<PAGE> 1
As filed with the Securities and Exchange Commission on June 21, 1996
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
SUNSHINE MINING AND REFINING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 75-2618333
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
877 W. MAIN STREET, SUITE 600
BOISE, IDAHO 83702
(208) 345-0660
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------
JOHN S. SIMKO, PRESIDENT
877 W. MAIN STREET, SUITE 600
BOISE, IDAHO 83702
(208) 345-0660
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
--------------------
COPY TO:
JANICE V. SHARRY
HAYNES AND BOONE, L.L.P.
3100 NATIONSBANK PLAZA
901 MAIN STREET
DALLAS, TEXAS 75202-3789
(214) 651-5000
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class Amount to be Offering Price Per Aggregate Offering Registration
of Securities to be Registered Registered Share Price Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per
share, issuable upon exchange of 30,000,000 shares $1.4375(1) $43,125,000(1) $14,871.00
the 8% Senior Exchangeable Notes
due 2000 issued by Sunshine
Precious Metals, Inc. (the
"Notes") (2) . . . . . . . . . .
- --------------------------------------------------------------------------------------------------------------------------
Warrants to purchase Common
Stock, $2.875 exercise price to 2,086,957 (4) (4) --
be sold by Selling
Securityholders(3) . . . . . . .
- --------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of Warrants to be sold
by Selling Securityholders(2) . . 2,086,957 shares $2.875(5) $6,000,002 (5) $2,069.00
- --------------------------------------------------------------------------------------------------------------------------
Total Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,940.00
=========
==========================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(g).
(2) Pursuant to Rule 416, the Registration Statement also covers such
indeterminate additional shares of Common Stock as may become issuable on
(i) exchange of the Notes as a result of any future adjustments in the
exchange price in accordance with the terms of the Notes or (ii) exercise of
the Warrants as a result of any future adjustments in the number of shares
of Common Stock issuable upon such exercise in accordance with the terms of
the Warrants.
(3) The Warrants being registered hereby represent rights to purchase an
aggregate of 2,087,957 shares of Common Stock. The Warrants are being
registered solely for the purposes of resale by the Selling
Securityholders.
(4) No separate registration fee is required pursuant to Rule 457(g).
(5) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(g).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JUNE 21, 1996
PROSPECTUS
_____________________
SUNSHINE MINING AND REFINING COMPANY
32,086,957 SHARES OF COMMON STOCK
AND WARRANTS TO PURCHASE COMMON STOCK
_____________________
This Prospectus relates to the issuance by Sunshine Mining and
Refining Company (the "Company") of up to an aggregate of 30,000,000 shares of
Common Stock, par value $.01 per share (the "Common Stock") of the Company upon
exchange (the "Exchange") and pursuant to the terms of the 8% Senior
Exchangeable Notes due 2000 issued by Sunshine Precious Metals, Inc. and
guaranteed by the Company (the "Notes"). See "Plan of Distribution" for a
detailed description of the Exchange.
This Prospectus also relates to the reoffer and resale by certain
holders of securities of the Company (the "Selling Securityholders") of certain
warrants to purchase the Common Stock issued to certain placing agents and
related parties (the "Warrants") and up to 2,086,957 shares of Common Stock
issuable upon exercise of the Warrants (the "Warrant Common Stock"). This
Prospectus does not purport to cover the initial issuance of the Warrants or
the Warrant Common Stock by the Company. The Company will not receive any of
the proceeds from the sale of the Warrants or Warrant Common Stock by the
Selling Securityholders.
Application has been made to list the Common Stock (including the
Warrant Common Stock) offered hereby on the New York Stock Exchange ("NYSE").
The Company's Common Stock is traded on the NYSE under the symbol "SSC." On
June 18, 1996, the reported closing sale price of the Company's Common Stock
was $1.375 per share.
SEE "RISK FACTORS" WHICH BEGINS ON PAGE 2 FOR CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_____________________
The date of this Prospectus is June ___, 1996
<PAGE> 3
RISK FACTORS
Investors should carefully consider the following matters in
connection with an investment in the securities in addition to the other
information contained or incorporated by reference in this Prospectus.
Information contained or incorporated by reference in this Prospectus contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, which can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon or
comparable terminology. The following matters constitute cautionary statements
identifying important factors with respect to such forward-looking statements,
including certain risks and uncertainties, that could cause actual results to
differ materially from those in such forward-looking statements. Reference
should be made to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (the "Annual Report"), the Quarterly Report on Form 10-Q for
the quarter ended March 31, 1996 (the "Quarterly Report"), the Prospectus/Proxy
on Form S-4 Statement for the Special Meeting of Stockholders of the Company
held on March 29, 1996 (the "Prospectus/Proxy Statement"), the Current Report
on Form 8-K dated March 5, 1996 (the "March 5 Form 8-K"), the Current Report on
Form 8-K dated March 22, 1996 (the "March 22 Form 8-K"), the Current Report on
Form 8-K dated May 22, 1996 (the "May 22 Form 8-K") and all financial
statements and notes thereto contained therein (all of which are incorporated
herein by reference) for a more detailed discussion of the following matters.
OPERATING LOSSES
The Company's revenues have historically been derived from sales of
silver and, from 1985 to 1991, from sales of oil and natural gas. In 1991 and
1992, the Company sold substantially all of the assets of its subsidiary Argent
Energy, Inc., previously Woods Petroleum Corporation ("Woods"), which was
engaged in the production of oil and natural gas. As a result, substantially
all of the Company's revenues are now derived from the sale of silver mined
from its Sunshine Mine in Kellogg, Idaho. Accordingly, the Company's earnings
are directly related to the price of silver. Silver prices have been depressed
since 1985, and as a result the Company has experienced losses from operations
for each of the last ten years. The Company reported losses from continuing
operations of $15.5 million, $4.9 million and $28.6 million in fiscal 1995,
1994 and 1993 respectively. The Company expects to fund its losses for fiscal
1996 from the Company's cash and cash equivalents and silver bullion held for
investment. At March 31, 1996, Sunshine's cash and silver bullion held for
investment totalled approximately $46.8 million.
The operating losses and cash flow deficiencies of the Company are
expected to continue until silver prices recover substantially or the Company's
exploration efforts at the Sunshine Mine or its other properties are successful
in developing significant additional production. Absent the foregoing, the
Company may eventually be required to further curtail operations or cease its
mining activities at the Sunshine Mine altogether. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Business and
Properties" and the Consolidated Financial Statements (including the Notes
thereto) of the Company appearing in the Annual Report and Quarterly Report.
VOLATILITY OF SILVER PRICES
The Company's earnings are directly related to the price of silver,
and the value of the Common Stock has historically moved in correlation with
movements in silver prices. Silver prices are subject to fluctuation and are
affected by numerous factors beyond the control of the Company, which alone or
in combination may cause the price of silver to rise or fall. These factors
include, among others, expectations for inflation, speculative activities,
levels of silver production and demand for silver as a component of
manufactured goods. The following table sets forth for the periods indicated
the high, low and average closing prices per ounce of silver on the Commodity
Exchange, Inc. ("COMEX") and also translates the average price as stated into
constant 1995 dollars.
<TABLE>
<CAPTION>
CONSTANT
NOMINAL DOLLARS 1995 DOLLARS
--------------- ------------
YEAR HIGH LOW AVG. AVG.
----- ---- ----- ----- ----
<S> <C> <C> <C>
1983 . . . . . . . . . . . . . . . . . $14.74 $8.38 $11.46 $18.62
1984 . . . . . . . . . . . . . . . . . 10.17 6.25 8.15 12.44
1985 . . . . . . . . . . . . . . . . . 6.89 5.48 6.14 8.94
1986 . . . . . . . . . . . . . . . . . 6.32 4.85 5.49 7.79
1987 . . . . . . . . . . . . . . . . . 11.25 5.35 6.99 9.86
1988 . . . . . . . . . . . . . . . . . 8.06 6.01 6.53 8.63
1989 . . . . . . . . . . . . . . . . . 6.20 5.02 5.47 6.86
1990 . . . . . . . . . . . . . . . . . 5.35 3.94 4.82 5.64
1991 . . . . . . . . . . . . . . . . . . 4.55 3.51 4.03 4.48
1992 . . . . . . . . . . . . . . . . . . 4.32 3.63 3.94 4.24
1993 . . . . . . . . . . . . . . . . . . 5.44 3.52 4.31 4.57
1994 . . . . . . . . . . . . . . . . . . 5.78 4.61 5.28 5.47
1995 . . . . . . . . . . . . . . . . . . 6.10 4.38 5.20 5.20
</TABLE>
On June 18, 1996, the closing price of silver reported on the COMEX
was $5.166 per ounce. In constant 1995 dollars, the average silver price from
1968 through 1995 has been approximately $11.66.
2
<PAGE> 4
DEPENDENCE ON EXPLORATION SUCCESS
Substantially all of the Company's revenues are derived from the
Sunshine Mine which at current silver prices is not profitable. Therefore, the
future earnings of the Company are presently dependent on the success of
exploration at the Sunshine Mine and at the Company's other exploration
projects. No assurance can be given that the Company's exploration program will
prove successful. See "Business and Properties - Operations -- Exploration
Activities at the Sunshine Mine" included in the Annual Report.
IMPRECISION OF RESERVE ESTIMATES
The ore reserve estimates presented in the Annual Report and Quarterly
Report are estimates made by the Company's geologic personnel, and no assurance
can be given that the indicated quantity of in situ silver will be realized.
No independent consultants have been retained by the Company to review and
verify such estimates. Reserve estimates are expressions of judgment based
largely on data from diamond drill holes and underground openings, such as
drifts or raises which expose the mineralization on 1, 2 or 3 sides, sampling
and similar examinations. Reserve estimates may change as ore bodies are mined
and additional data is derived. The Company's estimates of proven and probable
reserves for the Sunshine Mine are as of January 1, 1996.
MINING RISKS AND INSURANCE
The Company's operations may be affected by risks and hazards
generally associated with the mining industry, including fires, cave-ins, rock
bursts, flooding, industrial accidents, mechanical or electrical failures, and
unusual or unexpected rock formations. Such risks could result in damage to, or
destruction of, mineral properties or producing facilities, personal injury,
environmental damage, delays in mining, monetary losses and possible legal
liability. Although the Company maintains insurance at levels consistent with
its historical experience and industry practice, no assurance can be given that
such insurance will continue to be available at economically feasible premiums.
Insurance for environmental risks (including potential for pollution or other
hazards as a result of the disposal of waste products occurring from
production) is not generally available to the Company or to other companies
within the industry.
GOVERNMENT REGULATION
The Company's activities are subject to extensive federal, state, and
local laws and regulations controlling not only the mining of and exploration
for mineral properties, but also the possible effects of such activities upon
the environment. Except as described under "Legal Proceedings - Environmental
Matters" included in the Annual Report and under "Legal Proceedings" included
in the Quarterly Report, the Company is not aware of any material violations of
environmental laws, regulations, permits or licenses issued with respect to the
Company's operations. Future legislation and regulations could cause additional
expense, capital expenditures, restrictions and delays in the mining,
production or development of the Company's properties, the extent of which
cannot be predicted.
NO PRIOR MARKET FOR WARRANTS
Prior to this offering (the "Offering"), there has been no market for
the Warrants. There can be no assurance that a market for the Warrants will
develop or, if a market develops, how liquid a market it will be. The liquidity
of any market for the Warrants will depend on a number of factors, including
the interest of broker-dealers in making a market.
3
<PAGE> 5
THE COMPANY
Prior to May 22, 1996, the Company was known as Sunshine Merger
Company and was the wholly-owned subsidiary of Sunshine Mining and Refining
Company ("Sunshine"). On May 22, 1996 (the "Effective Date"), Sunshine merged
with and into the Company which was then renamed Sunshine Mining and Refining
Company. By virtue of the merger, the Company became the successor to all of
the business, assets, liabilities and capital structure of Sunshine, with the
sole exception that the $11.94 (Stated Value) Cumulative Redeemable Preferred
Stock (the "Preferred Stock") of Sunshine was retired in its entirety.
Pursuant to the merger of Sunshine with and into the Company, all
securities of Sunshine, with the exception of Sunshine's Preferred Stock were
converted pursuant to the terms of the merger and without any action by the
holders thereof into an equal number of identical securities of the Company.
Pursuant to the terms of the merger, the Preferred Stock was converted at the
option of holders thereof into: (i) six (6) shares of Common Stock, par value
$.01 of the Company (which number may be increased pursuant to an adjustment
formula based on the average NYSE composite closing price of the Common Stock
for the first 120 NYSE trading days following the Effective Date), and (ii)
either (a) two warrants ($1.92 initial exercise price, which exercise price may
be decreased pursuant to an adjustment formula based on the average NYSE
composite closing price of the Common Stock for the first 120 NYSE trading days
following the Effective Date) each to purchase one share of Common Stock or, at
the election of the holder, (b) an additional .9 (9/10) share of Common Stock.
The Company is a Delaware corporation. The Company's principal
executive offices and mailing address are 877 W. Main Street, Suite 600,
Boise, Idaho 83702 and its telephone number is (208) 345-0660.
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of the
Common Stock pursuant to the Exchange or from the resale of the Warrants or the
Warrant Common Stock by the Selling Securityholders.
Sunshine Precious Metals, Inc., the Company's principal operating
subsidiary and issuer of the Notes, may, in the future, have its indebtedness
reduced as a result of the Exchange, but only if the Notes are exchanged and
then only in an amount equal to the outstanding principal amount of such Notes
exchanged. Based upon the current outstanding principal amount of such Notes
and assuming that all such Notes are exchanged, the aggregate reduction in the
Company's indebtedness (on a consolidated basis) would be approximately $30.0
million. The Company, through Sunshine Precious Metals, Inc., incurred such
indebtedness in order to fund development and exploration opportunities of the
Company.
SELLING SECURITYHOLDERS
The following table lists (i) the name of each Selling Securityholder,
(ii) the number and type of securities owned by each Selling Securityholder
before this Offering, (iii) the number and type of securities that may be
offered by each Selling Securityholder pursuant to this Prospectus and (iv) the
number and type of Securities to be owned by each Selling Securityholder upon
completion of the Offering if all securities registered hereby are sold. This
Prospectus covers offers and resales from time to time by each Selling
Securityholder of the Warrants and the Warrant Common Stock (after such person
becomes a holder of the Warrant Common Stock). The Warrants were issued to each
Selling Securityholder in a private placement conducted outside of the United
States pursuant to Regulation S promulgated pursuant to the Securities Act of
1933, as amended (the "Regulation S Transaction"). The registration of the
shares of Warrant Common Stock offered for resale hereby is pursuant to a
Warrant Agreement dated June 21, 1996, among the Company, Rauscher Pierce &
Clark Limited ("RPC") and HSBC Investment Banking Limited ("HSBC") (the
"Warrant Agreement"). None of the Selling Securityholders had any affiliation
with the Company prior to the Regulation S Transaction.
<TABLE>
<CAPTION>
NUMBER AND TYPE NUMBER AND TYPE NUMBER AND TYPE
OF SECURITIES OF SECURITIES OF SECURITIES
NAME OF OWNED BEFORE BEING REGISTERED OWNED AFTER
SELLING SECURITYHOLDER THIS OFFERING FOR RESALE THIS OFFERING
---------------------- --------------- ---------------- --------------
<S> <C> <C> <C>
RAUSCHER PIERCE & CLARK 1,008,091 Warrants(1) 1,008,091 Warrants - 0 -
LIMITED 1,008,091 Shares of 1,008,091 Shares of
Common Stock(2) Common Stock(2)
HSBC INVESTMENT BANKING PLC 834,783 Warrants(1) 834,783 Warrants - 0 -
834,783 Shares of 834,783 Shares of
Common Stock(2) Common Stock(2)
DALWORTH CAPITAL CORPORATION 82,937 Warrants(1) 82,937 Warrants(1) - 0 -
82,937 Shares of 82,937 Shares of
Common Stock (2) Common Stock (2)
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
NUMBER AND TYPE NUMBER AND TYPE NUMBER AND TYPE
OF SECURITIES OF SECURITIES OF SECURITIES
NAME OF OWNED BEFORE BEING REGISTERED OWNED AFTER
SELLING SECURITYHOLDER THIS OFFERING FOR RESALE THIS OFFERING
---------------------- --------------- ---------------- --------------
<S> <C> <C> <C>
21,898 Warrants (1) 21,898 Warrants (1) - 0 -
THE ROYAL BANK OF SCOTLAND TRUST 21,898 Shares of 21,898 Shares of
COMPANY (JERSEY) LIMITED J331C Common Stock (2) Common Stock (2)
SIR ROBERT CLARK 2,193 Warrants (1) 2,193 Warrants (1) - 0 -
2,193 Shares of 2,193 Shares of
Common Stock (2) Common Stock (2)
DAVID P. QUINT 137,055 Warrants (1) 137,055 Warrants (1) - 0 -
137,055 Shares of 137,055 Shares of
Common Stock (2) Common Stock (2)
</TABLE>
___________________________
(1) Warrants to purchase shares at a price of $2.875 per share, subject
to adjustment under certain circumstances. See "Description of
Securities -- Warrants."
(2) Shares of Common Stock that are issuable pursuant to exercise of the
Warrants. The Warrants are exercisable at any time on or after
September 21, 1996 through the close of business, New York City time,
on March 20, 2001.
(3) Assumes the Warrants owned by the Selling Securityholders will be
offered and sold in whole or all shares held by such Selling
Securityholders acquired upon exercise of the Warrants will be offered
and sold.
DESCRIPTION OF SECURITIES
GENERAL
The authorized capital stock of the Company consists of (i) 400
million shares of Common Stock, par value $.01 per share, of which, depending
on elections by former preferred stockholders to receive either 6.9 shares of
Common Stock, or 6 shares of Common Stock and two warrants to purchase Common
Stock in exchange for each share of Preferred Stock held by such holder, from
235,125,440 to 241,575,007 shares were outstanding (excluding 4,674,991
treasury shares) at June 7, 1996, and were held of record by approximately
30,000 holders, and (ii) 20 million shares of Preferred Stock, $1.00 par value,
issuable in one or more series, with such dividend rates, liquidation
preferences, redemption, conversion and voting rights and such further
designations, powers, preferences, rights, limitations and restrictions as may
be fixed and determined by the Board of Directors of the Company, all without
a vote of the Company's stockholders. No shares of Preferred Stock are
outstanding. The Company's outstanding capital stock is fully paid and
nonassessable and none of the authorized capital stock is entitled to
preemptive rights.
The Company also has outstanding warrants to purchase Common Stock
which are all currently exercisable.
For a summarized description of recent transactions which have
affected the capital stock of the Company, see the Prospectus/Proxy Statement,
the Consolidated Statements of Stockholders Equity contained in the
Consolidated Financial Statements appearing in the Annual Report and the May 22
Form 8-K.
COMMON STOCK
Subject to the rights of holders of any outstanding shares of
Preferred Stock, holders of shares of the Common Stock are entitled to share
equally in dividends from sources legally available when, as and if declared by
the Board of Directors. The Company's payment of cash dividends on its shares
of capital stock is restricted.
Each stockholder is entitled to one vote for each share of Common
Stock held by such holder. Because stockholders are not entitled to cumulate
their votes, stockholders holding a majority of the outstanding Common Stock,
and any shares of voting preferred stock which may be issued, are able to elect
all members of the Board of Directors of the Company. Holders of Common Stock
have no preemptive rights, and shares of Common Stock have no redemption,
sinking fund or conversion privileges.
In the event of any liquidation, dissolution or winding up of the
affairs of the Company, subject to the rights of holders of any Preferred
Stock, the holders of Common Stock are entitled to receive pro rata any assets
of the Company after the satisfaction of corporate liabilities.
Article Five of the Certificate of Incorporation of the Company
requires the affirmative vote or consent of the holders of (i) a majority of
the Company's shares entitled to vote thereon and (ii) a majority of any series
or class of Preferred Stock entitled to vote as a class thereon, in order to
approve any business combination, including any merger, consolidation, or the
sale, lease, exchange or other disposition of all or substantially all of the
Company's assets (including a disposition in connection with the dissolution or
winding up or liquidation of the Company). Article Five may not be amended,
5
<PAGE> 7
altered, changed or repealed without the prior affirmative vote or consent of
the holders of (i) 66 2/3% of all shares of stock entitled to vote thereon and
(ii) 66 2/3% of any series or class of preferred stock upon which the right to
vote as a class thereon has been conferred by the resolution or resolutions
adopted by the Company's Board of Directors providing for the issue of such
series or class of preferred stock. Such provisions may have the effect of
delaying, deterring or preventing a change of control of the Company.
The Company currently does not pay cash dividends on its shares of
Common Stock and has not paid cash dividends on its shares of Common Stock
since the third quarter of 1981. Any future declaration of dividends will be at
the discretion of the Board of Directors of the Company, which will consider,
among other factors, current and projected earnings and the liquidity position
of the Company. The Company does not expect any resumption of dividends in the
foreseeable future.
The payment of cash dividends by the Company is subject to certain
restrictions. Certain of the Company's debt securities impose restrictions on
the Company's ability to declare or pay cash dividends and make certain
distributions on its capital stock. Pursuant to the most restrictive of these
provisions, at December 31, 1995, no funds were available for cash dividends on
shares of the Company's capital stock, including its Common Stock.
Meetings of the Stockholders. The By-Laws of the Company provide that
the stockholders shall have annual meetings, at such date and time designated
by the Board of Directors, and special meetings, called by the Chairman of the
Board, the President or by the Board of Directors or by written order of a
majority of the directors. The stockholders must be given written notice of
each such meeting of stockholders. In the case of special meetings, the purpose
or purposes for which the meeting is called shall be given to each stockholder
entitled to vote, not less than ten nor more than sixty days before the
meeting. In order to determine the stockholders entitled to notice of or to
vote at any meeting of stockholders, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting. The Company shall prepare and make, at
least ten days before every meeting of the stockholders, a complete list of the
stockholders entitled to vote at the meeting. Such list shall be open to the
examination of any stockholder for a period of ten days prior to the meeting.
The holders of a majority of the shares of capital stock issued and
outstanding and entitled to vote, present in person or represented by proxy,
shall constitute a quorum at any meeting of stockholders. When a quorum is
present at any meeting of the stockholders, the vote of the holders of a
majority of the shares of capital stock entitled to vote, present in person or
represented by proxy, shall decide any question brought before such meeting,
unless the question is one upon which a different vote is required by law, the
Certificate of Incorporation or the By-Laws.
Limitation of Liability. As permitted by the Delaware General
Corporation Law (the "DGCL"), the Company's Certificate of Incorporation
provides that directors of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of a fiduciary duty
as a director, including gross negligence, except to the extent such exemption
from liability is not permitted by the DGCL. This includes liability for (i)
any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) any act or omission not in good faith or which involves
intentional misconduct or a knowing violation of law, (iii) any transaction
from which the director derived any improper personal benefit or (iv) any act
or omission where the liability of the director is expressly provided by the
statute.
As a result of this provision, the Company and its stockholders may be
unable to obtain monetary damages from a director for breach of the duty of
care. Although stockholders may continue to seek injunctive or other equitable
relief for an alleged breach of fiduciary duty by a director, stockholders may
not have an effective remedy against the challenged conduct if equitable
remedies are unavailable.
In addition, the Company's Certificate of Incorporation and By-Laws
provide certain rights of indemnification for all officers and directors.
The Delaware Business Combination Act. The Company is subject to the
provisions of Section 203 of the DGCL. Section 203 prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A "business
combination" includes mergers, asset sales and certain other transactions
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, as defined therein, owns, or within three years did
own, 15% or more of the corporation's voting stock. This statute contains
provisions enabling a corporation to avoid the statute's restrictions if the
stockholders holding a majority of the shares of the corporation's voting stock
approve an amendment to the corporation's certificate of incorporation or
bylaws. The Company does not intend to "elect out" of this statute.
Miscellaneous. The Common Stock is listed on the NYSE. American
Stock Transfer & Trust Company is the transfer agent and registrar for the
Common Stock.
6
<PAGE> 8
PREFERRED STOCK
The Board of Directors is authorized, subject to any limitations
prescribed by Delaware law, to provide for the issuance of Preferred Stock in
one or more series, to establish from time to time the number of shares to be
included in each such series, to fix the rights, preferences and privileges of
the shares of each wholly unissued series and any qualifications, limitations
or restrictions therein, and to increase or decrease the number of shares of
any such series (but not below the number of shares of such series then
outstanding), without any further vote or action by the stockholders. The Board
of Directors may authorize the issuance of Preferred Stock with voting or
conversion rights that could adversely affect the voting power or other rights
of the holders of Common Stock. Thus, the issuance of Preferred Stock may have
the effect of delaying, deferring or preventing a change in control of the
Company. The Company has no current plan to issue any shares of Preferred
Stock.
WARRANTS
Pursuant to the Warrant Agreement, the Company issued the following
Warrants: (i) Warrants issued to RPC representing the right to purchase
1,008,091 shares of Common Stock, (ii) Warrants issued to HSBC representing
the right to purchase 834,783 shares of Common Stock, (iii) Warrants issued to
Dalworth Capital Corporation representing the right to purchase 82,937 shares
of Common Stock, (iv) Warrants issued to The Royal Bank of Scotland Trust
Company (Jersey) Limited J331C to purchase 21,898 shares of Common Stock, (v)
Warrants issued to Sir Robert Clark to purchase 2,193 shares of Common Stock and
(vi) Warrants issued to David P. Quint to purchase 137,055 shares of Common
Stock. The Warrants are exercisable for such shares, in whole or in part, at
any time on or after September 21, 1996 and will expire at 5:00 p.m. New York
City time on March 20, 2001. The Warrants are exercisable at a price per share
of Common Stock equal to $2.875 (the "Exercise Price"), subject to adjustment
upon (i) consolidation, merger or transfer of substantially all of the assets
of the Company or (ii) certain changes in the capital stock of the Company,
including payment of a stock dividend, stock split or reclassification.
Warrants may be exercised by tendering the aggregate Exercise Price
and any other amounts required to be paid under the Warrant Agreement and
surrendering to the Company a Warrant certificate with the form of election to
purchase the Common Stock, duly completed and signed by the registered holder
or such holder's duly appointed legal representative or by a duly authorized
attorney. Upon surrender of a Warrant certificate for exercise, the Company
will deliver or cause to be delivered, to or upon the written order of the
holder, certificates representing the shares of Common Stock issued upon the
exercise of the Warrants, together with Warrant certificates evidencing any
Warrants not exercised. No fractional shares will be issued upon exercise of
Warrants.
The Warrant Agreement contains certain restrictions on the
transferability of the Warrants. The Warrants may only be transferred upon the
prior notice and consent of the Company and only to (a) one or more of the
other Warrant holders, (b) any corporation, partnership, joint venture or other
entity which is a successor by merger or consolidation to such Warrant holders,
(c) any purchaser of substantially all of the assets of such Warrant holder,
(d) any officer, director, employee, agent of such Warrant holder, (f) the
stockholders or partners of such Warrant holder in the event of a liquidation,
dissolution or winding-up of such Warrant holder or (g) the respective nominees
of any of the foregoing.
Certificates for the Warrants will be exchangeable without a service
charge for similar certificates of different denominations at the office of the
Company. The Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of the Warrant certificates.
The Company has authorized and reserved for issuance such number of
shares of Common Stock as shall be issuable upon the exercise of all
outstanding Warrants. Such shares of Common Stock, when issued, will be validly
issued, fully paid and nonassessable.
PLAN OF DISTRIBUTION
EXCHANGE OF NOTES
The Notes were issued by Sunshine Precious Metals, Inc. and guaranteed
by the Company pursuant to the Regulation S Transaction. The Notes are
exchangeable at any time on and after May 1, 1996 up to (and including) March
21, 2000, unless previously redeemed or purchased and canceled, into shares of
Common Stock of the Company at an initial exchange price of $1.4375 per share
(subject to reset downwards and adjustment in certain circumstances). The
procedure for Exchange of the Notes by the holders thereof is set forth in the
"Terms and Conditions of the Notes" printed on the back of each Note.
At any time following one year after the date of issuance, the Notes
may be exchanged in whole or in part at the option of the Company at their
principal amount, provided that no such exchange may be made unless the Current
Market Price (as defined in the Trust Deed) of the Common Stock for each of 30
consecutive Stock Exchange Business Days (as defined in the Trust Deed) which
7
<PAGE> 9
such Current Market Price is available, the last of which occurs not more than
30 calendar days prior to the date upon which notice of exchange is first
published, is at least 150 percent of the Exchange Price (as defined in the
Trust Deed) then in effect. The Company may redeem all the Notes at any time
at their principal amount if any change in United States law results in the
imposition of withholding taxes on payments in respect of the Notes.
SELLING SECURITYHOLDERS
The Warrants and Warrant Common Stock may be offered and sold from
time to time by the Selling Securityholders. Except as set forth in the
Warrant Agreement with respect to the Warrants, the Selling Securityholders
will act independently of the Company in making decisions with respect to the
timing, manner and size of each sale. Such sales may be made on the NYSE market
or in the over-the-counter market, at market prices prevailing at the time of
the sale, at prices related to the then prevailing market price or in
negotiated transactions, including pursuant to an underwritten offering or
pursuant to one or more of the following methods: (i) purchases by a
broker-dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (ii) ordinary brokerage transactions and
transactions in which a broker solicits purchasers; and (iii) block trades in
which a broker-dealer so engaged will attempt to sell the shares as agent but
may take a position and resell a portion of the block as principal to
facilitate the transaction. In effecting sales, broker- dealers engaged by the
Selling Securityholders may arrange for other broker-dealers to participate.
Broker-dealers may receive commissions or discounts from the Selling
Securityholders in amounts to be negotiated immediately prior to the sale.
In connection with the sale of the Warrants and Warrant Common Stock,
underwriters or agents may receive compensation from the Selling
Securityholders or from purchasers of the Warrants or Warrant Common Stock for
whom they may act as agents, in the form of discounts, concessions or
commissions. Underwriters may sell the Warrants or Warrant Common Stock to or
through dealers and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they act as agents. Underwriters, dealers and
agents that participate in the distribution of the Warrants or Warrant Common
Stock covered hereby may be deemed to be underwriters, and any discounts or
commissions received by them from the Selling Securityholders and any profit on
the resale of the Warrants and Warrant Common Stock by them may be deemed to be
underwriting discounts and commissions under the Securities Act.
SHARES ELIGIBLE FOR FUTURE SALE
The 32,086,957 shares of Common Stock offered and sold in this
Offering will be freely tradeable without restrictions or further registration
under the Securities Act, except for any such securities owned by an
"affiliate" of the Company as such term is defined under Rule 144. Shares
owned by an "affiliate" of the Company may not be resold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including the exemptions contained in Rules 144 or 144A. This
Prospectus and the Registration Statement on Form S-3 (the "Registration
Statement") of which it is a part do not purport to register the resale of the
shares of Common Stock received upon the Exchange, and therefore any shares
received by an "affiliate" pursuant to an Exchange may not be resold unless an
exemption from registration is available.
In general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who has beneficially owned his or her
shares for at least two years, including an "affiliate," as that term is
defined below, is entitled to sell, within any three-month period, that number
of shares that does not exceed the greater of 1% of the then outstanding shares
or the average weekly trading volume of the then outstanding shares during the
four calendar weeks preceding each such sale. A person (or persons whose shares
are aggregated) who is not deemed an "affiliate" of the Company, and who has
beneficially owned shares for at least three years, is entitled to sell such
shares under Rule 144 without regard to the volume limitations described above.
As defined in Rule 144, an "affiliate" of an issuer is a person that directly,
or indirectly through the use of one or more intermediaries, controls, or is
controlled by, or is under the common control with, such issuer.
Rule 144A allows the immediate offer and sale by holders of securities
acquired in private placements without meeting the registration requirements of
the Securities Act to "qualified institutional buyers," which are generally
defined as entities that own and invest on a discretionary basis at least $100
million in securities of issuers with whom they are not affiliated. The
exemption from registration afforded by Rule 144A is only available for
securities that were acquired in a private placement; Rule 144A is not
available for transactions in securities that, when issued, were of the same
class of securities listed on a national exchange or quoted on an automated
inter-dealer quotation system. In addition, the holder and the prospective
purchaser of securities acquired in private placements must have the right to
receive from the issuer of such securities certain information concerning the
issuer's business and the issuer's financial statements for the most recent two
years.
The Company is unable to estimate the number of shares that may be
sold in the future by its existing stockholders or the effect, if any, that
sales of shares by such stockholders will have on the market price of the
Common Stock prevailing from time to time. Sales of substantial amounts of
Common Stock by existing stockholders could adversely affect the prevailing
market price.
8
<PAGE> 10
LEGAL MATTERS
The validity of the shares of Common Stock and the Warrants offered
hereby will be passed on for the Company by Haynes and Boone, LLP, Dallas,
Texas.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1995, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
with the Exchange Act, the Company files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). The
reports, proxy statements and other information can be inspected and copied at
the public reference facilities that the Commission maintains at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and Northwestern Atrium Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661. Copies of these materials can be obtained at prescribed rates
from the Public Reference Section of the Commission at the principal offices of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The Company's
Common Stock is listed for trading on the New York Stock Exchange under the
symbol "SSC". Reports and other information concerning the Company can be
inspected at the offices of such Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission the Registration Statement
on Form S-3 under the Securities Act with respect to the Common Stock and the
Warrants to purchase Common Stock. This Prospectus, which constitutes a part of
the Registration Statement, does not contain all the information set forth in
the Registration Statement, certain items of which are contained in schedules
and exhibits to the Registration Statement as permitted by the rules and
regulations of the Commission. Statements made in the Prospectus concerning the
contents of any documents referred to herein are not necessarily complete. With
respect to each such document filed with the Commission as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description, and each such statement shall be deemed qualified in its entirety
by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
in this Prospectus: (i) Annual Report on Form 10-K for the fiscal year ended
December 31, 1995; (ii) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996; (iii) Prospectus/Proxy on Form S-4 Statement for the Special
Meeting of Stockholders of the Company held on March 29, 1996; (iv) Current
Report on Form 8-K dated March 5, 1996, (v) Current Report on Form 8-K dated
March 22, 1996; (vi) Current Report on Form 8-K dated May 22, 1996; and (vii)
all other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act
since the fiscal year ended December 31, 1995.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the completion of the Offering shall be deemed to be incorporated
by reference herein. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed superseded or
modified for purposes of this Prospectus to the extent that a statement
contained herein (or in any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference (other than exhibits to such documents which are not specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to the Company, 877 W. Main Street, Suite 600, Boise, Idaho
83702, Attention: John S. Simko, President. Telephone requests may be directed
to John S. Simko, President, at (208) 345-0660.
9
<PAGE> 11
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS AND IF
GIVEN OR MADE SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. 32,086,957 SHARES OF COMMON
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO STOCK AND WARRANTS TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY PURCHASE COMMON STOCK
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES OR ANY OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
SUNSHINE MINING AND
------------------------------
REFINING COMPANY
TABLE OF CONTENTS
PAGE
----
Risk Factors 2
The Company 4 ---------------------------------
Use of Proceeds 4 PROSPECTUS
Selling Securityholders 4 ---------------------------------
Description of Securities 5
Plan of Distribution 7
Shares Eligible for Future Sale 8
Legal Matters 9
Experts 9
Available Information 9
Incorporation of Certain
Documents by Reference 9 June __, 1996
------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission Registration Fee $ 16,940
NYSE Listing Fee
Photocopying Expenses
Accounting Fees and Expenses
Legal Fees and Expenses
Blue Sky Fees and Expenses
Fees of Transfer Agent and Registrar
Miscellaneous Expenses
--------
Total $
========
All of the above expenses except the Securities and Exchange
Commission registration fee and the NYSE listing fee listing fee are estimated.
All of such expenses will be borne by the Registrant.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The information set forth pursuant to Item 20 of the Registrant's
Registration Statement on Form S-4 (Registration No. 33-98876) is incorporated
herein.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<S> <C>
*4.1 Certificate of Incorporation, filed as Exhibit 3.1 to the Registrant's Registration
Statement on Form S-4 (Registration No. 33-98876), which exhibit is incorporated herein by
reference.
*4.2 Amendment to Certificate of Incorporation, filed as Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated May 22, 1996 (File No. 33-98876), which exhibit is
incorporated herein by reference.
*4.3 Bylaws, filed as Exhibit 3.2 to the Registrant's Registration Statement on Form S- 4
(Registration No. 33-98876), which exhibit is incorporated herein by reference.
*4.4 Specimen Common Stock Certificate, filed as Exhibit 4.2 to the Registrant's Registration
Statement on Form S-1 (Registration No. 33-63446), which exhibit is incorporated herein by
reference.
**4.5 Trust Deed, dated as of March 21, 1996, between the Registrant, Sunshine Precious Metals,
Inc. and Marine Midland Bank.
**4.6 Form of Note (included in Exhibit 4.5).
***4.7 Warrant Agreement dated as of June 21, 1996, between the Registrant, Rauscher, Pierce &
Clark Limited and HSBC Investment Banking Limited.
***4.8 Form of Warrant Certificate (included in Exhibit 4.7).
***5.1 Opinion of Haynes and Boone, LLP.
***23.1 Consent of Haynes and Boone, LLP (included in the opinion filed as Exhibit 5.1).
**23.2 Consent of Ernst & Young LLP.
**24.1 Power of Attorney (set forth on signature page hereof).
</TABLE>
* Previously filed.
** Filed herewith.
*** To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement
(notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar of securities would not exceed that
which was registered) and any deviation from the low
or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if in the
aggregate, the changes in volume and price represents
no more than 20% change in the maximum
II-1
<PAGE> 13
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
Registration Statement); and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boise, State of Idaho, on the 21st day of June,
1996.
SUNSHINE MINING AND REFINING COMPANY
By: /s/ John S. Simko
------------------------------------
John S. Simko
President and Chief Executive Officer
POWER OF ATTORNEY
Each individual whose signature appears below hereby constitutes and
appoints John S. Simko as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and on his behalf and in
his name, place and stead, in any and all capacities, to sign, execute, and
file any and all documents relating to this Registration Statement, including
any and all amendments including post-effective amendments), exhibits and
supplements thereto, and requests to accelerate the effectiveness of this
Registration Statement, with any regulatory authority, granting unto said
attorneys and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises in order to effectuate the same as fully to all intents and
purposes as he himself might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and agent or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John S. Simko Director, President and June 21, 1996
------------------------- Chief Executive Officer
John S. Simko (Principal Executive Officer)
/s/ G. Chris Anderson Director June 21, 1996
-------------------------
G. Chris Andersen
/s/ Daniel D. Jackson Director June 21, 1996
-------------------------
Daniel D. Jackson
/s/ V. Dale Babbitt Director June 21, 1996
-------------------------
V. Dale Babbitt
/s/ William W. Davis Executive Vice President June 21, 1996
------------------------- (Principal Accounting
William W. Davis Officer and Principal
Financial Officer)
/s/ Robert B. Smith, Jr. Director June 21, 1996
-------------------------
Robert B. Smith, Jr.
/s/ Oren G. Shaffer Director June 21, 1996
-------------------------
Oren G. Shaffer
</TABLE>
II-3
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
----------- ------- ----
<S> <C>
*4.1 Certificate of Incorporation, filed as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-4 (Registration No. 33-98876), which exhibit
is incorporated herein by reference.
*4.2 Amendment to Certificate of Incorporation, filed as Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated May 22, 1996 (File No. 33-
98876), which exhibit is incorporated herein by reference.
*4.3 Bylaws, filed as Exhibit 3.2 to the Registrant's Registration Statement on
Form S-4 (Registration No. 33-98876), which exhibit is incorporated herein by
reference.
*4.4 Specimen Common Stock Certificate, filed as Exhibit 4.2 to the Registrant's
Registration Statement on Form S-1 (Registration No. 33-63446), which exhibit
is incorporated herein by reference.
**4.5 Trust Deed, dated as of March 21, 1996, between the Registrant, Sunshine
Precious Metals, Inc. and Marine Midland Bank.
**4.6 Form of Note (included in Exhibit 4.5).
***4.7 Warrant Agreement dated as of June 21, 1996, between the Registrant,
Rauscher, Pierce & Clark Limited and HSBC Investment Banking Limited.
***4.8 Form of Warrant Certificate (included in Exhibit 4.7).
***5.1 Opinion of Haynes and Boone, LLP.
***23.1 Consent of Haynes and Boone, LLP (included in the opinion filed as
Exhibit 5.1).
**23.2 Consent of Ernst & Young LLP.
**24.1 Power of Attorney (set forth on signature page hereof).
</TABLE>
_______________
* Previously filed.
** Filed herewith.
*** To be filed by amendment.
II-4
<PAGE> 1
CONFORMED COPY
DATED 21ST MARCH, 1996
-------------------------------
SUNSHINE PRECIOUS METALS, INC. (1)
SUNSHINE MINING AND REFINING COMPANY (2)
AND
MARINE MIDLAND BANK (3)
-------------------------------
TRUST DEED
CONSTITUTING
US$30,000,000
8 PERCENT SENIOR EXCHANGEABLE
NOTES DUE 2000
-------------------------------
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
CLAUSE HEADING PAGE
<S> <C>
1 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Amount of the Notes and covenant to pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4 Form of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5 Stamp duties and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6 Application of moneys received by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7 Covenant to comply with provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8 Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9 Exchange on redemption and mandatory exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10 Covenants relating to exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12 Remuneration and indemnification of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
13 Provisions supplemental to the Trustee Act 1925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14 Trustee liable for gross negligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
15 Waiver and proof of default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16 Trustee not precluded from entering into contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
17 Modification and substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
18 Appointment, retirement and removal of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19 Couponholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
20 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
21 Termination, Satisfaction and Discharge of the Trust Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
22 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
23 Currency indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
24 Governing law and jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SCHEDULE
1 Forms of Bearer Note, Coupon and Registered Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2 Form of Global Bearer Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3 Provisions for Meetings of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4 Register and Transfer of Registered Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5 Terms and Conditions of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
<PAGE> 3
THIS TRUST DEED is made on 21st March, 1996 BETWEEN:-
(1) SUNSHINE PRECIOUS METALS, INC. (the "COMPANY") whose registered
office is at 877 W. Main Street, Suite 600, Boise, Idaho 83702,
U.S.A.;
(2) SUNSHINE MINING AND REFINING COMPANY ("SSC") whose registered
office is at 877 W. Main Street, Suite 600, Boise, Idaho 83702,
U.S.A.; and
(3) MARINE MIDLAND BANK whose registered office is at 140 Broadway, New
York, New York 10005-1180, USA (the "TRUSTEE", which expression
shall, where the context so admits, include all persons for the
time being the trustee or trustees of this Trust Deed).
WHEREAS:-
(A) The Company, incorporated in the State of Delaware, has by a
written resolution of its Board of Directors adopted on 27th
February, 1996, authorised the issue of US$30,000,000 8 percent
Senior Exchangeable Notes to be constituted by this Trust Deed.
(B) SSC, incorporated in the State of Delaware, has by a resolution of
its Board of Directors adopted on 27th February, 1996 authorised
the giving of the Guarantee and the exchange of the Notes into
Shares.
(C) The Trustee has agreed to act as trustee of this Trust Deed on the
terms and conditions of this Trust Deed.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:-
1 INTERPRETATION
(A) Definitions: The following expressions shall have the following meanings:-
"AGENCY AGREEMENT" means the Registrar, Paying and Exchange Agency
Agreement dated 21st March, 1996, as altered from time to time, between the
Company, SSC, the Trustee, the Principal Paying, Exchange and Transfer
Agent, the other Paying, Exchange and Transfer Agent named in the
Conditions and the Registrar whereby the initial Paying, Exchange and
Transfer Agents and the Registrar were appointed in relation to the Notes,
as altered from time to time, between the Company, SSC, the Trustee and any
Agents and includes any agreements appointing any successor agents or
relating to the duties of any Agents or altering any of the aforesaid
agreements, in each case, on terms approved by the Trustee;
"AGENTS" means the Principal Paying, Exchange and Transfer Agent, the other
Paying, Exchange and Transfers Agents and the Registrar or, as the context
requires, any of them;
"AUDITORS" means the auditors for the time being of the Company or SSC or,
if there shall be joint auditors, any one or more of such auditors or, in
the event of their being unable or unwilling to carry out any action
requested of them pursuant to this Trust Deed, such other accountants or
firm of accountants as may be nominated by the Company or SSC, as the case
may, be with the written approval of the Trustee or, in default of such
nomination and approval, nominated by the Trustee (after consultation with
the Company or SSC, as the case may be, where such consultation is not
prejudicial to the interests of the Noteholders) for the purpose;
"BEARER NOTE" means a Note which is for the time being in bearer form;
"CONDITIONS" means the Terms and Conditions of the Notes set forth in
Schedule 5 and on the back of the Notes;
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<PAGE> 4
"CONSOLIDATED NET WORTH" has the meaning specified in Condition 13(g);
"COUPONHOLDERS" means the bearers of Coupons and, in relation to a Coupon,
"holder" means the bearer of a Coupon;
"COUPONS" means the bearer interest coupons for the time being relating to
the Bearer Notes in definitive form or, as the context may require, a
specific number of them and includes any replacement Coupons issued
pursuant to Condition 16;
"CURRENT MARKET PRICE" has the meaning specified in Condition 8(C);
"EVENT OF DEFAULT" means any of the events described in Condition 13;
"EXCHANGE DATE" has the meaning specified in Condition 8(B);
"EXCHANGE NOTICE" has the meaning specified in Condition 8(B);
"EXCHANGE PERIOD" has the meaning specified in Condition 8(A);
"EXCHANGE PRICE" means the exchange price of the Shares determined in
accordance with Condition 8(A)(iii);
"EXCHANGE RIGHT" has the meaning specified in Condition 8(A)(i);
"EXTRAORDINARY RESOLUTION" has the meaning set out in paragraph 21 of
Schedule 3;
"GLOBAL BEARER NOTE" means the temporary global bearer note for the Bearer
Notes in the form or substantially in the form set out in Schedule 2;
"GROUP" has the meaning specified in Condition 13(a);
"GUARANTEE" means the guarantee by SSC set out herein;
"INDEBTEDNESS" has the meaning specified in Condition 13(b);
"INTEREST PAYMENT DATE" has the meaning specified in Condition 6(A);
"LIEN" has the meaning specified in Condition 13(f);
"MANDATORY EXCHANGE DATE" has the meaning specified in Condition 8(E)(i);
"MERGER" has the meaning specified in condition 13(c);
"NOTES" means the notes (whether in bearer or registered form) comprising
the US$30,000,000 8 percent Senior Exchangeable Notes due 2000 constituted
by this Trust Deed and for the time being outstanding or, as the context
may require, a specific number of them and includes any replacement Notes
issued pursuant to Condition 16 and (except for the purposes of Clauses
4(A) and (B)), in relation to the Bearer Notes, the Global Bearer Note;
"NOTEHOLDER" and, in relation to a Note, "holder" means, in relation to a
Bearer Note, the bearer of a Bearer Note and, in relation to a Registered
Note, a person in whose name a Registered Note is registered;
"OUTSTANDING" means, in relation to the Notes, all the Notes issued other
than (a) those which have been redeemed or in respect of which Exchange
Rights have been exercised and which have been cancelled in accordance with
the Conditions, (b) those in respect of which the date for redemption in
accordance with the Conditions has occurred and the redemption moneys
(including all interest accrued on such Notes up to but excluding the date
fixed for such redemption and any interest payable under Condition 6 in
respect of any period commencing on or after such date) have been duly
- 2 -
<PAGE> 5
paid to the relevant Noteholder (or to a person on behalf of such
Noteholder) or to the Trustee or to the Principal Paying, Exchange and
Transfer Agent as provided in Clause 2(B) and remain available for payment
against presentation and surrender of Notes and/or Coupons, as the case may
be, (c) those which have become void or those in respect of which claims
have become prescribed under Condition 12, (d) those mutilated or defaced
Notes which have been surrendered in exchange for replacement Notes
pursuant to Condition 16, (e) (for the purpose only of determining how many
Notes are outstanding and without prejudice to their status for any other
purpose) those Notes alleged to have been lost, stolen or destroyed and in
respect of which replacement Notes have been issued pursuant to Condition
16, (f) those which have been purchased and cancelled as provided in
Condition 9, (g) those Bearer Notes which have been exchanged for
Registered Notes and vice versa and (h) the Global Bearer Note to the
extent that it shall have been exchanged for definitive Notes pursuant to
its provisions, provided that for the purposes of (i) ascertaining the
right to attend and vote at any meeting of the Noteholders, (ii) the
determination of how many Notes are outstanding for the purposes of
Conditions 13, 14 and 17 and Schedule 3 and (iii) the exercise of any
discretion, power or authority which the Trustee is required, expressly or
impliedly, to exercise in or by reference to the interests of the
Noteholders, those Notes (if any) which are beneficially held by, or are
held on behalf of, the Company or any of its Subsidiaries and not yet
cancelled shall be deemed not to remain outstanding;
"PAYING, EXCHANGE AND TRANSFER AGENTS" means, in relation to the Notes, the
several institutions (including the Principal Paying, Exchange and Transfer
Agent) at their respective specified offices referred to in the Conditions
or, as the context requires, any of them or, as the context requires, any
of them and, in each case, any successor paying, exchange and transfer
agent at its specified office;
"PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT" means, in relation to the
Notes, Midland Bank plc of Mariner House, Pepys Street, London EC3N 4DA in
its capacity as Principal Paying, Exchange and Transfer Agent and, in each
case, any Successor principal paying, exchange and transfer agent at its
specified office;
"PRINCIPAL SUBSIDIARY" has the meaning specified in Condition 13(d);
"REGISTERED NOTES" means those Notes for the time being in registered form;
"REGISTRAR" means, in relation to the Notes, Marine Midland Bank in its
capacity as the Registrar and, any Successor registrar;
"RIGHTS" includes rights in whatsoever form;
"SHAREHOLDERS" means the holders of Shares;
"SHARES" means common stock par value US$0.01 per Share of SSC or its
survivor by reason of the Merger (and all other (if any) shares or stock
resulting from any sub-division, consolidation or re-classification of such
shares);
"SPECIFIED OFFICE" means, in relation to any Agent, either the office
identified with its name at the end of the Conditions or any other office
approved in writing by the Trustee and notified to the Noteholders pursuant
to Clause 11(A)(vi);
"STOCK EXCHANGE BUSINESS DAY" has the meaning specified in Condition 8(B);
"STOCK SPLIT" has the meaning specified in Condition 8(C);
"SUBSIDIARY" has the meaning specified in Condition 13(e);
"SUCCESSOR" means, in relation to the Agents, such other or further person
as may from time to time be appointed by the Company as an Agent with the
written approval of,
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<PAGE> 6
and on terms approved in writing by, the Trustee and notice of whose
appointment is given to Noteholders pursuant to Clause 11(A)(vi) and
Condition 17;
"SUNSHINE MINE" has the meaning specified in Condition 11(C);
"THIS TRUST DEED" means this Trust Deed, including the Schedules and the
Conditions as from time to time altered in accordance with this Trust Deed
and any other document executed in accordance with this Trust Deed, as from
time to time so altered in accordance with this Trust Deed, and expressed
to be supplemental to this Trust Deed; and
"TRUST CORPORATION" means a corporation entitled by rules made under the
Public Trustee Act 1906 or entitled pursuant to any other legislation
applicable to a trustee in any jurisdiction other than England to carry out
the functions of a custodian trustee.
(B) Construction of certain references: References to:-
(1) costs, charges, remuneration or expenses shall include any value
added tax, turnover tax or similar tax charged in respect thereof;
(2) "U.S. Dollars", "Dollars", "dollars", "U.S.$" and "$" shall be
construed as references to the lawful currency for the time being
of United States of America;
(3) any action, remedy or method of judicial proceedings for the
enforcement of rights of creditors shall include, in respect of any
jurisdiction other than England and Wales, references to such
action, remedy or method of judicial proceedings for the
enforcement of rights of creditors available or appropriate in such
jurisdiction as shall most nearly approximate thereto;
(4) words denoting the singular number only shall include the plural
number also and vice versa;
(5) words denoting one gender only shall include the other genders;
(6) words denoting persons only shall include firms and corporations
and vice versa;
(7) any provision of any statute shall be deemed also to refer to any
statutory modification or re-enactment thereof or any statutory
instrument, order or regulation made thereunder or under such
modification or re- enactment;
(8) references in this Trust Deed to Clauses and Schedules are
references to Clauses of and Schedules to this Trust Deed;
(9) references to the issue of Shares or other securities or to issued
or to be issued Shares or other securities or to Shares or other
securities in issue or to the date of issue of any Shares or other
securities shall be construed as if the word "allotment" or
"allotted" or "allotment" (whichever the context shall require)
were substituted for the word or words "issue", "issue" or "in
issue" (as the case may be); and
(10) references to an issue or offer to holders of Shares "as a class"
or "by way of rights" shall be taken to be references to an issue
or offer to the majority of such holders other than holders to
whom, by reason of the laws of any territory or requirements of any
recognised regulatory body or any other stock exchange in any
territory or in connection with fractional entitlements, it is
determined not to make such issue or offer.
- 4 -
<PAGE> 7
(C) Definitions in Conditions: Words and expressions defined in the Conditions
and not defined in the main body of this Trust Deed shall when used in this
Trust Deed have the same meanings as are given to them in the Conditions.
(D) Headings: Headings shall be ignored in construing this Trust Deed.
(E) Schedules: The Schedules are part of this Trust Deed and shall have effect
accordingly.
(F) Enforceability: If at any time any provision of this Trust Deed is or
becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Trust Deed nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction
shall in any way be affected or impaired thereby.
2 AMOUNT OF THE NOTES AND COVENANT TO PAY
(A) Amount of the Notes: The aggregate principal amount of the Notes which may
be authenticated and delivered under this Trust Deed is limited to
US$30,000,000.
(B) Covenant to pay: The Company will by 12 noon (New York time) on any date
when the Notes or any of them become due to be redeemed unconditionally pay
to or to the order of the Trustee in Dollars in immediately available funds
in New York the principal amount of the Notes becoming due for redemption
on that date and will (subject to the Conditions) until such payment (both
before and after judgment) unconditionally pay to or to the order of the
Trustee as aforesaid interest on the principal amount of the Notes
outstanding as set out in Conditions 6 and 7, provided that (1) every
payment of any sum due in respect of the Notes made to or to the account of
the Principal Paying, Exchange and Transfer Agent as provided in the Agency
Agreement shall, to such extent, satisfy such obligation except to the
extent that there is failure in its subsequent payment to the relevant
Noteholders or (as the case may be) Couponholders under the Conditions and
(2) in the event that, upon due presentation of any Note for redemption,
payment of principal is improperly withheld or refused, such Note will
continue to bear interest as aforesaid until and including the day after
the Noteholders have been or are deemed to have been notified, whichever is
earlier, of receipt by the Trustee or the Principal Paying, Exchange and
Transfer Agent of all sums due in respect of the Notes up to and including
that day (except to the extent that there is a failure in the subsequent
payment by any Agent to the relevant holders under the Conditions). The
Trustee will hold the benefit of this covenant on trust for the Noteholders
and Couponholders.
(C) Discharge: Subject to Clause 2(D), any payment to be made in respect of
the Notes or the Coupons by the Company or the Trustee may be made as
provided in the Conditions and any payment so made will to such extent be a
good discharge to the Company or the Trustee, as the case may be in respect
of such payment.
(D) Payment after a default: At any time after an Event of Default has
occurred and is continuing the Trustee may:-
(1) by notice in writing to the Company, SSC and the Agents, require
the Agents, until notified in writing by the Trustee to the
contrary, so far as permitted by any applicable law:-
(a) to act, thereafter, as Agents of the Trustee under this
Trust Deed and the Notes on the terms of the Agency
Agreement (with consequential amendments as necessary and
except that the Trustee's liability for the
indemnification, remuneration and all other out-of-pocket
expenses of the Agents will be limited to the amounts for
the time being held by the Trustee in respect of the Notes
on the terms of this Trust Deed) and thereafter to hold all
Notes and Coupons and all moneys, documents
- 5 -
<PAGE> 8
and records held by them in respect of Notes and Coupons on
behalf of and to the order of the Trustee; or
(b) to deliver all Notes and Coupons and all moneys, documents
and records held by them in respect of the Notes and
Coupons to the Trustee or as the Trustee directs in such
notice, provided that such notice shall be deemed not to
apply to any documents or records which the relevant Agent
is obliged not to release by any law or regulation; and
(2) by notice in writing to the Company require it to make all
subsequent payments in respect of the Notes and Coupons to or to
the order of the Trustee and not to the Principal Paying, Exchange
and Transfer Agent or the Registrar.
3 GUARANTEE
(A) SSC's liability: SSC hereby irrevocably and unconditionally guarantees to
the Trustee on behalf of and for the benefit of the Noteholders and the
Couponholders the due and punctual payment by the Company of all moneys
payable from time to time in respect of the Notes and the Coupons
(including, without prejudice to the generality of the foregoing, all
additional amounts payable pursuant to Condition 10) and all other moneys
payable from time to time under or pursuant to these presents as follows:
(i) if and whenever the Company shall make default in the payment of
any such moneys, SSC shall forthwith upon written demand therefor
by the Trustee irrevocably and unconditionally pay to or to the
order of the Trustee in Dollars the amount in respect of which such
default has been made and any payment so made shall to such extent
cure such default by the Company subject as provided in Clauses
2(B), 2(C) and 2(D), the provisions of which Clauses shall apply
mutatis mutandis to such payment;
(ii) as a separate and independent stipulation SSC agrees that any such
moneys which may not be recoverable from the Company by reason of
any legal limitation, disability or incapacity on or of the Company
or any other fact or circumstance shall nevertheless be recoverable
from SSC as though the same had been incurred by SSC and SSC were
the sole and principal debtor in respect thereof and shall be paid
by SSC forthwith upon written demand therefor by the Trustee. SSC
shall not be exonerated or discharged from liability by time being
given, or any other indulgence or concession being granted, to the
Company by the Trustee or by the Noteholders or the Couponholders
or any of them or by anything done by the Trustee in exercise of
any of the trusts, powers, authorities or discretions vested in it
by these presents or by anything which the Noteholders or the
Couponholders or the Trustee or any of them may do or omit or
neglect to do or by any other dealing or thing which, but for this
provision, might operate to exonerate or discharge SSC from its
obligations hereunder. It is further agreed as a separate and
independent stipulation that any sums of money which may not be
recoverable from SSC on the basis of a guarantee whether by reason
of any legal limitation, disability or any other fact or
circumstances and whether or not known to the Trustee or the
Noteholders or the Couponholders or any of them shall nevertheless
be recoverable from SSC as sole or principal debtor in respect
thereof and shall be paid by SSC to the Trustee forthwith upon
written demand therefor by the Trustee;
(iii) the Guarantee shall be a continuing guarantee and accordingly shall
remain in operation until all such moneys have been paid or
satisfied in full and shall be in addition to and not in
substitution for, and shall not be affected by, any other rights
which the Trustee or the Noteholders or the Couponholders or any of
them may have under or by virtue of these presents and may be
enforced without first having recourse to any such rights and
without taking any steps or proceedings against the Company;
- 6 -
<PAGE> 9
(iv) the Trustee may from time to time make any arrangement or
compromise with SSC in relation to the Guarantee which the Trustee
and SSC may think fit;
(v) prior to the liquidation of the Company, SSC shall not, without the
prior written consent of the Trustee, at any time after default has
been made by the Company in the payment of any such moneys and so
long as any moneys payable from time to time by SSC in respect of
such defaulted moneys remain unpaid, exercise in respect of any
amounts paid under the Guarantee any right of subrogation,
indemnity or reimbursement or any other right or remedy which SSC
may have in respect of or as a result of such payment;
(vi) in the event of the liquidation of the Company, if any moneys shall
then be payable by SSC under the Guarantee, SSC will, until all
such moneys payable from time to time in respect of the Notes and
the Coupons and all other moneys payable from time to time under or
pursuant to these presents have been paid in full, hold the benefit
of all its claims against the Company upon trust to pay the same to
the Trustee and shall prove for such claims against the Company and
SSC hereby irrevocably authorises the Company to pay to the
Trustee, to the extent that all such moneys payable from time to
time in respect of the Notes and the Coupons and all other moneys
payable under or pursuant to these presents shall not have been
paid in full, all moneys due in respect of such claims;
(vii) if any payment received by the Trustee or any Noteholder or
Couponholder pursuant to the provisions hereof shall be avoided
under any laws relating to bankruptcy, insolvency, corporate
reorganisation or other similar events, such payment shall not be
considered as having discharged or diminished the liability of SSC,
and the Guarantee shall continue to apply as if such payment had at
all times remained owing by the Company and SSC shall indemnify the
Trustee and the Noteholders and Couponholders in respect thereof.
(B) No payments by Company: If any moneys shall become payable by SSC under
the Guarantee, the Company shall not (save in the event of the liquidation
of the Company), so long as such moneys remain unpaid, pay any moneys for
the time being due by the Company to SSC.
(C) Consents and authorisations: If at any time any authorisation or approval
becomes necessary to permit SSC to pay any moneys payable from time to time
in respect of the Notes or the Coupons or under or pursuant to these
presents in accordance with the terms of these presents as a result of any
change in, any change in the official application of, or any amendment to,
the laws or regulations of the United States, SSC shall forthwith apply for
the necessary authorisation and approval and shall provide copies of such
application as soon as reasonably practicable to the Trustee. SSC shall
provide copies of such authorisation and approval to the Trustee as soon as
they are obtained.
(D) Application of moneys received by the Trustee: Any amount from time to
time received by the Trustee under the Guarantee shall be applied by the
Trustee in accordance with the provisions of Clause 6.
(E) Nature of obligations: SSC hereby covenants with the Trustee that the
obligations of SSC under the Guarantee constitute direct, unconditional and
unsecured obligations of SSC and rank and will rank senior to all other
outstanding unsecured and subordinated obligations of SSC, present and
future (including, without limitation, the Convertible Subordinated Reset
Debentures due July, 15 2008 issued by SSC) but, in the event of the
bankruptcy or insolvency of SSC, only to the extent permitted by applicable
laws relating to creditors' rights.
- 7 -
<PAGE> 10
4 FORM OF THE NOTES
(A) The Global Bearer Note: The Bearer Notes will be represented initially by
the Global Bearer Note in the principal amount of US$30,000,000 which will
be exchangeable for definitive Bearer Notes in denominations of US$1,000
and US$10,000 each with Coupons attached on issue as set out in the Global
Bearer Note. Pending exchange of the Global Bearer Note, its holder will,
subject to its provisions, be deemed to be the holder of the definitive
Bearer Notes and the Coupons for all purposes save that unless, upon due
presentation of the Global Bearer Note for exchange, delivery of Bearer
Notes is improperly refused or withheld and such refusal or withholding is
continuing at the relevant time, the Global Bearer Note will not confer
upon its holder the right to receive interest or to exercise the Exchange
Rights.
(B) The definitive Notes: The Bearer Notes and the Coupons will be security
printed in accordance with the applicable stock exchange requirements and
the Bearer Notes, Coupons, Registered Notes and Global Bearer Note will be
in or substantially in the respective forms set out in Schedules 1 and 2
and the Notes will be endorsed with the Conditions. The Registered Notes
will be in dominations of US$1,000 each and integral multiplies thereof
without Coupons attached. Title to the Registered Notes in definitive form
shall pass upon the registration of transfers in respect thereof in
accordance with the provisions of these presents and Schedule 4.
(C) Signature: The Bearer Notes and the Coupons will be signed manually or in
facsimile by a duly authorised officer of the Company and will be
authenticated by or on behalf of the Principal Paying, Exchange and
Transfer Agent. The Registered Notes will be signed manually or in
facsimile by a duly authorised officer executed under the Common Seal of
the Company and will be authenticated by the Registrar. The Company may
use the facsimile signature of any person who is at the date of this Trust
Deed a duly authorised officer of the Company even if at the time of issue
of any Notes and/or Coupons he no longer holds such office. None of the
Global Bearer Note, the Notes or the Coupons shall be valid for any purpose
unless and until so authenticated (if applicable) and executed.
5 STAMP DUTIES AND TAXES
(A) Stamp and other duties and taxes: The Company will pay any stamp, issue,
registration, documentary or other similar taxes and duties, including
interest and penalties, payable in the United Kingdom and the United States
in respect of the creation and original issue and offering of the Notes and
the Coupons and the execution or delivery of this Trust Deed. The Company
will also indemnify the Trustee, the Noteholders and the Couponholders from
and against all stamp, issue, registration, documentary or other taxes paid
by any of them in any jurisdiction in relation to which the liability to
pay arises directly as a result of any action properly taken by or on
behalf of the Trustee or, as the case may be, (where entitled under
Condition 14 to do so) the Noteholders or the Couponholders to enforce the
obligations of the Company under this Trust Deed, the Notes or the Coupons.
(B) Change of taxing jurisdiction: If the Company becomes subject generally to
the taxing jurisdiction of any territory or any authority of or in that
territory having power to tax (other than the United States or any such
authority of or in the United States), then the Company will (unless the
Trustee otherwise agrees in writing and subject to any required
governmental or other consents or approvals) give to the Trustee an
undertaking in form satisfactory to the Trustee in terms corresponding to
the terms of Condition 10 with the substitution for the references in that
Condition to the United States of references to that other territory or
authority to whose taxing jurisdiction the Company has become so subject
and in such event this Trust Deed, the Notes and the Coupons will be
construed accordingly.
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<PAGE> 11
6 APPLICATION OF MONEYS RECEIVED BY THE TRUSTEE
Declaration of trust: All moneys received by the Trustee in respect of the
Notes or amounts payable under this Trust Deed will, regardless of any
appropriation of all or part of them by the Company, be held by the Trustee
upon trust to apply them in accordance with the provisions of the Notes and
this Trust Deed:-
first, in payment of all costs, charges, expenses and liabilities properly
incurred by the Trustee (including remuneration payable to the Trustee) in
carrying out its functions under this Trust Deed;
secondly, in payment of any principal and interest and all other sums owing
in respect of the Notes and the Coupons pari passu and rateably; and
thirdly, in payment of the balance (if any) to the Company for itself.
Without prejudice to this Clause 6, if the Trustee holds any moneys which
represent principal or interest or other sums in respect of Notes or
Coupons which have become void or in respect of which claims have become
prescribed under Condition 12, the Trustee will hold such moneys upon the
above trusts.
7 COVENANT TO COMPLY WITH PROVISIONS
(A) Compliance with this Trust Deed: Each of the Company and SSC hereby
covenants with the Trustee that it will comply with and perform and observe
all the provisions of this Trust Deed which are expressed to be binding on
it. The Conditions shall be binding on the Company, SSC, the Noteholders
and the Couponholders. The Trustee shall be entitled to enforce its rights
and the obligations of the Company under the Notes, the Coupons and the
Conditions and the same shall be deemed to be set out and contained in, and
shall form part of, this Trust Deed. The Schedules shall also form part of
this Trust Deed and have effect in the same manner as if herein set forth.
(B) When Trustee required to act: The Trustee is hereby authorised and it is
declared that the Trustee shall be entitled to assume without enquiry (in
the absence of express written notice to the Trustee from the Company or
SSC, as the case may be, to the contrary) that the Company and SSC are duly
performing and observing all its obligations under, and all covenants and
provisions contained in this Trust Deed, the Notes and the Coupons and on
its part to be performed and observed. Notwithstanding knowledge by or
notice to the Trustee of any breach of any such obligation, covenant or
provision, it shall be in the discretion of the Trustee whether or not to
take any action or proceedings to enforce the performance thereof and the
Trustee shall not be bound to enforce the same or any of the covenants or
provisions of these presents unless and until, in any of such cases (but
subject to Condition 13), the Trustee is directed to do so by an
Extraordinary Resolution or in writing by the holders of at least
one-quarter part in principal amount of the Notes for the time being
outstanding, and then only if the Trustee shall be indemnified to its
satisfaction against all actions, proceedings, costs, claims and demands to
which it may render itself liable and all costs, charges, damages and
expenses which it may incur by so doing.
8 EXCHANGE
(A) Rights of exchange: The holder of each Note will have the right, subject
to the Conditions and in accordance with the provisions of Condition 8, to
exchange such Note into Shares, credited as fully paid and non-assessable.
(B) Adjustment of Exchange Price: Upon the happening of any event on which the
Exchange Price is to be adjusted in accordance with the Conditions, the
Exchange Price shall be adjusted in relation to subsequent exchanges of the
Notes as follows:
(i) If and whenever there shall be an alteration to the number of the
Shares as a result of consolidation, reclassification or
subdivision of the Shares, the
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<PAGE> 12
Exchange Price shall be adjusted by multiplying the Exchange Price
in force immediately before such alteration by the following
fraction:-
A
---
B
where:
A is the number of Shares in issue immediately after such
alteration; and
B is the number of Shares in issue immediately before such
alteration.
Such adjustment shall become effective on the date the alteration takes
effect.
(ii) If and whenever SSC shall issue any Shares credited as fully paid
to Shareholders by way of capitalisation of profits or reserves
(including any share premium account and capital redemption
reserve), or may make any Stock Split the Exchange Price shall be
adjusted by multiplying the Exchange Price in force immediately
before such issue by the following fraction:-
A
---
B
where:
A is the aggregate nominal amount of the issued Shares immediately
before such issue; and
B is the aggregate nominal amount of the issued Shares immediately
after such issue.
Such adjustment shall become effective on the date of such issue.
(iii) If and whenever SSC shall issue Shares to Shareholders as a class
by way of rights, or shall issue or grant to Shareholders as a
class by way of rights securities (including options, warrants and
other rights) carrying rights to subscribe for or purchase any
Shares, in each case at a price per Share which is less than the
Current Market Price per Share on the dealing day last preceding
the date on which the terms of such issue or grant are publicly
announced, the Exchange Price shall be adjusted by multiplying the
Exchange Price in force immediately before such issue or grant by
the following fraction:-
A + B
-----
A + C
where:
A is the number of Shares in issue immediately before such
announcement;
B is the number of Shares which the aggregate consideration
receivable for the Shares so issued, or for the maximum number of
Shares to be issued upon exercise in full of such rights, would
purchase at such Current Market Price per Share; and
C is the number of Shares so issued or such maximum number of Shares.
Such adjustment shall become effective on the date of such issue or grant.
(iv) If and whenever SSC shall issue any securities (other than Shares
and any securities, options, warrants or other rights referred to
in paragraph (iii) of this Clause 8(B)) to Shareholders as a class
by way of rights, or shall issue or grant
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<PAGE> 13
to Shareholders as a class by way of rights securities (including
options, warrants and other rights) carrying rights to subscribe
for or purchase any securities (other than Shares and any
securities, options, warrants or other rights referred to in such
paragraph (iii)) or the distribution by SSC of assets, cash or
other property to Shareholders (other than usual annual or interim
dividends in cash), the Exchange Price shall be adjusted by
multiplying the Exchange Price in force immediately before such
issue or grant by the following fraction:-
A - B
-----
A
where:
A is the Current Market Price per Share on the dealing day last
preceding the date on which the terms of such issue or grant are
publicly announced; and
B is the fair market value on the date of such announcement, as
determined in good faith by a merchant bank in London of
international repute, acting as an expert, appointed by SSC and
approved in writing by the Trustee or, in default of such
appointment or in the absence of such approval, appointed by the
Trustee, of the portion of the rights attributable to one Share.
Such adjustment shall become effective on the date of such issue or grant.
(v) If and whenever SSC or (at the direction or request of or pursuant
to any arrangements with the Company or any Subsidiary), the
Company, any Subsidiary or any other company, person or entity
(otherwise than as mentioned in paragraph (iii) or (iv) of this
Clause 8(B)) shall issue or grant wholly for cash or for no
consideration any securities (other than the Notes but including
options, warrants and other rights) carrying rights of conversion
into, or exchange or subscription for, Shares, or securities which
by their terms might be redesignated as Shares or so as to carry
rights of conversion into, or exchange or subscription for, Shares,
where the consideration per Share receivable upon exercise of such
rights or upon such redesignation is less than the Current Market
Price per Share on the dealing day last preceding the date on which
the terms of such issue or grant are publicly announced, the
Exchange Price shall be adjusted by multiplying the Exchange Price
in force immediately before such issue or grant by the following
fraction:-
A + B
-----
A + C
where:
A is the number of Shares in issue immediately before such issue or
grant;
B is the number of Shares which the aggregate consideration
receivable for the maximum number of Shares to be issued upon
exercise in full of such rights, or arising from such
redesignation, would purchase at such Current Market Price per
Share; and
C is the maximum number of Shares to be issued upon exercise in full
of such rights at the initial conversion, exchange or subscription
price or rate or to arise upon such redesignation.
Such adjustment shall become effective on the date of such issue or grant.
(vi) If SSC (after consultation with the Trustee) or the Trustee (after
consultation with SSC) determines that an adjustment should be made
to the Exchange Price as a result of one or more events or
circumstances not referred to in paragraphs
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<PAGE> 14
(i) to (v) of this Clause 8(B) (even if the relevant event or
circumstance is specifically excluded from the operation of those
paragraphs or any of them) SSC, shall, at its own expense and
acting reasonably, request the Auditors, acting as experts, to
determine as soon as practicable what adjustment (if any) to the
Exchange Price is fair and reasonable to take account of such event
or circumstance and the date on which such adjustment should take
effect, and upon such determination such adjustment (if any) shall
be made and shall take effect in accordance with such
determination, but so that an adjustment shall only be made
pursuant to this sub-paragraph (vi) if the Auditors are so
requested to make such a determination not more than 21 days after
the occurrence of the relevant event or circumstance.
Provided that where the circumstances giving rise to any adjustment
pursuant to this Clause 8(B) have already resulted or will result in an
adjustment to the Exchange Price or where the circumstances giving rise to
any adjustment arise by virtue of any other circumstances which have
already given or will give rise to an adjustment to the Exchange Price,
such modification (if any) shall be made to the operation of the provisions
of this Clause 8(B) as may be advised by the Auditors, acting as experts,
to be in their opinion appropriate in order to give the intended effect.
(C) Calculation of consideration receivable: For the purpose of any
calculation of the consideration receivable pursuant to paragraphs (iii)
and (v) of Clause 8(B), the following provisions shall apply:-
(i) the aggregate consideration receivable for Shares issued for cash
shall be the amount of such cash received or receivable by SSC,
provided that in no case shall any deduction be made for any
commission or any expenses paid or incurred by SSC for any
underwriting of the issue or otherwise in connection therewith;
(ii) the aggregate consideration receivable for Shares to be issued upon
the exercise of rights of exchange or subscription shall be the
consideration received or receivable by SSC which is attributed by
SSC to such rights or, if no part of such consideration is so
attributed or the Trustee so requires by notice in writing to SSC,
the fair market value of such rights as at the date on which the
terms of issue of the relevant securities (including options,
warrants and other rights) are publicly announced (as determined in
good faith by an independent merchant bank in London of
international repute, acting as an expert, appointed by SSC and
approved in writing by the Trustee or, in default of such
appointment or in the absence of such approval, appointed by the
Trustee) plus the additional consideration to be received by SSC as
a consequence of such exercise, such additional consideration to be
the amount (including any premium) to be treated by SSC as paid up
on the Shares or other securities arising from such exercise (the
consideration in all such cases to be determined subject to the
proviso in paragraph (i) of this Clause 8(C)); and
(iii) the consideration per Share receivable upon the exercise of rights,
exchange or subscription shall be the aggregate consideration
referred to in paragraph (ii) of this Clause 8(C), converted into
Dollars if such consideration is expressed in a currency other than
Dollars at such rate of exchange as may be determined in good faith
by an independent merchant bank in London of international repute,
acting as an expert, appointed by SSC and approved in writing by
the Trustee or, in default of such appointment or in the absence of
such approval, appointed by the Trustee, to be the spot rate ruling
at the close of business on the date on which the terms of issue of
the relevant securities (including options, warrants and other
rights) are publicly announced, divided by the number of Shares to
be issued upon such exercise at the initial conversion, exchange or
subscription price or rate.
(D) Post-record date adjustments: If the Exchange Date in relation to any Note
shall be after the record date for any such issue, grant or offer as is
mentioned in Clause 8(B),
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<PAGE> 15
but before the relevant adjustment becomes effective under Clause 8(B), SSC
shall (conditional upon such adjustment becoming effective) procure that
there shall be issued to the exchanging Noteholder or in accordance with
the instructions contained in the Exchange Notice (subject to any
applicable exchange control or other laws or other regulations) such
additional number of Shares as, together with the Shares issued or to be
issued on exchange of the relevant Note, is equal to the number of Shares
which would have been required to be issued on exchange of such Note if the
relevant adjustment (more particularly referred to in such paragraphs) to
the Exchange Price had in fact been made and become effective immediately
after the relevant record date. Such additional Shares will be allotted as
at, and within one month after, the relevant Exchange Date or of the date
of issue of Shares if adjustment results from the issue of Shares and
certificates for such Shares (if the Shares are in certificated form as
defined in Clause 10) will be despatched within such period of one month.
(E) No adjustment
Notwithstanding the provisions of this clause 8 the Exchange Price will not
be (i) adjusted by reason of the Merger other than pursuant to the
provisions of Condition 8(A)(iv) or (ii) reduced as a result of any such
adjustment, and the Company covenants not to take any action, if, after
giving effect thereto, the Exchange Price would be reduced to such an
extent that, under applicable law then in effect, Notes may not be
exchanged at such reduced Exchange Price for legally issued, fully paid and
non-assessable Shares. No adjustment will be made where such adjustment
would be less than 5 percent of the Exchange Price then in effect. Any
adjustment not so made will be carried forward and taken into account in
any subsequent adjustment. On any adjustment, the resultant Exchange
Price, if not an integral multiple of one cent shall be rounded down to the
nearest one cent.
(F) The Company shall give sufficient notice to the Trustee to enable it to
comply with its obligation under Condition 8(A)(iv) to give notice to the
Noteholders of any reset of the Exchange Price pursuant to Condition 17.
9 EXCHANGE ON REDEMPTION AND MANDATORY EXCHANGE
(A) (i) Exchange by Trustee: The Trustee may, at its absolute discretion
and without any responsibility for any loss occasioned thereby,
within the period commencing on the date six Business Days prior
to, and ending at the close of business in New York prior to the
date fixed for redemption from time to time of any of the Notes
(including any redemption under Condition 9(A), (B) or (C) but
subject as aforesaid), elect by notice in writing to the Company
and SSC to exchange the aggregate number of Notes due for
redemption on such date fixed for redemption and in respect of
which Exchange Rights have not been exercised by Noteholders
("Unexercised Notes") into Shares at the Exchange Price applicable
at such redemption date if all necessary consents (if any) have
been obtained and the Trustee is satisfied or is advised by an
independent merchant bank that the net proceeds of an immediate
sale of the Shares arising from such exchange, disregarding any
liability (other than a liability of the Trustee) to taxation or
the payment of any capital, stamp, issue or registration duties
consequent thereon, would be likely to exceed by 5 percent or more
the amount of redemption moneys and interest which would otherwise
be payable in respect of interest accrued since the Interest
Payment Date last immediately preceding such redemption date or, if
such date falls on or before the first Interest Payment Date, since
the Closing Date in respect of such Unexercised Notes.
(ii) Allotment of Shares to Trustee: SSC undertakes to allot, within 10
Business Days after the relevant date fixed for redemption, to the
Trustee on behalf of the holders of the Unexercised Notes so
exchanged as of the relevant redemption date the Shares required to
be allotted pursuant to Clause 9(A) and to deliver, within 15
Business Days after such Shares, in New York to the Trustee.
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<PAGE> 16
(iii) Sale of Shares by Trustee: The Trustee shall, subject to
applicable law, on behalf of the holders of the Unexercised Notes,
arrange for the sale of the Shares issued on such exchange of the
Unexercised Notes as soon as practicable and (subject to any
necessary consents being obtained and to the deduction by the
Trustee of any amount which it determines to be payable in respect
of its liability to taxation and the payment of any capital, stamp,
issue or registration duties (if any) and any costs incurred by the
Trustee in connection with that allotment and sale thereof) the net
proceeds of sale together with accrued interest payable under
Condition 8(B)(iv) (if any) in respect of such Unexercised Notes
(if any) shall be held by the Trustee and distributed rateably to
the holders of such Unexercised Notes against due presentation of
such Unexercised Notes in accordance with Condition 7. The amount
of such net proceeds of sale shall be treated for all purposes as
the full amount due by the Company in respect of the Unexercised
Notes (for this purpose treating any Coupon expressed to be payable
on the date fixed for redemption of such Notes as an unmatured
Coupon).
(B) (i) In the event the Company elects to exercise its right of mandatory
exchange under Condition 8(E)(i) the Company shall, not less than
30 and not more than 60 calendar days prior to the Mandatory
Exchange Date, cause written notice of the Mandatory Exchange Date
to be given to the Trustee, the Paying Agents, the Exchange Agents
and the holders of the Notes (in accordance with Condition 17 (such
notice to include a statement of the consequences of failure on the
part of the Noteholders to perform the obligations specified in
Condition 8(E)). Following such notice, each of the Noteholders
will be required on or before the Mandatory Exchange Date to
deliver or procure delivery of its Notes together with a duly
completed Exchange Notice to the specified office of any Exchange
Agent, during its usual business hours for such purposes and
perform together with the Company and SSC, the obligations
applicable to it on exchange specified in Condition 8.
(ii) If any Noteholder with respect to whose Notes mandatory exchange
(pursuant to Condition 8) is to take place shall fail to perform
its obligations specified in Condition 8 or shall have a registered
address in any territory where, in the absence of any registration
statement or other special formalities or legal requirements, the
issue, allotment, transfer or delivery of the Shares arising on
mandatory exchange in the reasonable opinion of the Trustee, is or
could be unlawful or impracticable, subject to applicable law, the
Trustee shall make arrangements for the sale of such Shares to a
third party at the best consideration reasonably obtainable by the
Trustee and pay to such Noteholder the consideration received by
the Trustee in respect of such Shares (after any deduction required
to reimburse any reasonable and proper expenses incurred in
arranging any such sale or any taxes payable in connection
therewith arising solely as a result of the Noteholder's failure to
perform its obligations under Condition 8(E)).
10 COVENANTS RELATING TO EXCHANGE
(A) SSC hereby undertakes to and covenants with the Trustee that so long as any
Exchange Right remains exercisable, it will, save with the approval of an
Extraordinary Resolution or with the prior written approval of the Trustee
where, in the Trustee's opinion, it is not materially prejudicial to the
interests of the Noteholders to give such approval:-
(i) Issue and ensure sufficient share capital: issue Shares to
Noteholders on the exercise of Exchange Rights in accordance with
the Conditions and at all times keep available for issue free from
pre-emptive rights out of its authorised but unissued capital such
number of Shares as would enable the Exchange Rights and all other
rights of subscription and exchange for and exchange into Shares to
be satisfied in full;
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<PAGE> 17
(ii) Limited modification of rights: not in any way modify the rights
attaching to the Shares with respect to voting, dividends or
liquidation nor issue any other class of equity share capital
carrying any rights which are more favourable than the rights
attaching to the Shares;
(iii) Restricted action: not make any issue, grant or distribution or
take any other action if the effect thereof would be that, on the
exchange of Notes, Shares would have to be issued at a discount or
otherwise could not, under any applicable law then in effect, be
legally issued as fully paid;
(iv) Notice of adjustment to Exchange Price: simultaneously with the
announcement of the terms of any issue or grant referred to in
paragraph (i), (ii) or (iii) or (iv) of Clause 8(B) and the
announcement of any proposed modification referred to in paragraph
(iv) of Clause 8(B) give notice to the Noteholders in accordance
with Condition 17 advising them of the date on which the relevant
adjustment to the Exchange Price is likely to become effective and
of the effect of exercising their rights of exchange pending such
date;
(v) Officers' certificate on adjustment of Exchange Price: upon the
happening of an event as a result of which the Exchange Price will
be adjusted pursuant to this Trust Deed as soon as reasonably
practicable deliver to the Trustee a certificate signed by two duly
authorised officers of SSC on behalf of SSC setting forth brief
particulars of the event, the adjusted Exchange Price, the date on
which such adjustment takes effect and such other particulars and
information as the Trustee may reasonably require;
(vi) Consolidation: in the event that SSC consolidates with or merges
into any Person or sells, leases, conveys, transfers or otherwise
disposes of its properties or assets as an entirety or
substantially as an entirety to any Person, and as a result of such
transaction the Shares are no longer traded on the NYSE or an
Alternative Stock Exchange, then subject to compliance with
applicable law, each Noteholder may require the Company to redeem
his or its outstanding Notes at 100 percent of the principal
amount, plus accrued and unpaid interest thereon;
(vii) No Liens over shares in Company: will not create or permit to
subsist any Lien relating to or over the shares of the Company,
held or beneficially owned by SSC;
(viii) File Registration Statement: to the extent SSC and its counsel
determine it is required because an exemption from registration is
not available, file with the Securities and Exchange Commission on
or before June 30, 1996, and keep effective a Registration
Statement in such form as SSC determines to be appropriate in
respect of the registration of the Shares to be issued pursuant to
the Exchange Rights to U.S. persons and any subsequent resale of
such Shares to U.S. persons; and
(ix) Maintain Listing:
(a) to maintain a listing for all the issued Shares on the
NYSE, it being understand that if SSC is unable to obtain
or maintain such listing of Shares, it will obtain and
maintain a listing for all the Shares issued on the
exercise of the Exchange Rights on any other stock exchange
or authorised for quotation on NASDAQ or by the National
Quotation Bureau Incorporated (each an "Alternative Stock
Exchange") as SSC may from time to time (with the written
consent of the Trustee) determine and will forthwith give
notice to the Noteholders in accordance with Condition 17
of the listing, de-listing or quotation or lack of
quotation of the Shares (as a class) by any such
Alternative Stock Exchange; and
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<PAGE> 18
(b) procure that the Company maintains a listing of the Notes
on the Luxembourg Stock Exchange.
(B) Undertakings by the Company
Whilst any Exchange Right remains exercisable, the Company will, save with
the approval of an Extraordinary Resolution or with the approval of the
Trustee where, in the Trustee's opinion, it is not materially prejudicial
to the interests of the Noteholders to give such approval:
(i) not incur, create, assume or guarantee any Indebtedness other than
the Notes;
(ii) not create or permit to subsist any Lien or other encumbrance or
security interest over or otherwise dispose, sell or transfer any
of its assets, revenues, undertaking or property including, without
limitation, its interest in the Sunshine Mine;
(iii) maintain a listing for the Notes on the Luxembourg Stock Exchange;
and
(iv) in the event that either an Additional Amount or Shares equal
thereto are payable pursuant to Condition 6(B), notify the Trustee
of the Additional Amount payable or the Shares to be issued no
later than the 2 Business Days after the Anniversary Date (as
defined in Condition 6(B)).
11 COVENANTS
(A) So long as any Note is outstanding, the Company will and SSC will procure
that the Company will:-
(i) Books of account: keep, and procure that its Principal
Subsidiaries keep, proper books of account and, at any time after
the occurrence of an Event of Default or if the Trustee has
reasonable grounds to believe that any such event has occurred, so
far as permitted by applicable law, allow, and procure that each of
its Principal Subsidiaries will allow, the Trustee and anyone
appointed by it to whom the Company and/or the relevant Principal
Subsidiary has no reasonable objection, access to the books of
account of the Company and/or the relevant Principal Subsidiary
respectively at all reasonable times during normal business hours,
provided that nothing in this Clause 11(A) shall oblige the Company
or any of its Principal Subsidiaries to disclose confidential
information concerning customers;
(ii) Notice of Events of Default: notify the Trustee in writing
immediately upon becoming aware of the occurrence of any Event of
Default;
(iii) Information: so far as permitted by applicable law, give to the
Trustee such information as it reasonably requires for the
performance of its functions;
(iv) Financial statements etc.: send to the Trustee four copies of
every consolidated balance sheet, profit and loss account, report
and notice of general meeting and every other document issued or
sent to its shareholders, stockholders or creditors generally
together with any of the foregoing, and every document issued or
sent to holders of listed securities other than its shareholders
(including the Noteholders) or its creditors generally and in its
or their capacity as such, at the time of issue thereof or as soon
is practical thereafter;
(v) Officers' certificate concerning Events of Default: send to the
Trustee, within 14 days after its annual audited consolidated
balance sheet and profit and loss account being made available to
its members, and also within 14 days after any request by the
Trustee a certificate signed by two duly authorised officers of the
Company on behalf of the Company to the effect that, having made
all reasonable enquiries, to the best of the knowledge, information
and belief of the
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<PAGE> 19
Company as at a date (the "Certification Date") being not more than
five days before the date of the certificate no Event of Default
had occurred since the date of this Trust Deed or the Certification
Date of the last such certificate (if any) or, if such an event had
occurred, giving details of it together with a list of Subsidiaries
which are Principal Subsidiaries of the Company and details of its
Consolidated Net Worth as at the date of such certificate;
(vi) Notices to Noteholders: send to the Trustee before the date of
publication a copy of the form of each notice to the Noteholders to
be published in accordance with Condition 17 and upon publication
two copies of each notice so published (such notice to be in a form
approved in writing by the Trustee);
(vii) Further acts: so far as permitted by applicable law, do all such
further things as may be necessary in the reasonable opinion of the
Trustee having regard to the interests of Noteholders to give
effect to this Trust Deed;
(viii) Notice of late payment: forthwith upon request by the Trustee give
notice to the Noteholders of any unconditional payment to the
Principal Paying, Exchange and Transfer Agent or the Trustee of any
sum due in respect of the Notes or Coupons made after the due date
for such payment;
(ix) Change in Agents: give not less than 14 days' prior notice to the
Noteholders of any future appointment or any resignation or removal
of any Agent or of any change by any Agent of its specified office
or, if later, notice as soon as reasonably practicable after
becoming aware thereof and not make any such appointment or removal
without the written approval of the Trustee;
(x) Notes held by the Company etc.: send to the Trustee as soon as
practicable after being so requested by the Trustee a certificate
of the Company signed by any two duly authorised officers on behalf
of the Company setting out the total number of Notes which, at the
date of such certificate, were held by or on behalf of the Company
or its Subsidiaries and which had not been cancelled; and
(xi) Early redemption: give prior notice to the Trustee of any proposed
redemption pursuant to Condition 9(B) or 9(C), make drawings (if
appropriate) and redeem Notes accordingly.
(B) Covenants by SSC: SSC hereby covenants with the Trustee in the terms of
Clauses 11.1(i), (ii), (iii), (iv), (v) and (vii) as if references to the
Company therein were references to SSC.
12 REMUNERATION AND INDEMNIFICATION OF THE TRUSTEE
(A) Normal remuneration: So long as any Note is Outstanding the Company
(failing which SSC) will pay to the Trustee by way of remuneration for its
services as Trustee such fees as have been previously provided in writing
to the Company or as may from time to time be agreed between them. Such
remuneration will accrue from day to day from the date of this deed and
shall be payable on such dates as may be agreed between the Company and the
Trustee.
(B) Extra remuneration: At any time after the occurrence of an Event of
Default or if the Trustee finds it expedient in the interests of
Noteholders or necessary, or is requested by the Company or SSC, to
undertake duties which the Trustee and the Company or SSC, as the case may
be, agree to be of an exceptional nature or otherwise outside the scope of
the normal duties of the Trustee under this Trust Deed, the Company
(failing which SSC) will pay such additional remuneration as may be agreed
between them or, failing agreement as to any of the matters in this Clause
12(B) (or as to such sums referred to in Clause 12(A)), as determined by a
merchant bank in London of international repute, acting as an expert,
selected by the Trustee and approved by the Company or, in the absence of
such approval, nominated by the President for the time
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<PAGE> 20
being of The Law Society of England and Wales, the expenses involved in
such selection and approval and the fee of such merchant bank being shared
equally between the Trustee and the Company. The determination of such
merchant bank will, in the absence of manifest error, be conclusive and
binding on the Company, the Trustee, SSC, the Noteholders and the
Couponholders.
(C) Expenses: The Company (failing which SSC) will also pay or discharge all
reasonable costs, charges, liabilities and expenses incurred by the Trustee
in relation to the preparation and execution of this Trust Deed and the
carrying out of its functions under this Trust Deed including, but not
limited to, legal and travelling expenses and any stamp, registration,
documentary or other taxes or duties paid by the Trustee in connection with
any legal proceedings brought by the Trustee against the Company for
enforcing any obligation under this Trust Deed, the Notes or the Coupons.
(D) Payment of expenses: All such reasonable costs, charges, liabilities and
expenses incurred and payments made by the Trustee reasonably necessary in
relation to the preparation and execution of this Trust Deed and in the
lawful performance of its functions under this Trust Deed will be payable
or reimbursable by the Company (failing which SSC) within 14 days of demand
by the Trustee and:-
(1) in the case of payments made by the Trustee prior to such demand
will (if not paid within 14 days of such demand) carry interest
from and including the date on which the demand is made at the rate
of two percent. per annum over the base rate of Marine Midland
Bank for the time being; and
(2) in all other cases will carry interest at such rate from and
including the thirtieth day after the date on which the demand is
made or (where the demand properly specifies that payment is to be
made on an earlier date) from and including such earlier date.
(E) Indemnity: The Company (failing which SSC) will, subject to Clause 14,
indemnify the Trustee in respect of all liabilities and expenses properly
incurred by it in the proper fulfilment of its obligations under this Trust
Deed or by anyone appointed by it or to whom any of its functions may be
delegated by it in the carrying out of its functions in the fulfilment of
its obligations under this Trust Deed and against any loss, liability,
cost, claim, action, demand or expense (including, but not limited to, all
reasonable costs, charges and expenses paid or properly incurred in
disputing or defending any of the foregoing) which any of them may properly
incur or which may be made against any of them arising out of or in
relation to or in connection with its appointment or the exercise of its
functions, provided that such indemnity shall not extend to any such loss,
liability, cost, claim, action, demand or expense incurred or suffered by
any agent or delegate appointed by the Trustee in connection with the
performance of its functions hereunder in the event of gross negligence or
wilful default of such agent or delegate.
(F) Provisions continuing: The provisions of Clauses 12(C), 12(D) and 12(E)
will continue in full force and effect in relation to the Trustee even if
it may have ceased to be Trustee.
13 PROVISIONS SUPPLEMENTAL TO THE TRUSTEE ACT 1925
By way of supplement to the Trustee Act 1925 and subject to Clause 14 it is
expressly declared as follows:-
(A) Advice: In performing its duties hereunder, the Trustee may act on the
opinion or advice of, or information obtained from, any expert and will not
be responsible to anyone for any loss occasioned by so acting. Any such
opinion, advice or information may be sent or obtained by letter, telex or
facsimile transmission and the Trustee will not be liable to anyone for
acting in good faith on any opinion, advice or information purporting to be
conveyed by such means even if it contains some error or is not authentic.
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<PAGE> 21
(B) Trustee to assume due performance: The Trustee need not notify anyone of
the execution of this Trust Deed or do anything to ascertain whether any
Event of Default has occurred and, until it has actual written knowledge to
the contrary, the Trustee may assume that no such event has occurred.
(C) Resolutions of Noteholders: The Trustee will not be responsible for having
acted in good faith upon a resolution purporting to have been passed at a
meeting of Noteholders in respect of which minutes have been made and
signed even though it may later be found that there was a defect in the
constitution of such meeting or the passing of such resolution or that such
resolution was not valid or binding upon the Noteholders or the
Couponholders.
(D) Officers' certificate: The Trustee may call for and may accept as
sufficient evidence of any fact or matter or of the expediency of any act a
certificate signed by any two authorised officers of the Company or SSC on
behalf of the Company or SSC (including any calculation of the Consolidated
Net Worth of SSC) as to any fact or matter upon which the Trustee may, in
the exercise of any of its functions, require to be satisfied or to have
information to the effect that, in the opinion of the persons so
certifying, any particular act is expedient and the Trustee need not call
for further evidence and will not be responsible for any loss that may be
occasioned by it failing to do so or by it acting or not acting on any such
certificate.
(E) Deposit of documents: The Trustee may deposit this Trust Deed and any
other documents in any part of the world with any banker or banking company
or entity whose business includes undertaking the safe custody of documents
or with any lawyer or firm of lawyers believed by it to be of good repute
and may pay all sums to be paid on account of or in respect of any such
deposit, provided that, unless in the opinion of the Trustee it is required
in connection with the enforcement of any obligation of the Company or SSC
under this Trust Deed, the Notes or the Coupons or otherwise in connection
with the performance of the duties of the Trustee hereunder or thereunder
or unless it comprises the holding or placing of such documents in the
United Kingdom, the Trustee may not take any such action if a liability to
stamp duty or other duties or taxes would thereby arise.
(F) Discretion of Trustee: Save as expressly provided in this Trust Deed, the
Trustee will have absolute and uncontrolled discretion as to the exercise
of its functions and will not be responsible for any loss, liability, cost,
claim, action, demand, expenses or inconvenience which may result from
their exercise or non-exercise.
(G) Delegation: Whenever it considers it expedient in the best interests of
the Noteholders the Trustee may delegate to any person and on any terms
(including power to sub-delegate) all or any of its functions including to
any agent employed and paid by it. If the Trustee exercises reasonable
care in the selection of such delegate, it will not be under any obligation
to supervise such delegate or be responsible for any loss, liability, cost,
claim, action, demand or expense incurred by reason of any misconduct or
default by any such delegate or sub-delegate. Notwithstanding the general
power of delegation in this Clause 13(G) the Trustee may not delegate the
right to give any notice under Condition 13 that the Notes are immediately
due and repayable unless prior to such delegation the Trustee provides to
the Company and SSC confirmation in writing that the Trustee has been
advised by its legal advisers that it should delegate that right (with or
without any other rights, trusts, powers, authorities and discretions) to
another person or fluctuating body of persons because of the conflict of
interest or possible conflict of interest and/or other similar
circumstances which the Trustee might face, or be subjected to, as the
Trustee of this Trust Deed if it were not to delegate that right.
(H) Forged Notes: The Trustee will not be liable to the Company, SSC or any
Noteholder or Couponholder by reason of having accepted as valid or not
having rejected any Note or Coupon purporting to be such and later found to
be forged or not authentic.
(I) Confidentiality: Unless ordered to do so by a court of competent
jurisdiction, the Trustee shall not be required to disclose to any
Noteholder or Couponholder any
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<PAGE> 22
confidential financial, price sensitive or other information made
available to the Trustee by the Company or SSC and no Noteholder or
Couponholder shall be entitled to take any action to obtain from the
Trustee any such information.
(J) Determinations conclusive: As between itself and the Noteholders and
Couponholders the Trustee may determine all questions and doubts arising in
relation to any of the provisions of this Trust Deed. Every such
determination, whether made upon such a question actually raised or implied
in the acts or proceedings of the Trustee, will be conclusive in the
absence of manifest error and shall bind the Trustee, the Noteholders and
the Couponholders.
(K) Currency conversion: Subject as provided in this Trust Deed, where it is
necessary or desirable to convert any sum from one currency to another, it
will (unless otherwise provided hereby or required by law) be converted at
such rate or rates, in accordance with such method and as at such date as
may reasonably be specified by the Trustee but having regard to current
rates of exchange, if available. Any rate, method and date so specified
will be binding on the Company, SSC, the Noteholders and the Couponholders.
(L) Events of default: The Trustee may determine whether or not a default in
the performance or observance by the Company or SSC of any obligation is in
its opinion capable of remedy and/or whether or not any event is in its
opinion materially prejudicial to the interests of the Noteholders or has a
material adverse effect on the Company's or SSC's ability to perform or
comply with any of its obligations under this Trust Deed, the Notes or the
Coupons. Any such determination will be conclusive and binding upon the
Company, SSC, the Noteholders and the Couponholders.
(M) Payment for and delivery of Notes: The Trustee will not be responsible for
the receipt or application by the Company of the proceeds of the issue of
the Notes, the exchange of the Global Bearer Note for the definitive Notes
or the delivery of definitive Notes to the persons entitled to them.
(N) Notes held by the Company etc.: In the absence of actual knowledge in
writing to the contrary, the Trustee may assume without enquiry that no
Notes are for the time being held by or on behalf of the Company, SSC or
any of its Subsidiaries.
(O) Interests of Noteholders: In connection with the exercise of its powers,
trusts, authorities or discretions (including, but not limited to, those in
relation to any proposed modification, waiver or authorisation of any
breach or proposed breach of any of the Conditions or any of the provisions
of this Trust Deed or any proposed substitution in accordance with Clause
17(B) or 17(C) or any modification made pursuant to Clause 17(A)), the
Trustee shall have regard to the interests of the Noteholders as a class
and in particular, but without limitation, shall not have regard to the
consequences of such exercise for individual Noteholders or Couponholders
resulting from their being for any purpose domiciled or resident in, or
otherwise connected with, or subject to the jurisdiction of, any particular
territory and the Trustee shall not be entitled to require, nor shall any
Noteholder or Couponholder be entitled to claim from the Company, SSC or
the Trustee or any other person, any indemnification or payment of any tax
arising in consequence of any such exercise upon individual Noteholders or
Couponholders except to the extent provided for in Condition 10 and/or in
any undertakings given in addition thereto or in substitution therefor
pursuant to this Trust Deed.
(P) No responsibility for values etc.: The Trustee shall not at any time be
under any duty or responsibility to any Noteholder to determine whether any
facts exist which may require any adjustment to the Exchange Price or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or in this Trust Deed provided to be
employed, in making the same. The Trustee shall not at any time be under
any duty or responsibility in respect of the validity or value (or the kind
or amount) of any Shares or of any other securities, property or cash,
which may at any time be made available or delivered upon the conversion of
any Note, and it makes no
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<PAGE> 23
representation with respect thereto. The Trustee shall not be responsible
for any failure of the Company to make available or deliver any Shares or
share certificates or other securities or property or make any payment upon
the exercise of the Exchange Right in respect of any Note or of the Company
to comply with any of the provisions contained in this Trust Deed.
14 TRUSTEE LIABLE FOR GROSS NEGLIGENCE
Nothing in this Trust Deed shall in any case in which the Trustee has
failed to show the degree of care and diligence required of it as trustee
having regard to the provisions of this Trust Deed relieve or indemnify it
from or against any liability which by virtue of any rule of law would
otherwise attach to it in respect of any gross negligence, bad faith,
default, breach of duty or breach of trust of which it may be liable.
15 WAIVER AND PROOF OF DEFAULT
(A) Waiver: The Trustee may agree, without the consent of the Noteholders or
Couponholders to any modification (subject to certain exceptions) of, or to
the waiver or authorisation of any breach or proposed breach of, any of the
Conditions or any of the provisions of this Trust Deed which is not, in the
opinion of the Trustee, materially prejudicial to the interests of the
Noteholders or Couponholders or to any modification which is of a formal,
minor or technical nature or to correct a manifest error.
(B) Proof of default: If it is proved that, as regards any specified Note or
Coupon the Company has made default in paying any sum due to the relevant
Noteholder or Couponholder, such proof will (unless the contrary be proved)
be sufficient evidence that the same default has been made as regards all
other Notes or (as the case may be) Coupons which are then payable.
16 TRUSTEE NOT PRECLUDED FROM ENTERING INTO CONTRACTS
Neither the Trustee nor any director or officer of a corporation acting as
a Trustee, whether acting for itself or in any other capacity, will be
precluded from becoming the owner of, or acquiring any interest in, or
holding, or disposing of, any Note or Coupon or any shares or securities of
the Company or any of its Subsidiaries, holding or associated companies
with the same rights as it would have had if the Trustee were not Trustee
or from entering into or being interested in any contracts or transactions
with the Company or any of its Subsidiaries, holding or associated
companies or from acting on, or as depositary or agent for, any committee
or body of holders of any securities of the Company or any of its
Subsidiaries, holding or associated companies and will not be liable to
account for any profit.
17 MODIFICATION AND SUBSTITUTION
(A) Modification: The Trustee, the Company and SSC may mutually agree, without
the consent of the Noteholders or Couponholders, to any modification to the
Conditions, the Notes, the Coupons or any other provisions of this Trust
Deed which in its opinion is of a formal, minor or technical nature, or
which is made to correct a manifest error. The Trustee, the Company and
SSC may also mutually agree to any modification to the Conditions, the
Notes, the Coupons or any other provisions of this Trust Deed which is in
the opinion of the Trustee not materially prejudicial to the interests of
the Noteholders, but such power does not extend to any such modification as
is mentioned in the proviso to paragraph 19 of Schedule 3. Any such
modification permitted by this Clause 17(A) shall be binding upon the
Noteholders and Couponholders.
(B) Substitution:
(1) Substitution by Substituted Obligor: The Trustee may, without the
consent of the Noteholders or Couponholders, agree to the
substitution of a Subsidiary or a holding company of the Company or
any Subsidiary of such holding company (the "Substituted Obligor")
in place of the Company (or of any
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<PAGE> 24
previously substituted company under this Clause 17(B)) as the
principal debtor under this Trust Deed, the Notes and the Coupons,
provided that:-
(a) a trust deed is executed or some other form of undertaking
is given by the Substituted Obligor to the Trustee, in form
and manner reasonably satisfactory to the Trustee, agreeing
to be bound by the terms of this Trust Deed, the Notes and
the Coupons, including the Exchange Rights, with any
consequential amendments which the Trustee may reasonably
deem appropriate as fully as if the Substituted Obligor had
been named in this Trust Deed and on the Notes and Coupons
as the principal debtor in place of the Company;
(b) where the Substituted Obligor is subject generally to the
taxing jurisdiction of any territory or any authority of or
in that territory having power to tax (the "Substituted
Territory") other than the taxing jurisdiction of any
territory to which (or to any such authority of or in
which) the Company is subject generally (the "Company's
Territory"), the Substituted Obligor will (unless the
Trustee otherwise agrees) give to the Trustee an
undertaking in form and manner reasonably satisfactory to
the Trustee in terms corresponding to the terms of
Condition 10 with the substitution for the references in
that Condition to the Company's Territory of references to
the Substituted Territory and in such event the Trust Deed,
the Notes and the Coupons will be read accordingly;
(c) if any two authorised officers of the Substituted Obligor
certify on behalf of the Substituted Obligor that it will
be solvent immediately after such substitution, the Trustee
need not have regard to the financial condition, profits or
prospects of the Substituted Obligor or compare them with
those of the Company; and
(d) the Company and the Substituted Obligor comply with such
other requirements, as the Trustee may direct in the
interests of the Noteholders.
(e) any other documentation requested by the Trustee, including
an opinion of counsel which it deems appropriate.
In the case of any such substitution, the Trustee may agree,
without the consent of the Noteholders and the Couponholders, to a
change of law governing the Notes, the Coupons and/or the Trust
Deed provided that such change would not, in the opinion of the
Trustee, be materially prejudicial to the interests of the
Noteholders.
(2) Release of substituted company: Any such agreement by the Trustee
pursuant to this Clause 17(B) will, if so expressed, operate to
release the Company (or any such previously substituted company
under this Clause 17(B)) from any or all of its obligations under
this Trust Deed, the Notes and the Coupons. Not later than 14 days
after the execution of any such documents and after compliance with
such requirements, notice of the substitution will be given by the
Company to the Noteholders.
(3) Completion of substitution: Upon the execution of such documents
and compliance with such requirements, the Substituted Obligor will
be deemed to be named in this Trust Deed and on the Notes and
Coupons as the principal debtor in place of the Company (or of any
previously substituted company under this Clause 17(B)) and this
Trust Deed, the Notes and the Coupons will be deemed to be modified
in such manner as shall be necessary to give effect to the
substitution.
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<PAGE> 25
(C) (a) The Trustee may, without the consent of the Noteholders or the
Couponholders, but so as to bind the Noteholders and the
Couponholders, agree with the Company and SSC to the substitution
of any Subsidiary or holding company of SSC or any subsidiary of
such holding company (the "SUBSTITUTED GUARANTOR") in place of SSC
(or of any previous substitute under this Clause 17(B)) as the
guarantor of the obligations of the Company (or any previous
substitute under Clause 17(C) under these presents guaranteed by
SSC (or if any previous substitute under this Clause 17(C) under
these presents, provided that:
(i) the Trustee is satisfied that such substitution is not
materially prejudicial to the interests of the Noteholders;
(ii) a trust deed is executed or some other form of undertaking
is given by the Substituted Guarantor to the Trustee, in a
form and manner satisfactory to the Trustee, agreeing to be
bound by the provisions of this Trust Deed, the Notes and
the Coupons binding on SSC with any consequential
amendments which the Trustee may deem appropriate as fully
as if the Substituted Guarantor had been named in these
presents as the guarantor of such obligations of the
Company (or of any previous substitute under Clause 17(B))
in place of SSC (or of any previous substitute under this
Clause 17.(C));
(iii) where the Substituted Guarantor is subject generally to the
taxing jurisdiction of any territory or any authority of or
in that territory having power to tax (for the purpose of
this Clause 17(C), the "SUBSTITUTED TERRITORY") other than
the taxing jurisdiction of any territory to which (or to
any authority of or in which) SSC (or any previous
substitute under this Clause 17(C) is subject generally
(for the purpose of this Clause 17(C), the "EXISTING
TERRITORY"), the Substituted Guarantor will (unless the
Trustee otherwise agrees) give to the Trustee an
undertaking in form and manner satisfactory to the Trustee
in terms corresponding to the terms of Condition 10 with
the substitution for the references in that Condition to
the Existing Territory of references to the Substituted
Territory and in such event this Trust Deed, the Notes and
the Coupons will be read accordingly;
(iv) if any two authorised officers of the Substituted Guarantor
certify on behalf of the Substituted Guarantor to the
Trustee that it will be solvent immediately after such
substitution, the Trustee need not have regard to the
financial condition, profits or prospects of the
Substituted Guarantor or compare them with those of SSC (or
of any previous substitute under this Clause 17(C)); and
(v) the Company (and any previous substitute under Clause
17(B)), SSC and the Substituted Guarantor (and any previous
substitute under this Clause 17.(C)) comply with such other
requirements as the Trustee may direct in the interests of
the Noteholders.
In the case of such substitution, the Trustee may agree, without
the consent of the Noteholders or the Couponholders, to a change of
law governing these presents provided that such change would not,
in the opinion of the Trustee, be materially prejudicial to the
interests of the Noteholders. Any such substitution as is
permitted by this Clause 17(C) shall be binding upon the
Noteholders and the Couponholders.
(b) Release of existing obligor: Any such agreement by the Trustee
pursuant to this Clause 17(C) will, if so expressed, operate to
release SSC (or any such previous substitute) from any or all of
its obligations under this Trust Deed save with respect to its
obligations relating to the exchange of Notes for Shares. Not
later than 14 days after the execution of any such documents and
after
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<PAGE> 26
compliance with such requirements, notice of the substitution will
be given by the Substituted Guarantor to the Noteholders in
accordance with Condition 17 as soon as practicable.
(c) Completion of substitution: Upon the execution of such documents
and compliance with such requirements, the Substituted Guarantor
will be deemed to be named in this Trust Deed as the guarantor of
the obligations aforesaid of the Company (or of any previous
substitute under Clause 17(B)) in place of SSC (or of any previous
substitute under this Clause 17(C)) and this Trust Deed will be
deemed to be modified in such manner as shall be necessary to give
effect to the substitution.
18 APPOINTMENT, RETIREMENT AND REMOVAL OF THE TRUSTEE
(A) Appointment: The Company will have the power of appointing any new Trustee
but no person will be so appointed unless previously approved by an
Extraordinary Resolution of Noteholders. A trust corporation will at all
times be a Trustee and may be the sole Trustee. Any appointment of a new
Trustee will be notified by the Company to the Noteholders as soon as
practicable.
(B) Retirement and removal: Any Trustee may retire at any time on giving not
less than three months' notice in writing to the Company without giving any
reason and without being responsible for any costs occasioned by such
retirement and the Noteholders may by Extraordinary Resolution remove any
Trustee, provided that the retirement or removal of any sole Trustee or
sole trust corporation will not become effective until a trust corporation
is appointed as successor Trustee. If a sole Trustee gives notice of
retirement or an Extraordinary Resolution is passed for its removal under
this Clause 18(B), it will use all reasonable endeavours to procure that
another trust corporation be appointed as Trustee.
(C) Co-Trustees: The Trustee may, notwithstanding Clause 18(A), by notice in
writing to the Company, appoint anyone to act as an additional Trustee
jointly with the Trustee:-
(a) if the Trustee considers such appointment to be in the interests of
the Noteholders and/or the Couponholders;
(b) for the purpose of conforming with any legal requirement,
restriction or condition in any jurisdiction in which any
particular act is to be performed; or
(c) for the purpose of obtaining a judgment in any jurisdiction or the
enforcement in any jurisdiction against the Company of either a
judgment already obtained or any of the provisions of this Trust
Deed.
Subject to the provisions of this Trust Deed, the Trustee may confer on any
person so appointed such functions as it thinks fit. The Trustee may by
notice in writing to the Company and such person remove any person so
appointed. At the request of the Trustee, the Company will do all things
as may be required to perfect such appointment or removal and it
irrevocably appoints the Trustee to be its attorney in its name and on its
behalf to do so.
(D) Competence of a majority of Trustees: If there are more than two Trustees
the majority of such Trustees will (provided such majority includes a trust
corporation) be competent to carry out all or any of the Trustee's
functions.
19 COUPONHOLDERS
(A) Notices: Neither the Trustee nor the Company need give any notice to the
Couponholders and the Couponholders will be deemed to have notice of the
contents of any notice given to the Noteholders.
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<PAGE> 27
(B) Noteholders assumed to hold Coupons: Even if it has notice to the
contrary, whenever the Trustee is required to exercise any of its functions
by reference to the interests of the Noteholders, the Trustee will assume
that each Noteholder is the holder of all Coupons relating to each Note of
which he is the bearer.
20 ENFORCEMENT
No holder of any Note or Coupon shall have any right to institute any
proceeding judicial or otherwise, with respect to this Trust Deed, or for
the appointment of a receiver or trustee or for any other remedy hereunder,
unless:
(a) such holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the holders of not less than 25 per cent. in principal amount of
the Outstanding Note shall have made written request to or an
Extraordinary Resolution has directed the Trustee to institute
proceeding in respect of such Event of Default in its own name as
Trustee hereunder;
(c) the Trustee has been given reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 30 day period by the holders of a
majority in principal amount of the Outstanding Notes;
it being understood and intended that no one or more holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provisions of this Trust Deed to affect, disturb or prejudice the rights of
any other holders of Notes or to obtain or seek to obtain priority or
preference over any other holders or to enforce any right under this Trust
Deed, except in the manner herein provided and for the equal and ratable
benefit of all the holders of Notes and/or Coupons.
21 TERMINATION, SATISFACTION AND DISCHARGE OF THE TRUST DEED
This Trust Deed shall cease and be of no further effect and the Trustee
shall, upon the request and cost of the Company, execute proper documents
acknowledging the termination, satisfaction and discharge of this Trust
Deed, when none of the Notes are Outstanding.
22 COMMUNICATIONS
Any communication shall be by letter delivered personally or facsimile
transmission:-
in the case of the Company, to it at:-
877 W. Main Street, Suite 600
Boise
Idaho, 83702
U.S.A.
Fax no. 001 214 265 0324
Attention: John Simko
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<PAGE> 28
in the case of SSC, to it at:
877 W. Main Street, Suite 600
Boise
Idaho, 83702
U.S.A.
Fax no. 001 214 265 0324
Attention: John Simko
and in the case of the Trustee, to it at:-
140 Broadway-12th Floor
New York
New York 10005-1180
USA
Fax no. 001 212 658 6425
Attention: Corporate Trust Administration
Any such communication will take effect, in the case of delivery, at the
time of delivery or, in the case of facsimile transmission, at the time of
despatch.
23 CURRENCY INDEMNITY
(A) Currency of account and payment: Dollars (the "Contractual Currency") is
the sole currency of account and payment for all sums payable by the
Company and SSC under or in connection with this Trust Deed, the Notes and
the Coupons, including damages.
(B) Extent of discharge: Any amount received or recovered in a currency other
than the Contractual Currency (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding-up or dissolution of the Company or otherwise) by the Trustee, any
Noteholder or any Couponholder in respect of any sum expressed to be due to
it from the Company will only constitute a discharge to the Company to the
extent of the Contractual Currency amount which the recipient is able to
purchase with the amount so received or recovered in that other currency on
the date of that receipt or recovery (or, if it is not practicable to make
that purchase on that date, on the first date on which it is practicable to
do so).
(C) Indemnities: If that Contractual Currency amount is less than the
Contractual Currency amount expressed to be due to the recipient under this
Trust Deed, the Notes or the Coupons, the Company will indemnify such
recipient against any loss sustained by it as a result. In any event, the
Company will indemnify the recipient against the cost of making any such
purchases.
(D) Indemnities separate: These indemnities constitute a separate and
independent obligation from the other obligations in this Trust Deed, will
give rise to a separate and independent cause of action, will apply
irrespective of any indulgence granted by the Trustee and/or any Noteholder
or Couponholder and will continue in full force and effect despite any
judgment, order, claim or proof for a liquidated amount in respect of any
sum due under this Trust Deed, the Notes and/or the Coupons or any judgment
or order. No proof of evidence of any actual loss may be required.
24 GOVERNING LAW AND JURISDICTION
(A) Governing law: This Trust Deed shall be governed by and construed in
accordance with English law.
(B) Each of the Company and SSC irrevocably agrees for the benefit of the
Trustee, the Noteholders and the Couponholders that the courts of England
are to have jurisdiction
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<PAGE> 29
to settle any disputes which may arise out of or in connection with these
presents and that accordingly any suit, action or proceedings arising out
of or in connection therewith (together referred to as "Proceedings") may
be brought in such courts. Each of the Company and SSC irrevocably waives
any objection which it may have now or hereafter to the laying of the venue
of any Proceedings in any such court and any claim that any Proceedings
have been brought in an inconvenient forum and further irrevocably agrees
that a judgment in any Proceedings brought in the courts of England shall
be conclusive and binding upon the Company and SSC and may be enforced in
the courts of any other jurisdiction. Nothing contained in this clause
shall limit any right to take Proceedings against the Company or SSC in any
other court of competent jurisdiction, nor shall the taking of Proceedings
in one or more jurisdictions preclude the taking of Proceedings in any
other jurisdiction, whether concurrently or not. Each of the Company and
SSC hereby irrevocably designates, appoints and empowers The Law Debenture
Trust Corporation p.l.c. at present of Princes House, 95 Gresham Street,
London EC2V 7LY to receive for it and on its behalf, service of process
issued out of the English courts in any such legal action or proceedings.
Nothing in these presents shall affect the right to serve process in any
other manner permitted by law.
IN WITNESS whereof this Trust Deed has been executed as a deed by the Company,
SSC and the Trustee and entered into the day and year first above written.
- 27 -
<PAGE> 30
SCHEDULE 1
Forms of Bearer Note, Coupon and
Registered Note
FORM OF BEARER NOTE
Denomination ISIN Series Certif. No.
U.S.$
SUNSHINE PRECIOUS METALS, INC.
U.S.$30,000,000
8 PERCENT SENIOR EXCHANGEABLE NOTES DUE 2000
THIS IS TO CERTIFY that SUNSHINE PRECIOUS METALS, INC., a corporation
organised under the laws of the State of Delaware (the "Company") will pay to
the bearer of this Note on 21st March, 2000 (or on such earlier date as the
principal sum hereinafter mentioned may become repayable in accordance with the
Terms and Conditions endorsed hereon) the principal sum of
U.S.$o (o UNITED STATES DOLLARS)
together with interest on the said principal sum at the rate of 8 percent per
annum from and including 21st March, 1996, payable semi-annually in arrears on
21st March and 21st September in each year, save that the first payment of
interest payable on 21st September, 1996 shall be in respect of the period
from, and including, 21st March, 1996 to, but excluding, 21st September, 1996,
and such additional amounts (if any) as may be payable under the same Terms and
Conditions, all subject to and in accordance with the said Terms and
Conditions.
This note forms one of a series of Notes in the aggregate principal amount
of U.S.$30,000,000 (the "Notes") which have been issued pursuant to resolutions
of the Board of Directors of the Company passed on 27th February, 1996 and are
constituted by a Trust Deed (the "Trust Deed") dated 21st March, 1996 made
between the Company, Sunshine Mining and Refining Company and Marine Midland
Bank as Trustee. The Notes are issued subject to and with benefit of the
provisions of such Trust Deed.
This Note is guaranteed by and exchangeable into shares of common stock of
Sunshine Mining and Refining Company in accordance with and subject to the said
Terms and Conditions.
This Note and the coupons appertaining hereto shall not be valid or become
binding for any purpose unless and until this Note is authenticated by or on
behalf of the Principal Paying Agent (as defined in the Trust Deed).
IN WITNESS WHEREOF the Company has caused this note and the coupons
appertaining hereto to be duly executed.
Issued as of o, 1996.
<TABLE>
<S> <C>
CERTIFICATE OF AUTHENTICATION
This Note is authenticated by or on behalf of the
Principal Paying Agent.
SUNSHINE PRECIOUS METALS, INC.
By: By:
--------------------------------------- -------------------------------
[Name and Title]
</TABLE>
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW IS AVAILABLE.
- 28 -
<PAGE> 31
On the back:
Terms and Conditions
Here will be set out the Terms and Conditions
as set out in Schedule 5.
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
Marine Midland Bank
140 Broadway
New York 10005-1180
U.S.A.
- 29 -
<PAGE> 32
FORM OF COUPON
On the front:
SUNSHINE PRECIOUS METALS, INC
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$30,000,000
8 percent Senior Exchangeable Notes due 2000
Coupon for US$........ due on o 6/7/8/9/2000/o
This Coupon is payable to bearer (subject to the Terms and Conditions
endorsed on the Note to which this Coupon appertains, which shall be binding
upon the holder of this Coupon whether or not it is for the time being attached
to such Note) at the specified offices of the Paying Agents set out on the
reverse hereof (or any further or other Paying and Exchange Agents or specified
offices duly appointed or nominated from time to time and notified to the
Noteholders).
If the Bearer Note to which this Coupon relates shall have become due and
payable before the maturity date of this Coupon, this Coupon shall become void
and no payment shall be made in respect of it.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
SUNSHINE PRECIOUS METALS, INC.
By:
- 30 -
<PAGE> 33
On the back:
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
- 31 -
<PAGE> 34
FORM OF REGISTERED NOTE
On the front:
SUNSHINE PRECIOUS METALS, INC.
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$,000,000
o percent Senior Exchangeable Notes due 2000
This Note is a Registered Note and forms part of a series designated as
specified in the title (the "Notes") of Sunshine Precious Metals, Inc. (the
"Company") and constituted by the Trust Deed referred to on the reverse hereof.
The Notes are subject to, and have the benefit of, that Trust Deed and the
terms and conditions (the "Conditions") set out on the reverse hereof.
The Company hereby certifies that is/are, at the
date hereof, entered in the Register as the holder(s) of Notes in the principal
amount of US$ Interest on such principal amount at the rate of o
percent. per annum is payable annually in arrear on o in each year.
This Registered Note is exchangeable into registered Shares of US$0.01 each in
the capital of Sunshine Mining and Refining Company subject to and in
accordance with the Conditions and the Trust Deed.
This Registered Note is evidence of entitlement only. Title to Registered
Notes passes only on due registration on the Register and only the duly
registered holder is entitled to payments in respect of this Note.
This Registered Note shall not be valid for any purpose until signed on behalf
of the Company and authenticated by or on behalf of the Registrar.
In witness whereof the Company has caused this Registered Note to be signed on
its behalf by a Director of the Company by his facsimile signature this
- ---------------------
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------
This Registered Note is authenticated
by or on behalf of the Registrar
without warranty, recourse or liability
By:-
---------------------------
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW IS AVAILABLE.
- 32 -
<PAGE> 35
On the back:
Terms and Conditions
Here will be set out the Terms and Conditions
as set out in Schedule 5
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
Marine Midland Bank
140 Broadway
New York 10005-1180
U.S.A.
- 33 -
<PAGE> 36
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby transfers to
--------------------------------------------------------------------
--------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE
[not more than four names may appear as joint holders])
US$.......... principal amount of this Note, and all rights under it, and
irrevocably requests the Registrar to transfer this Note on the books kept for
registration thereof.
Dated
-------------------------
Signed
-------------------------
Note:
(i) The signature to this transfer must correspond with the name as it
appears on the face of this Note.
(ii) A representative of the Noteholder should state the capacity in
which he signs e.g. executor.
(iii) The signature of the person effecting a transfer shall conform to
any list of duly authorised specimen signatures supplied by the
registered holder or be certified by a recognised bank, notary
public or in such other manner as the Registrar may require.
- 34 -
<PAGE> 37
SCHEDULE 2
Form of Global Bearer Note
SUNSHINE PRECIOUS METALS, INC.
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$30,000,000
8 percent Senior Exchangeable Notes due 2000
TEMPORARY GLOBAL BEARER NOTE
Sunshine Precious Metals, Inc. (the "Company") for value received hereby
promises to pay to bearer the sum of
US$,000,000 (o Dollars)
on 21st March, 2000 (or such earlier date as such principal sum may become
payable in accordance with the Trust Deed (as defined below) and with the terms
and conditions (the "Conditions") of the Notes designated above (the "Notes")
set out in Schedule 5 to the Trust Deed dated 21st March, 1996 (the "Trust
Deed") between the Company, Sunshine Mining and Refining Company ("SSC") and
Marine Midland Bank (as trustee) upon presentation and surrender of this
Temporary Global Bearer Note.
This Temporary Global Bearer Note is exchangeable in accordance with the
terms hereof for definitive Notes (the "Definitive Notes") in bearer form with
Coupons attached to be known as 8 percent. Senior Exchangeable Notes due 2000,
and, until so exchanged, is subject to the Conditions and the Trust Deed. The
Company hereby irrevocably undertakes to deliver the Definitive Notes in
exchange for this Temporary Global Bearer Note on and after the Request Date.
On or after the Request Date this Temporary Global Bearer Note may be
exchanged in whole or in part for Definitive Notes in an aggregate principal
amount not exceeding the principal amount of this Temporary Global Bearer Note
submitted for exchange with respect to which there shall be presented to the
Principal Paying, Exchange and Transfer Agent a certificate from Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear") or Cedel Bank societe anonyme ("Cedel")
substantially to the following effect:-
"CERTIFICATE OF CLEARING SYSTEM
SUNSHINE PRECIOUS METALS, INC.
US$30,000,000
8 percent. Senior Exchangeable Notes due 2000 (the "Notes")
This is to certify that, based solely on certificates we have received in
writing, by tested telex or by electronic transmission from member
organisations appearing in our records as persons being entitled to a portion
of the principal amount set forth below (our "Member Organisations")
substantially to the effect set forth in the Temporary Global Bearer Note in
respect of the Notes the form of which is set out in Schedule 2 to the Trust
Deed relating to the Notes, as of the date hereof, US$30,000,000 principal
amount of the above-captioned Notes (i) is owned by persons that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States Federal income taxation regardless of its source or U.S. persons (as
defined under Regulation S of the Securities Act of 1933, as amended) ("United
States persons"), (ii) is owned by United States persons that are (a) foreign
branches of United States financial institutions (as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v) ("financial institutions")) purchasing
for their own account or for resale or (b) United States persons who
- 35 -
<PAGE> 38
acquired the Notes through foreign branches of United States financial
institutions and who hold the Notes through such United States financial
institutions on the date hereof (and in either case (a) or (b) each such United
States financial institution has agreed, on its own behalf or through its
agent, that we may advise the Company or the Company's agent that it will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder) or
(iii) is owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in U.S. Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)) and to the further effect that United States or
foreign financial institutions described in (iii) above (whether or not also
described in (i) or (ii) above) have certified that they have not acquired the
Notes for purposes of resale directly or indirectly to a United States person
or to a person within the United States or its possessions.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the Temporary Global Bearer Note excepted in such certificates and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organisations to the effect that the statements made by such
Member Organisation with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection with certain
securities and tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorise
you to produce this certificate to any interested party in such proceedings.
Date: , 19 *
---------- --
Yours faithfully,
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
Brussels Office,
as operator of the Euroclear System]
- 36 -
<PAGE> 39
or
[Cedel Bank societe anonyme]
By:
---------------------------
* To be dated no earlier than the Request Date."
Any person appearing in the records maintained by Cedel or Euroclear as
entitled to any interest in this Temporary Global Bearer Note shall be entitled
to require the exchange of an appropriate part of this Temporary Global Bearer
Note for a Definitive Note or Notes in bearer form by delivering or causing to
be delivered to Cedel or Euroclear a certificate or certificates in
substantially the following form (copies of which certificate will be available
at the office of Cedel in Luxembourg and Euroclear in Brussels and the
specified office of each of the Agents):-
"CERTIFICATE OF CLEARING SYSTEM PARTICIPANT
SUNSHINE PRECIOUS METALS, INC.
US$30,000,000
8 percent. Senior Exchangeable Notes due 2000 (the "Notes")
To: [Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euroclear System] or [Cedel Bank societe anonyme]
This is to certify that as of the date hereof, and except as set forth below,
the above-captioned Notes held by you for our account (i) are owned by
person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source or
U.S. persons (as defined under Regulation S of the Securities Act of 1933, as
amended) ("United States person(s)") or (ii) are owned by United States
person(s) that are (a) foreign branches of United States financial institutions
(as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) ("financial
institutions")) purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Notes through foreign branches of United
States financial institutions and who hold the Notes through such United States
financial institutions on the date hereof (and in either case (a) or (b), each
such United States financial institution hereby agrees, on its own behalf or
through its agent, that you may advise the Company or the Company's agent that
it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder) or
(iii) are owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)) and, in addition, if the owner of
the Notes is a United States or foreign financial institution described in
(iii) above (whether or not also described in (i) or (ii) above), this is to
certify further that such financial institution has not acquired the Notes for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein "United States" means the United States of America (including
the States and the District of Columbia) and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certificate relating to the Notes held by you
for our account in accordance with your documented procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certificate applies as of such date.
- 37 -
<PAGE> 40
This certificate excepts and does not relate to US$ principal
------------
amount of such interest in the above Notes in respect of which we are not able
to certify and as to which we understand exchange and delivery of definitive
Notes (or, if relevant, exercise of any rights or collection of any interest)
cannot be made until we do so certify.
We understand that this certificate is required in connection with certain
securities and tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorise
you to produce this certificate to any interested party in such proceedings.
Dated: , 19 *
-------------------- --
By:
-------------------------------------
[Name of person giving certificate]
as, or as agent for, the beneficial owner(s)
of the above Notes to which this
certificate relates.
* To be dated no earlier than the fifteenth day prior to the Request Date."
As used herein "Request Date" means 1st May, 1996.
Until the exchange of the appropriate part of this Temporary Global Bearer Note
pursuant to the foregoing provisions, no such person as aforesaid shall (except
as stated herein) be entitled to receive any payment by way of principal of or
interest on this Temporary Global Bearer Note (unless, upon due presentation of
this Temporary Global Bearer Note for exchange, delivery of any Definitive
Notes shall be improperly withheld or refused) or to receive the Shares which
he would otherwise be entitled to receive.
Upon any exchange of a part of this Temporary Global Bearer Note for a
Definitive Note or Notes, the portion of the principal amount hereof so
exchanged shall be endorsed by the Principal Paying, Exchange and Transfer
Agent in the Schedule hereto, whereupon the principal amount hereof shall be
reduced for all purposes by the amount so exchanged and endorsed.
Subject to the second preceding paragraph, no provisions of this Temporary
Global Bearer Note shall alter or impair the obligation of the Company to pay
the principal and interest on the Notes when due in accordance with the
Conditions.
This Temporary Global Bearer Note shall not be valid for any purpose until
signed on behalf of the Company and authenticated by or on behalf of the
Principal Paying, Exchange and Transfer Agent.
This Temporary Global Bearer Note shall be governed by and construed in
accordance with English law.
In witness whereof the Company has caused this Temporary Global Bearer Note to
be signed on its behalf.
Dated 21st March, 1996
- -----------------------
Authorised Signatory
- 38 -
<PAGE> 41
For and on behalf of
SUNSHINE PRECIOUS METALS, INC.
This Temporary Global Bearer Note is authenticated
by or on behalf of the Principal Paying,
Exchange and Transfer Agent without warranty,
recourse or liability.
By:
------------------------------------
Authorised Signatory
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
THIS TEMPORARY GLOBAL BEARER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") AND
ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAW IS AVAILABLE.
- 39 -
<PAGE> 42
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES
AND PURCHASES AND CANCELLATIONS
The following exchanges of a part of this Global Bearer Note for Definitive
Notes and/or purchases and cancellations of a part of this Temporary Global
Note have been made:-
<TABLE>
<CAPTION>
Date made Amount of Amount of Principal Notation made
- --------- decrease in decrease in amount of this -------------
principal principal Temporary
amount of this amount of this Global Bearer
Temporary Temporary Note following
Global Bearer Global Bearer such decrease
Note Note following -------------
following purchase and
exchange cancellation
-------- ------------
<S> <C> <C> <C> <C>
</TABLE>
- 40 -
<PAGE> 43
SCHEDULE OF INTEREST AND PRINCIPAL PAID
<TABLE>
<CAPTION>
Date of payment Amount of interest and principal Notation made
- --------------- -------------------------------- -------------
<S> <C> <C>
</TABLE>
- 41 -
<PAGE> 44
SCHEDULE 3
Provisions for Meetings of Noteholders
1 The following expressions shall have the following meanings:-
"voting certificate" means a certificate in the English language
issued by a Paying, Exchange and Transfer Agent and dated in which it
is stated:-
(a) that on that date Bearer Notes (not being Notes in respect of
which a block voting instruction has been issued and is
outstanding in respect of the meeting specified in such voting
certificate or any adjournment of such meeting) bearing
specified serial numbers were deposited with such Paying,
Exchange and Transfer Agent (or to its order at a bank or other
depositary) and that such Notes will not be released until the
earlier of:-
(i) the conclusion of the meeting specified in such certificate
or any adjournment of it; and
(ii) the surrender of the certificate to the Paying,
Exchange and Transfer Agent which issued it; and
(b) that its bearer is entitled to attend and vote at such meeting
or any adjournment of it in respect of the Notes represented by
such certificate;
"block voting instruction" means a document in the English language
issued by a Paying, Exchange and Transfer Agent and dated in which:-
(a) it is certified that Bearer Notes (not being Notes in respect of
which a voting certificate has been issued and is outstanding in
respect of the meeting specified in such block voting
instruction or any adjournment of it) have been deposited with
such Paying, Exchange and Transfer Agent (or to its order at a
bank or other depositary) and that such Notes will not be
released until the earlier of:-
(i) the conclusion of the meeting specified in such document or
any adjournment of it; and
(ii) the surrender, not less than 48 hours before the time
fixed for such meeting or adjournment, of the receipt
for each such deposited Note which is to be released
to the Paying, Exchange and Transfer Agent which
issued it and the notification of such surrender by
such Agent to the Company;
(b) it is certified that each depositor of such Notes or a duly
authorised agent on his behalf has instructed such Paying,
Exchange and Transfer Agent that the votes attributable to his
Notes so deposited should be cast in a particular way in
relation to the resolution to be put to such meeting or any
adjournment of it and that all such instructions are, during the
period of 48 hours before the time fixed for such meeting or
adjourned meeting, neither revocable nor subject to amendment;
(c) the total number and the serial numbers of the Notes so
deposited are listed, distinguishing with regard to each such
resolution between those in respect of which instructions have
been so given (i) to vote for, and (ii) to vote against, the
resolution; and
(d) any person named in such document (a "proxy") is authorised and
instructed by such Paying, Exchange and Transfer Agent to vote
in respect of the Notes so listed in accordance with the
instructions referred to in (c) above as set out in such
document.
References to paragraphs are references to paragraphs of this
Schedule.
- 42 -
<PAGE> 45
2. (A) A holder of a Bearer Note may obtain a voting certificate from a
Paying, Exchange and Transfer Agent or require a Paying,
Exchange and Transfer Agent to issue a block voting instruction
by depositing his Note with such Paying and Exchange Agent not
later than 48 hours before the time fixed for any meeting.
Voting certificates and block voting instructions shall be valid
until the relevant Notes are released pursuant to paragraph 1
and until then the holder of any such voting certificate or (as
the case may be) the proxy named in any such block voting
instruction shall, for all purposes in connection with any
meeting or proposed meeting of Noteholders, be deemed to be the
holder of the Notes to which such voting certificate or block
voting instruction relates and the Paying, Exchange and Transfer
Agent with which (or to the order of which) such Notes have been
deposited shall be deemed for such purposes not to be the holder
of those Notes.
(B) (i) A holder of a Registered Note may by an instrument in
writing (a "form of proxy") in the form available from the
specified office of the Registrar in the English language
signed by the holder or, in the case of a corporation,
executed under its common seal or signed on its behalf by
an attorney or a duly authorised officer of the corporation
and delivered to the Registrar not later than 24 hours
before the time fixed for any meeting, appoint any person
(a "proxy") to act on his or its behalf in connection with
any meeting or proposed meeting of Noteholders.
(ii) Any holder of a Registered Note which is a
corporation may by delivering to the Registrar not
later than 24 hours before the time fixed for any
meeting a resolution of its directors or other
governing body in the English language authorise any
person to act as its representative (a
"representative") in connection with any meeting or
proposed meeting of Noteholders.
(iii) Any proxy appointed pursuant to sub-paragraph (a) above or
representative appointed pursuant to sub- paragraph (b)
above shall so long as such appointment remains in force be
deemed, for all purposes in connection with any meeting or
proposed meeting of Noteholders specified in such
appointment, to be the holder of the Registered Notes to
which such appointment relates and the holder of the
Registered Note shall be deemed for such purposes not to be
the holder.
3. Each of the Company and the Trustee at any time may, and the Trustee
(subject to it being indemnified to its satisfaction against all costs and
expenses thereby occasioned) upon a request in writing of Noteholders
holding not less than one-tenth in principal amount of the Notes for the
time being outstanding shall, convene a meeting of Noteholders. Whenever
any such party is about to convene any such meeting it shall forthwith
give notice in writing to the other party of the day, time and place of
the meeting and of the nature of the business to be transacted at it.
Every such meeting shall be held at such time and place as the Trustee may
approve.
4. At least 21 days' notice (exclusive of the day on which the notice is
given and of the day on which the meeting is held) specifying the day,
time and place of meeting shall be given to the Noteholders. A copy of
the notice shall in all cases be given by the party convening the meeting
to the other party. Such notice shall also specify, unless in any
particular case the Trustee otherwise agrees in writing, the nature of the
resolutions to be proposed and shall include a statement to the effect
that Bearer Notes may be deposited with (or to the order of) any Paying,
Exchange and Transfer Agent for the purpose of obtaining voting
certificates or appointing proxies not later than 48 hours before the time
fixed for the meeting and that the holders of Registered Notes may appoint
proxies by executing and delivering a form of proxy in the English
language to the specified office of the Registrar not later than 24 hours
before the time fixed for the meeting or, in the case of corporations, may
appoint representatives by resolution in the English language of their
directors or other governing body and by delivering an executed copy of
such resolution to the Registrar not later than 24 hours before the time
fixed for the meeting.
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<PAGE> 46
5. A person (who may, but need not, be a Noteholder) nominated in writing by
the Trustee may take the chair at every such meeting but if no such
nomination is made or if at any meeting the person nominated shall not be
present within 15 minutes after the time fixed for the meeting the
Noteholders present shall choose one of their number to be chairman,
failing which the Company may appoint a chairman. The chairman of an
adjourned meeting need not be the same person as was chairman of the
original meeting.
6. At any such meeting any one or more persons present in person holding
Notes or voting certificates or being proxies or representatives and
holding or representing in the aggregate not less than one-tenth in
principal amount of the Notes for the time being outstanding shall (except
for the purpose of passing an Extraordinary Resolution) form a quorum for
the transaction of business and no business (other than the choosing of a
chairman) shall be transacted at any meeting unless the requisite quorum
be present at the commencement of business. The quorum at any such
meeting for passing an Extraordinary Resolution shall (subject as provided
below) be one or more persons present in person holding Notes or voting
certificates or being proxies or representatives and holding or
representing in the aggregate a clear majority in principal amount of the
Notes for the time being outstanding provided that at any meeting the
business of which includes any of the matters specified in the proviso to
paragraph 19 the quorum shall be one or more persons present in person
holding Notes or voting certificates or being proxies or representatives
and holding or representing in the aggregate not less than two-thirds in
principal amount of the Notes for the time being outstanding.
7. If within 15 minutes from the time fixed for any such meeting a quorum is
not present the meeting shall, if convened upon the requisition of
Noteholders, be dissolved. In any other case it shall stand adjourned
(unless the Company and the Trustee agree that it be dissolved) for such
period, not being less than 14 days nor more than 42 days, and to such
place, as may be decided by the chairman. At such adjourned meeting one
or more persons present in person holding Notes or voting certificates or
being proxies or representatives (whatever the principal amount of the
Notes so held or represented) shall form a quorum and may pass any
resolution and decide upon all matters which could properly have been
dealt with at the meeting from which the adjournment took place had a
quorum been present at such meeting provided that at any adjourned meeting
at which is to be proposed an Extraordinary Resolution for the purpose of
effecting any of the modifications specified in the proviso to paragraph
19 the quorum shall be one or more persons present holding Notes or voting
certificates or being proxies or representatives and holding or
representing in the aggregate not less than one-third in principal amount
of the Notes for the time being outstanding.
8. The chairman may with the consent of (and shall if directed by) any
meeting adjourn such meeting from time to time and from place to place but
no business shall be transacted at any adjourned meeting except business
which might lawfully have been transacted at the meeting from which the
adjournment took place.
9. At least 10 days' notice of any meeting adjourned through want of a quorum
shall be given in the same manner as for an original meeting and such
notice shall state the quorum required at such adjourned meeting. It
shall not, however, otherwise be necessary to give any notice of an
adjourned meeting.
10. Every question submitted to a meeting shall be decided in the first
instance by a show of hands and in case of equality of votes the chairman
shall both on a show of hands and on a poll have a casting vote in
addition to the vote or votes (if any) which he may have as a Noteholder
or as a holder of a voting certificate or as a proxy or representative.
11. At any meeting, unless a poll is (before or on the declaration of the
result of the show of hands) demanded by the chairman, the Company, the
Trustee or by one or more persons holding one or more Notes or voting
certificates or being proxies or representatives and holding or
representing in the aggregate not less than one-fiftieth in principal
amount of the Notes for the time being outstanding, a declaration by the
chairman that a resolution has been carried or carried by a particular
majority or lost or not carried by any particular majority shall be
conclusive evidence of the fact without
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<PAGE> 47
proof of the number or proportion of the votes recorded in favour of or
against such resolution.
12. If at any meeting a poll is so demanded, it shall be taken in such manner
and (subject as provided below) either at once or after such an
adjournment as the chairman directs and the result of such poll shall be
deemed to be the resolution of the meeting at which the poll was demanded
as at the date of the taking of the poll. The demand for a poll shall not
prevent the continuation of the meeting for the transaction of any
business other than the question on which the poll has been demanded.
13. Any poll demanded at any meeting on the election of a chairman or on any
question of adjournment shall be taken at the meeting without adjournment.
14. The Company and the Trustee (through their respective representatives) and
their respective financial and legal advisers may attend and speak at any
meeting of Noteholders. No one else may attend at any meeting of
Noteholders or join with others in requesting the convening of such a
meeting unless he is the holder of a Note or a voting certificate or is a
proxy or a representative.
15. At any meeting on a show of hands every person who is present in person
and who produces a Note or voting certificate or is a proxy or a
representative shall have one vote and on a poll every person who is so
present shall have one vote in respect of each such principal amount as is
equal to the lowest common denomination of the Notes forming a particular
series. Without prejudice to the obligations of proxies named in any
block voting instruction, any person entitled to more than one vote need
not use all his votes or cast all the votes to which he is entitled in the
same way.
16. The proxy named in any block voting instruction need not be a Noteholder.
17. Each block voting instruction shall be deposited at the registered office
of the Company, or at such other place as the Trustee shall designate or
approve, not less than 24 hours before the time appointed for holding the
meeting or adjourned meeting at which the proxy named in the block voting
instruction proposes to vote and in default the block voting instruction
shall not be treated as valid unless the chairman of the meeting decides
otherwise before such meeting or adjourned meeting proceeds to business.
A notarially certified copy of each such block voting instruction and
satisfactory proof (if applicable) shall, if required by the Trustee, be
produced by the proxy at the meeting or adjourned meeting but the Trustee
shall not thereby be obliged to investigate or be concerned with the
validity of, or the authority of, the proxy named in any such block voting
instruction.
18. Any vote given in accordance with the terms of a block voting instruction
shall be valid even if the block voting instruction or any of the
Noteholders' instructions pursuant to which it was executed has been
previously revoked or amended, provided that no intimation in writing of
such revocation or amendment shall have been received from the relevant
Paying, Exchange and Transfer Agent by the Company or the Trustee at its
registered office or by the chairman of the meeting in each case not less
than 24 hours before the time fixed for the meeting or adjourned meeting
at which the block voting instruction is used.
19. A meeting of Noteholders shall, subject to the Conditions, in addition to
the powers given above, but without prejudice to any powers conferred on
other persons by this Trust Deed, have power exercisable by Extraordinary
Resolution:-
(a) to sanction any proposal by the Company for any modification,
abrogation, variation or compromise of, or arrangement in respect of,
the rights of the Noteholders and/or the Couponholders against the
Company, SSC or against any of its property whether such rights shall
arise under this Trust Deed or otherwise;
(b) to sanction any scheme or proposal for the exchange, substitution or
sale of the Notes for, or the conversion of the Notes into, or the
cancellation of the Notes in
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<PAGE> 48
consideration of, shares, stock, notes, bonds, debentures, debenture
stock and/or other obligations and/or securities of the Company, SSC
or any other body corporate formed or to be formed, or for or into or
in consideration of cash, or partly for or into or in consideration
of such shares, stock, notes, bonds, debentures, debenture stock
and/or other obligations and/or securities as aforesaid and partly
for or into or in consideration of cash;
(c) to assent to any modification of this Trust Deed, the Notes or the
Coupons which shall be proposed by the Company or the Trustee;
(d) to authorise anyone to concur in and do all such things as may be
necessary to carry out and give effect to any Extraordinary
Resolution;
(e) to give any authority, direction or sanction which under this Trust
Deed or the Notes is required to be given by Extraordinary
Resolution;
(f) to appoint any persons (whether Noteholders or not) as a committee or
committees to represent the interests of the Noteholders and to
confer upon such committee or committees any powers or discretions
which the Noteholders could themselves exercise by Extraordinary
Resolution;
(g) to approve a person proposed to be appointed as a new Trustee and to
remove any Trustee;
(h) to approve the substitution of any entity for the Company (or any
previous substitute) as principal debtor under this Trust Deed; and
(i) to discharge or exonerate the Trustee from any liability in respect
of any act or omission for which it may become responsible under this
Trust Deed, the Notes or the Coupons;
provided that the special quorum provisions contained in the proviso to
paragraph 6 and, in the case of an adjourned meeting, in the proviso to
paragraph 7 shall apply in relation to any Extraordinary Resolution for
the purpose of paragraph 19(b) or (h) or for the purpose of making any
modification to the provisions contained in this Trust Deed, the Notes or
the Coupons which would have the effect of:-
(i) postponing the maturity of the Notes or the dates on which
interest is payable in respect of the Notes;
(ii) modifying the status and exchange terms of the Notes;
(iii) reducing or cancelling the principal amount of, or interest on,
or other amounts in respect of or reducing the rate of interest
on, the Notes;
(iv) changing the currency of payment of the Notes;
(v) modifying the provisions contained in this Schedule concerning
the quorum required at any meeting of Noteholders or the
majority required to pass an Extraordinary Resolution; or
(vi) amending this proviso.
20. An Extraordinary Resolution passed at a meeting of Noteholders duly
convened and held in accordance with this Trust Deed shall be binding upon
all the Noteholders, whether or not present at such meeting and whether or
not they vote in favour, and upon all the Couponholders and each of the
Noteholders and Couponholders shall be bound to give effect to it
accordingly. The passing of any such resolution shall be conclusive
evidence that the circumstances of such resolution justify the passing of
it.
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<PAGE> 49
21. The expression "Extraordinary Resolution" means a resolution passed at a
meeting of Noteholders duly convened and held in accordance with these
provisions by a majority consisting of not less than two thirds of the
Notes then Outstanding.
22. Minutes of all resolutions and proceedings at every such meeting shall be
made and entered in the books to be from time to time provided for that
purpose by the Company or the Trustee and any such minutes, if purporting
to be signed by the chairman of the meeting at which such resolutions were
passed or proceedings transacted or by the chairman of the next succeeding
meeting of Noteholders, shall be conclusive evidence of the matters
contained in them and until the contrary is proved every such meeting in
respect of the proceedings of which minutes have been so made and signed
shall be deemed to have been duly convened and held and all resolutions
passed or proceedings transacted at it to have been duly passed and
transacted.
23. Subject to all other provisions contained in this Trust Deed, the Trustee
may without the consent of the Noteholders prescribe such further
regulations regarding the holding of meetings of Noteholders and
attendance and voting at them as the Trustee may in its sole discretion
determine, including particularly (but without prejudice to the generality
of the foregoing) such regulations and requirements as the Trustee thinks
reasonable:-
(a) so as to satisfy itself that persons who purport to requisition a
meeting in accordance with paragraph 3 or who purport to make any
requisition to the Trustee in accordance with this Trust Deed are in
fact Noteholders; and
(b) as to the form of voting certificates or block voting instructions to
be issued pursuant to paragraph 1 so as to satisfy itself that
persons who purport to attend or vote at any meeting of Noteholders
are entitled to do so in accordance with this Trust Deed.
24. (A) If and whenever the Company shall have issued and have outstanding
any Notes which are not identical and do not form one single series,
then those Notes which are in all respects identical shall be deemed
to constitute a separate series of the Notes and the foregoing
provisions of this Schedule shall have effect subject to the
following modifications:-
(i) a resolution which in the opinion of the Trustee affects
one series only of the Notes shall be deemed to have been
duly passed if passed at a separate meeting of the holders
of the Notes of that series;
(ii) a resolution which in the opinion of the Trustee affects
more than one series of the Notes but does not give rise to
a conflict of interest between the holders of Notes of any
of the series so affected shall be deemed to have been duly
passed if passed at a single meeting of the holders of the
Notes of all the series so affected;
(iii) a resolution which in the opinion of the Trustee affects
more than one series of the Notes and gives or may give
rise to a conflict of interest between the holders of the
Notes of any of the series so affected shall be deemed to
have been duly passed only if it shall be duly passed at
separate meetings of the holders of the Notes of each
series so affected; and
(iv) to all such meetings as aforesaid all the preceding
provisions of this Schedule shall mutatis mutandis apply as
though references therein to Notes and holders were
references to the Notes of the series or group of series in
question and to the holders of such Notes respectively.
(B) If the Company shall have issued and have outstanding (a) Notes which
are not denominated in Dollars or (b) more than one series of Notes
denominated in Dollars but in differing denominations, the following
provisions shall apply. In the case of any meeting of holders of
Notes of more than one currency the principal amount of such Notes
not denominated in Dollars shall (i) for the purposes of paragraph 3
be
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<PAGE> 50
the equivalent in Dollars at the spot rate of a bank nominated by the
Trustee for the conversion of the relevant currency or currencies
into Dollars on the seventh dealing day prior to the day on which the
request in writing is received by the Trustee and (ii) for the
purposes of paragraphs 6, 7, 11 and 15 (whether in respect of the
meeting or any adjourned such meeting or any poll resulting
therefrom) be the equivalent in Dollars at such spot rate on the
seventh dealing day (as defined above) prior to the day of such
meeting or, if applicable, the taking of such poll. In such
circumstances, and where separate series of Notes denominated in
sterling but of different denominations are to be treated together
for the purposes of this Schedule, on any poll each person present
shall have one vote for each US$1.00 in principal amount of the Notes
(converted as above) which he holds.
25. Nothing in this Trust Deed shall prevent any of the proxies named in any
block voting instruction or form of proxy from being a director, managing
director, officer or representative of, or otherwise connected with, the
Company, or any of its Subsidiaries.
26. References in this Schedule to Paying, Exchange and Transfer Agents shall,
where the context requires, be taken to be references to Agents.
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<PAGE> 51
SCHEDULE 4
Register and Transfer of Registered Notes
1 The Company and SSC shall at all times ensure that the Registrar maintains
in New York, or at such other place as the Trustee may agree, a register
showing the amount of the Registered Notes from time to time Outstanding
and the dates of issue and all subsequent transfers and changes of
ownership thereof and the names and addresses of the holders of the
Registered Notes. The Trustee and the holders of the Registered Notes or
any of them and any person authorised by it or any of them may at all
reasonable times during office hours inspect the register and take copies
of or extracts from it. The register may be closed by the Company for
such periods at such times (not exceeding in total 30 business days in any
one year) as it may think fit.
2 Each Registered Note shall have an identifying serial number which shall
be entered on the register.
3 The Registered Notes are transferable by execution of the form of transfer
endorsed thereon under the hand of the transferor or, where the transferor
is a corporation, under its common seal or under the hand of two of its
officers duly authorised in writing. In each case the signature(s) must
be guaranteed by a commercial bank with a correspondent bank in New York
City, Luxembourg or London or by an institution which is a member of The
New York Stock Exchange or The American Stock Exchange in New York City or
the Luxembourg Stock Exchange or London Stock Exchange Limited.
4 The Registered Notes to be transferred must be delivered for registration
to the specified office of the Registrar or any Transfer Agent with the
form of transfer endorsed thereon duly completed and executed and must be
accompanied by such documents, evidence and information as may be required
pursuant to the Conditions and such other evidence as the Company may
reasonably require to prove the title of the transferor or his right to
transfer the Registered Notes and, if the form of transfer is executed by
some other person on his behalf or in the case of the execution of a form
of transfer on behalf of a corporation by its officers, the authority of
that person or those persons to do so.
5 The executors or administrators of a deceased holder of Registered Notes
(not being one of several joint holders) and in the case of the death of
one or more of several joint holders the survivor or survivors of such
joint holders shall be the only person or persons recognised by the
Company as having any title to such Registered Notes.
6 Any person becoming entitled to Registered Notes in consequence of the
death or bankruptcy of the holder of such Registered Notes may upon
producing such evidence that he holds the position in respect of which he
proposes to act under this paragraph or of his title as the Company shall
require be registered himself as the holder of such Registered Notes or,
subject to the preceding paragraphs as to transfer, may transfer such
Registered Notes. The Company shall be at liberty to retain any amount
payable upon the Registered Notes to which any person is so entitled until
such person shall be registered as aforesaid or shall duly transfer the
Registered Notes.
7 Unless otherwise requested by him, the holder of Registered Notes of any
series shall be entitled to receive only one Registered Note in respect of
his entire holding of such series.
8 The joint holders of Registered Notes of any series shall be entitled to
one Registered Note only in respect of their joint holding of such series
which shall, except where they otherwise direct, be delivered to the joint
holder whose name appears first in the register of the holders of
Registered Notes in respect of such joint holding.
9 Where a holder of Registered Notes has transferred part only of his
holding of any series there shall be delivered to him without charge a
Registered Note in respect of the balance of such holding.
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<PAGE> 52
10 The Company shall make no charge to the Holders for the registration of
any holding of Registered Notes or any transfer thereof or for the issue
thereof or for the delivery thereof at the specified office of the
Registrar or of any Transfer Agent or by post to the address specified by
the Holder. If any Holder entitled to receive a Registered Note wishes to
have the same delivered to him otherwise than at the specified office of
the Registrar or of any Transfer Agent, such delivery shall be made, upon
his written request to the Registrar or such Transfer Agent, at his risk
and (except where sent by post to the address specified by the Holder) at
his expense.
11 The Holder of a Registered Note may (to the fullest extent permitted by
applicable laws) be treated at all times, by all persons and for all
purposes as the absolute owner of such Registered Note notwithstanding any
notice any person may have of the right, title, interest or claim of any
other person thereto. The Company and the Trustee shall not be bound to
see to the execution of any trust to which any Registered Note may be
subject and no notice of any trust shall be entered on the register. The
Holder of a Registered Note will be recognised by the Company as entitled
to his Registered Note free from any equity, set-off or counterclaim on
the part of the Company against the original or any intermediate holder of
such Registered Note.
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<PAGE> 53
SCHEDULE 5
Terms and Conditions of the Notes
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<PAGE> 54
TERMS AND CONDITIONS OF THE NOTES
The following, save for the paragraphs in italics, is the text of the
terms and conditions of the Notes which will be endorsed on each Note in
definitive form:
The U.S.$30,000,000 8 percent Senior Exchangeable Notes due 2000 (the
"Notes") of Sunshine Precious Metals, Inc. (the "Company") are constituted by a
trust deed dated March 21, 1996 (the "Trust Deed", which expression shall
wherever the context so admits include any deed supplemental thereto) made
between the Company, Sunshine Mining and Refining Company ("SSC", which shall
include for all purposes hereof any successor corporation created pursuant to
the Merger) and Marine Midland Bank (the "Trustee", which expression shall
include all persons for the time being the trustee or trustees under the Trust
Deed) as trustee for the holders of the Notes (the "Noteholders"). The issue of
the Notes was authorised by a written resolution of the board of directors of
the Company adopted on February 27, 1996. The giving of the guarantee by SSC
(the "Guarantee") was authorised by a resolution of the board of directors of
SSC adopted on February 27, 1996. Application has been made to list the Notes
on the Luxembourg Stock Exchange.
The statements in these Terms and Conditions include summaries of, and
are subject to, the detailed provisions of and definitions in the Trust Deed.
Copies of the Trust Deed and of an agency agreement dated March 21, 1996 (the
"Agency Agreement") made between the Company, SSC, Midland Bank plc, as
principal paying, exchange and transfer agent (the "Principal Paying Agent",
"Principal Exchange Agent" and "Principal Transfer Agent", respectively, which
expressions shall include any successors), the other paying, exchange and
transfer agents named therein (together with the Principal Paying Agent, the
"Paying Agents", together with the Principal Exchange Agent, the "Exchange
Agents" and together with the Principal Transfer Agent, the "Transfer Agent",
respectively, which expression shall include any additional or successor paying
agents, exchange agents or transfer agents, as the case may be), the registrar
referred to below (the "Registrar," which expression shall include any
successor registrar) and the Trustee are available for inspection during normal
business hours by the Noteholders and the holders of the interest coupons
appertaining to the Notes in bearer form (respectively, the "Couponholders" and
the "Coupons"), at the registered office for the time being of the Trustee,
being at the date of issue of the Notes at 140 Broadway, New York, New York
10005-1180, USA and at the specified office of each of the Paying Agents and
the Registrar. The Noteholders and the Couponholders are entitled to the
benefit of, and are bound by, and are deemed to have notice of, all the
provisions of the Trust Deed and the Agency Agreement.
1. Form, Denominations and Title
(A) The Notes are either in bearer form ("Bearer Notes"), serially
numbered, in denominations of U.S.$1,000 and U.S.$10,000 each with Coupons
attached on issue, or in registered form ("Registered Notes"), in principal
amounts of U.S.$1,000 or integral multiples thereof ("Authorised
Denominations") without Coupons attached. Bearer Notes of one denomination may
not be exchanged for Bearer Notes of the other denomination.
(B) Title to the Bearer Notes and to the Coupons will pass by
delivery. Title to the Registered Notes will pass by transfer and registration
as described in these Terms and Conditions and the Agency Agreement. The
Company, any Paying Agent or Exchange Agent and the Trustee may (to the fullest
extent permitted by applicable laws) deem and treat the holder of any Bearer
Note and the holder of any Coupon as the absolute owner thereof for all
purposes (whether or not the Bearer Note or Coupon shall be overdue and
notwithstanding any notice of ownership or writing on the Bearer Note or Coupon
or any notice of previous loss or theft of the Bearer Note or Coupon). In these
conditions, (in relation to a Note) "Noteholder" and (in relation to a Note or
Coupon) "Holder" means the bearer of any Bearer Note or Coupon (as the case may
be) or the person in whose name a Registered Note is registered, as the case
may be.
The Bearer Notes will be represented initially by a temporary global
note (the "Global Note"), without interest coupons, which will be deposited
with a common depository (the "Common Depository") and held on behalf of Morgan
Guaranty Trust Company of New York,
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<PAGE> 55
as operator of the Euroclear System ("Euroclear"), and Cedel Bank, societe
anonyme ("Cedel") for credit to the accounts designated by the Noteholders at
Euroclear and Cedel. The Company undertakes to make definitive Bearer Notes
available for exchange for the Global Note, in whole or in part, on or after
May 1, 1996.
Definitive Bearer Notes will only be delivered upon issuance following
certification that the holder of such Bearer Notes is not a U.S. person (as
defined in Regulation S under the Securities Act of 1993, as amended) (a "U.S.
person").
The Registered Notes will be issued in definitive registered form and
delivered on or about the Closing Date to the Lead Managers for the account of
the subscribers thereof as specified by the Lead Managers upon certification
that (i) the holders of the relevant Registered Notes are not U.S. persons and
(ii) the proposed holder of the relevant Registered Notes (a) is not, nor is it
a nominee for, Euroclear or Cedel or any other person providing a clearance
service within Section 96 of the Finance Act 1986 of the United Kingdom and (b)
is not, nor is it a nominee or agent for, a person whose business is or
includes issuing depository receipts within Section 93 of the Finance Act 1986
of the United Kingdom.
In addition to other legends required by the Securities Act, the Notes
and any Coupons will bear the following legend: "Any United States person who
holds this obligation will be subject to limitations under the U.S. income tax
laws, including the limitations provided in Section 165(j) and 1287(a) of the
United States Internal Revenue Code of 1986, as amended."
2. Status
(A) The Notes and any Coupons are direct, unconditional and unsecured
obligations of the Company and rank and will rank pari passu , without any
preference among themselves, and such obligations will rank senior to all other
outstanding unsecured and subordinated obligations of the Company, present and
future, but, in the event of bankruptcy or insolvency of the Company, only to
the extent permitted by the applicable laws relating to creditors' rights.
(B) SSC has, in the Trust Deed, unconditionally and irrevocably
guaranteed the due and punctual payment of the principal of and interest on the
Notes as and when the same shall become due and payable together with any
additional amounts payable pursuant to Condition 10 and all other moneys
payable under the Trust Deed. The obligations of SSC under the terms of the
Guarantee constitute direct, unconditional and unsecured obligations of SSC and
such obligations rank and will rank senior to all other outstanding unsecured
and subordinated obligations of SSC present and future (including, without
limitation, the Convertible Subordinated Reset Debentures due July 15, 2008
issued by SSC) but, in the event of bankruptcy or insolvency of SSC, only to
the extent permitted by applicable laws relating to creditors' rights.
3. Covenants
(A) So long as any Note remains Outstanding (as defined in the Trust
Deed), the Company will not create or permit to subsist any Lien (as defined
below) or create, assume or guarantee any Indebtedness (as defined below).
(B) The Company will not merge or consolidate with or sell, convey or
otherwise dispose of all, or substantially all of its assets to any other
corporation, partnership or other legal entity unless (i)(A) the Company shall
be the surviving corporation, partnership or other legal entity in the case of
a merger or (B)(I) the surviving, resulting or transferee corporation,
partnership or other legal entity ("the successor corporation") shall expressly
assume the due and punctual payment of the principal of and interest on all the
Notes, according to their tenor, and due and punctual performance of all of the
covenants and obligations of the Company under the Notes and (II) if the
successor corporation is not organised under the laws of the U.S. or any State
thereof or the District of Columbia, it shall agree to indemnify and hold
harmless the holder of each Note or Coupon against the then existing or future
tax, assessment or governmental charge imposed on such holder by a jurisdiction
other than the U.S. or any political subdivision or taxing authority thereof or
therein with respect to and withheld on the making of, any payment of principal
of or interest on such Note which would not have been
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<PAGE> 56
so imposed and withheld had such merger, consolidation, sale or conveyance not
been made and any tax, assessment or governmental charge imposed on or relating
to, and any costs and expenses involved in such merger, consolidation, sale or
conveyance and (ii) the Company or such successor corporation, as the case may
be, shall not immediately after such merger, consolidation, sale or conveyance
be in default in the performance of any covenants or obligations of the Company
under the Notes.
(C) Without prejudice to the provisions of Condition 8(F), SSC may not
merge or consolidate with or sell, convey or otherwise dispose of all, or
substantially all of its assets to any other corporation, partnership or other
legal entity unless (A) SSC shall be the surviving corporation, partnership or
other legal entity in the case of a merger or (B)(I) the successor corporation,
partnership or other legal entity shall expressly assume the obligations of SSC
under the Trust Deed and (II) the successor corporation, partnership or other
legal entity (together with its subsidiaries, if any) on a consolidated basis
shall have a Consolidated Net Worth (as defined below) following the
transaction equal to or greater than the Consolidated Net Worth of SSC before
the transaction.
(D) Upon any merger, consolidation, sale or conveyance as provided
above, the successor or surviving corporation shall succeed to and be
substituted for and may exercise every right and power of and be subject to all
of the obligations of the Company under the Notes or SSC under the Trust Deed
referred to in Condition 2(B), as the case may be, with the same effect as if
the successor or surviving corporation had been named as the Company or SSC
therein and herein and the Company or SSC, as the case may be, shall be
released from its liability as obligor under the Notes and/or the Trust Deed.
4. Registration
The Company will cause to be kept at the specified office of the
Registrar a register (the "Register") on which shall be entered the names and
addresses of the holders of the Registered Notes and the particulars of the
Registered Notes held by them and of all transfers of Registered Notes and
exchanges of Registered Notes. Holders of Registered Notes will be entitled to
receive only one Registered Note in respect of their holding.
5. Exchange Between Bearer and Registered Notes
(A) Exchange of Bearer Notes for Registered Notes. At the option of
the holder thereof upon presentation, at any time on or after May 1, 1996 (the
"Request Date"), of a duly completed and signed request for exchange in the
form for the time being currently obtainable from the specified office of the
Registrar or a Transfer Agent (a "Registration Request") together with the
relevant Bearer Note, subject to the terms of the Agency Agreement and to
Conditions 5(E) and 5(F), Bearer Notes are exchangeable for the same aggregate
principal amount of Registered Notes provided that (save as provided below) all
unmatured Coupons relating thereto are attached thereto or are surrendered
therewith. Bearer Notes surrendered in exchange for Registered Notes from and
including the Record Date (as defined below) in respect of any Interest Payment
Date (as defined below) up to and including such Interest Payment Date will not
be required to be surrendered with the Coupon relating to the interest payable
on such Interest Payment Date. Interest on a Registered Note issued in exchange
will accrue as from the immediately preceding Interest Payment Date or, if
none, the Closing Date (as defined below), except where issued in respect of a
Bearer Note surrendered during the period from and including the Record Date in
respect of an Interest Payment Date up to and including such Interest Payment
Date, in which event interest shall accrue as from such last-mentioned Interest
Payment Date. Bearer Notes may only be surrendered in exchange for Registered
Notes at the specified office of the Registrar or of a Transfer Agent.
The Registrar or the relevant Transfer Agent will within three
Business Days (as defined below) of the presentation of any Registration
Request together with the relevant Bearer Note deliver a Registered Note to the
Noteholder at its specified office, or (at the risk and, if mailed at the
request of the Noteholder otherwise than by ordinary mail at the expense of the
Noteholder), mail the Registered Note by uninsured mail to such address as the
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Noteholder may request. A Noteholder will receive only one Registered Note for
all of the Bearer Notes which are the subject of a single Registration Request.
(B) Exchange of Registered Notes for Bearer Notes. At the option of
the holder thereof, upon presentation at any time on or after the Request Date,
of a duly completed and signed request for exchange in the form for the time
being obtainable from the specified office of the Registrar or a Transfer Agent
(a "Bearer Request") together with the relevant Registered Note, subject to the
terms of the Agency Agreement and to Conditions 5(E) and 5(F), Registered Notes
are exchangeable in whole or in part in an Authorised Denomination for the same
aggregate principal amount of Bearer Notes. Interest on a Registered Note
surrendered for exchange will cease to accrue as from the Interest Payment Date
immediately preceding the date of surrender or, if none, the Closing Date,
except where the date of surrender falls during any period from and including
the Record Date in respect of an Interest Payment Date up to and including such
Interest Payment Date, in which event interest will cease to accrue as from
such last-mentioned Interest Payment Date. Registered Notes may only be
surrendered in exchange for Bearer Notes at the specified office of the
Registrar or a Transfer Agent.
The Registrar or the relevant Transfer Agent will within three
Business Days of the presentation of any Bearer Request together with the
relevant Registered Note deliver the Bearer Note or Bearer Notes requested
together with all Coupons in respect of all Interest Payment Dates after the
date of presentation (other than the Coupon in respect of the next Interest
Payment Date after the date of presentation in the case of a Registered Note
presented for exchange during any period from and including the Record Date in
respect of such Interest Payment Date and up to and including such Interest
Payment Date) and, in the case of exchange of part only of a Registered Note, a
Registered Note for the balance after such exchange, in each case at the
specified office of the Registrar or the relevant Transfer Agent, or (at the
risk and, if mailed at the request of the Noteholder otherwise than by ordinary
mail, at the expense of the Noteholder) mail the Bearer Note or Bearer Notes
together with all Coupons as aforesaid and any such Registered Note by
uninsured mail to such address as the Noteholder may request.
(C) Transfer of Registered Notes. Registered Notes, may, subject to
the terms of the Agency Agreement and to Conditions 5(E) and 5(F) be
transferred in whole or in part in an Authorised Denomination by lodging the
relevant Registered Note (with the application for transfer in respect thereof
duly executed and duly stamped where applicable) at the specified office of the
Registrar or a Transfer Agent. No transfer of a Registered Note will be valid
unless and until entered on the Register. A Registered Note may be registered
only in the name of, and transferred only to, a named person (or persons, not
exceeding four in number).
The Registrar or the relevant Transfer Agent will within three
Business Days of any duly made application for the transfer of a Registered
Note deliver a Registered Note to the transferee (and, in the case of a
transfer of part only of a Registered Note, deliver a Registered Note for the
untransferred balance to the transferor), at the specified office of the
Registrar or the relevant Transfer Agent, or (at the risk and, if mailed at the
request of the transferee or, as the case may be, the transferor otherwise than
by ordinary mail, at the expense of the transferee or, as the case may be, the
transferor) mail the Registered Note by uninsured mail to such address as the
transferee or, as the case may be, the transferor may request.
(D) Formalities Free of Charge. Such exchange or transfer will be
effected without charge subject to (i) the person making such request for
exchange or such application for transfer paying or procuring the payment of
any taxes, duties and other governmental charges payable in connection
therewith, (ii) the Registrar or the relevant Transfer Agent (in the case of
exchange of Registered Notes for Bearer Notes or the transfer of Registered
Notes) being satisfied with the documents of title and/or identity of the
person making the request or application and (iii) such reasonable regulations
as the Company may from time to time agree with the Registrar. The exchange of
Bearer Notes for Registered Notes and Registered Notes for Bearer Notes will be
subject to the provisions of all applicable fiscal or other laws and
regulations in effect at the time of such exchange.
(E) Closed Periods. Neither the Company, the Registrar, nor any
Transfer Agent will be required (i) to register the transfer of any Registered
Note, (ii) to exchange any Bearer Note
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for a Registered Note or (iii) to exchange any Registered Note (or part
thereof) for a Bearer Note (a) during the period of seven calendar days
immediately prior to March 21, 2000, or any earlier date fixed for redemption
of the Notes pursuant to Condition 9, (b) in respect of which an Exchange
Notice (as defined below) has been delivered in accordance with Condition 8 or
(c) in respect of which the Trustee or the Company have exercised Exchange
Rights under Condition 8(D) or 8(E), as the case may be. A Bearer Note or
Registered Note called for redemption may, however, be exchanged for a
Registered Note or Bearer Note, as the case may be, which is simultaneously
surrendered not later than the relevant Record Date.
(F) Certification of Non-U.S. Person Status. Neither the Company nor
the Registrar will be required to register the transfer of any Registered Note
prior to the Request Date unless the transferee provides written certification
that such transferee is not a U.S. person or unless the transfer of the
Registered Notes is exempt from the registration under the Securities Act and
any applicable state securities laws. In addition, the transferee of a
Registered Note will be required to complete certain documentation to ensure
the Company's compliance with U.S. federal income tax laws.
6. Interest and Additional Interest
(A) The Notes bear interest from (and including) March 21, 1996 (the
"Closing Date") at the rate of 8 percent per annum, payable semi-annually in
arrears on March 21 and September 21 in each year (each an "Interest Payment
Date"), the first such payment to be made on September 21, 1996 in respect of
the period from (and including) the Closing Date to (but excluding) September
21, 1996 and will amount to U.S.$40.00 per U.S.$1,000 principal amount of the
Notes.
Each Note will cease to bear interest (i) from its due date for
redemption unless, upon due presentation, payment of the principal in respect
of the Note is improperly withheld or refused or unless default is otherwise
made in respect of such payment, in which event interest shall continue to
accrue as provided in the Trust Deed and (ii) where the Exchange Right (as
defined below) shall have been exercised, or the Trustee or the Company shall
have exercised Exchange Rights pursuant to Conditions 8(D) and 8(E),
respectively, from the Interest Payment Date last preceding the relevant
Exchange Date or, if the Notes are exchanged before the first Interest Payment
Date, since the Closing Date.
When interest is required to be calculated in respect of a period of
less than a full year, it shall be calculated on the basis of a 360 day year
consisting of 12 months of 30 days each and, in the case of an incomplete
month, the number of days elapsed.
(B) In the event that during the period commencing on the fortieth
calendar day after the Closing Date and ending on the third anniversary of the
Closing Date (the "Anniversary Date") there is not any period consisting of
forty-five consecutive Stock Exchange Business Days (as defined below) during
which on each such Stock Exchange Business Day the Current Market Price (as
defined below) of the Shares (as defined below) is equal to or greater than 133
percent of the Exchange Price in effect for the Shares on each such Stock
Exchange Business Day, the Company shall, no later than five Business Days
after the Anniversary Date at its option, either:
(i) pay to each Noteholder a one time additional payment on the Notes
equal to 22.5 percent (the "Additional Amount") of the principal amount of
Notes held by such Noteholder; or
(ii) procure the issue by SSC to such Noteholder of Shares which have
an average Current Market Price per Share for the previous ten Stock Exchange
Business Days preceding the Anniversary Date equal to the Additional Amount.
In the event an Additional Amount is to be paid or Shares are to be
issued in lieu thereof, notice shall be given by the Trustee to the Noteholders
in accordance with Condition 17(B) and, so long as the Notes are listed on the
Luxembourg Stock Exchange, to the Luxembourg Stock Exchange two Business Days
after the Anniversary Date, and the Trustee shall also calculate the Additional
Amount or number of Shares due and owing. The number
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of Shares to be issued shall be made available by SSC to the Trustee and/or the
Transfer Agent in Luxembourg and shall be rounded down to the nearest whole
number. Receipt of the Additional Amount or Shares will be made upon
presentation of a Bearer Note to a Paying Agent, which Note shall be stamped to
reflect such payment or issuance, or, in the case of Registered Notes, to the
Holders shown on the Register on the Anniversary Date.
7. Payments
Payments of principal in respect of each Bearer Note and any
additional interest payable under Condition 6(B) and any net proceeds payable
under Conditions 8(D) or 8(E) will only be made, in the case of Bearer Notes,
against presentation and surrender (or, in the case of part payment only,
endorsement) of the relevant Bearer Note at the specified office of any of the
Paying Agents or in the case of Registered Notes, to the persons shown on the
Register at the close of business seven Business Days prior to the relevant
payment date (the "Record Date") and subject to surrender of the Registered
Notes at the specified office of the Registrar or any Transfer Agent. Payments
of interest due on the Bearer Notes on an Interest Payment Date will be made
against presentation and surrender (or, in the case of part payment only,
endorsement) of the relevant Coupons, at the specified office of any of the
Paying Agents or, in the case of Registered Notes, to the persons shown on the
Register at the close of business on the Record Date. Each such payment and any
payment of the net proceeds of the sale of Shares pursuant to Conditions 8(D)
or 8(E) will be made at the specified office of any Paying Agent, at the option
of the holder, by U.S. dollar cheque drawn on, or by transfer to a U.S. dollar
account maintained by the payee with, a bank in London, England and in the case
of Registered Notes, by U.S. dollar cheque drawn on a bank in London, England
and mailed, not later than the due date for payment (at the risk and, if mailed
at the request of the holder otherwise than by ordinary mail, expense of the
holder) to the holder or to the first named of joint holders of the relevant
Registered Notes at his registered address outside the United States and its
possessions or in accordance with mandate instructions acceptable to the
Registrar, subject in all cases to any applicable fiscal or other laws and
regulations, but without prejudice to the provisions of Condition 12.
Each Bearer Note should be presented for redemption together with all
unmatured Coupons relating to such Note, failing which the full amount of any
missing unmatured Coupon (or, in the case of payment not being made in full,
that proportion of the full amount of the missing unmatured Coupons which the
amount so paid bears to the total amount due) will be deducted from the amount
due for payment. Each amount so deducted will be paid in the manner mentioned
above against presentation and surrender (or, in the case of part payment only,
endorsement) of such missing Coupon at any time before the expiry of 10 years
after the Relevant Date (as defined in Condition 10) in respect of the relevant
Note (whether or not such Coupon would otherwise have become void pursuant to
Condition 12), or, if later, five years after the date on which such Coupon
would have become due, but not thereafter.
A holder shall be entitled to present a Bearer Note or Coupon for
payment only on a Presentation Date and shall not be entitled to any further
interest or other payment if a Presentation Date is after the due date.
"Presentation Date" means a day which (subject to Condition 12):
(a) is or falls after the relevant due date but, if the due date is
not or was not a Business Day in New York, is or falls after the next following
such Business Day; and
(b) is a Business Day in the place of the specified office of the
Paying Agent at which the Bearer Note or Coupon is presented for payment and,
in the case of payment by transfer to a U.S. dollar account in London as
referred to above, in London.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New
York, New York, are authorised or obliged by law, regulation or executive order
to close and, as the context may require, the day on which commercial banks are
open for business in the relevant place of presentation or payment.
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When making payments to Noteholders or Couponholders, fractions of one
cent will be rounded down to the nearest whole cent.
The names of the initial Paying Agents, Exchange Agents and Transfer
Agents and Registrar and their initial specified offices are set out at the end
of the "Terms and Conditions of the Notes". The Company reserves the right,
subject to the prior written approval of the Trustee, at any time to vary or
terminate the appointment of any Paying Agent, Exchange Agent or the Registrar
and to appoint additional or other Paying Agents, Exchange Agents or Registrar,
provided that it will at all times maintain (i) at least two Paying Agents, two
Exchange Agents and two Transfer Agents having specified offices in separate
European cities approved by the Trustee, one of which, so long as the Notes are
listed on the Luxembourg Stock Exchange, shall be Luxembourg or such other
place as the rules of the Luxembourg Stock Exchange may approve and one of
which shall be in London and (ii) a Registrar with a specified office in New
York. Notice of any termination or appointment and of any changes in specified
offices will be given to the Noteholders promptly by the Company in accordance
with Condition 17.
8. Exchange
(A) Exchange Period and Price
(i) Noteholders have the right, subject as provided herein and to any
applicable laws and regulations, to require SSC to exchange all or any of their
Notes at their principal amount in exchange for Shares at any time during the
Exchange Period referred to below. The right of a Noteholder to exchange any
Note into Shares is hereinafter called the "Exchange Right." Upon exchange, the
right of the exchanging Noteholder to repayment of the principal amount of the
Note to be exchanged (and, subject as provided in Condition 8(B)(iv), accrued
interest thereon) shall be extinguished and released, and in consideration and
in exchange therefor SSC shall allot and issue Shares credited as paid up in
full as provided in this Condition 8. Subject to and upon compliance with the
provisions of these Conditions, the Exchange Right attaching to any Note may be
exercised, at the option of the holder thereof, at any time on and after the
Request Date up to the close of business on the second Business Day preceding
March 21, 2000 (but in no event thereafter) or, if such Note shall have been
called for redemption pursuant to Condition 9(B) on the date seven calendar
days prior to the date fixed for redemption thereof (the "Exchange Period").
The number of Shares to be issued on exchange of a Note will be
determined by dividing the principal amount of the Note to be exchanged (or, in
the case of exchange of part only of the principal amount of the relevant Note,
the principal amount thereof being exchanged) by the Exchange Price (as defined
below) in effect on the Exchange Date, with the result being rounded down to
the nearest whole number.
(ii) An Exchange Right may only be exercised in respect of an
authorised denomination of Notes. If more than one Note is exchanged at any one
time by the same holder, the number of Shares to be issued upon such exchange
will be calculated on the basis of the aggregate principal amount of the Notes
to be exchanged. Fractions of Shares will not be issued on exchange and no cash
adjustments will be made in respect thereof.
(iii) The price at which Shares will be issued upon exchange (the
"Exchange Price") will initially be U.S.$1.4375 per Share but will be subject
to adjustment in the manner provided in Condition 8(C).
(iv) In the event that the Exchange Price in effect on the first
anniversary of the Merger (the "Reset Date") is greater than the average
Current Market Price of the Common Stock for the 90 Stock Exchange Business
Days immediately preceding the Reset Date (the "Reset Exchange Price"), the
Exchange Price shall be adjusted by the Company to equal the Reset Exchange
Price, save that if the Reset Exchange Price would be less than U.S.$1.00 per
Share, the adjusted Exchange Price shall be U.S.$1.00. (provided, however, that
this minimum Exchange Price of U.S.$1.00 per Share shall be subject to
adjustment pursuant to Condition 8(C)).
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Notice of any reset of the Exchange Price shall be given by the
Trustee in accordance with Condition 17 within ten Business Days of the Reset
Date.
(v) Notwithstanding the provisions of paragraph (i) of this Condition
8(A), if the Company shall default in making payment in full in respect of any
Note which shall have been called for redemption prior to March 21, 2000 on the
date fixed for redemption thereof, the Exchange Right attaching to such Note
will continue to be exercisable (unless already exercised by the Trustee
pursuant to Condition 8(D) or by the Company pursuant to Condition 8(E)) up to,
and including the close of business (at the place where the Note is deposited
in connection with the exercise of the Exchange Right), on the date upon which
the full amount of the moneys payable in respect on such Note has been duly
received by the Trustee or the Principal Paying Agent or, if earlier, March 21,
2000.
(vi) As used in these Conditions, the expression "Shares" means common
stock, par value U.S.$0.01, of SSC or its survivor by reason of the Merger (and
all other (if any) shares or stock resulting from any sub-division,
consolidation or re-classification of such shares).
(vii) In the case of a Bearer Note, an Exchange Right may only be
exercised in respect of the total principal amount of such Bearer Note and, in
the case of a Registered Note an Exchange Right may only be exercised in
respect of an Authorised Denomination. Where an Exchange Right is exercised in
respect of part only of a Registered Note, the old Registered Note shall be
cancelled and a new Registered Note for the balance thereof shall be issued in
lieu thereof without charge but upon payment by the holder of any taxes, duties
and other governmental charges payable in connection therewith and the
Registrar will within seven Business Days of the relevant Exchange Date deliver
such new Registered Note to the Noteholder at the specified office of the
Registrar or (at the risk and, if mailed at the request of the Noteholder
otherwise than by ordinary mail, at the expense of the Noteholder) mail the new
Registered Note by uninsured mail to such address as the Noteholder may
request.
In the case of a Registered Note, an Exchange Right may not be
exercised by the Noteholder during the period commencing on the Record Date in
respect of any payment and ending on the due date for such payment (both days
inclusive).
(B) Procedure for Exchange
(i) To exercise the Exchange Right attaching to any Note, the holder
thereof must complete, execute and deposit at his own expense during normal
business hours at the specified office of the Principal Exchange Agent or any
of the other Exchange Agents or, in the case of a Registered Note, the
Registrar, a notice of exchange (an "Exchange Notice") in duplicate in the form
(for the time being current) obtainable from the specified office of each
Exchange Agent, together with the relevant Note and any amount to be paid by
the Noteholder pursuant to this Condition 8(B)(i).
The exchange date in respect of a Note (the "Exchange Date") must fall
at a time when the Exchange Right attaching to that Note is expressed in these
Conditions to be exercisable and will be deemed to be the Business Day
immediately following the date of the surrender of the Note and delivery of
such Exchange Notice and, if applicable, any payment to be made or indemnity
given under these Conditions in connection with the exercise of such Exchange
Right or, in the case of an automatic exchange on redemption pursuant to
Condition 8(D), the relevant redemption date. An Exchange Notice once delivered
shall be irrevocable. "Stock Exchange Business Day" means any day (other than a
Saturday or Sunday) on which The New York Stock Exchange, Inc. (the "NYSE") or
the Alternative Stock Exchange (as defined in Condition 11(A)(v)(a)), as the
case may be, is open for business.
A Noteholder or the Trustee delivering a Note for exchange must pay
(in the case of the Trustee, by way of deduction from the net proceeds of sale
referred to in Condition 8(D)) any taxes and capital, stamp, issue and
registration duties arising on exchange (other than any taxes or capital, or
stamp duties payable in the U.S. or in the place of the Alternative Stock
Exchange, as the case may be, by SSC in respect of the allotment and issue of
Shares and listing of the Shares on exchange) and such Noteholder or the
Trustee (as the case may be) must pay (in the case of the Trustee, by way of
deduction from the net proceeds of sale as
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aforesaid) all, if any, taxes arising by reference to any disposal or deemed
disposal of a Note in connection with such exchange.
Until such time as SSC shall have either, to the satisfaction of the
Trustee, complied with its obligations under or made the determination referred
to in Condition 11(A)(iii), a Noteholder or the Trustee delivering a Note for
exchange on behalf of a Noteholder must either (i) provide a written
certification that the Noteholder is not a U.S. person, that the Note is not
being exchanged on behalf of a U.S. person, and that such persons are located
outside the U.S., acquired the Notes to be exchanged outside the U.S., and are
not affiliates of SSC or persons acting on behalf of an affiliate of SSC; or
(ii) provide a written opinion of U.S. legal counsel, in form and substance
acceptable to SSC, to the effect that the exchange of the Note for Shares is
exempt from registration under the Securities Act and any applicable state
securities law.
(ii) As soon as practicable, and in any event not later than 14
calendar days after the Exchange Date, SSC will in the case of Notes exchanged
on exercise of the Exchange Right, whether by the Noteholder or by the Trustee,
or a Note being exchanged in accordance with Condition 8(E) and in respect of
which an Exchange Notice has been delivered and the relevant Note and amounts
payable by the relevant Noteholder, or, as the case may be, the Trustee
deposited as permitted by sub-paragraph (i) above, cause the person or persons
designated for the purpose in the Exchange Notice to be registered as holder(s)
of the relevant number of Shares and will make a certificate or certificates
for the relevant Shares available for collection at SSC's principal office in
Boise, Idaho or, if so requested in the relevant Exchange Notice, will deliver
such certificate or certificates to the person and at the place specified in
the Exchange Notice together with any other securities, property or cash
required to be delivered upon exchange and such assignments and other documents
(if any) as may be required by law to effect the transfer thereof.
(iii) The person or persons specified for that purpose will be deemed
for all purposes to be the holder of record of the number of Shares issuable
upon exchange with effect from the Exchange Date. The Shares issued upon
exchange of the Notes will in all respects rank pari passu with the issued and
outstanding Shares in issue on the relevant Exchange Date except for any right
excluded by mandatory provisions of applicable law. A holder of Shares issued
on exchange of Notes shall not be entitled to any rights the Record Date for
which precedes the relevant Exchange Date.
(iv) If any notice requiring the redemption of any Notes is given
pursuant to Condition 9(B) on or after the fifteenth calendar day prior to the
Record Date in respect of any dividend payable in respect of the Shares where
such notice specifies a date for redemption falling on or prior to the next
following Interest Payment Date, interest shall (subject as hereinafter
provided) accrue on Notes (i) which shall have been delivered for exchange on
or after such Record Date or (ii) to which the election by the Trustee provided
for in Condition 8(D) applied on or after such Record Date, in each case from
the preceding Interest Payment Date (or, if the relevant Exchange Date falls
before the first Interest Payment Date, from the Closing Date, to the relevant
Exchange Date) provided that the relevant Noteholder's entitlement to interest
shall on any Note, in the event that the Shares allotted on exchange thereof
shall carry an entitlement to receive such dividend, be limited to the amount
by which the interest he or it would have received had no exchange taken place
exceeds the amount of the dividend received on such Shares. Any such interest
shall be paid by the Company not later than 14 calendar days after the relevant
Exchange Date by U.S. dollar cheque drawn on, or by transfer to U.S. dollar
account maintained by the payee with, a bank in London, England in accordance
with instructions given by the relevant Noteholder or, in the case of such
election by the Trustee, the Trustee, including any payment of any Additional
Amount or Shares in lieu thereof pursuant to Condition 6(B).
Save as provided in this sub-paragraph (iv), no payment or adjustment
will be made on exchange for any interest accrued on exchanged Notes since the
Interest Payment Date last preceding the relevant Exchange Date, or, if the
Notes are exchanged before the first Interest Payment Date, since the Closing
Date, including any payment of any Additional Amount or Shares in lieu thereof
pursuant to Condition 6(B).
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(C) Adjustments in Exchange Price
The Exchange Price will be subject to adjustment in certain events set
out in the Trust Deed, including:
(i) the making of a Stock Split;
(ii) the consolidation and reclassification of Shares;
(iii) the grant, issue or offer, to the holders of Shares, of rights
or warrants entitling them to subscribe for or purchase Shares or any
securities convertible into or exchangeable for Shares, at a consideration per
Share less than the Current Market Price per Share;
(iv) the distribution, to the holders of Shares, of shares of capital
stock of SSC, evidence of indebtedness of SSC, assets (other than annual or
interim dividends in cash) or rights or warrants to subscribe for or purchase
securities (other than those rights and warrants mentioned in (iii) above);
(v) the issue of securities (other than the Notes or in any of the
circumstances mentioned in (iii) above) convertible into or exchangeable for
Shares, or of rights or warrants to subscribe for or purchase Shares or
securities convertible into or exchangeable for Shares (other than those rights
and warrants mentioned in (iii) above), at a consideration per Share less than
the Current Market Price per Share; and
(vi) the issue of Shares (other than Shares issued on conversion or
exchange of any convertible or exchangeable securities issued by SSC (including
the Notes) or on the exercise of any rights or warrants granted, issued or
offered by SSC or in any of the circumstances described in (i) and (ii) above
or Shares issued to stockholders of any company which merges into or
consolidates with SSC, in proportion to their shareholding in such company
immediately prior to such merger, upon such merger) at a consideration per
Share less than the Current Market Price per Share; provided, however, that the
Exchange Price will not be (i) adjusted by reason of the Merger (other than
pursuant to Condition 8(A)(iv)) or (ii) reduced as a result of any such
adjustment, and the Company covenants in the Trust Deed not to take any action,
if, after giving effect thereto, the Exchange Price would be reduced to such an
extent that, under applicable law then in effect, Notes may not be exchanged at
such reduced Exchange Price for legally issued, fully paid and non-assessable
Shares. No adjustment will be made where such adjustment would be less than 5
percent of the Exchange Price then in effect. Any adjustment not so made will
be carried forward and taken into account in any subsequent adjustment. On any
adjustment, the resultant Exchange Price, if not an integral multiple of one
cent shall be rounded down to the nearest one cent. Any adjustment will be
notified by the Trustee to the Noteholders in accordance with Condition 17.
"Stock Split" means any kind of stock split in relation to the Shares
and includes a free share distribution, a stock dividend and a sub-division.
"Current Market Price" means in respect of a Share on a particular
Stock Exchange Business Day the average of the high and low sale prices (or, if
no sales prices are reported, the average of the high and low bid prices) as
reported in the NYSE's Composite Transactions (or the equivalent quotations of
an Alternative Stock Exchange, as the case may be).
The Exchange Price may not be reduced so that, on exchange of Notes,
Shares would be issued at a discount to their par value.
Where more than one event which gives or may give rise to an
adjustment to the Exchange Price occurs within such a short period of time that
in the opinion of the Company's auditors (the "Auditors") the foregoing
provisions would need to be operated subject to some modification in order to
give the intended result, such modification shall be made to the operation of
the foregoing provisions as may be advised by the Auditors to be in their
opinion appropriate in order to give such intended result.
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No adjustment will be made to the Exchange Price when Shares or other
securities (including rights or options) are issued, offered or granted to
employees (including directors holding executive office) of SSC or any
Subsidiary or any associated company of SSC pursuant to any Employee Share
Scheme (as defined in the Trust Deed).
(D) Exchange on Redemption
The Trust Deed provides that the Trustee may, at its absolute
discretion (and without any responsibility for any loss occasioned thereby),
within the period commencing on the date six Business Days prior to, and ending
at the close of business in New York City prior to, the date fixed for
redemption of any of the Notes (including any redemption under Conditions 9(A),
9(B) and 9(C)), elect by notice in writing to the Company and SSC to exchange
as of such redemption date the aggregate number of Notes due for redemption on
such date and in respect of which Exchange Rights have not been exercised by
Noteholders ("Unexercised Notes") into Shares at the Exchange Price applicable
at such redemption date if all necessary consents (if any) have been obtained
and the Trustee is satisfied or is advised by a reputable independent merchant
bank appointed by it that the net proceeds of an immediate sale of the Shares
arising from such exchange (disregarding any liability other than a liability
of the Trustee) to taxation or the payment of any capital, stamp, issue or
registration duties consequent thereon) would be likely to exceed by 5 percent
or more the amount of redemption moneys and interest which would otherwise be
payable in respect of interest accrued since the Interest Payment Date
immediately preceding such redemption date or if such date falls before the
first Interest Payment Date, since the Closing Date in respect of such
Unexercised Notes.
Subject to applicable law, the Trustee shall arrange for the sale on
behalf of the holders of the Unexercised Notes of the Shares issued on such
exchange as soon as practicable, and (subject to any necessary consents being
obtained and to the deduction by the Trustee of any amount which it determines
to be payable in respect of its liability to taxation or the payment of any
capital, stamp, issue or registration duties (if any) and any costs incurred by
the Trustee in connection with that allotment and sale thereof) the net
proceeds of sale together with accrued interest payable under Condition
8(B)(iv) in respect of such Unexercised Notes (if any) shall be held by the
Trustee and distributed by the Principal Paying Agent rateably to the holders
of such Unexercised Notes against due presentation in accordance with Condition
7. The amount of such net proceeds of sale shall be treated for all purposes as
the full amount due by the Company in respect of such Unexercised Notes.
(E) Mandatory Exchange
(i) Each Noteholder acknowledges and agrees that the Company may, at
its own cost (save those expenses or taxes referred to in Condition 8(E)(iii)),
at any time on or after March 21, 1997, elect to exercise the Exchange Right on
behalf of each and every Noteholder in respect of Notes in whole or in part
outstanding at the date of such election (the "Mandatory Exchange Date"),
provided that the Current Market Price of the Shares for each of the 30
consecutive Stock Exchange Business Days, the last of which falls on a day not
more than 30 calendar days prior to the date on which notice is given to
Noteholders of the mandatory exchange under this Condition 8(E), is equal to or
greater than 150 percent of the Exchange Price at the time such notice is
given.
(ii) Not less than 30 and not more than 60 calendar days prior to such
Mandatory Exchange Date, the Company shall cause written notice of the
Mandatory Exchange Date to be given to the Trustee, the Paying Agents, the
Exchange Agents and the holders of the Notes (in accordance with Condition 17
(such notice to include a statement of the consequences of failure on the part
of the Noteholders to perform the obligations specified in this Condition
8(E)). Following such notice, each of the Noteholders will be required on or
before the Mandatory Exchange Date to deliver or procure delivery of its Notes
together with a duly completed Exchange Notice to the specified office of any
Exchange Agent, during its usual business hours for such purposes and perform
together with the Company and SSC, the obligations applicable to it on exchange
specified in this Condition 8.
(iii) If any Noteholder with respect to whose Notes mandatory exchange
(pursuant to this Condition 8) is to take place shall fail to perform its
obligations specified in this
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Condition 8 or shall have a registered address in any territory where, in the
absence of any registration statement or other special formalities or legal
requirements, the issue, allotment, transfer or delivery of the Shares arising
on mandatory exchange in the reasonable opinion of the Trustee, is or could be
unlawful or impracticable, subject to applicable law, the Trustee shall make
arrangements for the sale of such Shares to a third party at the best
consideration reasonably obtainable by the Trustee and arrange for the
Principal Paying Agent to pay to such Noteholder the consideration received by
the Trustee in respect of such Shares (after any deduction required to
reimburse any reasonable and proper expenses incurred in arranging any such
sale or any taxes payable in connection therewith arising solely as a result of
the Noteholder's failure to perform its obligations under this Condition 8(E)).
(F) Consolidation, Amalgamation or Merger
Without limiting the provisions of Condition 3(C) hereof, in the case
of any consolidation, amalgamation or merger of SSC (other than the Merger)
with any other corporation (other than a consolidation, amalgamation or merger
in which SSC is the continuing corporation), or in the case of any sale or
transfer of all, or substantially all, of the assets of SSC, SSC will forthwith
notify the Noteholders of such event in accordance with Condition 17 and (so
far as legally possible) cause the corporation resulting from such
consolidation, amalgamation or merger or the corporation which shall have
acquired such assets, as the case may be, to execute a trust deed supplemental
to the Trust Deed to ensure that the holder of each Note then outstanding will
have the right (during the period in which such Note shall be exchangeable) to
exchange such Note into the class and amount of shares and other securities and
property receivable upon such consolidation, amalgamation, merger, sale or
transfer by a holder of the number of Shares which would have become liable to
be issued upon exchange of such Note immediately prior to such consolidation,
amalgamation, merger, sale or transfer. Such supplemental trust deed will
provide for adjustments which will be as nearly equivalent as may be
practicable to the adjustments provided for in the foregoing provisions of this
Condition. The above provisions of this Condition 8(F) will apply in the same
way to any subsequent consolidations, amalgamations, mergers, sales or
transfers.
9. Redemption and Purchase
(A) Unless previously redeemed, exchanged or purchased and cancelled
as provided herein, the Company will redeem the Notes at their principal amount
on March 21, 2000.
(B) If as a result of any change in, or amendment to, the laws or
regulations of the U.S. or any political sub- division of, or any authority in,
or of, the U.S. having power to tax, or any change in the application or
official interpretation of such laws or regulations, which change or amendment
becomes effective after March 21, 1996, the Company has or will become obliged
to pay additional amounts as provided or referred to in Condition 10 (and such
amendment or change has been evidenced by the delivery by the Company to the
Trustee (who shall, in the absence of manifest error, accept such certificate
and opinion as sufficient evidence thereof) of (i) a certificate signed by two
officers of the Company on behalf of the Company stating that such amendment or
change has occurred (irrespective of whether such amendment or change is then
effective), describing the facts leading thereto and stating that such
obligation cannot be avoided by the Company taking reasonable measures
available to it and (ii) an opinion in a form satisfactory to the Trustee of
independent legal advisers of recognised standing to whom the Trustee shall
have no reasonable objection to the effect that such amendment or change has
occurred (irrespective of whether such amendment or change is then effective)),
the Company may at its option, having given not less than 30 nor more than 60
calendar days' notice to the Noteholders in accordance with Condition 17 (which
notice shall be irrevocable), redeem all the Notes but not some only, at their
principal amount together with interest (if any) accrued to (but excluding) the
date of redemption, provided that no notice of redemption shall be given
earlier than 90 calendar days before the earliest date on which the Company
would be required to pay such additional amounts were a payment in respect of
the Notes then due.
Upon expiry of any such notice period as is referred to in this
Condition 9(B) (and subject as provided above), the Company shall be bound to
redeem the Notes at their principal amount together with interest accrued to
but excluding the redemption date.
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(C) Redemption at the Option of Noteholders
Any Noteholder may on or after a Cessation of Listing, by completing,
signing and depositing at the specified office of any of the Paying Agents
during normal business hours of such Agent at any time after notice of a
Cessation of Listing has been given by the Company, a notice of redemption in
the form (for the time being current) obtainable from any of the Paying Agents
specifying a date for redemption together with the Bearer Note or the
Registered Note, as the case may be, to be redeemed, require the Company to
redeem in U.S. dollars all or some only of the Notes held by it at their
principal amount, plus accrued interest to the date of redemption.
Any such notice of redemption will be irrevocable unless its
revocation is approved in writing by the Company not later than five days prior
to the relevant date for redemption of the relevant Note and will bind the
Company to redeem the Note to which such notice relates. Certificates for
Registered Notes and Bearer Notes will not be returned to Noteholders except in
the limited circumstances set out in the Agency Agreement. The Company shall
notify Noteholders of a Cessation of Listing no later than five Business Days
after its occurrence in accordance with Condition 17. For the purposes of this
Condition 9(C) "Cessation of Listing" means the consolidation with or merger
into any Person by SSC or the sale, lease, conveyance, transfer or other
disposal by SSC of its property or assets as an entirety or substantially as an
entirety to a Person and as a result of such transaction the Shares are no
longer listed on the NYSE or an Alternative Stock Exchange.
(D) Subject to applicable law, the Company, SSC or any of their
Subsidiaries or Affiliates (as defined in the Trust Deed) may at any time
purchase Notes together, in the case of Bearer Notes, with unmatured Coupons in
any manner and at any price in the open market or by private treaty. If
purchases are made by tender, tenders must be available to all Noteholders
alike. Notes purchased by the Company, SSC or any of their Subsidiaries will
forthwith be surrendered for cancellation and shall no longer be deemed
Outstanding.
(E) All Notes which are redeemed by the Company will forthwith be
cancelled (together with all relative unmatured Coupons attached to or
surrendered with the Bearer Notes) and may not be reissued or resold.
10. Taxation
All payments in respect of the Notes by the Company or, as the case
may be, SSC shall be made without withholding or deduction for, or on account
of, any present or future taxes, duties, assessments or governmental charges of
whatever nature ("Taxes") imposed or levied by or on behalf of the U.S. or any
political sub-division of, or any authority in, or of, the U.S. having power to
tax, unless the withholding or deduction of the Taxes is required by law. In
that event, the Company or, as the case may be, SSC will pay such additional
amounts as may be necessary in order that the net amounts received by the
Noteholders and Couponholders after the withholding or deduction shall equal
the respective amounts which would have been receivable in respect of the Notes
or, as the case may be, Coupons in the absence of the withholding or deduction;
except that no additional amounts shall be payable in relation to any payment
in respect of any Note or Coupon:
(A) to, or to a third party on behalf of, a holder who is liable for
the Taxes in respect of the Note or Coupon by reason of his having some
connection with the U.S. other than the mere holding of the Note or Coupon; and
(B) presented for payment more than 30 calendar days after the
Relevant Date except to the extent that a holder would have been entitled to
additional amounts on presenting the same for payment on the last day of such
period of 30 calendar days; or
(C) to, or to a third party on behalf of, a holder who would not be
liable or subject to the withholding or deduction by making a declaration of
non-residence or other similar claim for exemption to the relevant tax
authority.
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As used herein, "Relevant Date" means the date on which the payment
first becomes due but, if the full amount of the money payable has not been
received in New York by the Principal Paying Agent or the Trustee on or before
the due date, it means the date on which, the full amount of the money having
been so received, notice to that effect shall have been duly given to the
Noteholders by the Company in accordance with Condition 17.
Any reference in these Terms and Conditions to any amounts in respect
of the Notes shall be deemed also to refer to any additional amounts which may
be payable under this Condition or under any undertakings given in addition to,
or in substitution for, this Condition pursuant to the Trust Deed.
11. Additional Covenants
(A) Undertakings by SSC
Whilst any Exchange Right remains exercisable, SSC will, save with the
approval of an Extraordinary Resolution (as defined in the Trust Deed) or with
the approval of the Trustee where, in its opinion, it is not materially
prejudicial to the interests of the Noteholders to give such approval:
(i) at all times keep available for issuance free from any pre-emptive
rights out of its authorised but unissued capital such number of Shares as
would enable the Exchange Rights and all other rights of subscription and
exchange for and exchange into Shares to be satisfied in full;
(ii) will not create or permit to subsist any Lien relating to or over
the shares of the Company, held or beneficially owned by SSC;
(iii) to the extent SSC and its counsel determine it is required
because an exemption from registration is not available, file with the
Securities and Exchange Commission on or before June 30, 1996, and keep
effective a Registration Statement on such form as SSC determines to be
appropriate in respect of the registration of the Shares to be issued pursuant
to the Exchange Rights to U.S. persons and any subsequent resale of such Shares
to U.S. persons;
(iv) (a) to maintain a listing for all the issued Shares on the NYSE,
it being understood that if SSC is unable to obtain or maintain such listing of
Shares, to obtain and maintain a listing for all the Shares issued on the
exercise of the Exchange Rights on any other stock exchanges or authorised for
quotation on NASDAQ or by the National Quotation Bureau Incorporated (each an
"Alternative Stock Exchange") as SSC may from time to time (with the written
consent of the Trustee) determine and will forthwith give notice to the
Noteholders in accordance with Condition 17 of the listing, de- listing or
quotation or lack of quotation of the Shares (as a class) by any such
Alternative Stock Exchange;
(b) procure that the Company maintains a listing of the Notes on the
Luxembourg Stock Exchange; and
(v) not in any way modify the rights attaching to the Shares with
respect to voting, dividends or liquidation nor issue any class of equity share
capital carrying any rights which are more favorable than such rights.
(B) Undertakings by the Company
Whilst any Exchange Right remains exercisable, the Company will, save
with the approval of an Extraordinary Resolution or with the approval of the
Trustee where, in its opinion, it is not materially prejudicial to the
interests of the Noteholders to give such approval:
(i) not incur any Indebtedness other than the Notes;
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(ii) not create or permit to subsist any Lien or other encumbrance or
security interest over or otherwise dispose, sell or transfer its interest in
the Sunshine Mine; and
(iii) maintain a listing for the Notes on the Luxembourg Stock
Exchange.
(C) For the purposes of this condition, "Sunshine Mine" means that
certain real property location in Shoshone County, Idaho, known as the
"Sunshine Mine", consisting of the ownership rights of the Company in the real
property, together with the ownership rights of the Company in equipment,
plant, machinery and other property located thereon and all patented and
unpatented mining claims and interests therein owned by the Company.
12. Prescription
Bearer Notes and Coupons will become void unless presented for payment
within periods of 10 years (in the case of principal) and five years (in the
case of interest) from the Relevant Date in respect of the Notes or, as the
case may be, the Coupons, subject to the provisions of Condition 7.
Claims for the payment of principal and interest and other sums
payable in respect to Registered Notes shall be prescribed unless made within
10 years (in the case of principal) and 5 years (in the case of interest) from
the Relevant Date.
13. Events of Default
The Trustee at its discretion may, and if so requested in writing by
the holders of at least one-quarter in principal amount of the Notes then
outstanding or if so directed by an Extraordinary Resolution of the Noteholders
shall, give notice to the Company that the Notes are, and they shall
accordingly thereby forthwith become, immediately due and repayable at their
principal amount together with accrued interest (as provided in the Trust Deed)
if any of the following events (each an "Event of Default") shall have occurred
(unless (i) such events (including, without limitation, the Merger) are
expressly permitted or contemplated by the Trust Deed or (ii) such Event of
Default has been remedied to the satisfaction of the Trustee):
(A) if default is made for a period of 5 Business Days or more in the
payment of any principal or interest due in respect of the Notes or any of
them; or
(B) if the Company or SSC fails to perform or observe any of its other
obligations, covenants, conditions or provisions under the Notes or the Trust
Deed and (except where the Trustee shall have certified to the Company in
writing that it considers such failure to be incapable of remedy in which case
no such notice or continuation as is hereinafter mentioned will be required)
such failure continues for the period of 30 calendar days (or such longer
period as the Trustee may in its absolute discretion permit) next following the
service by the Trustee on the Company or SSC, as the case may be, of notice
requiring the same to be remedied; or
(C) if (i) any other Indebtedness of the Company, SSC or any Principal
Subsidiary (as defined below) becomes due and repayable prior to its stated
maturity by reason of an event of default (howsoever described) or (ii) any
such Indebtedness is not paid when due or, as the case may be, within any
applicable grace period (as originally provided) or (iii) the Company, SSC or
any Principal Subsidiary fails to pay when due (or, as the case may be, within
any originally applicable grace period) any amount payable by it under any
present or future guarantee for, or indemnity in respect of, any Indebtedness
of any Person or (iv) any security given by the Company, SSC or any Principal
Subsidiary for any Indebtedness of any Person or any guarantee or indemnity of
Indebtedness of any Person or any guarantee or indemnity of Indebtedness of any
Person becomes enforceable by reason of default in relation thereto and steps
are taken to enforce such security save in any such case where there is a bona
fide dispute as to whether the relevant Indebtedness or any such guarantee or
indemnity as aforesaid shall be due and payable, provided that in each such
case the Indebtedness exceeds in the aggregate US$1,000,000 and in each such
case such event continues unremedied for a period of 30 calendar days (or such
longer period as the Trustee may in its sole discretion consent to in writing
upon receipt of written notice from the Company or SSC); or
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(D) if the Company, SSC or any Principal Subsidiary shall fail to pay
its debts as such debts become due (except debts which the Company, SSC or such
Principal Subsidiary, as the case may be) may contest in good faith generally
or shall be declared or adjudicated by a competent court to be insolvent or
bankrupt, consents to the entry of an order of relief against it in an
involuntary bankruptcy case, shall enter into any assignment or other similar
arrangement for the benefit of its creditors or consents to the appointment of
a custodian (including, without limitation, a receiver, liquidator or trustee);
or
(E) if a receiver, administrative receiver, administrator or other
similar official shall be appointed in relation to the Company, SSC or any
Principal Subsidiary or in relation to the whole or a substantial part of the
undertaking or assets of any of them or a distress, execution or other process
shall be levied or enforced upon or sued out against, or an encumbrancer shall
take possession of, the whole or a substantial part of the assets of any of
them and in any of the foregoing cases it or he shall not be paid out or
discharged within 90 calendar days (or such longer period as the Trustee may in
its absolute discretion consent to in writing upon receipt of written notice
from the Company or SSC); or
(F) if the Company, SSC or any Principal Subsidiary institutes
proceedings to be adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking organization under the laws of the U.S. Federal
Bankruptcy Code or any similar applicable U.S. Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a receiver or liquidator or trustee or assignee (or other similar official)
in bankruptcy or insolvency of it or its property, or shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they come due; or
(G) if a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking the reorganisation of the
Company under the U.S. Federal Bankruptcy Code or any other similar applicable
U.S. Federal or State law, and such decree or order shall have continued
undischarged or unstated for a period of 90 calendar days; or a decree or order
of a court having jurisdiction in the premises for the appointment of a
receiver or liquidator or trustee or assignee (or other similar official) in
bankruptcy or insolvency of the Company or of all or substantially all of its
property, or for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have continued undischarged and
unstayed for a period of 90 calendar days; or
(H) if a warranty, representation or other statement made by or on
behalf of the Company or SSC contained in the Trust Deed, the Notes or any
certificate or other agreement furnished in compliance with such documents is
false in any material respect when made; or
(I) if SSC or its successor as permitted by Condition 3(C) ceases to
own all of the issued and outstanding shares of the Company or shall at any
time pledge, transfer, exchange or otherwise dispose of such shares; or
(J) if there is any final judgment or judgments for the payment of
money exceeding in the aggregate US$1,000,000 outstanding against the Company,
SSC or any Principal Subsidiary which has been outstanding for more than sixty
(60) calendar days from the date of its entry and shall not have otherwise been
discharged in full or stayed by appeal, bond or otherwise.
For the purposes of these Terms and Conditions:
(a) "Group" means SSC and all its Subsidiaries.
(b) "Indebtedness" of any person, means any present or future
obligations, which shall include all obligations (i) which in accordance with
the generally accepted accounting principles in the U.S., shall be classified
upon the balance sheet of such person as liabilities, (ii) for borrowed money,
(iii) which have been incurred in connection with the acquisition of any
property (including without limitation, all obligations evidenced by any
indenture, bond, note, commercial paper or other similar security, but
excluding, in any case, obligations arising
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from the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection, (iv) obligations secured by any Lien
existing on property owned, even though such person has not assumed or become
liable for the payment of such obligations, (v) obligations created or arising
under conditional sale or other title retention agreement with respect to
property acquired by such person, notwithstanding the fact that the rights and
remedies of the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of such property, (vi) for
capitalised leases, (vii) for all guarantees, whether or not reflected in the
balance sheet of such person, and (viii) all reimbursement and other payment
obligations (whether contingent mature or otherwise) of such person in respect
of acceptance or documentary credit. Notwithstanding the foregoing,
Indebtedness shall not include (i) Indebtedness incidental to the operation of
the business of the Person in the ordinary course and in the aggregate not
material to the business and operations of the Person and (ii) Indebtedness
represented by purchase, rental or lease obligations which would cause the
direct or contingent liabilities of the Person and its Subsidiaries, on a
consolidated basis, in respect of all such obligations, not to exceed
US$1,000,000 in any period of 12 months.
(c) "Merger" means the proposed merger of SSC with and into Sunshine
Merger Company, a Delaware corporation and wholly-owned subsidiary of SSC, with
Sunshine Merger Company being the surviving corporation;
(d) a "Principal Subsidiary" at any time means a Subsidiary of the
Company or SSC:
(A) whose gross assets represent 15 percent or more of the
consolidated gross assets of the Group as calculated by reference to the then
latest audited financial statements of the Group; or
(B) to which is transferred all or substantially all of the business,
undertaking and assets of a Subsidiary of the Company or SSC which immediately
prior to such transfer is a Principal Subsidiary, whereupon the transferor
Subsidiary shall immediately cease to be a Principal Subsidiary and the
transferee Subsidiary shall cease to be a Principal Subsidiary under the
provisions of this sub-paragraph (B) (but without prejudice to the provisions
of sub- paragraph (A) above), upon publication of its next audited financial
statements; all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a Subsidiary of the
Company or SSC is or is not or was or was not at any particular time or
throughout any specified period a Principal Subsidiary shall, in the absence of
manifest error, be conclusive and binding on all parties; and
(e) "Subsidiary" means any corporation of which at least a majority of
the shares of stock having by the terms thereof ordinary voting power to elect
a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is directly or indirectly owned or controlled by any one of or
any combinations of the Company, SSC or one or more of the Principal
Subsidiaries.
(f) "Lien" means any mortgage, pledge, security interest, lien, charge
or other encumbrance, but shall not include any of the foregoing types of
encumbrances that are incidental to the conduct of the business of the Company,
SSC or any of its Subsidiaries or the ownership of property and assets of any
of them, including (i) pledges or deposits made to secure obligations of the
Company, SSC or any of its Subsidiaries under the workmen's compensation laws
or similar legislation; (ii) liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's, vendors', repairments', governmental
(Federal, state or municipal) liens arising out of contracts for the purchase
or lease of products of the Company, SSC or a Subsidiary, and deposits or
pledges to obtain the release of any of the foregoing liens; (iii) liens
created by or resulting from any litigation or legal proceedings currently
being contested in good faith by appropriate proceedings; (iv) leases made or
existing on property entered into in the ordinary course of business of the
Company, SSC or one of its Subsidiaries; (v) landlords' liens under leases of
property to which the Company, SSC or one of its Subsidiaries is a party; (vi)
zoning restrictions, easements, licenses or restrictions on the use of property
or minor irregularities in the title thereto; (vii) deposits in connection with
bids, tenders, contracts (other than the repayment of money) to which the
Company, SSC or one of
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its Subsidiaries is a party; (viii) deposits to secure public or statutory
obligations of the Company, SSC or one of its Subsidiaries; (ix) deposits in
connection with obtaining or maintaining self-insurance or to obtain the
benefits of any law regulation or arrangement pertaining to unemployment
insurance, old age pensions, social security or similar matters; (x) deposits
or cash or obligations of the United States of America to secure surety, appeal
or customs bonds to which the Company, SSC or any of its Subsidiaries is a
party; and (xi) liens for tax or assessments or government charges or levies
not yet due or delinquent or which can thereafter be paid without penalty, or
which are being contested in good faith by appropriate proceedings.
(g) "Consolidated Net Worth" means at any time, the total consolidated
stockholders' equity determined on a consolidated basis in accordance with the
U.S. generally accepted accounting principles, plus there shall be added
thereto when determined with respect to SSC and its Subsidiaries (or any
successor entity thereof): (i) the principal amount of the Notes then
outstanding, (ii) if not
otherwise included, the book value of any mandatorily redeemable preferred
stock, except for the aggregate liquidation preference of any portion thereof
which has a stated maturity date or a mandatory redemption requirement due on
or prior to the final maturity date of the Notes, (iii) if not otherwise
included, the book value of any shares of preferred stock then outstanding
mandatorily redeemable for shares of Common Stock, and (iv) the principal
amount of any other convertible subordinated Indebtedness then outstanding, or
the principal amount of any portion of any such convertible subordinated
Indebtedness, except for the principal amount which has a stated maturity date
or mandatory redemption requirement due on or prior to the final maturity date
of the Notes.
14. Enforcement
The Trustee may at any time, at its discretion and with prior written
notice to the Company and SSC, take such proceedings against the Company or SSC
as it may think fit to enforce the provisions of the Trust Deed, the Notes and
the Coupons or the Guarantee but it shall not be bound to take any proceedings
or any other action in relation to the Trust Deed, the Notes or the Coupons or
the Guarantee unless (a) it shall have been so directed by an Extraordinary
Resolution of the Noteholders or so requested in writing by the holders of at
least one-quarter in principal amount of the Notes then outstanding, and (b) it
shall have been indemnified to its satisfaction. No Noteholder or Couponholder
shall be entitled to proceed directly against the Company unless the Trustee,
having become bound so to proceed, fails so to do within a reasonable period
and such failure shall be continuing.
15. Substitution
The Trustee may, without the consent of the Noteholders or
Couponholders, agree with the Company to the substitution in place of the
Company (or of any previous substitute under this Condition) as the principal
debtor under the Notes, the Coupons and the Trust Deed of any Subsidiary or
holding company (being a corporation holding (directly or indirectly) at least
a majority of shares of stock having by the terms ordinary voting power to
elect a majority of the board of directors of the Company (or such previous
substitute) (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency)) of the Company or any Subsidiary of such
holding company, subject to (a) the Notes continuing to be unconditionally and
irrevocably guaranteed by SSC and exchangeable into Shares of SSC, (b) the
Trustee being satisfied that the interests of the Noteholders will not be
materially prejudiced by the substitution, and (c) certain other conditions set
out in the Trust Deed being complied with.
16. Replacement of Notes and Coupons
Should any Note or Coupon be lost, stolen, mutilated, defaced or
destroyed, it may be replaced at the specified office of the Paying Agent in
London, in the case of Bearer Notes or Coupons, or the Registrar, in the case
of Registered Notes, upon payment by the claimant of the expenses incurred in
connection with the replacement and on such terms as to evidence
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<PAGE> 72
indemnity and security as the Company may reasonably require. Mutilated or
defaced Notes or Coupons must be surrendered before replacements will be
issued.
17. Notices
(A) Notices to holders of Registered Notes will be mailed to them at
the respective addresses in the Register and deemed to have been given on the
fourth Business Day after the date of mailing, provided that, if at any time by
reason of suspension or curtailment (or except suspension or curtailment) of
postal services within the U.S. or elsewhere the Company is unable effectively
to give notice to holders of Registered Notes through the post, notices to
holders of Registered Notes will be valid if given in the same manner as other
notices as set forth below.
(B) Notices to all the Noteholders will be valid if published in a
leading English language daily newspaper published in London or such other
English language daily newspaper with general circulation in Europe as the
Trustee may approve (which is expected to be the Financial Times) and, so long
as the Notes are listed on the Luxembourg Stock Exchange and the rules of that
Exchange require, in a leading newspaper having general circulation in
Luxembourg (which is expected to be the Luxemburger Wort). Any notice shall be
deemed to have been given on the date of publication or, if so published more
than once, on the date of the first publication. If publication as provided
above is not practicable, notice will be given in such other manner, and shall
be deemed to have been given on such date, as the Trustee may approve.
(C) Couponholders will be deemed for all purposes to have notice of
the contents of any notice given to the Noteholders in accordance with this
Condition.
18. Meetings of Noteholders, Modification, Waiver and Authorisation
(A) The Trust Deed contains provisions for convening meetings of the
Noteholders to consider any matter affecting their interests, including the
modification by Extraordinary Resolution of these Terms and Conditions or the
provisions of the Trust Deed. The quorum at any meeting for passing an
Extraordinary Resolution will be one or more persons present holding or
representing a clear majority in principal amount of the Notes for the time
being outstanding, or at any adjourned such meeting one or more persons present
whatever the principal amount of the Notes held or represented by him or them,
except that at any meeting, the business of which includes the modification of
certain of the provisions of these Terms and Conditions and certain of the
provisions of the Trust Deed, the necessary quorum and vote required for
passing an Extraordinary Resolution will be one or more persons present holding
or representing not less than two-thirds, or at any adjourned such meeting not
less than one-third, of the principal amount of the Notes then Outstanding. An
Extraordinary Resolution passed at any meeting of the Noteholders will be
binding on all Noteholders, whether or not they are present at the meeting, and
on all Couponholders.
(B) The Trustee may agree, without the consent of the Noteholders or
Couponholders, to any modification (subject to certain exceptions) of, or to
the waiver or authorisation of any breach or proposed breach of, any of these
Conditions or any of the provisions of the Trust Deed which is not, in the
opinion of the Trustee, materially prejudicial to the interests of the
Noteholders or to any modification which is of a formal, minor or technical
nature or to correct a manifest error.
(C) In connection with the exercise by it of any of its trusts,
powers, authorities or discretions (including, without limitation, any
modification, waiver, authorisation or substitution), the Trustee shall have
regard to the interests of the Noteholders as a class and, in particular but
without limitation, shall not have regard to the consequences of the exercise
of its trusts, powers, authorities or discretions for individual Noteholders
and Couponholders resulting from their being for any purpose domiciled or
resident in, or otherwise connected with, or subject to the jurisdiction of,
any particular territory and the Trustee shall not be entitled to require, nor
shall any Noteholder or Couponholder be entitled to claim, from the Company,
the Trustee or any other person any indemnification or payment in respect of
any tax consequences of any such exercise upon individual Noteholders or
Couponholders except
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<PAGE> 73
to the extent already provided for in Condition 10 and/or any undertaking given
in addition to, or in substitution for, Condition 10 pursuant to the Trust
Deed.
(D) Any modification, waiver or authorisation shall be binding on the
Noteholders and the Couponholders and, unless the Trustee agrees otherwise, any
modification shall be notified by the Company to the Noteholders as soon as
practicable thereafter in accordance with Condition 17.
19. Indemnification of the Trustee
The Trust Deed contains provisions for the indemnification of the
Trustee and for its relief from responsibility, including provisions relieving
it from taking action unless indemnified to its satisfaction.
20. Governing Law
The Trust Deed, the Agency Agreement, the Notes and the Coupons are
governed by, and will be construed in accordance with, English law. In relation
to any legal action or proceedings arising out of or in connection with the
Trust Deed, the Agency Agreement, the Notes, the Coupons or the Guarantee, the
Company and SSC have irrevocably submitted to the jurisdiction of the Courts of
England and in relation thereto have appointed The Law Debenture Trust
Corporation plc, now at Princes House, 95 Gresham Street, London EC2 V7LY as
its agent for service of process in England.
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London EC3 N4DA
PAYING, EXCHANGE AND TRANSFER AGENT
Banque G--n--rale du Luxembourg, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
U.S.A.
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<PAGE> 74
EXECUTED and DELIVERED )
as a DEED by )
SUNSHINE PRECIOUS )
METALS, INC. )
by: /s/ William Davis
----------------------
WILLIAM DAVIS
Authorised Officer
EXECUTED and DELIVERED )
as a DEED by )
SUNSHINE MINING AND )
REFINING COMPANY )
by: /s/ William Davis
----------------------
WILLIAM DAVIS
Authorised Officer
EXECUTED and DELIVERED )
as a DEED by )
MARINE MIDLAND BANK )
by: /s/ Julie Betts
----------------------
JULIE BETTS
Assistant Vice President
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<PAGE> 1
Exhibit 23.2
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
and to the use of our report dated February 28, 1996, with respect to the
consolidated financial statements incorporated by referenced in the
Registration Statement (Form S-3) and related Prospectus of Sunshine Mining and
Refining Company as filed with the Securities and Exchange Commission on June
21, 1996.
ERNST & YOUNG LLP
Dallas, Texas
June 21, 1996
