (or any
refinancings thereof). The Company shall not take (or permit any of its
subsidiaries to take) any action prior to the Closing Date that would be
prohibited by the foregoing provisions subsequent to the Closing Date.
1.3 Registration Rights. The New Notes will be subject to the
registration rights set forth in a registration rights agreement among the
Company and the Purchasers, dated as of Closing Date, and in form and substance
reasonably acceptable to the Company and the Purchasers (the "Registration
Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company
will agree, among other things, to use its best efforts to file with the SEC a
shelf registration statement pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") relating to the resale of the New Notes
and the Common Stock issuable upon conversion of the New Notes (the "Shelf
Registration Statement") and to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required, in order to permit
the prospectus forming part thereof to be usable by Purchasers for a period of
two years after the Closing Date or, if earlier, when all of the registrable
securities covered by such Shelf Registration Statement (i) have been sold
pursuant to the Shelf Registration Statement in accordance with the intended
method of distribution thereunder, (ii) become eligible for resale pursuant to
Rule 144(k) under the 1933 Act or (iii) cease to be registrable securities under
the Registration Rights Agreement. The Registration Rights agreement will
provide, among other things, that if the Shelf Registration Statement is not
declared effective by the SEC within 90 days after the Closing Date, then on the
91st day after the Closing Date, the Company shall make a cash payment to the
holders of the New Notes equal to $7.4492 for each $1,000 principal amount of
the New Notes held. If the Shelf Registration Statement is not declared
effective by the SEC within 120 days after the Closing Date, then on the 121st
day after the Closing Date (or the 5th day after the date on which such Shelf
Registration Statement ceases to be effective or usable by the Purchasers for
any reason for any period other than the mutually-agreed blackout periods
contemplated by the Registration Rights Agreement) and on each date which is 30
days after any such date, the Company shall make a cash payment to the holders
of the New Notes equal to $10 for each $1,000 principal amount of the New Notes
held, until such time as the Shelf Registration Statement shall be declared
effective by the SEC, at which time the Company's obligation to make such cash
payments shall cease. No additional interest shall be payable on the New Notes
due to any delay in having the Shelf Registration Statement declared effective
by the SEC.
SECTION 2. CLOSING.
2.1 Closing. Upon satisfaction of the conditions set forth in Sections
6.1 and 6.2, the closing of the transactions contemplated hereby shall take
place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxxxxx, XX 00000, on May 17, 2002 (the "Closing Date"), or at such other time
and place as the parties may agree (the "Closing").
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2.2 Delivery at the Closing. Deliveries of certificates for the New
Notes shall be made at the Closing and payment of the purchase price for the New
Notes shall be made by the Purchasers via wire transfer of immediately available
funds contemporaneous with Closing to the Company at Bank of America, Coeur
d'Alene, Idaho, ABA #000000000, Account #00000000, Beneficiary: Coeur d'Xxxxx
Xxxxx Corporation, Reference: New Note Proceeds. Certificates for the Notes
shall be in such denominations as the Purchasers may request in writing prior to
the Closing Time. Each global certificate representing New Notes shall be
registered in the name of Cede & Co. pursuant to the Letter of Representations
with The Depository Trust Company ("DTC"). DTC will credit the accounts of the
Purchasers to reflect their purchase of the New Notes acquired by them
hereunder.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Purchasers, as of the date hereof and as of the
Closing Date, except as set forth in any publicly available report, schedule,
form, statement and other document filed by the Company with the SEC on or after
March 29, 2002 and on or before the date hereof (together with other publicly
available documents filed by the Company with the SEC on or after March 29, 2002
and on or prior to the date hereof that revise or supersede earlier filed
documents, the "SEC Reports"), as follows:
3.1 SEC Reports. The Company has timely filed all required reports with
the SEC since January 1, 1999. As of their respective filing dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Reports. None of the SEC Reports as of their respective
dates contained, and none of the SEC Reports as of the date hereof contains, any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (except to the extent corrected by a subsequently filed SEC Report).
3.2 Financial Statements. The financial statements of the Company
included in the SEC Reports (a) complied as of their respective dates of filing
with the SEC in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto, (b)
have been prepared (i) in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by Regulation S-X promulgated by the SEC), (ii) on a consistent basis for all
periods presented (except as may be indicated in the notes thereto), and (iii)
in accordance with the books and records of the Company, (c) are complete and
correct in all material respects, and (d) fairly present in all material
respects the financial condition of the Company as at said dates, and the
results of operations and cash flows for the periods stated (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
3.3 No Material Adverse Change in Business. Since December 31, 2001,
except as otherwise stated in the SEC Reports, as contemplated therein or as set
forth in Schedule 5.3 attached hereto, there has not been (A) any material
adverse change in the condition, financial or otherwise, or in the revenues,
earnings, business or affairs of the Company and its subsidiaries considered as
a whole, whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) any transaction entered into by the Company or any of its
subsidiaries,
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other than in the ordinary course of business, that is material to the Company
and its subsidiaries considered as a whole, or (C) any dividend or distribution
of any kind declared, paid or made by the Company on any class or series of its
capital stock other than regular quarterly dividends on the Company's Common
Stock.
3.4 Due Incorporation and Good Standing of the Company. 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, the Indenture, the New Notes, the Registration Rights
Agreement; the Company is duly qualified or registered as a foreign corporation
and is in good standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
properties or the conduct of business, except where the failure to so qualify or
register would not have a Material Adverse Effect.
3.5 Due Organization and Good Standing of Significant Subsidiaries. Each
subsidiary of the Company that is a "significant subsidiary" (as defined in
Section 1-02 of Regulation S-X, a "Significant Subsidiary") has been duly
organized and is validly existing as a corporation, limited partnership, limited
liability company or other entity, as the case may be, in good standing under
the laws of its jurisdiction of organization (to the extent the "good standing"
concept is applicable in the case of any jurisdiction outside the United
States), with all requisite power and authority to own, lease and operate its
properties and to conduct its business as being conducted; and each Significant
Subsidiary is duly qualified or registered as a foreign corporation, limited
partnership or limited liability company or other entity, as the case may be, to
transact business and is in good standing in each jurisdiction in which such
qualification or registration is required (to the extent the "good standing"
concept is applicable in the case of any jurisdiction outside the United
States), whether by reason of the ownership or leasing of properties or the
conduct of business, except where the failure to so qualify or register would
not have a Material Adverse Effect.
3.6 Capital Stock Duly Authorized and Validly Issued. All of the issued
and outstanding capital stock of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; all of the issued and
outstanding capital stock or other equity interests of each Significant
Subsidiary of the Company has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company, directly or through
subsidiaries (except for directors' qualifying shares), free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equitable right
(collectively, "Liens"); and none of the issued and outstanding capital stock or
other equity interests of the Company or any of its Significant Subsidiaries was
issued in violation of any preemptive or similar rights arising by operation of
law, under the charter, bylaws or other organizational documents of the Company
or any of its subsidiaries or under any agreement to which the Company or any of
its subsidiaries is a party.
3.7 Capitalization. The authorized, issued and outstanding capital stock and
long-term indebtedness of the Company is as set forth in Schedule 3.7 attached
hereto, as of the dates set forth on such schedule; and there has not been (A)
any subsequent issuance of capital stock of the Company, except for subsequent
issuances, if any, pursuant to any outstanding securities or
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benefit or compensation plans described in the SEC Reports or (B) any subsequent
increase exceeding five percent of the amount shown under the heading "Other
long-term liabilities", if any, in the outstanding principal amount of other
long-term liabilities, except as otherwise disclosed in the SEC Reports.
3.8 Authorization of Agreements. 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"). Each of the Indenture, the New Notes and the
Registration Rights Agreement has been duly authorized, and when executed and
delivered by the Company upon the Closing Date will constitute a valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent enforceability may be limited by
the Enforceability Exceptions and except that enforcement of rights to
indemnification and contribution contained therein may be limited by applicable
federal or state laws or the public policy underlying such laws.
3.9 Not an Investment Company. The Company has conducted, and as of the
date hereof intends in the future to conduct, its affairs in such a manner as to
ensure that it is not and will not become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), and the Rules and Regulations
thereunder.
3.10 Absence of Defaults and Conflicts. Neither the Company nor any of
its Significant Subsidiaries is in violation of its charter, bylaws or other
organizational documents, as the case may be; none of the other subsidiaries of
the Company are in violation of their respective charter, bylaws or other
organizational documents, as the case may be, in any material respect; neither
the Company nor any of its subsidiaries is in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by which it or
any of them may be bound or to which any of their respective properties or
assets is subject (collectively, "Agreements and Instruments"), except for such
defaults under Agreements and Instruments that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this Agreement,
the Indenture and the Registration Rights Agreement by the Company, the
issuance, sale and delivery of the New Notes, the consummation of the
transactions contemplated by this Agreement, the Indenture and the Registration
Rights Agreement, and compliance by the Company with the terms of this
Agreement, the Indenture, the Registration Rights Agreement, the New Notes, have
been duly authorized by all necessary corporate action on the part of the
Company and 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 pursuant to, any
Agreements and Instruments, except for such conflicts, breaches, defaults or
Liens that, singularly or in the aggregate, would not result in a Material
Adverse Effect, nor will any of the foregoing result in any violation of the
provisions of the charter, bylaws or other organizational documents of the
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Company or any of its subsidiaries or any violation by the Company or any of its
subsidiaries of any applicable laws, statutes, rules, regulations, judgments,
orders, writs or decrees of any government, governmental authority, agency or
instrumentality or court (collectively, "Governmental Entities").
3.11 Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company, has
been threatened, and the Company has not received written notice of any existing
or threatened labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
3.12 Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any Governmental Entity, now
pending, or, to the knowledge of the Company, threatened, against the Company or
any of its subsidiaries, which is not disclosed in the SEC Reports and which
would reasonably be expected to result in a Material Adverse Effect, or which
could materially and adversely affect the consummation of the transactions
contemplated by this Agreement, the Indenture or the Registration Rights
Agreement or the performance by the Company of its obligations hereunder,
thereunder or under the New Notes; and the aggregate of all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is a
party or of which any of their respective properties or assets is the subject
which are not described in the SEC Reports, including ordinary routine
litigation incidental to the business, would not reasonably be expected to
result in a Material Adverse Effect.
3.13 Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
Governmental Entity is necessary or required for the execution, delivery or
performance by the Company of its obligations under this Agreement, the
Indenture, the New Notes, the Registration Rights Agreement, or the consummation
by the Company of the transactions contemplated by this Agreement, the Indenture
or the Registration Rights Agreement, except as may be required under the
securities laws of the various states and foreign jurisdictions in which the New
Notes will be offered and sold or as may be required by the Federal and state
securities laws with respect to the Company's obligations under the Registration
Rights Agreement.
3.14 Possession of Licenses and Permits. Each of the Company and its
subsidiaries possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
Governmental Entities necessary to conduct the business now conducted by them,
except where the failure to possess any such Governmental License would not
result in a Material Adverse Effect; each of the Company and its subsidiaries is
in compliance with the terms and conditions of all Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate, result in
a Material Adverse Effect; all Governmental Licenses are valid and in full force
and effect, except where the invalidity of Governmental Licenses or the failure
of Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification of
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any Governmental Licenses which would, singly or in the aggregate, result in a
Material Adverse Effect.
3.15 Title to Property. Each of the Company and its subsidiaries has
good and marketable title to all of their respective real properties owned by
them and good title to their respective personal properties owned by them, in
each case free and clear of all Liens, except (i) as disclosed in the SEC
Reports or (ii) as does not have a Material Adverse Effect and does not
interfere in any material respect with the use made and proposed to be made of
such property by the Company and its subsidiaries considered as a whole; and all
of the leases and subleases material to the business of the Company and its
subsidiaries considered as a whole, and under which the Company or any of its
subsidiaries holds properties, are in full force and effect and neither the
Company nor any of its subsidiaries has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of such leases or subleases, or affecting or questioning
the rights of such entity to the continued possession of the leased or subleased
premises under any such lease or sublease, except where such claims would not
reasonably be expected to result in a Material Adverse Effect.
3.16 Intellectual Property. Each of the Company and its subsidiaries
owns or possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") presently employed
by them in connection with the business now operated by them or reasonably
necessary in order to conduct such business, except where the failure to own,
possess or acquire any such Intellectual Property would not reasonably be
expected to result in a Material Adverse Effect; and neither the Company nor any
of its subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy would, singly or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
3.17 No Registration. Subject to the accuracy of the representations of
the Purchasers, and except as otherwise contemplated in the Registration Rights
Agreement, it is not necessary in connection with the offer, sale and delivery
of the New Notes to the Purchasers in the manner contemplated by this Agreement
(it being understood that the aforementioned representation shall not cover any
subsequent resales of the New Notes) to register the New Notes under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "1939 Act").
3.18 Ore Reserve Reports. All of the information provided by the Company
in connection with the preparation of its ore reserve reports was, at the time
provided, and continues to be as of the date hereof, true and correct in all
material respects. The Company believes that all of the assumptions made by its
internal Ore Reserve Committee and/or independent third parties in reaching the
conclusions stated in the ore reserve reports are
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reasonable and appropriate, and that the production estimates of the Company
which are based on the ore reserve reports are reasonable and appropriate.
3.19 Mining Rights. The Company or each of its subsidiaries holds
freehold title, mining leases, mining claims or other conventional proprietary
interests or rights recognized in the jurisdiction in which each property
described in the SEC Reports is located, in the ore bodies and mineral
inventories described in the SEC Reports (and all properties respectively
relating thereto) under valid, subsisting and enforceable title documents,
contracts, leases, licenses of occupation, mining concessions, permits, or other
recognized and enforceable instruments and documents, sufficient to permit the
Company or each of its subsidiaries, as the case may be, to explore for,
extract, exploit, remove, process and refine the minerals relating thereto,
except where the failure to so hold such interests or rights would not have a
Material Adverse Effect. In addition, either the Company or each of its
subsidiaries has all necessary surface rights, water rights and rights in water,
rights of way, licenses, easements, ingress, egress and access rights, and all
other necessary rights and interests granting the Company or each of its
subsidiaries, as the case may be, the rights and ability to explore for, mine,
extract, and remove the minerals derived from the ore bodies and mineral
inventories described in the SEC Reports and to transport for refinement or
market or distribute the ore and metals produced, all as referred to in the SEC
Reports, with only such exceptions as are described in the SEC Reports or as do
not have a Material Adverse Effect. Each of the aforementioned interests and
rights is currently in good standing except for those interests and claims
which, if not kept in good standing, would not have a Material Adverse Effect.
3.20 Independent Auditors. Ernst & Young LLP, who has reported upon the
fiscal year 1998 audited financial statements of the Company, and Xxxxxx
Xxxxxxxx LLP, who has reported upon the fiscal year 1999, fiscal year 2000 and
fiscal year 2001 audited financial statements of the Company, are, and during
the periods covered by the reports were, independent of the Company as defined
under the Securities Act.
3.21 Regulation M. The Company has not taken and will not take, directly
or indirectly, any action resulting in a violation of Rule 102 of Regulation M
promulgated under the Exchange Act or designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the distribution of the New Notes.
3.22 Environmental Matters. Except as disclosed in the SEC Reports and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, (i) neither the Company nor any of its subsidiaries is in violation of
or has liability under any federal, state, local, municipal or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials"), to the manufacture, processing,
distribution, use, treatment, storage, disposal,
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transport or handling of Hazardous Materials, or to the restoration, reclamation
of or compensation for natural resources (collectively, "Environmental Laws"),
(ii) the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (iii) there are no pending or, to the
knowledge of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (iv) to the knowledge of the
Company, there are no events or circumstances that might reasonably be expected
to form the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
3.23 Common Stock. Except as set forth on Schedule 3.23 attached hereto,
the Company has not received any notice from the New York Stock Exchange
regarding the de-listing of its Common Stock and the board of directors of the
Company has not taken any action to de-list the Company's Common Stock from the
New York Stock Exchange or to effect any stock split, reverse stock split or
similar transaction relating to the Company's Common Stock.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each
Purchaser represents and warrants to the Company that:
4.1 Investment Intent. The Purchaser is acquiring the New Notes 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 Purchaser is
purchasing the New Notes for investment purposes and not with a view to the sale
or distribution of any New Notes in contravention of the Securities Act.
4.2 No Public Offering. The Purchaser is able to bear the economic risk
of its investment in the New Notes. The Purchaser is aware that it must be
prepared to hold the New Notes for an indefinite period and that the New Notes
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 New Notes are being issued by the Company without any public offering within
the meaning of Section 4(2) of the Securities Act. The Purchaser understands
that the Company's reliance on such exemption is predicated on the Purchaser's
representations set forth herein.
4.3 Receipt of Information. The Purchaser believes that it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the New Notes. The Purchaser has had an opportunity to discuss the
terms and conditions of the offering of the New Notes 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 Purchaser or to which the Purchaser had access. The
Purchaser is not subscribing for the New Notes as a result of, or subsequent, to
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
Purchaser in connection with investments in securities generally.
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4.4 Securities will be "Restricted Securities". The Purchaser
understands that the New Notes, and any shares of Common Stock issued upon any
conversion thereof occurring prior to the effectiveness of the Shelf
Registration Statement, will be "restricted securities" as that term is defined
in Rule 144 promulgated under the Securities Act and, accordingly, that the New
Notes may not be sold, transferred or otherwise disposed of and must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. The Purchaser understands and
agrees that, except as provided herein and in the Registration Rights Agreement,
the Company is not under any obligation to register the New Notes under the
Securities Act. The Purchaser is aware that the New Notes (and any common stock
issued on the conversion thereof) 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.
4.5 Accredited Purchaser. The Purchaser has been advised or is aware of
the provisions of Regulation D under the Securities Act relating to the
accreditation of Purchasers, and the Purchaser is an "accredited purchaser" as
defined in Rule 501 of Regulation D promulgated under the Securities Act.
4.6 Sophistication of the Purchaser. The Purchaser has such knowledge
and experience in financial and business matters that the Purchaser 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 Purchaser
acknowledges that investment in the New Notes is highly speculative and involves
a substantial and high degree of risk of loss of the Purchaser's entire
investment. The Purchaser 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 has no need for liquidity
of the investment in the New Notes and could afford complete loss of such
investment.
4.7 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 Purchaser.
4.8 Due Organization and Good Standing of the Purchaser. The Purchaser
has been duly organized and is validly existing as an entity in good standing
under the laws of the state of its organization, with all requisite power and
authority under such laws to enter into and perform its obligations under this
Agreement and the Registration Rights Agreement.
4.9 Authorization of Agreements. This Agreement has been duly
authorized, executed and delivered by the Purchaser and constitutes a valid and
legally binding agreement of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as enforcement is limited by the
Enforceability Exceptions. Prior to the Closing, the Registration Rights
Agreement will have been duly authorized, and when executed and delivered by the
Purchaser upon the Closing Date will constitute a valid and legally binding
agreement of the Purchaser, enforceable against the Purchaser in accordance with
its terms, except to the extent enforceability may be limited by the
Enforceability Exceptions and except that enforcement of rights to
indemnification and contribution contained therein may be limited by applicable
federal or state laws or the public policy underlying such laws.
11
4.10 Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any Governmental Entity, now
pending, or, to the knowledge of the Purchaser, threatened, against the
Purchaser which could materially and adversely affect the consummation of the
transactions contemplated by this Agreement or the performance by the Purchaser
of its obligations hereunder.
4.11 Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
Governmental Entity is necessary or required for the execution, delivery or
performance by the Purchaser of its obligations under this Agreement, the
Registration Rights Agreement, or the consummation by the Purchaser of the
transactions contemplated by this Agreement or the Registration Rights
Agreement, except as may be required under the securities laws of the various
states and foreign jurisdictions in which the New Notes will be offered and sold
or as may be required by the Federal and state securities laws with respect to
the Company's obligations under the Registration Rights Agreement.
4.12 Financial Wherewithal. Purchaser has and will have on the Closing
Date sufficient liquidity to pay the cash consideration set forth opposite its
name on Annex A attached hereto.
SECTION 5. COVENANTS.
5.1 Notices of Certain Events. From the date hereof to the Closing Date,
each party shall promptly notify the other parties, of:
(i) the receipt by the Company or any of the Purchasers of any
notice or other communication from any person alleging that the consent
of such person is or may be required in connection with the transactions
contemplated by this Agreement;
(ii) the receipt by the Company or any of the Purchasers of any
notice or other communication from any governmental entity in connection
with the transactions contemplated by this Agreement;
(iii) the Company or any of the Purchasers obtaining knowledge of
any actions, suits, claims investigations or proceedings commenced or
threatened against, relating to or involving or otherwise affecting the
Company or any of the Purchasers, as the case may be, or any of their
respective subsidiaries which relate to the consummation of the
transactions contemplated by this Agreement; and
(iv) the Company or any of the Purchasers obtaining knowledge of
the occurrence, or failure to occur, of any event which occurrence or
failure to occur will be likely to cause (i) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any
material respect, or (ii) any material failure of any party to comply
with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement.
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5.2 Efforts.
(a) The Company shall cooperate and use commercially reasonable
efforts to take, or cause to be taken, all appropriate action required
of the Company, and to make, or cause to be made, all filings required
to be made by the Company necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without
limitation, commercially reasonable efforts to (i) obtain, prior to the
Closing Date, all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities
and parties to contracts with the Company required to be obtained by the
Company, and (ii) defend against and respond to any action, suit,
proceeding or investigation against the Company relating to the
transactions contemplated by this Agreement, in each case as are
necessary for consummation of the transactions contemplated by this
Agreement and to fulfill the conditions the Company is required to
fulfill with respect to the transactions contemplated hereby.
(b) Each Purchaser shall cooperate and use commercially
reasonable efforts to take, or cause to be taken, all appropriate action
required of each such Purchaser, and to make, or cause to be made, all
filings required to be made by each such Purchaser necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including,
without limitation, commercially reasonable efforts to (i) obtain, prior
to the Closing Date, all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities
and parties to contracts with each such Purchaser required to be
obtained by each such Purchaser and (ii) defend against and respond to
any action, suit, proceeding or investigation against each such
Purchaser relating to the transactions contemplated by this Agreement,
in each case as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions each such
Purchaser is required to fulfill with respect to the transactions
contemplated hereby.
5.3 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 Purchasers of this Agreement,
the Indenture, the Registration Rights Agreement and such other documents as may
be required in connection with the offering, purchase, sale and delivery of the
New Notes, (ii) the preparation, issuance and delivery of the certificates for
the New Notes to the Purchasers, (iii) the fees and disbursements of the
Company's counsel, accountants and other advisors, (iv) any rating agency fees
and (v) the fees and expenses of the Trustee appointed under the Indenture,
including the fees and disbursements of counsel for the Trustee. In addition,
the Company agrees to promptly reimburse the Purchasers for the reasonable fees
and expenses of Xxxxxx & Xxxxxxx, counsel for the Purchasers, in connection with
the transactions contemplated hereby (including the reasonable fees and expenses
incurred in the preparation of any 13D/13G filing which any Purchaser is
required to make as a result of the transactions contemplated herein) upon
submission of reasonable invoices for the services of Xxxxxx & Xxxxxxx (subject
to maintenance of the attorney-client privilege between Xxxxxx & Xxxxxxx and the
Purchasers).
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5.4 Agreement Regarding Conversion; Voting Agreements.
(a) Limitations on Conversion. Each Purchaser agrees that it will
not convert New Notes into shares of Common Stock if, as a result of
such conversion, such Purchaser shall hold shares of Common Stock
constituting that represent more than 10% of the number of the
then-outstanding shares of Common Stock (based on the number of
outstanding shares disclosed on the cover page of the Company's most
recent 10-K or 10-Q) (the "Maximum Percentage"); provided, however, that
no such conversions shall be prohibited if the Purchaser sells, disposes
or otherwise transfers (or enters into a binding agreement to sell,
dispose or otherwise transfer) any shares held by such Purchaser that
are in excess of the Maximum Percentage within 10 days of any such
conversion.
(b) Voting. If any Purchaser converts the New Notes into shares
of Common Stock, then such Purchaser agrees until December 31, 2003 that
it will, at any meeting of the stockholders of the Company, however
called, or in connection with any written consent of the stockholders of
the Company, vote (or cause to be voted) the shares of Common Stock so
issued upon such conversion and held of record and beneficially by such
party in a manner consistent, if at all, with the Other Stockholders'
Vote (as defined below) on each and every matter proposed for approval
by the stockholders of the Company (other than any proposal to
effectuate a reverse stock split of the Common Stock). In addition, each
Purchaser agrees until December 31, 2003 to vote any shares of Common
Stock acquired by it and held beneficially by such party, if any, on or
about the Closing Date, upon conversion of certain of the Company's debt
securities, consistent with the foregoing provisions, if at all. The
term "Other Stockholders' Vote" shall mean the results of voting on such
matter that shall result from the votes cast by all other stockholders
(other than stockholders who are officers of the Company) prior to the
casting of votes by the Purchaser on such matter.
(c) Until December 31, 2003, each Purchaser agrees that it will
cause (i) any Affiliate (as defined below) or (ii) any other party with
whom it has an agreement regarding the voting of Common Stock, who has
acquired shares of Common Stock or New Notes subject to the provisions
of Section 5.4(b) from the Purchaser, to agree for the benefit of the
Company to cast their votes in accordance with Section 5.4(b).
"Affiliate" shall mean (w) any person that directly or indirectly,
through one or more intermediaries, controls or is controlled by or is
under common control with the Purchaser; (x) any person who, from time
to time, is a spouse or immediate relative of the Purchaser; (y) any
person who, from time to time, is an officer, director or manager of the
Purchaser; or (z) any person who, directly or indirectly, is the
beneficial owner of 50% or more of any class of equity securities or
other ownership interests of the Purchaser, or of which the Purchaser is
directly or indirectly the owner of 50% or more of any class of equity
securities or other ownership interests.
(d) Survival: Specific Performance. The obligations of each
Purchaser under this Section 5.4 shall survive the Closing. The parties
hereto agree that damages would be an inadequate remedy for the Company
in the event of breach or threatened breach of this Section 5.4 and
thus, in any such event, the Company may, either with or without
14
pursuing any potential damage remedies, immediately obtain and enforce
an injunction prohibiting any Purchaser from violating this Section 5.4.
5.5 Listing of Common Stock. The Company shall cause all shares of
Common Stock issuable upon conversion of the New Notes to be listed on the New
York Stock Exchange.
5.6 No Market Manipulation. Each Purchaser agrees that, during the
Pricing Period and at all other times, it will not to use or employ, in
connection with the purchase or sale of any security of the Company, any
manipulative or deceptive device or contrivance in contravention of such rules
and regulations as the SEC may prescribe.
SECTION 6. CONDITIONS TO CLOSING.
6.1 Conditions to the Purchasers' Obligations to Close. The obligations
of each Purchaser to effect the transactions contemplated hereby are subject to
the fulfillment, prior to or at the Closing, of the following conditions:
(a) Representations and Warranties; Performance. The
representations and warranties of the Company contained in Section 3
shall be true and correct when made and as of the Closing with the same
effect as though such representations and warranties had been made on
and as of the date of the Closing, except to the extent of changes
caused by transactions contemplated herein (it being understood and
agreed by the Purchasers that, in the case of any representation and
warranty of the Company contained herein which is not hereinabove
qualified by application thereto of a materiality standard (including
for this purpose Material Adverse Effect), such representation and
warranty need be true and correct only in all material respects in order
to satisfy as to such representation or warranty the condition precedent
set forth in the foregoing provisions of this Section 6.1(a)). The
Company shall have performed and complied in all material respects with
all agreements, obligations and conditions contained in this Agreement
that are required to be performed by it or with which it is required to
have complied with on or before the Closing.
(b) Consents, Permits and Waivers. The Company shall have
obtained any and all material consents, approvals, licenses, permits,
orders, authorizations, waivers and the like required to be obtained by
the Company necessary for consummation of the transactions contemplated
by this Agreement.
(c) Absence of Litigation. No proceeding challenging this
Agreement or the transactions contemplated hereby or thereby, or seeking
to obtain damages or prohibit, alter, prevent or delay the Closing,
shall have been instituted against the Company before any Governmental
Entity and shall be pending.
(d) Compliance Certificate. The Company shall deliver to the
Purchasers at the Closing a certificate signed by an executive officer
of the Company stating that the Company has complied with or satisfied
each of the conditions to the Purchasers' obligation to consummate the
Closing set forth in Sections 8.1(a), (b) and (c), unless waived in
writing by the Purchasers.
15
(e) Registration Rights Agreement. The Registration Rights
Agreement shall be in form and substance reasonably satisfactory to the
Purchasers and shall have been executed by the Company on or prior to
such Closing.
(f) Indenture and New Notes. The Indenture and the New Notes
shall be in form and substance reasonably satisfactory to the Purchasers
and shall have been executed by the Company on or prior to such Closing.
(g) Opinion of Counsel. The Company shall deliver to the
Purchasers at the Closing opinions of Xxxxxx, Xxxx & Xxxxxxxx LLP and
other counsel for the Company reasonably acceptable to Purchasers in the
form as set forth on Annex B.
(h) Legal Prohibition. The transactions contemplated hereby shall
not be prohibited by any law or governmental order or regulation.
(i) Listing of Common Stock. The Company shall have caused all
shares of Common Stock issuable upon conversion of the New Notes to be
listed on the New York Stock Exchange.
6.2 Conditions to the Company's Obligations to Close. The obligations of
the Company to effect the transactions contemplated hereby are subject to the
fulfillment, prior to or at the Closing, of the following conditions:
(a) Representations and Warranties; Performance. The
representations and warranties of the Purchasers contained in Section 4
hereof shall be true and correct on and as of the Closing (it being
understood and agreed by the Company that, in the case of any
representation and warranty of the Purchasers contained herein which is
not hereinabove qualified by application thereto of a materiality
standard (including for this purpose Material Adverse Effect), such
representation and warranty need be true and correct only in all
material respects in order to satisfy as to such representation or
warranty the condition precedent set forth in the foregoing provisions
of this Section 6.2(a). The Purchasers shall have performed and complied
in all material respects with all agreements, obligations, and
conditions contained in the Agreement that are required to be performed
by it or with which it are required to have complied with on or before
the Closing.
(b) Consents, Permits and Waivers. The Purchasers shall have
obtained any and all material consents, approvals, licenses, permits,
orders, authorizations, waivers and the like required to be obtained by
the Purchasers necessary for consummation of the transactions
contemplated by this Agreement.
(c) Absence of Litigation. No proceeding challenging this
Agreement or the transactions contemplated hereby or thereby, or seeking
to prohibit, alter, prevent or delay the Closing, shall have been
instituted against the Purchasers before any Governmental Entity and
shall be pending.
(d) Legal Prohibition. The transactions contemplated hereby shall
not be prohibited by any law or governmental order or regulation.
16
(e) Tax Deliveries. The Purchasers shall have executed and
delivered to the Company a Form W-9 or Form W-8, as applicable, and a
FIRPTA certificate.
(f) Registration Rights Agreement. The Registration Rights
Agreement shall be in form and substance reasonably satisfactory to the
Company and shall have been executed by the Purchasers on or prior to
such Closing.
(g) Indenture and New Notes. The Indenture and the New Notes
shall be in form and substance reasonably satisfactory to the Company.
SECTION 7. TERMINATION OF AGREEMENT.
7.1 Termination. This Agreement may be terminated (except for provisions
that expressly contemplate performance after termination) and the transactions
contemplated hereunder abandoned at any time prior to the Closing only as
follows:
(a) by the Purchasers, upon notice to the Company, if the
conditions set forth in Section 6.1 shall not have been satisfied on or
prior to June 15, 2002;
(b) by the Company, upon notice to the Purchasers, if the
conditions set forth in Section 6.2 shall not have been satisfied on or
prior to June 15, 2002;
(c) at any time by mutual agreement of the Company and the
Purchasers;
(d) by the Purchasers, if there has been any material breach of
any representation or warranty or any material breach of any covenant of
the Company contained herein and the same has not been cured within
fifteen days after notice thereof, (it being understood and agreed by
the Company and the Purchasers that, in the case of any representation
or warranty of the Company contained herein that is qualified by a
materiality standard (including for this purpose Material Adverse
Effect), such representation or warranty will be deemed to have been
breached for purposes of this Section 7.1(d) if such representation or
warranty was not true and correct in all respects at the time such
representation or warranty was made by the Company); or
(e) by the Company, if there has been any material breach of any
representation, warranty or any material breach of any covenant by the
Purchasers contained herein and the same has not been cured within
fifteen days after notice thereof (it being understood and agreed by the
Purchasers and the Company that, in the case of any representation and
warranty of the Purchasers contained herein that is qualified by a
materiality standard (including for this purpose Material Adverse
Effect), such representation or warranty will be deemed to have been
breached for purposes of this Section 7.1(e) if such representation or
warranty was not true and correct in all respects at the time such
representation or warranty was made by the Purchasers).
7.2 Liability. Except as otherwise provided herein, any termination
pursuant to this Section 7 shall be without liability on the part of any party,
unless such termination is the result of a material breach of this Agreement by
a party to this Agreement (which is not cured as
17
permitted under Section 7.1(d) or 7.1(e)) in which case such breaching
party shall remain liable for such breach notwithstanding any termination of
this Agreement.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION.
8.1 Indemnification.
(a) The Company (the "Indemnifying Party") hereby agrees to
indemnify the Purchasers and their 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, (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 New Notes or Common Stock issued upon
conversion thereof and 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 by 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
8.1 shall survive the termination of this Agreement; provided that the
warranties and representations of the Company and each Purchaser
contained in or made pursuant to this Agreement shall expire and
terminate on the date that is eighteen (18) months following 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
Indemnifying Party may have to any Indemnified Party under this
Agreement or otherwise unless the Indemnifying Party is materially
adversely
18
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.
8.2 Contribution.
If the indemnification provided for in Section 8.1 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 Purchasers 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 8.1, 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 8.2 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.
19
SECTION 9. MISCELLANEOUS.
9.1 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 the Purchasers shall be
directed to the names and addresses of the Purchasers 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.
9.2 Assignment. Neither the Company nor the Purchasers may assign or
delegate (whether by contract or operation of law, it being agreed that a merger
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.
9.3 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 the Purchasers.
9.4 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.
9.5 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.
9.6 Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
9.7 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.
9.8 Confidentiality. No disclosure shall be made by the Company to any
person or entity of (i) the fact that this Agreement has been entered into or
(ii) the identity of any of the Purchasers, without the prior written consent of
the Purchasers, except on a need to know basis to directors, officers,
employees, agents and/or representatives of the Company who have agreed to the
limitations on use imposed by this Agreement, unless in the opinion of counsel
for the Company, disclosure is required to be made under applicable law,
provided that, if the Company proposes to make any disclosure based upon the
opinion of its counsel as aforesaid, the Company
20
will advise and consult with the Purchasers prior to such disclosure concerning
the information it proposes to disclose. Notwithstanding the foregoing, it is
understood and agreed to by the Purchasers that the Company intends to file this
Agreement as an exhibit to a Form 8-K filing promptly after the date hereof and
that the Company shall not be obligated to advise and consult with the
Purchasers prior to such disclosure or any other similar disclosure required
pursuant to the rules and regulations of the SEC.
[Signature page follows]
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above first written.
THE COMPANY: COEUR D'XXXXX XXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman, President and Chief Executive
Officer
S-1
THE PURCHASERS: XXXXXXXX PARTNERS L.P.
BY: SOUTHAMPTON CAPITAL L.P.
BY: SOUTHAMPTON CAPITAL LLC
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
S-2
THE CONUS FUND L.P.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member, G.P.
S-3
EAST XXXXXX INC. (BVI)
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director, Conus Partners Inc.,
Attorney-in-fact
S-4
THE CONUS FUND OFFSHORE LTD.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director, Investment Manager
S-5
JMB CAPITAL PARTNERS, L.P.
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: General Partner
S-6
XXXXXXX PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxx
----------------------------------------------
Name: Xxxxxxx Capital, LLC
Title: Xxxxxxx Xxxxx / Managing Member
S-7
QUANTICO PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxx
----------------------------------------------
Name: Xxxxxxx Capital, LLC
Title: Xxxxxxx Xxxxx / Managing Member
S-8
GRYPHON MASTER FUND, LP
By: /s/ X.X. Xxxx, XX
----------------------------------------------
Name: X.X. Xxxx, XX
Title: Authorized Agent
S-9
ANNEX A
PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NEW NOTES PURCHASE PRICE
----------------------------- -------------------- --------------
Xxxxxxxx Partners L.P. 5,999,000 $ 4,468,781.85
0 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxx
The Conus Fund L.P. 1,498,000 $ 1,115,891.85
c/o Conus Partners Inc.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxx
East Xxxxxx Inc. (BVI) 331,000 $ 246,568.89
c/o Conus Partners Inc.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxx
The Conus Fund Offshore Ltd. 226,000 $ 168,352.17
c/o Conus Partners Inc.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxx
JMB Capital Partners, L.P. 6,041,000 $ 4,500,068.53
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Mr. Xxxxxxxx Xxxxxx
Xxxxxxx Partners, L.P. 2,685,000 $ 2,000,113.23
c/x Xxxxxxx Capital, LLC
Attn. Xx. Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000 Facsimile
XX@XxxxxxxXxxxxxx.xxx
Quantico Partners, L.P. 1,007,000 $ 750,135.58
c/x Xxxxxxx Capital, LLC
Attn. Xx. Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
(000) 000-0000 Facsimile
XX@XxxxxxxXxxxxxx.xxx
Gryphon Master Fund, L.P. 3,692,000 $ 2,750,248.80
Attn. Xx. X.X. Xxxx, XX
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 Facsimile
Xxxxx@XxxxxxxXX.xxx
TOTAL 21,479,000 $16,000,160.90
ANNEX A
ANNEX B
FORM OF OPINION OF COMPANY COUNSEL
(a) The Purchasers shall have received the opinion of Xxxxxx, Xxxx &
Xxxxxxxx LLP, counsel for the Company (or other counsel reasonably acceptable to
the Purchasers), dated the Closing Date addressed to the Purchasers to the
effect that:
(i) Assuming the due authorization, execution and delivery
of this Agreement, it constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms;
(ii) Assuming the due authorization, execution and
delivery of the Registration Rights Agreement , it constitutes a
legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms;
(iii) Assuming the due authorization, execution and
delivery of the Indenture, it constitutes a legal, valid and
binding agreement of the Company enforceable against the Company
in accordance with its terms;
(iv) The New Notes, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to
and paid for by the Purchasers pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms;
(v) The Company is not, and after giving effect to the
transactions contemplated by this Agreement, will not be,
directly or indirectly "controlled" by an "investment company,"
as such terms are defined in the 1940 Act;
(vi) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Registration Rights Agreement and the Indenture
will not, to such counsel's knowledge, result in a material
breach or violation of any of the terms and provisions of, or
constitute a default under, any applicable U.S. federal or New
York statute, rule or regulation known to such counsel to be
applicable to the Company, or, to such counsel's knowledge, any
order, writ or decree of any U.S. federal or New York court,
government or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or over any of their
properties or operations (the opinion will also state that our
opinion in this paragraph is based upon our consideration of only
those statutes, rules and regulations which, in our experience,
are normally applicable to offerings of debt securities and we
will express no opinion as to compliance by any of the parties to
the above
referenced agreements with any state or federal laws or
regulations applicable to the subject transaction because of the
nature or extent of their business);
(vii) To our knowledge, no consent, approval,
authorization, permit or order of or qualification with any U.S.
federal or New York court, government or governmental or body
having jurisdiction over the Company or any of its subsidiaries,
or over any of their properties or operations, is necessary in
connection with the consummation by the Company of its
obligations under this Agreement, the Registration Rights
Agreement and the Indenture (the opinion will also state that our
opinion in this paragraph is based upon our consideration of only
those statutes, rules and regulations which, in our experience,
are normally applicable to offerings of debt securities and we
will express no opinion as to compliance by any of the parties to
the above referenced agreements with any state or federal laws or
regulations applicable to the subject transaction because of the
nature or extent of their business);
(viii) Based solely on certificates of public officials,
we confirm that the Company is duly qualified to do business as a
foreign corporation in the following states:___________;
(ix) Assuming the accuracy of the representations and
warranties made by each of the Purchasers, it is not necessary in
connection with the issuance and delivery of the New Notes to the
Purchasers pursuant to the terms of this Agreement to register
such New Notes under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the
"1939 Act"); and
(x) the Indenture complies as to form in all material
respects with the requirements of the 1939 Act, and the rules and
regulations of the SEC applicable to an indenture which is
qualified thereunder.
(b) The Purchasers shall have received the opinion of Xxxxxxx Xxxx,
counsel for the Company, dated the Closing Date, addressed to the Purchasers to
the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
state of Idaho;
(ii) The Company has the requisite corporate power and
authority to enter into this Agreement, the Registration Rights
Agreement and the Indenture;
(iii) This Agreement, the performance by the Company of its
obligations hereunder and the issuance and delivery by the
Company of the New Notes have been duly authorized by all
necessary corporate
3
action on the part of the Company; and this Agreement has been
duly executed and delivered by the Company;
(iv) The Registration Rights Agreement and the performance
by the Company of its obligations thereunder have been duly
authorized by all necessary corporate action on the part of the
Company; and the Registration Rights Agreement has been duly
executed and delivered by the Company;
(v) The Indenture and the performance by the Company of
its obligations thereunder have been duly authorized by all
necessary corporate action on the part of the Company; and the
Indenture has been duly executed and delivered by the Company;
(vi) The Common Stock issuable upon conversion of the New
Notes has been duly authorized and reserved for issuance and
delivery and when issued in accordance with the terms of the New
Notes, will be validly issued, fully paid and non-assessable, and
the issuance of such Common Stock is not subject to any
preemptive or similar rights under the Company's certificate of
incorporation or bylaws or the Idaho Business Corporation Act;
(vii) The execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement, the Registration Rights Agreement and the Indenture
will not, to such counsel's knowledge, result in any violation of
the Company's charter or bylaws.
(viii) The authorized, issued and outstanding capital
stock of the Company is as set forth in Section 3.7 of this
Agreement;
(ix) To such counsel's knowledge, after due inquiry, the
Company has not failed to obtain any license, claim, permit,
franchise or other administrative or governmental authorization
necessary to the ownership or lease of its properties and assets
or to the conduct of its business as it is presently conducted,
which failure to obtain would, individually or in the aggregate,
have a Material Adverse Effect, or which might, if determined
adversely to the company, materially and adversely affect the
execution, delivery or performance by the Company of this
Agreement and, all such licenses, claims, permits, franchises or
other administrative or governmental authorizations which are so
required are valid and subsisting and in good standing;
(x) To such counsel's knowledge, after due inquiry, the
Company and each of Coeur Rochester Inc., Coeur Silver Valley
Inc., and Coeur Alaska Inc. (each a "Domestic Subsidiary" and
together, the "Domestic Subsidiaries") holds freehold title,
mining leases, mining
4
claims or other conventional proprietary interests or rights
recognized in the relevant jurisdiction in which each property
described in the SEC Reports is located, in the ore bodies and
mineral inventories described in the SEC Reports (and all
properties respectively relating thereto) under valid, subsisting
and enforceable title documents, contracts, leases, licenses of
occupation, mining concessions, permits, or other recognized and
enforceable instruments and documents, sufficient to permit the
Company or each of its subsidiaries, as the case may be, to
explore for, extract, exploit, remove, process and refine the
minerals relating thereto, except where the failure to so hold
such interests or rights would not have a Material Adverse
Effect. In addition, to such counsel's knowledge, after due
inquiry, either the Company or each of its subsidiaries has all
necessary surface rights, water rights and rights in water,
rights of way, licenses, easement, ingress, egress and access
rights, and all other necessary rights and interests granting the
Company or any of its subsidiaries, as the case may be, the
rights and ability to explore for, mine, extract, and remove the
minerals derived from the ore bodies and mineral inventories
described in the SEC Reports and to transport for refinement or
market or distribute the ore and metals produced, all as referred
to in the SEC Reports, with only such exceptions as are described
in the SEC Reports or as do not have a Material Adverse Effect,
and each of the aforementioned interests and rights is currently
in good standing except for those interests and claims which, if
not kept in good standing, would not have a Material Adverse
Effect;
(xi) Each of the Company's Domestic Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation, and has the corporate power to own, lease and
operate its properties and to conduct its business as described
in the SEC Reports, and is qualified to do business as a foreign
corporation and is in good standing in each jurisdiction, if any,
in which the ownership and leasing of its properties or the
conduct of its business requires such qualification, except where
the failure to be so qualified or be in good standing would not
have a Material Adverse Effect; and
(xii) All issued and outstanding shares of capital stock
of each of the Company's Domestic Subsidiaries have been duly
authorized and validly issued and are fully paid and
nonassessable and, to such counsel's knowledge, have not been
issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or
other similar right and, except as disclosed in the SEC Reports,
are owned by the Company directly or indirectly through one or
more subsidiaries of the Company, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest
(other than such preemptive rights or other rights to subscribe
for or purchase securities as were fully complied with or
expressly waived or with respect to the violation of
5
which the right to make a claim is barred by the applicable
statute of limitations).
(c) The Purchasers shall have received opinions substantially, in the
form below for each of CDE Fachinal Ltd., Compania Minera CDE Petorca, and
Empressa Minera Manquirie S.R.L. (each a "Foreign Subsidiary" and together, the
"Foreign Subsidiaries"), opinions customary to such foreign jurisdiction of
incorporation of each Foreign Subsidiary of foreign counsel that is satisfactory
to the Purchasers, addressed to the Purchasers and to the effect that:
(i) Each of the Company's Foreign Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation, and has the corporate power to own, lease and
operate its properties and to conduct its business as described
in the SEC Reports, and is qualified to do business as a foreign
corporation and is in good standing in each jurisdiction, if any,
in which the ownership and leasing of its properties or the
conduct of its business requires such qualification, except where
the failure to be so qualified or be in good standing would not
have a Material Adverse Effect;
(ii) All issued and outstanding shares of capital stock of
each of the Company's Foreign Subsidiaries have been duly
authorized and validly issued and are fully paid and
nonassessable and, to such counsel's knowledge, have not been
issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or
other similar right and, except as disclosed in the SEC Reports
are owned by the Company directly or indirectly through one or
more subsidiaries of the Company, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest
(other than such preemptive rights or other rights to subscribe
for or purchase securities as were fully complied with or
expressly waived or with respect to the violation of which the
right to make a claim is barred by the applicable statute of
limitations);
(iii) To such counsel's knowledge, after due inquiry, each
of the Company's Foreign Subsidiaries has not failed to obtain
any license, claim, permit, franchise or other administrative or
governmental authorization necessary to the ownership or lease of
its properties and assets or to the conduct of its business as it
is presently conducted, which failure to obtain would,
individually or in the aggregate, have a Material Adverse Effect,
or which might, if determined adversely to the Company,
materially and adversely affect the execution, delivery or
performance by the Company of this Agreement and, all such
licenses, claims, permits, franchises or other administrative or
governmental authorizations which are so required are valid and
subsisting and in good standing; and
6
(iv) To such counsel's knowledge, after due inquiry, the
Company and each of its Foreign Subsidiaries holds freehold
title, mining leases, mining claims or other conventional
proprietary interests or rights recognized in the relevant
jurisdiction in which each property described in the SEC Reports
is located, in the ore bodies and mineral inventories described
in the SEC Reports (and all properties respectively relating
thereto) under valid, subsisting and enforceable title documents,
contracts, leases, licenses of occupation, mining concessions,
permits, or other recognized and enforceable instruments and
documents, sufficient to permit the Company or each of its
subsidiaries, as the case may be, to explore for, extract,
exploit, remove, process and refine the minerals relating
thereto, except where the failure to so hold such interests or
rights would not have a Material Adverse Effect. In addition, to
such counsel's knowledge, after due inquiry, each of the
Company's Foreign Subsidiaries has all necessary surface rights,
water rights and rights in water, rights of way, licenses,
easement, ingress, egress and access rights, and all other
necessary rights and interests granting the relevant Foreign
Subsidiary, as the case may be, the right and ability to explore
for, mine, extract, and remove the minerals derived from the ore
bodies and mineral inventories described in the SEC Reports and
to transport for refinement or market or distribute the ore and
metals produced, all as referred to in the SEC Reports, with only
such exceptions as are described in the SEC Reports or as do not
have a Material Adverse Effect, and each of the aforementioned
interests and rights is currently in good standing except for
those interests and claims which, if not kept in good standing,
would not have a Material Adverse Effect.
The opinions set forth above that any document is valid, binding or
enforceable according to its terms are qualified as to:
(i) limitations imposed by bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium or
other similar laws relating to or affecting the rights and
remedies of creditors generally;
(ii) rights to indemnification and contribution which may be
limited by applicable law or equitable principles; and
(iii) general principles of equity, including, without
limitation, the possible unavailability of specific performance
or injunctive relief, and limitations or rights of acceleration,
regardless of whether enforceability is considered in a
proceeding at law or in equity.
7
(d) Counsel rendering the foregoing opinions may rely as to questions of
law not involving the laws of the United States of America or the applicable
state law, upon opinions of local counsel, and as to questions of fact upon
representations or certifications of officers of the Company, and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to the
Purchasers and to their counsel, Xxxxxx & Xxxxxxx.
8
