<PAGE> 1
As filed with the Securities and Exchange Commission on August 14, 1996
Registration No. 333-06537
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
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
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 shares (4) (4) --
be sold by Selling
Securityholders(3) . . . . . . .
- ----------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of Warrants to be sold 2,086,957 shares $2.875(5) $6,000,002(5) $2,069
by Selling Securityholders . . .
- ----------------------------------------------------------------------------------------------------------------------------
Total Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,940(6)
============================================================================================================================
</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
exchange of the Notes as a result of any future adjustments in the exchange
price in accordance with the terms of the Notes.
(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).
(6) Already paid.
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 AUGUST 14, 1996
PROSPECTUS
SUNSHINE MINING AND REFINING COMPANY
------------------------------------
32,086,957 SHARES OF COMMON STOCK
AND WARRANTS TO PURCHASE COMMON STOCK
--------------------
The shares of Common Stock, $0.01 par value per share (the "Common
Stock"), of Sunshine Mining and Refining Company (the "Company") covered by
this Prospectus are shares which may be offered and sold, from time to time, by
certain stockholders of the Company (collectively, the "Selling Stockholders").
See "Selling Stockholders." The shares of Common Stock covered by this
Prospectus (the "Exchange Common Stock") are issuable to the Selling
Stockholders upon exchange (the "Exchange") of the 8% Senior Exchangeable Notes
due 2000 issued by Sunshine Precious Metals, Inc. and guaranteed by the Company
(the "Notes"). All of the shares of Exchange Common Stock covered hereby will
only be sold by the Selling Stockholders. This Prospectus does not purport to
cover the initial issuance by the Company of the shares of Exchange Common
Stock upon exchange of the Notes, but only the reoffer and resale of such
shares by the Selling Stockholders. The Company will not receive any of the
proceeds from the sale of the shares of Exchange Common Stock by the Selling
Stockholders.
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.
The Selling Stockholders and the Selling Securityholders may from time
to time sell the Warrants, shares of Warrant Common Stock or Exchange Common
Stock, as the case may be, covered by this Prospectus to or through one or more
underwriters, and may also sell shares of Common Stock directly to other
purchasers or through agents, on the New York Stock Exchange ("NYSE") in
ordinary brokerage transactions, in negotiated transactions, or otherwise, at
market prices prevailing at the time of sale, at prices related to the then
prevailing market price or at negotiated prices. See "Plan of Distribution."
Application has been made to list the Exchange Common Stock and the
Warrant Common Stock offered hereby on the NYSE. The Company's Common Stock is
traded on the NYSE under the symbol "SSC." On August 12, 1996, the reported
closing sale price of the Company's Common Stock was $1.25 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 August ____, 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 and the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 (the "Quarterly Reports"), 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 Reports.
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> <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>
2
<PAGE> 4
On August 12, 1996, the closing price of silver reported on the COMEX
was $5.051 per ounce. In constant 1995 dollars, the average silver price from
1968 through 1995 has been approximately $11.66.
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
Reports 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 Reports, 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 resale of the
Exchange Common Stock by the Selling Stockholders or from the resale of the
Warrants or the Warrant Common Stock by the Selling Securityholders.
SELLING STOCKHOLDERS
This Prospectus covers offers from time to time by each Selling
Stockholder (after such person becomes a holder of Exchange Common Stock) of
the Exchange Common Stock to be owned by such person. The Selling Stockholders
will hold shares of Exchange Common Stock issued or issuable upon the exchange
of the Notes. The Notes were issued in a private placement conducted outside
of the United States pursuant to Regulation S promulgated pursuant to the
Securities Act and consummated on March 22, 1996. The Notes are exchangeable
at any time through the close of business on March 21, 2000, into shares of
Exchange Common Stock at a price of $1.4375 per shares, subject to reset
downwards adjustment under certain circumstances. The Notes are currently
convertible into an aggregate of 3,000,000 shares of Exchange Common Stock.
This Prospectus will provide by amendment or supplement a table that
lists (i) the name of each Selling Stockholder, (ii) the number of shares of
Common Stock owned by each Selling Stockholder before this Offering, (iii) the
number of shares of Exchange Common Stock that may be offered by each Selling
Stockholder pursuant to this Prospectus and (iv) the number of shares of Common
Stock to be owned by each Selling Stockholder upon completion of the Offering
if all shares registered hereby are sold.
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.
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(3)
---------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
RAUSCHER PIERCE & CLARK 1 Warrant (1) 1 Warrant - 0 -
LIMITED 1,008,091 Shares of 1,008,091 Shares of
Common Stock(2) Common Stock(2)
HSBC INVESTMENT BANKING PLC 1 Warrant (1) 1 Warrant - 0 -
834,783 Shares of 834,783 Shares of
Common Stock(2) Common Stock(2)
DALWORTH CAPITAL CORPORATION 1 Warrant (1) 1 Warrant (1) - 0 -
82,937 Shares of 82,937 Shares of
Common Stock (2) Common Stock (2)
THE ROYAL BANK OF SCOTLAND TRUST 1 Warrant (1) 1 Warrant (1) - 0 -
COMPANY (JERSEY) LIMITED J331C 21,898 Shares of 21,898 Shares of
Common Stock (2) Common Stock (2)
SIR ROBERT CLARK 1 Warrant (1) 1 Warrant (1) - 0 -
2,193 Shares of 2,193 Shares of
Common Stock (2) Common Stock (2)
DAVID P. QUINT 1 Warrant (1) 1 Warrant (1) - 0 -
137,055 Shares of 137,055 Shares of
Common Stock (2) Common Stock (2)
</TABLE>
___________________________
(1) One Warrant 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.
5
<PAGE> 7
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,
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
6
<PAGE> 8
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.
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) a Warrant issued to RPC representing the right to purchase
1,008,091 shares of Common Stock, (ii) a Warrant issued to HSBC representing
the right to purchase 834,783 shares of Common Stock, (iii) a Warrant issued to
Dalworth Capital Corporation representing the right to purchase 82,937 shares
of Common Stock, (iv) a Warrant issued to The Royal Bank of Scotland Trust
Company (Jersey) Limited J331C to purchase 21,898 shares of Common Stock, (v) a
Warrant issued to Sir Robert Clark to purchase 2,193 shares of Common Stock and
(vi) a Warrant 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.
7
<PAGE> 9
PLAN OF DISTRIBUTION
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. The shares of Exchange Common Stock may
be offered and sold from time to time by the Selling Stockholders. The Selling
Stockholders will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale. Such sales by the Selling
Securityholders or the Selling Stockholders, as the case may be, 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 or Selling Stockholders may arrange for other
broker-dealers to participate. Broker-dealers may receive commissions or
discounts from the Selling Securityholders or Selling Stockholders in amounts
to be negotiated immediately prior to the sale.
In connection with the sale of the Warrants and Common Stock,
underwriters or agents may receive compensation from the Selling
Securityholders, the Selling Stockholders or from purchasers of the Warrants or
Common Stock for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters may sell the Warrants or 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 Common Stock
covered hereby may be deemed to be underwriters, and any discounts or
commissions received by them from the Selling Securityholders or the Selling
Stockholders and any profit on the resale of the Warrants and 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". Quarterly 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) Quarterly Report on Form 10-Q for the quarter ended June
30, 1996; (iv) Prospectus/Proxy on Form S-4 Statement for the Special Meeting
of Stockholders of the Company held on March 29, 1996; (v) Current Report on
Form 8-K dated March 5, 1996, (vi) Current Report on Form 8-K dated March 22,
1996; (vii) Current Report on Form 8-K dated May 22, 1996; and (viii) 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
================================================================================
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. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY 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.
______________________________
TABLE OF CONTENTS
PAGE
----
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selling Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 5
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Shares Eligible for Future Sale . . . . . . . . . . . . . . . . . . . . . . 8
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . 9
----------------------------
32,086,957 SHARES OF COMMON
STOCK AND WARRANTS TO
PURCHASE COMMON STOCK
SUNSHINE MINING AND
REFINING COMPANY
---------------
PROSPECTUS
---------------
August __, 1996
================================================================================
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . $ 16,940
NYSE Listing Fee . . . . . . . . . . . . . . . . . . . . 3,000
Printing & Photocopying Expenses . . . . . . . . . . . . 5,000
Accounting Fees and Expenses . . . . . . . . . . . . . . 1,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . 10,000
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . 1,000
Miscellaneous Expenses . . . . . . . . . . . . . . . . . 60
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . $ 37,000
=========
</TABLE>
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 Warrant Agreement dated as of June 21, 1996, between the Registrant, Rauscher, Pierce &
Clark Limited and HSBC Investment Banking Limited.
**4.6 Form of Warrant Certificate (included in Exhibit 4.5).
**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.
</TABLE>
- --------------------------
* Previously filed.
** Filed herewith.
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 aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement); and
II-1
<PAGE> 13
(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
Pre-Effective Amendment No. 1 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boise,
State of Idaho, on the 14th day of August, 1996.
SUNSHINE MINING AND REFINING COMPANY
By: /s/ John S. Simko
----------------------------------
John S. Simko
President and
Chief Executive Officer
POWER OF ATTORNEY
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 August 14, 1996
- -------------------------------------- Chief Executive Officer
John S. Simko (Principal Executive Officer)
G. Chris Anderson* Director August 14, 1996
- --------------------------------------
G. Chris Andersen
Daniel D. Jackson* Director August 14, 1996
- --------------------------------------
Daniel D. Jackson
V. Dale Babbitt* Director August 14, 1996
- --------------------------------------
V. Dale Babbitt
William W. Davis* Executive Vice President August 14, 1996
- -------------------------------------- (Principal Accounting
William W. Davis Officer and Principal
Financial Officer)
Robert B. Smith, Jr.* Director August 14, 1996
- --------------------------------------
Robert B. Smith, Jr.
Oren G. Shaffer* Director August 14, 1996
- --------------------------------------
Oren G. Shaffer
</TABLE>
John S. Simko, by signing his name hereto, does sign and execute this
Pre-Effective Amendment No. 1 to the Registration Statement on behalf of each
of the above-named officers and directors of the Registrant on this 14th day of
August, 1996, pursuant to powers of attorney executed on behalf of each of such
officers and directors, and previously filed with the Securities and Exchange
Commission.
/s/ John S. Simko
- -----------------------------------
John S. Simko
Attorney-in-Fact
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 Warrant Agreement dated as of June 21, 1996, between the Registrant,
Rauscher, Pierce & Clark Limited and HSBC Investment Banking Limited.
**4.6 Form of Warrant Certificate (included in Exhibit 4.5).
**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.
- --------------------------
</TABLE>
* Previously filed.
** Filed herewith.
II-4
<PAGE> 1
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is made this 21st day of June, 1996 (the
"Agreement") by and among Sunshine Mining and Refining Company, a Delaware
corporation (the "Company"), HSBC Investment Bank plc, a public company limited
by shares incorporated under the laws of England ("HSBC"), and Rauscher Pierce
& Clark Limited, a limited liability company organized and existing under the
laws of England ("RPC").
WHEREAS, the Company has duly authorized the issuance and sale of
warrants (the"Warrants") to purchase an aggregate of two million eighty-six
thousand nine hundred fifty-seven (2,086,957) shares (the "Warrant Shares") of
its common stock, par value $.01 per share (the "Common Stock"), to the Persons
and in the respective amounts set forth hereto in Schedule 1 (collectively, the
"Warrant Holders") exercisable at the initial exercise price of $2.875 per
share, subject to adjustment in certain events (the "Exercise Price");
WHEREAS, the Company has agreed to offer and sell the Warrants to the
Warrant Holders, who are not "U.S. persons" as defined in Regulation S
("Regulation S") under the United States Securities Act of 1933, as amended
(the "Securities Act"), pursuant to Warrant Certificates (the "Warrant
Certificates") to be issued by the Company to each such Warrant Holder, in
reliance upon and in conformity with an exemption from the registration
requirements of the Securities Act pursuant to Regulation S;
WHEREAS, pursuant to that certain letter agreement dated as of January
19, 1996, from RPC to the Company, the Company has agreed to issue to RPC
warrants exercisable to purchase shares of the Common Stock of the Company in
partial consideration for RPC's consulting services to be provided thereunder,
and RPC and the Company have agreed that such Warrants shall be issued to the
Warrant Holders; and
WHEREAS, the Company, RPC and HSBC wish to define the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company and the Warrant Holders.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and intending to be legally bound, the
undersigned agree as follows:
1. Agreement to Sell and Purchase the Warrants.
(a) On the basis of the representations, warranties and
agreements contained in this Warrant Agreement and subject to the terms and
conditions set forth herein, the Company agrees to issue and sell to each of
the Warrant Holders and each of such Warrant Holders agree to purchase from the
Company, on the date hereof or on such other date as shall be mutually agreed
upon by the Company and the Warrant Holders (the "Closing Date") such number of
Warrants as set forth hereto on Schedule 1, each Warrant being exercisable to
purchase one (1) share of the Company's Common Stock, at the Exercise Price.
The aggregate purchase price payable for the Warrants shall be Two Hundred
Dollars ($200.00) (the "Warrant Purchase Price").
(b) The completion of the sale and purchase of the
Warrants (the "Closing") shall take place at the offices of HSBC at Thames
Exchange, 10 Queen Street Place, London EC4R 1BL, England at 10:00 a.m. local
time on the Closing Date or at such other time and place
<PAGE> 2
as the Company and the Warrant Holders shall agree. At the Closing, the
Company shall deliver to each of the Warrant Holders a Warrant Certificate
representing the Warrants registered in the name of each such Warrant Holder
upon payment of the Warrant Purchase Price in cash at closing.
2. Form and Execution of Warrant Certificates.
2.1. Issuance of Warrants. Each Warrant Certificate shall
evidence the number of Warrants specified therein, and each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase from the Company one fully paid and nonassessable
share of Common Stock and, pursuant to Section 10 hereof, such other securities
as may be issuable to the Warrant Holder upon exercise of such Warrant, at the
price specified herein and therein.
2.2. Form of Warrant Certificates. The Warrant
Certificates shall be in substantially the form set forth in Schedule 2
attached hereto and may have such letters, numbers, or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed, engraved or otherwise affixed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Agreement or as may comply with any law or with any rule or regulation made
pursuant thereto or to conform to usage.
2.3. Execution of Warrant Certificates. Warrant
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, any Vice President or its Treasurer, and signed by its
Secretary or any Assistant Secretary and have affixed thereon the Company's
seal. Each such signature and such seal may be manual or facsimile.
Any Warrant Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Warrant
Certificate, shall be a duly elected officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such an officer. Upon execution and
delivery, the Warrant Certificate shall be valid and binding upon the Company,
and the Warrant Holder thereof shall be entitled to all of the benefits of this
Agreement.
2.4. Temporary Certificates. Until definitive Warrant
Certificates are ready for delivery, the Company may prepare and execute and
deliver temporary Warrant Certificates. Temporary Warrant Certificates shall
be substantially in the form of the definitive Warrant Certificates but may
have variations that the Company considers appropriate for temporary Warrant
Certificates. After the preparation of definitive Warrant Certificates, the
temporary Warrant Certificates shall be exchangeable for definitive Warrant
Certificates upon surrender of the temporary Warrant Certificates at the
offices of the Company located at 877 W. Main Street, Suite 600, Boise, Idaho
83702 (the "Office"). Except as set forth in Section 7 hereof, such exchange
shall be without charge to the holders. Upon surrender for cancellation of any
one or more temporary Warrant Certificates, the Company shall execute and
deliver in exchange thereof one or more definitive Warrant Certificates
representing in the aggregate a like number of Warrants. Until exchanged, the
temporary Warrant Certificates, if any, shall in all respects be entitled to
the same benefits under this Warrant Agreement as definitive Warrant
Certificates.
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<PAGE> 3
3. Registration.
The Company shall number and register the Warrant Certificates
in a register (the "Warrant Register") maintained at the Office as they are
issued by the Company. The Company may deem and treat the registered holder of
any Warrant as the absolute owner thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone), for all purposes, and the
Company shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other person, notwithstanding any
notice to the Company to the contrary. The Company shall keep copies of this
Agreement available for inspection by the Warrant Holders during normal
business hours at the Office.
4. Transfer and Registration of Warrants and Warrant
Shares.
4.1. Disposition. The Warrants and the Warrant Shares,
and any interest in either, may be sold, assigned, pledged, encumbered or in
any other manner transferred or disposed of, in whole or in part, only in
accordance with Section 5 hereof and in compliance with applicable United
States federal and state securities laws and the terms and conditions hereof.
4.2. Registration Rights.
(a) Piggyback Registration. If, at any time on or before
March 20, 2001 (the "Expiration Date"), the Company proposes to prepare and
file any new registration statement under the Securities Act covering the
public sale of Common Stock of the Company for cash (in any case, other than in
connection with an employee benefit plan, a dividend reinvestment plan or
pursuant to a registration statement Forms S-4 or S-8 or any successor form)
(collectively, a "Registration Statement"), it will give written notice by
certified or registered mail, at least thirty (30) days prior to the filing of
each such Registration Statement, to each Warrant Holder of its intention to do
so. If each Warrant Holder notifies the Company within fifteen (15) days after
receipt of any such notice of such Warrant Holder's desire to include in such
proposed Registration Statement any Warrants and any shares of Common Stock (i)
issued or issuable to the Warrant Holder upon exercise of the Warrant Holder's
Warrants, or (ii) that are owned by the Warrant Holder (collectively, the
"Registrable Shares") (which notice shall specify the number of Registrable
Shares owned by the Warrant Holder, the number intended to be disposed of by
the Warrant Holder, if any, and the intended method of disposition of such
Registrable Shares), the Company shall use reasonable efforts to include, to
the extent possible, in such Registration Statement the number of Registrable
Shares which the Company has been so requested to register by the Warrant
Holder, at the Company's sole cost and expense and at no cost or expense to the
Warrant Holder, except that the Warrant Holder shall pay (i) all underwriters',
broker-dealers', placement agents' and similar selling discounts, commissions
and fees relating to the Warrant Holder's Registrable Shares, (ii) all
registration and filing fees imposed under the Securities Act, by any stock
exchange or under applicable state securities or blue sky laws based on the
Warrant Holder's Registrable Shares, (iii) all transfer, franchise, capital
stock and other taxes, if any, applicable to the Warrant Holder's Registrable
Shares, and (iv) any costs and expenses of legal counsel, accountants or other
advisors retained by the Warrant Holder (collectively, the "Holder's
Expenses"), all of which shall be paid by the Warrant Holder; provided, that:
(i) anything in this Section 4.2 to the contrary
notwithstanding, if the Company's securities so registered for sale are to be
distributed in an underwritten offering and the managing underwriter shall
advise the Company in writing that, in its opinion, the amount
3
<PAGE> 4
of securities to be offered should be limited in order to assure a successful
offering, the amount of Registrable Shares to be included in such Registration
Statement shall be so limited and shall be allocated among the persons selling
such securities in the following order of priority: (A) first to be registered
will be the securities the Company proposes to sell, (B) next to be registered
will be the securities subject to any demand or other piggyback registration
rights granted by the Company before the initial issuance date of the Warrants,
and (C) next to be registered will be the Registrable Shares and any other
shares of Common Stock subject to similar piggyback registration rights granted
by the Company as of the initial issuance date of the Warrants in proportion,
as nearly as practicable, to the number of shares of Common Stock desired and
eligible to be sold by each holder of such shares of Common Stock; and
(ii) anything in this Section 4.2 to the contrary
notwithstanding, the Company shall not be required to include any of the
Warrant Holder's Registrable Shares in a registration statement if in the
written opinion of legal counsel to the Company the securities for which
registration is requested may be sold publicly without registration under the
Securities Act; and
(iii) if the securities or blue sky laws of any
jurisdiction in which the securities so registered are proposed to be offered
would require the Holder's payment of greater registration expenses than those
otherwise required by this Section 4.2 and if the Company shall determine, in
good faith, that the offering of such securities in such jurisdiction is
necessary for the successful consummation of the registered offering, then the
Warrant Holder shall either agree to pay the portion of the registration
expenses required by the securities or blue sky laws of such jurisdiction to be
paid by the Warrant Holder or withdraw his request for inclusion of his
Registrable Shares in such registration; and
(iv) notwithstanding the provisions of this
Section 4.2(a), the Company shall have the right at any time and for any reason
or for no reason after it shall have given written notice pursuant to this
Section (irrespective of whether a written request for inclusion of any such
securities shall have been made) to elect not to file any such proposed
Registration Statement, or to withdraw the same after the filing but prior to
the effective date thereof and, thereupon, shall be relieved from its
obligation to proceed with such registration.
If a Warrant Holder's Registrable Shares are included in a
Registration Statement, the Warrant Holder shall furnish the Company in writing
with such appropriate information in connection with the sale of such Shares,
including, without limitation, information about the Warrant Holder, the
Registrable Shares, other securities of the Company owned by the Warrant
Holder, and the plan of distribution, as the Company shall reasonably request
or as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement. In addition, if the
offering is underwritten, the Company shall have the exclusive right to select
the underwriter. The Warrant Holder shall execute and deliver all documents
reasonably requested by such underwriter and any other documents customary in
similar offerings, including, without limitation, underwriting agreements,
custody agreements, powers of attorney, indemnification agreements, and
agreements restricting other sales of securities.
With respect to each Warrant Holder, the rights and
obligations under Sections 4.2(a) and (b) shall terminate at the earlier of (i)
five (5) years after the initial issuance date of the Warrants, (ii) the date
all of the Warrant Holder's Registerable Shares have been transferred by the
Warrant Holder, except for transfers in accordance with Section 5, (iii) the
date the
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<PAGE> 5
Warrant Holder's Registerable Shares have been eligible for inclusion in a
registration statement filed by the Company pursuant to the Securities Act,
(iv) the date the Warrant Holder is eligible to sell the Registerable Shares to
the public pursuant to Rule 144 (or any similar provisions then in force) under
the Securities Act, regardless of whether volume or manner of sale restrictions
shall apply to any such sale, and (v) 90 days after the effective date of any
registration statement covering all of the Registerable Shares then owned by
the Warrant Holder.
(b) Covenants of the Company With Respect to
Registration. The Company covenants and agrees as follows:
(i) The Company shall pay all costs, fees and
expenses in connection with all Registration Statements filed pursuant to
Section 4.2(a) above including, without limitation, the Company's legal and
accounting fees, printing expenses, filing fees and other expenses, except that
the Warrant Holder shall pay all of the Warrant Holder's Expenses (as defined
in Section 4.2(a)).
(ii) The Company will use its reasonable efforts
to qualify or register the Registrable Shares included in a Registration
Statement for offering and sale under the securities or blue sky laws of such
states of the United States as are reasonably requested by the Warrant Holder;
provided, however, that the Company shall not be required to (i) qualify or
register the Registrable Shares in any jurisdiction in which the Company would
be required to qualify as a broker or dealer in securities under the securities
or blue sky laws of such jurisdictions, (ii) qualify generally to do business
as a foreign corporation in any jurisdiction wherein it is not already so
qualified, (iii) subject itself to taxation in any such jurisdiction, or (iv)
consent to general service of process in any such jurisdiction.
(c) Indemnification.
(i) To the extent permitted by law, the Company
shall indemnify and hold harmless each Warrant Holder of the Registrable Shares
to be sold pursuant to any Registration Statement (such Warrant Holder being
hereinafter referred to as a "Distributing Holder"), each underwriter (an
"Underwriter") and each person, if any, who controls such Distributing Holder
or Underwriter within the meaning of Section 15 of the Securities Act and each
director of such Distributing Holder and Underwriter, against all loss, claim,
damage, expense or liability (or actions in respect thereof) to which any of
them may become subject under the Securities Act or otherwise, arising out of
or based upon any untrue statement or alleged untrue statement of any material
fact contained in any such Registration Statement or any preliminary prospectus
or final prospectus constituting part thereof or any amendments or supplements
thereto, or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, and will reimburse the Distributing Holder and
Underwriter and each such controlling person and director of the Distributing
Holder and Underwriter for any legal or other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are paid out-of-pocket (including
reasonable attorneys' fees); provided, however, that (A) the Company will not
be liable in any such case to the extent that any such loss, claim, damage,
expense or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by, or on behalf of, such Distributing Holder, any other Distributing
Holder or any such Underwriter
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<PAGE> 6
specifically for use therein, and (B) such indemnity shall not inure to the
benefit of such Distributing Holder or Underwriter (or such controlling person
or director of the Distributing Holder or Underwriter) if any such loss, claim,
damage, expense or liability arises out of or is based upon (i) any
Distributing Holder's or the Underwriter's bad faith or gross negligence, (ii)
any Distributing Holder's or the Underwriter's failure to deliver timely a copy
of the final prospectus (or the final prospectus as then amended, revised or
supplemented), or (iii) any such untrue statement or omission of a material
fact that was corrected in the final prospectus (or the most recent amendment,
revision or supplement thereto) and any Distributing Holder or the Underwriter
failed to deliver it in a timely manner.
(ii) To the extent permitted by law, each
Distributing Holder shall, severally and jointly, indemnify and hold harmless
the Company, its directors, officers, employees and agents, each Underwriter
and each person, if any, who controls any of the foregoing within the meaning
of Section 15 of the Securities Act, against all loss, claim, damage, expense
or liability (or actions in respect thereof) to which any of them may become
subject under the Securities Act or otherwise, arising out of or based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such Registration Statement or any preliminary prospectus or final
prospectus constituting part thereof or any amendments or supplements thereto,
or arising out of or based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and will reimburse the Company and each such director, officer,
employee, agent, Underwriter or controlling person for any legal or other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred (including reasonable attorneys' fees) in each case to the extent,
but only to the extent, that (A) such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by, or on behalf
of, such Distributing Holder or any other Distributing Holder specifically for
use therein, or (B) such loss, claim, damage, expense or liability arises out
of or is based upon (i) any Distributing Holder's failure to deliver in a
timely manner a copy of the final prospectus (or the final prospectus as then
amended, revised or supplemented), or (ii) any such untrue statement or
omission of a material fact that was corrected in the final prospectus (or the
most recent amendment, revision or supplement thereto) and any Distributing
Holder failed to deliver it in a timely manner. Notwithstanding the foregoing,
such indemnity shall not inure to the benefit of such Underwriter (or such
controlling person of the Underwriter) if any such loss, claim, damage, expense
or liability arises out of or is based upon (i) the Underwriter's failure to
deliver in a timely manner a copy of the final prospectus (or the final
prospectus as then amended, revised or supplemented), or (ii) any such untrue
statement or omission of a material fact that was corrected in the final
prospectus (or, the most recent amendment, revision or supplement thereto) and
the Underwriter failed to deliver it in a timely manner.
(iii) Promptly after receipt by an indemnified
party under this Section 4.2(c) of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 4.2(c), notify the
indemnifying party in writing of the commencement thereof; provided, however,
that the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
otherwise than under this Section 4.2(c) except to the extent such indemnifying
party is materially prejudiced by such lack of notice. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein
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<PAGE> 7
and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 4.2(c) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation requested by the indemnifying party or
required by law; provided, that if the indemnifying party elects to assume such
defense, the indemnified party shall be entitled to participate in such defense
with its own counsel retained at its own sole cost and expense. If the
indemnifying party does not elect to assume the defense of any such claim,
action or proceeding, the indemnifying party shall not be liable for any
settlement thereof which is effected without its prior written consent. No
indemnifying party shall, without the prior written consent of the indemnified
party, agree to the settlement of any such claim, action or proceeding if the
effect thereof would be to find the indemnified party has violated the
Securities Act, the Exchange Act or any state securities or blue sky laws.
(iv) If recovery is not available under the
foregoing indemnification provisions of this Section 4.2(c) for any reason
other than as specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution toward the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in Section 4.2(c)(i) or 4.2(c)(ii) above, except that
no person found to be liable for fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not also found to be liable for such
fraudulent misrepresentation. In determining the amount of contribution to
which the respective parties are entitled, there shall be considered the
relative benefits received by each party from the offering of the securities,
the parties' relative knowledge and access to information concerning the matter
with respect to which the claim was asserted, the opportunity to correct and
prevent any untrue statement or omission, and any other equitable
considerations appropriate under the circumstances, including, without
limitation, the relative fault of the parties. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 4.2(c)(iv) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim that is
the subject of this Section 4.2(c)(iv) (including reasonable attorneys' fees).
5. Registration of Transfers; Exchanges of Warrant
Certificates.
5.1. Registration of Transfers. Subject to Section 7
hereof, the Company shall from time to time register the transfer of any
outstanding Warrant Certificate on the Warrant Register maintained at the
Office, upon surrender thereof accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, duly endorsed by
the registered holder thereof or such Warrant Holder's appointed legal
representative or attorney-in- fact, or accompanied by proper evidence of
succession, assignment or authority to transfer; provided, however, that a
Warrant Holder may transfer the Warrants (i) only upon prior written notice to
the Company and the consent of the Company, not to be unreasonably withheld,
and (ii) 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 Holder, (c) any purchaser of
substantially of the assets of such Warrant Holder, (d) any officer, director,
employee or agent of such Warrant Holder, (e) any of the stockholders of such
Warrant Holder, (f) the stockholders or partners of such Warrant Holder in the
event of the liquidation, dissolution or winding-up of such Warrant Holder, or
(g) the respective nominees of any of the
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<PAGE> 8
foregoing. The signature of such Warrant Holder, legal representative shall be
guaranteed by an "eligible guarantor institution" (an "Eligible Guarantor
Institution") within the meaning of Rule 17Ad-15 under the Exchange Act. In
all cases of transfer by an attorney, the original power of attorney, duly
approved, or an official copy thereof, duly certified, shall be deposited and
remain with the Company. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited and remain
with the Company in its discretion. Upon any such registration of transfer in
such name or names as may be directed in writing by the Warrant Holder, the
Company shall execute and deliver (or cause to be delivered) a new Warrant
Certificate(s) without charge to such Warrant Holder, except as set forth in
Section 7 hereof, to the person or persons entitled to receive the same, and
the surrendered Warrant Certificate shall be cancelled by the Company.
Cancelled Warrant Certificates shall thereafter be disposed of in a manner
satisfactory to the Company and in compliance with applicable rules and
regulations promulgated by the SEC.
5.2. Exchanges of Warrant Certificates. Each Warrant
Certificate may be exchanged at the option of the Warrant Holder without charge
to such Warrant Holder when surrendered to the Company at the Office properly
endorsed in the manner described in Section 5.1 hereof for another Warrant
Certificate(s) of like tenor and representing in the aggregate a like number of
Warrants. Thereupon, the Company shall deliver to the person(s) entitled
thereto a new Warrant Certificate(s) as so requested. Warrant Certificates
surrendered for exchange shall be cancelled by the Company. Such cancelled
Warrant Certificates shall then be disposed of by the Company in a manner
satisfactory to the Company and in compliance with applicable SEC rules and
regulations.
6. Term of Warrants; Exercise of Warrants; Exercise
Price.
6.1. Term of Warrants. Subject to the provisions of this
Agreement, each Warrant Holder shall have the right, which may be exercised
during the period commencing on September 21, 1996 and ending at 5:00pm, New
York City time, on the Expiration Date, to purchase from the Company the number
of fully paid and nonassessable Warrant Shares that the Warrant Holder may at
the time be entitled to purchase on exercise of such Warrants and payment of
the Exercise Price (as defined below) for such Warrant Shares. To the extent
the Expiration Date does not fall on a business day, the Expiration Date shall
occur on the next following Business Day.
Each Warrant not exercised prior to 5:00pm, New York
City time, on the Expiration Date shall automatically become void and no longer
outstanding.
6.2. Exercise of Warrants. Subject to the provisions of
this Agreement, a Warrant may be exercised by the Warrant Holder in whole or in
part upon surrender at the Office to the Company of the Warrant Certificate(s)
evidencing the Warrants to be exercised together with the form of election to
purchase (the "Election to Purchase"), in the form set forth on the reverse
side of the Warrant Certificate, duly completed and signed by such Warrant
Holder or by such Warrant Holder's appointed legal representative or
attorney-in-fact, which signature shall be guaranteed by an Eligible Guarantor
Institution, and upon payment in full to the Company, of the Exercise Price for
each Warrant exercised and any other amounts required to be paid pursuant to
Section 7 hereof. Payment of the aggregate Exercise Price and such additional
amounts, if any, shall be made by certified or official bank check payable to
the order of the Company.
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<PAGE> 9
Subject to the provisions of Section 7 hereof, upon due
exercise of the Warrants and surrender of the Warrant Certificate, duly
completed and signed, and payment of the Exercise Price as aforesaid, the
Company shall cause to be issued and delivered with all reasonable dispatch to
or upon the written order of the Warrant Holder and in such name or names as
the Warrant Holder may designate in the Election to Purchase, a certificate or
certificates for the number of full Warrant Shares so purchased, together with
cash in respect of any fractional Warrant Shares otherwise issuable upon
exercise in accordance with Section 11. If all of the items referred to in the
first sentence of the preceding paragraph are received by the Company at or
prior to 2:00pm, New York City time, on a business day, the exercise of the
Warrant to which such items relate will be effective on such business day. If
all of such items are received after 2:00pm, New York City time, on a business
day, the exercise of the Warrants to which such items relate will be effective
the next business day. Notwithstanding the foregoing, in the case of any
exercise of Warrants on the Expiration Date, if all of such items are received
by the Company at or prior to 5:00pm, New York City time, on the Expiration
Date, the exercise of the Warrants to which such items relate will be effective
on the Expiration Date.
The number and kind of Warrant Shares for which a Warrant may
be exercised shall be subject to adjustment from time to time as set forth in
Section 10.
The Warrants shall be exercisable as provided herein at the
election of the Warrant Holder either in whole or from time to time in part.
Only whole numbers of Warrants may be exercised. In the event that prior to
the Expiration Date the holder of a Warrant Certificate shall exercise fewer
than all of the Warrants evidenced thereby, a new Warrant Certificate(s)
evidencing the remaining unexercised Warrants shall be issued to such Warrant
Holder by the Company.
All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Company.
6.3. Exercise Price. The price per share at which each
Warrant Share shall be purchased upon exercise of each Warrant (the "Exercise
Price") shall be equal to $2.875 per share, subject to adjustment as set forth
herein.
7. Payment of Taxes. The Company covenants and agrees
that it will pay when due and payable all documentary, stamp and other taxes
attributable to the issuance or delivery of the Warrant Certificates or of the
Warrant Shares purchaseable upon the exercise of Warrants; provided, however,
that the Company shall not be required to pay any tax or taxes that may be
payable in respect of any transfer involving the issue of any Warrant
Certificate(s) or any certificate(s) for Warrant Shares in a name other than
that of the Warrant Holder of such exercised Warrant Certificate(s), and the
certificates(s) for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the reasonable satisfaction of the
Company that such tax has been paid.
8. Mutilated or Missing Warrant Certificates. In the
event that any Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver in exchange and substitution
for and upon cancellation of the mutilated Warrant Certificate, or in lieu of
and substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing a like number of Warrants,
but only, in case of a lost,
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<PAGE> 10
stolen or destroyed Warrant Certificate, upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction and the absence of notice to
the Company that such Warrant Certificate has been acquired by a bona fide
purchaser or holder in due course. A Warrant Holder applying for such
substitute Warrant Certificate shall also comply with such other reasonable
requests (including, without limitation, in the case of a lost, stolen or
destroyed Warrant Certificate, a request to provide a letter of indemnification
or an indemnity bond sufficient in the reasonable judgment of the Company to
protect the Company against any loss that it may suffer if a Warrant
Certificate is replaced) and pay such other reasonable charges as the Company
may reasonably prescribe. Every substitute Warrant Certificate executed and
delivered pursuant to this Section 8 in lieu of any lost, stolen or destroyed
Warrant Certificate shall constitute an additional contractual obligation of
the Company, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of (but shall be subject to all the limitations of rights set forth
in) this Warrant Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section 8 are exclusive with respect to the replacement of mutilated,
lost, stolen or destroyed Warrant Certificates and shall preclude (to the
extent lawful) any and all other rights or remedies notwithstanding any law or
statue existing or hereafter enacted to the contrary with respect to the
replacement of mutilated, lost, stolen or destroyed securities certificates.
9. Reservation of Warrant Shares.
9.1. Reservation. The Company shall at all times keep
reserved, free from preemptive rights, out of its authorized Common Stock or
other securities of the Company issuable upon exercise of the Warrants, a
number of shares of Common Stock or such other securities sufficient to provide
for the exercise of the right of purchase represented by all outstanding
Warrants. The Company covenants that the transfer agent for the Common Stock
or other securities of the Company issuable upon the exercise of the Warrants
(the "Transfer Agent") will be irrevocably authorized and directed at all times
to reserve such number of shares of Common Stock or such other securities as
shall be required for such purpose. The Company shall keep a copy of this
Warrant Agreement on file with the Transfer Agent. The Company shall furnish
the Transfer Agent a copy of all notices of adjustments and certificates
related thereto that are transmitted to each Warrant Holder pursuant to Section
10.2 and Section 12 hereof.
9.2. Covenant. The Company covenants that all Warrant
Shares will, upon issuance, be fully paid, nonassessable, free of preemptive
rights and free from all taxes payable by the Company, liens, charges and
security interests (except any liens, charges or security interests created or
suffered to be created by any of the Warrant Holders), and will not be subject
to any restrictions on voting or transfer thereof that are created by the
Company except for such restrictions on voting or transfer provided in this
Agreement, the Amended Certificate of Incorporation or as otherwise provided by
law.
10. Adjustments to Exercise Price.
10.1. Adjustments. The number and kind of Warrant Shares
purchaseable upon exercise of each Warrant (the "Exercise Rate") shall be
subject to adjustment from time to time as follows:
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(a) Reclassification, Merger, etc. If, after the date
hereof, the Company, in a singe transaction or through a series of related
transactions, consolidates with or merges with or into any other entity or
transfers (by lease, assignment, sale or otherwise) all or substantially all of
its properties and assets to another entity or group of affiliated entities
(other than a sale of all or substantially all of the assets of the Company in
a transaction in which the holders of Common Stock immediately prior to such
transaction do not receive securities, cash, or other assets of the Company or
any other entity) or is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock, the entity thereafter
obligated to deliver securities, cash or other assets upon exercise of Warrants
shall agree to assume the Company's obligations under this Agreement. If the
issuer of securities deliverable upon exercise of Warrants is an Affiliate of
the successor to the Company, that issuer shall agree to assume the Company's
obligations under this Agreement.
The holder of a Warrant may exercise such Warrant for the kind
and amount of securities, cash or other assets which such holder would have
received immediately after the consolidation, merger, binding share exchange or
transfer if such holder had exercised such Warrant immediately before the
effective date of the transaction, assuming (to the extent applicable) that
such holder (i) is not a constituent person or an Affiliate of a constituent
person to such transaction; (ii) made no election with respect thereto; and
(iii) was treated alike with the plurality of non- electing holders. The
successor to the Company shall mail to the holders of Warrants at the addresses
appearing on the Warrant Register a notice briefly describing the transaction
pursuant to which the Company's obligations hereunder have been assumed and the
name and address of the entity assuming such obligations.
If this Section 10.1(a) applies, Section 10.1(b) shall not
apply. The provisions of this Section 10.1(a) shall similarly apply to
successive consolidates, mergers, binding share exchanges or transfers.
(b) Adjustment for Change in Capital Stock. If, after
the date hereof, the Company:
(i) pays a dividend or makes a distribution on
its Common Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(iii) combines its outstanding shares of Common
Stock into a smaller number of shares; or
(iv) issues by reclassification of its Common
Stock any other shares of its capital stock,
then the Exercise Rate in effect immediately prior to such action shall be
adjusted so that the holder of a Warrant thereafter exercised shall receive the
number of shares of Common Stock or other shares of capital stock of the
Company which such holder would have received immediately following such action
if such holder had exercised such Warrant immediately prior to such action.
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An adjustment to the Exercise Rate pursuant to this Section
10.1(b) shall become effective immediately after the record date in the case of
a dividend or distribution and immediately after the effective date in the case
of a subdivision, combination or reclassification. In the event that such a
dividend or distribution is not so paid or made or such subdivision,
combination or reclassification is not effected, the Exercise Rate shall again
be adjusted to be the Exercise Price which would then be in effect if such
record date or effective date had not been so fixed.
(c) Adjustments to Exercise Rate. If after an adjustment
pursuant to this Section 10.1 a holder of a Warrant upon exercise of such
Warrant may receive shares of two or more classes of capital stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of capital stock,
as is contemplated by this Section 10 with respect to the Common Stock, on
terms comparable to those applicable to the Common Stock in this Section 10.1.
10.2. Notice of Adjustment to Exercise Rate. Whenever the
Exercise Rate is required to be adjusted as provided in this Section 10, the
Company shall forthwith compute the adjusted Exercise Rate and shall prepare a
certificate setting forth such adjusted Exercise Rate and showing in reasonable
detail the facts upon which such adjustment is based. A copy of such
certificate accompanied by a certification of the independent public
accountants regularly employed by the Company to the effect that they have
reviewed the Company's certificate and are in agreement with the computations
set forth therein, shall forthwith be filed with the Transfer Agent; and
thereafter, until further adjusted, the Transfer Agent shall not be under any
duty or responsibility with respect to any such certificate except to exhibit
the same to any Warrant Holder desiring inspection thereof. Whenever the
Exercise Rate is adjusted, the Company shall promptly mail, or cause to be
mailed, to the Warrant Holder a statement setting forth the adjustment and the
reasons for such adjustment.
10.3. Voluntary Reduction
(a) The Company may at its option, but shall not be
obligated to, at any time during the term of the Warrants provided for in
Section 6.1 hereof, increase the then current Exercise Rate by any amount
selected by the Board; provided, that if the Company elects so to increase the
then current Exercise Rate, such increase shall be irrevocable during its
effective period and remain in effect for a minimum of 20 business days
following the date of such election, after which time the Company may, at its
option, reinstate the Exercise Rate in effect prior to such increase. Whenever
the Exercise Rate is increased, the Company shall mail or cause to be mailed to
the Warrant Holder a notice of the increase at least 15 days before the date
the increased Exercise Rate takes effect stating the increased Exercise Rate
and the period for which such increased Exercise Rate will be in effect.
(b) The Company may at its option, but shall not be
obligated to, at any time during the term of the Warrants provided for in
Section 6.1 hereof, decrease the then current Exercise Price by any amount
selected by the Board; provided, that if the Company elects so to decrease the
then current Exercise Price, such decrease shall be irrevocable during its
effective period and remain in effect for a minimum of 20 business days
following the date of such election, after which time the Company may, at its
option, reinstate the Exercise Price in effect prior to such decrease.
Whenever the Exercise Price is decreased, the Company shall mail or cause to be
mailed to the Warrant Holder a notice of the decrease at least 15 days before
the
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date the decreased Exercise Price takes effect, stating the decreased Exercise
Price and the period for which such decreased Exercise Price will be in effect.
(c) The Company may make such increases in the Exercise
Rate or decreases in the Exercise Price, as the case may be, in addition to
those required or allowed by this Section 10 as shall be determined by it, as
evidenced by a certified resolution of the Board to be advisable in order to
avoid or diminish any income tax to the Warrant Holder resulting from any
dividend or distribution of stock or issuance of rights or warrants to purchase
or subscribe for stock or from any event treated as such for income tax
purposes.
10.4. Deferral of Issuance or Payment. In any case in
which Section 10.1 hereof shall require that an adjustment in the Exercise Rate
be made effective as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event (i) issuing to the holder of
any Warrant exercised after such record date the Warrant Shares issuable upon
such exercise over and above the Warrant Shares issuable upon such exercise on
the basis of the Exercise Rate in effect immediately prior to such adjustment
and (ii) paying to such Warrant Holder any amount in cash in lieu of a
fractional share pursuant to Section 11 hereof; provided, however, that the
Company shall deliver to such Warrant Holder a due bill or other appropriate
instrument evidencing such Warrant Holder's right to receive such additional
Warrant Shares and cash upon the occurrence of the event requiring such
adjustment.
10.5. Form of Warrant Certificates. Irrespective of any
adjustments in the Exercise Price or Exercise Rate or the kind of Warrant
Shares purchasable upon the exercise of the Warrants, Warrant Certificates
evidencing such Warrants theretofore or thereafter issued may continue to
express the same number and kind of Warrant Shares as are stated in the Warrant
Certificates initially issuable pursuant to this Agreement.
10.6. No Impairment. Without limiting the generality of
the foregoing, the Company shall (i) take all such action as may be necessary
or appropriate in order that the Warrant Shares to be issued upon the exercise
of the Warrants from time to time outstanding will, when issued, be fully paid
and nonassessable, and (ii) will not take any action that results in any
adjustment to the Exercise Rate if after such adjustment the total number of
shares of Common Stock issuable upon the exercise of all of the outstanding
Warrants would exceed the total number of shares of Common Stock or other
capital stock of the Company then authorized by the Amended Certificate of
Incorporation and available for the purpose of issuance upon such exercise.
11. Fractional Interests
The Company shall not issue fractional Warrant Shares on the
exercise of Warrants. If more than one Warrant shall be presented for exercise
at the same time by the same Warrant Holder, the number of full Warrant Shares
that shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of Warrant Shares purchasable on exercise of the
Warrants so presented. If any fraction of a Warrant Share would be issuable on
the exercise of any Warrants, the Company shall pay to the Warrant Holder an
amount in cash equal to the product of such fraction times the Quoted Price for
such Warrant Share on the business day next preceding the latest of the date
of the surrender of the Warrant Certificate(s) evidencing the Warrants to be
exercised, with the Election to Purchase duly completed and signed, and payment
of the Exercise Price and any other amounts required to be paid pursuant to
Section 7 hereof. "Quoted Price" means, for any given day, the last reported
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per share sale price (or, if no sale price is reported, the average of the bid
and ask prices or, if more than one in either case, the average of the average
bid and average ask prices) on such day of such Warrant Share on the principal
national or regional securities exchange upon which such Warrant Share is
listed, or if such Warrant Share is not listed on a national or regional
securities exchange, as quoted on the National Association of Securities
Dealers Automated Quotation System or by the National Quotation Bureau
Incorporated. In the absence of one or more such quotations, the Board shall
be entitled to determine the Quoted Price on the basis of such quotations as it
considers appropriate.
12. Notice of Warrant Holders.
In the event:
(a) of any consolidation or merger or binding share
exchange to which the Company is a party and for which approval of any
shareholders of the Company is required, or of the conveyance or sale of all or
substantially all of the assets of the Company, or of any reclassification or
change of the Common Stock or other securities issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par value,
or from no par value to par value or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common Stock
(or other securities issuable upon the exercise of the Warrants); or
(b) the Company shall declare any dividend or
distribution, other than regular cash dividends, on the Common Stock or other
securities; or
(c) the Company shall authorize the granting to the
holders of Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or series of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company,
then the Company shall cause to be sent to each Warrant Holder at such address
appearing on the Warrant Register, at least 30 days prior to the applicable
record date hereinafter specified, or promptly in the case of events for which
there is no record date, by first-class mail, postage prepaid, a written notice
stating (x) the date for the determination of the holders of record of shares
of Common Stock (or other securities issuable upon the exercise of the
Warrants) entitled to receive any such dividends or other distribution, (y) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock (or other securities issuable upon the exercise of the
Warrants) or (z) the date on which any such consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up is expected to become
effective or consummated, and the date as of which it is expected that holders
of record of shares of Common Stock (or other securities issuable upon the
exercise of the Warrants) shall be entitled to exchange such shares for
securities or other property, or if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. Failure to give such notice or any defect therein
shall not affect the legality or validity of any distribution, right, option,
warrant, issuance, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
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Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Warrant Holder thereof
any rights of a shareholder of the Company.
13. Reports to Warrant Holder. The Company will cause to
be delivered by first-class mail, postage prepaid, to each Warrant Holder at
such Warrant Holder's address appearing on the Warrant Register, a copy of any
reports delivered by the Company to the holders of Common Stock or other
securities of the Company.
14. Certain Definitions. As used in this Agreement, the
following terms have the meanings specified below:
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling, controlled by or under direct
or indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing; provided, that, in any event, any "person" or
"group" (each as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act)
that is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) if more than 10% of the capital stock having ordinary voting power in the
election of directors of such Person (if a corporation) or more than 10% of the
partnership or other ownership interests of such Person (if other than a
corporation) will be deemed to control such Person.
"Amended Certificate of Incorporation" means the Certificate
of Incorporation of the Company, as filed with the Secretary of State of the
State of Delaware on June 1, 1988, as amended to the date hereof, as such
certificate may be amended, modified, changed or restated from time to time in
accordance with its terms, this Agreement and the applicable provisions of the
General Corporation Law of the State of Delaware.
"Board" means the Board of Directors of the Company, as such
Board may be constituted from time to time.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday
or Friday on which (i) banking institutions in The City of New York, (ii) the
principal national securities exchange or inter-dealer quotation system, if
any, on which the Common Stock is listed or quoted and (iii) the principal
national securities exchange or inter- dealer quotation system, if any, on
which the Warrants are listed or quoted, are open for business and not
authorized or obligated by law, regulation or executive order to close.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"NSM" means The Nasdaq Stock Market, Inc. or, if the Warrants
are not then traded on The Nasdaq Stock Market, Inc., the principal national
securities exchange on which the Warrants are then traded or, if the Warrants
are not then traded on The Nasdaq Stock Market, Inc., the national securities
exchange or principal over-the-counter market in which the Warrants are then
traded.
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"NYSE" means the New York Stock Exchange, Inc., or if the
Common Stock is not then traded on the New York Stock Exchange, Inc., the
principal national securities exchange on which the Common Stock is then traded
or, if the Common Stock is not then traded on any national securities exchange,
the principal over-the-counter market in which the Common Stock is then traded.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity.
15. Representations and Warranties of the Company.
The Company represents and warrants to the Warrant Holders
that:
15.1. No Other Offers or Sales. Neither the Company or any
affiliate of the Company nor anyone acting on the behalf of the Company or any
such affiliate, has, directly or indirectly, offered or sold, or attempted to
offer, sell or dispose of, any of the Warrants or the Warrant Shares, or
solicited any offer to buy any Warrants or the Warrant Shares from, or
otherwise approached or negotiated with respect thereto with, any person.
15.2. Due Execution, Delivery and Performance of the
Warrant Agreement. The execution, delivery and performance of this Warrant by
the Company (i) have been duly authorized by all requisite corporate action of
the Company, and (ii) will not violate (A) the Certificate of Incorporation or
the By-laws of the Company or (B) any law applicable to the Company or any
rule, regulation or order of any court or governmental agency or body having
jurisdiction over the Company or (C) any provision of any indenture, mortgage,
agreement, contract or other instrument to which the Company is a party or by
which the Company is bound or to which any of the properties or assets of the
Company are subject, or result in a breach of or constitute (upon notice or
lapse of time or both) a default under any such indenture, mortgage, agreement,
contract or other instrument or result in the creation or imposition of any
claim (including any adverse claim as defined in the Uniform Commercial Code),
lien, security interest, mortgage, pledge, charge or other encumbrance of any
nature whatsoever (each a "Lien" and, collectively, "Liens") upon any of the
properties or assets of the Company (except for such violation, breach or
default described in (ii) above which would not have a material adverse effect
on the Company). Upon execution and delivery by the Company and the Warrant
Holders, this Agreement will constitute the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting the enforcement of creditors' rights generally and by general
equitable principles, regardless of whether such enforceability is considered
in a proceeding in equity or at law and except as rights to indemnity or
contribution may be limited under applicable law.
15.3. Issuance and Delivery of the Warrants. Upon
execution by the Company and delivery to each of the Warrant Holders in
accordance herewith, the Warrants will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited by any
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights generally and by
general equitable principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law and except as rights to
indemnity or contribution may be limited under applicable law. The Warrant
Shares have been duly and validly authorized by all requisite corporation
action of the Company and reserved
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for issuance. The Warrant Shares, as and when issued and delivered in
accordance with the terms thereof, and upon receipt by the Company of the
exercise price therefor, will be duly and validly issued and outstanding, fully
paid and non-assessable, and will not be subject to any pre-emptive or similar
right (except for anti-dilution adjustments), and each of the Warrant Holders
will receive good and valid record title to such shares upon exercise thereof,
free and clear of any Lien, except such as may have been created by the Warrant
Holders.
15.4. Compliance with Regulation S. The Company is a
"reporting issuer" (as defined in Regulation S). The Company, its affiliates
and any person acting on behalf of any of the foregoing, (a) have offered and
sold the Warrants to the Warrant Holders only in "offshore transactions" (as
defined in Regulation S), (b) have not made with respect to the Warrants any
"directed selling efforts" (as defined in Regulation S) in the United States,
(c) have implemented all "offering restrictions" (as defined in Regulation S)
in respect of the Warrants, (d) have not delivered any offering document to any
"U.S. person" (as defined in Regulation S) (other than directors, officers,
employees and agents of the Company, affiliates of the Warrant Holders and
their officers, employees and agents, and professional advisers of the
foregoing), (e) have not made any offers or sales of any of the Warrants or any
interest therein in the United States or to, or for the account or benefit of,
any "U.S. person" (as defined in Regulation S), and (f) have not made any sales
of any of the Warrants or any interest therein in connection with the offering
to any person other than the Warrant Holders.
15.5. Representations and Warranties at the Closing. Each
of the representations and warranties contained in this Section 15 is true and
correct in all material respects as of the date of this Agreement, and will be
true and correct in all material respects as of the Closing Date, except to the
extent such representations and warranties expressly relate to an earlier date.
16. Representations and Warranties of RPC and HSBC.
Each of RPC and HSBC hereby represent and warrant to, and
covenant with, the Company as follows:
16.1. Compliance with United States Securities Laws. Each of
RPC and HSBC understand, acknowledge and agree that (a) the Warrants and the
Warrant Shares have not been and will not be registered under the Securities
Act or under any state or foreign securities or blue sky laws, and may not be
exercised, offered, sold, transferred, pledged 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 ), unless such securities are registered under the
Securities Act and any applicable state and foreign securities or blue sky laws
or exemptions from the registration requirements of the Securities Act and any
applicable state and foreign securities or blue sky laws are available, and (b)
the Warrants and the Warrant Shares are being offered and sold pursuant to the
terms of Regulation S under the Securities Act, which permits securities to be
sold to persons who are not "U.S. persons" in "offshore transactions" (as
defined in Regulation S), subject to certain terms and conditions.
16.2. Status of RPC and HSBC.
(a) Each of RPC and HSBC are purchasing the Warrants and will
purchase any Warrant Shares for their own account. Each of RPC and HSBC (i) is
not a "U.S. person", and
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(ii) is not acquiring the Warrants and will not acquire any Warrant Shares for
the account or benefit of any "U.S. person", and (iii) is not organized under
the laws of the United States of America, its territories and possessions, any
State of the United States or the District of Columbia (the "United States"),
and (iv) was not organized for the purpose of acquiring the Warrants or any
Warrant Shares, and (v) is not registered under the Exchange Act, as amended,
(vi) is not part of an identifiable group of U.S. citizens abroad, and (vii) is
not purchasing the Warrants in any transaction or series of transactions that,
although in technical compliance with Regulation S, is part of a plan or scheme
to evade the registration provisions of the Securities Act in the United
States. Each of RPC and HSBC have executed this Agreement outside the United
States, and at the time the buy order for the Warrants was originated each of
RPC and HSBC were outside the United States. All offers to the Warrant Holders
of the Warrants and the sale of the Warrants have occurred outside the United
States.
(b) Each of RPC and HSBC is knowledgeable, sophisticated and
experienced in financial and business matters and in making, and is qualified
to make, decisions with respect to investments in restricted securities (such
as this Agreement, the Warrants and the Warrant Shares) and has requested,
received, reviewed and considered all information it deems relevant in making a
decision to execute this Agreement and to purchase the Warrants. Each of RPC
and HSBC acknowledge that they are capable of evaluating the merits and risks
of an investment in the Warrants and the Warrant Shares.
(c) Each of RPC and HSBC acknowledges that at all times
following its initial contact with the Company or its agents pertaining to the
Warrants and the Warrant Shares and through March 21, 1996, the Company made
available to RPC and HSBC the opportunity to ask questions and receive answers
concerning the Company and the terms and conditions of the offering, the
Warrants and the Warrant Shares, and to obtain any additional information that
the Company possesses or could acquire without unreasonable effort or expense
that is necessary to verify the accuracy of the information furnished to each
of RPC and HSBC.
(d) Each of RPC and HSBC agrees to purchase the Warrants for
investment purposes and not with a view to, or for sale in connection with, any
distribution.
16.3. Restrictions on Sale and Resale.
(a) For a period of forty days following the Closing Date or,
if there is more than one Closing Date, the latest Closing Date (the
"Restricted Period"), the Warrant Holders, their affiliates and any person
acting on their behalf shall not make any directed selling efforts (as defined
in Regulation S) in the United States in connection with any offer or sale of
the Warrants or the Warrant Shares and shall not engage in any activity
undertaken for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market in the United States for the Warrants or the
Warrant Shares, or offer, sell, transfer, pledge or otherwise dispose of the
Warrants or the Warrant Shares or any interest therein, in the United States or
to, or for the account or benefit of, a "U.S. person" (as defined in Regulation
S).
(b) Each of the Warrant Holders understands and agrees that
the Warrants are only transferable on the books and records of the Company and
that the Warrant Shares are only transferable on the books and records of the
Transfer Agent of the Common Stock.
(c) Unless registered under the Securities Act, any proposed
offer, sale or transfer during the Restricted Period or before the legend on
the Warrants is removed from any of the
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Warrants or any of the Warrant Shares or any interest therein shall be subject
to the condition that each of the Warrant Holders must deliver to the Company
(i) a written certification that neither record nor beneficial ownership of the
Warrants or the Warrant Shares or any interest therein has been offered or sold
in the United States or to, or for the account or benefit of, any "U.S.
person"; (ii) a written certification of the proposed transferee that such
transferee (or any account for which such transferee is acquiring such Warrants
or Warrant Shares or any interest therein) is not a "U.S. person" or purchasing
the Warrants or Warrant Shares for the account or benefit of a "U.S. person",
that such transferee is acquiring such Warrants or Warrant Shares or such
interest therein for such transferee's own account (or an account over which it
has investment discretion) for investment purposes and not with a view to a
distribution, that such transferee did not receive any other offer relating to
the Warrants or Warrant Shares in the United States, that at the time the buy
order was originated, such transferee was outside the United States, that such
transferee is not a U.S. citizen part of an identifiable group of U.S.
citizens abroad, and that such transferee is knowledgeable of and agrees to be
bound by the restrictions on resale set forth in this Agreement and Regulation
S during the Restricted Period and that such transferee agrees that until the
expiration of the Restricted Period, it will not, directly or indirectly,
execute or effect or cause to be executed or effected any short sale, option,
or equity swap transactions in or relating to the Common Stock or any other
derivative security transactions the purpose or effect of which is to hedge or
transfer to a third party all or any part of the risk of loss associated with
the ownership of the Warrants or any of the Warrant Shares to be acquired from
the proposed transferor; and (iii) a written opinion of United States legal
counsel, in form and substance satisfactory to the Company, to the effect that
the offer, sale and transfer of the Warrants or the Warrant Shares or any
interest therein, as the case may be, are exempt from registration under the
Securities Act and any applicable state and foreign securities or blue sky
laws.
(d) Each of the Warrant Holders will not, directly or
indirectly, voluntarily offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) its rights under this Agreement, the Warrants, the Warrant Shares or any
interest therein otherwise than in compliance with the Securities Act, any
applicable state and foreign securities or blue sky laws and any applicable
securities laws of jurisdictions outside the United States, and the rules and
regulations promulgated thereunder.
16.4. Due Execution, Delivery and Performance of this
Agreement and Other Obligations.
Each of RPC and HSBC has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by RPC and HSBC has been duly authorized by all requisite corporate action of
RPC and HSBC. This Agreement has been validly executed and delivered by or on
behalf of each of RPC and HSBC. Upon the execution and delivery of this
Agreement by the Company, this Agreement shall constitute the legal, valid and
binding obligation of each of RPC and HSBC enforceable against them in
accordance with the terms hereof, except as the enforceability thereof may be
limited by any applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of creditors' rights
generally and by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law and except for
indemnification and contribution provisions.
19
<PAGE> 20
16.5. Compliance with Regulation S
(a) Each of the Warrant Holders agrees that all offers
and sales of the Warrants or Warrant Shares prior to the expiration of the
Restricted Period shall be made only in accordance with the provisions of
Section 903 or 904 of Regulation S, pursuant to the registration of the
Warrants or the Warrant Shares under the Securities Act, or pursuant to an
available exemption from the registration requirements of the Securities Act.
In connection with the offer and sale of the Warrants or Warrant Shares, the
Warrant Holders will (i) not make an offer to a person in the United States or
to an identifiable group of U.S. citizens abroad, and (ii) take all appropriate
action so that at the time the buy order is originated, it reasonably believes
that the buyer is outside the United States.
(b) All offering materials and documents used by the
Warrant Holders in connection with offers and sales of the Warrants or the
Warrant Shares prior to the expiration of the Restricted Period shall include
statements to the effect that the securities have not been registered under the
Securities Act and may not be offered or sold in the United States or to "U.S.
persons" (other than distributors) unless the securities are registered under
the Securities Act, or an exemption from the registration requirements of the
Securities Act is available.
(c) No offer or sale of the Warrants or Warrant Shares
made prior to the expiration of the Restricted Period shall be made by the
Warrant Holders to a "U.S. person" or for the account or benefit of a "U.S.
person" (other than a distributor).
(d) If the Warrant Holders sell the Warrants or the
Warrant Shares to a distributor, a dealer (as defined in Section 2(12) of the
Securities Act), or a person receiving a selling concession or other
remuneration in respect of the securities sold, prior to the expiration of the
Restricted Period, the Warrant Holders shall send a confirmation or other
notice to the purchaser stating that the purchaser is subject to the same
restrictions on offers and sales that apply to each of the Warrant Holders.
(e) RPC hereby agrees to obtain a written certification
from each of the Warrant Holders (other than RPC and HSBC) to the effect that
such Warrant Holder is not a "U.S. person" as defined under Regulation S and
that such Warrant Holder agrees to be bound by the provisions of this Warrant
Agreement, including the requirements for compliance with Regulation S as
provided in this Section 16. The Company shall not be required to deliver a
Warrant Certificate to each Warrant Holder (other than RPC and HSBC) until the
Company has received the required certification from such Warrant Holder.
16.6. Representations and Warranties at the Closing.
Each of the representations and warranties contained in this Section 16 is true
and correct as of the date of this Agreement and will be true and correct in
all material respects as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date.
17. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in
this Warrant Agreement shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Warrant Holders or
any controlling person, director, officer or agent of each of the Warrant
Holders or by or on behalf of the Company or any controlling person,
20
<PAGE> 21
director, officer or agent of the Company, and shall survive the execution of
this Agreement, the delivery of the Warrants and the receipt by the Company of
payment for the Warrants.
18. Notices
All communications provided for or permitted hereunder shall
be in writing and shall be deemed to have been duly given if and when
personally delivered, 2 (two) business days after sent by overnight courier or
10 (ten) days after mailed by certified, registered or international recorded
airmail, postage prepaid and return receipt requested, or when transmitted by
telefax, telex or telegraph and confirmed by sending a similar mailed writing,
if to the Warrant Holders addressed respectively to Rauscher Pierce & Clark
Limited at 56 Green Street, London W1Y 3RH, England, Attention: David P.
Quint, Managing Director, or to such other address as RPC may designate in
writing to the Company and to HSBC Investment Bank Plc at Thames Exchange, 10
Queen Street Place, London EC4R 1BL, Attention: Simon Eagles, Equity Capital
Markets Assistant Director, or to such other address as HSBC may designate, and
to each of the other Warrant Holders at the respective addresses set forth in
Schedule 1 hereto, or to any subsequent Warrant Holder at the address any such
Warrant Holder may designate in writing to the Company, and, if to the Company,
addressed to Sunshine Mining and Refining Company, 877 W. Main Street, Suite
600, Boise, Idaho 83702. Attention: John S. Simko or to such other address as
the Company may designate in writing to the Warrant Holders.
19. Parties.
This Agreement shall inure to the benefit of and be binding
upon the Warrant Holders, the Company and their respective permitted successors
and assigns. This Agreement may not be assigned by either party without the
consent of the other party. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective permitted successors and assigns and for the
benefit of no other person.
20. Miscellaneous.
This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the matters and
transactions contemplated hereby and supersedes all prior agreements and
understandings whatsoever relating to such matters and transactions. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for the purposes of reference only
and shall not limit or otherwise affect the meaning hereof. This Agreement may
be executed in counterparts, each of which shall constitute an original, but
all of which shall together constitute one instrument.
21. Governing Law.
This Agreement and the relationships of the parties in
connection with the subject matter of this Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Delaware, in
the United States of America, applicable to agreements made and to be performed
entirely therein, without regard to the conflict of laws provisions thereof.
21
<PAGE> 22
22. Severability. If any provision of this Agreement is
held to be invalid or unenforceable by any judgment of a tribunal of competent
jurisdiction, the remainder of this Agreement shall not be affected by such
judgment, and the Agreement shall be carried out as nearly as possible
according to its original terms and intent.
22
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
SUNSHINE MINING AND REFINING COMPANY
By /s/ William W. Davis
--------------------------------------------
Name: William W. Davis
Title: Executive Vice President
and Chief Financial Officer
RAUSCHER PIERCE & CLARK LIMITED
By /s/ David P. Quint
--------------------------------------------
Name: David P. Quint
Title: Managing Director
HSBC INVESTMENT BANK PLC
By /s/ Simon Eagles
--------------------------------------------
Name: Simon Eagles
Title: Assistant Director - Equity Capital Markets
23
<PAGE> 24
SCHEDULE 1
TO THE
WARRANT AGREEMENT
<TABLE>
<CAPTION>
NAME AND ADDRESS OF WARRANT HOLDER NUMBER OF SHARES AS TO WHICH THE
- ---------------------------------- WARRANTS ARE EXERCISABLE INITIALLY
----------------------------------
<S> <C>
HSBC Investment Bank plc 834,783
Thames Exchange
10 Queen Street Place
London EC4R 1BL
England
Sir Robert Clark 2,193
c/o Rauscher Pierce & Clark Limited
56 Green Street
London W1Y 3RH
England
Dalworth Capital Corporation 82,937
Tortola, British Virgin Islands
c/o Mr. Leslie Norman
Guarding House
P.O. Box 316
St. Helier, Jersey
Channel Islands
Rauscher Pierce & Clark Limited 1,008,091
56 Green Street
London W1Y 3RH
England
The Royal Bank of Scotland Trust
Company (Jersey) Limited J331C 21,898
6/7 Mulcaster Street
St. Helier, Jersey
Channel Islands
David P. Quint 137,055
c/o Rauscher Pierce & Clark Limited
56 Green Street
London W1Y 3RH
England
</TABLE>
24
<PAGE> 25
SCHEDULE 2
TO THE
WARRANT AGREEMENT
FORM OF WARRANT CERTIFICATE
25
<PAGE> 26
<TABLE>
<S> <C>
NUMBER WARRANTS
- --------------------- -------------------------
- --------------------- -------------------------
EXERCISE PRICE $2.875 SUBSCRIPTION WARRANTS,
EACH WARRANT FOR
ONE SHARE OF COMMON STOCK
VOID AFTER 5:00 P.M., NEW YORK CITY TIME ON MARCH 20, 2001
SUNSHINE MINING AND REFINING COMPANY
WARRANT CERTIFICATE FOR SHARES OF COMMON STOCK
THIS SUBSCRIPTION WARRANT CERTIFICATE CERTIFIES THAT
, or registered assigns is the registered holder of
Subscription Warrants ("Warrants") to acquire the number of shares of Common Stock, par value $0.01 per share (the "Common Stock")
of Sunshine Mining and Refining Company, a Delaware corporation (the "Company") indicated above. Each Warrant entitles the holder
to purchase from the Company at any time from September 21, 1996 to 5:00 p.m., New York City time, on the Expiration Date (as
defined below) one fully paid and nonassessable share of Common Stock at the above exercise price of $2.875 per share subject to
adjustments as set forth in the Warrant Agreement (the "Exercise Price") upon surrender of this Warrant Certificate and payment of
the Exercise Price at the offices of the Company, subject to the conditions set forth herein and in the Warrant Agreement. The
Exercise Price shall by payable by certified check or official bank check or by such other means as is acceptable to the Company in
the lawful currency of the United States of America which as of the time of payment is legal lender for payment of public or private
debts.
THIS WARRANT AND THE UNDERLYING COMMON STOCK HAVE 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, EXERCISED 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.
The Expiration Date is March 20, 2001.
Any Warrants not exercised on or prior to 5:00 p.m., New York City time, on the Expiration Date shall automatically become
void and no longer outstanding.
Reference is hereby made to the further provisions on the reverse hereof which provisions shall for all purposes have the
same effect as though fully set forth in this place.
This Warrant Certificate and the rights of the holder hereof shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to principles of conflict laws.
WITNESS the facsimile seal of the Company and the facsimile signatures of its duly authorized offices.
SUNSHINE MINING AND REFINING COMPANY
Dated: June 21, 1996 Attest: By:
Secretary: President:
</TABLE>
<PAGE> 27
SUNSHINE MINING AND REFINING COMPANY
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring at 5:00 p.m. New York City time, on the
Expiration Date, each of which represents the right to acquire at any time on or
prior to such date one share of Common Stock, subject to adjustment as set forth
in the Warrant Agreement. The Warrants are issued pursuant to a Warrant
Agreement, dated as of June 21, 1996 (the "Warrant Agreement"), which is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the word
"holders" or "holder" meaning the registered holders or registered holder of the
Warrants).
Subject to the provisions of the Warrant Agreement, the holder of each
Warrant shall have the right to acquire from the Company (and the Company shall
issue and sell to such holder of the Warrant) at any time on any business day
(as defined below) from September 21, 1996 until 5:00 p.m., New York City time,
on the Expiration Date, one fully paid and non-assessable share of Common Stock
at the Exercise Price. Warrants may be exercised by (i) surrendering this
Warrant Certificate with the form of Election to Purchase set forth hereon duly
completed and executed and (ii) paying in full the Exercise Price for each such
Warrant exercised and any other amounts required to be paid pursuant to the
Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Company at or prior to 2:00 p.m., New York City
time, on a business day, the exercise of the Warrant to which such items relate
will be effective on such business day. If all such items are received after
2:00 p.m., New York City time, on a business day, the exercise of the Warrants
to which such items relate will be effective the next business day.
Notwithstanding the foregoing, in the case of any exercise of Warrants on the
Expiration Date, the exercise of the Warrants to which such items relate will be
effective on the Expiration Date.
As soon as practicable after the exercise of any Warrant or Warrants, the
Company shall issue or cause to be issued, to or upon the written order of the
holder of this Warrant Certificate, a certificate or certificates evidencing the
share or shares to which such holder is entitled, in fully registered form,
registered in such name or names as such holder may designate in the form of
Election to Purchase set forth hereon. Such certificate or certificates
evidencing the share or shares shall be deemed to have been issued and any
persons who are designated to be named therein shall be deemed to have become
the holder of record of such share or shares as of the close of business on the
effective date of the exercise of such Warrant or Warrants.
The Company will not be required to issue fractional shares upon the
exercise of the Warrants. If more than one Warrant shall be presented for
exercise at the same time by the same holder, the number of full shares that
shall be issuable upon the exercise thereof shall be computed on the basis of
the aggregate number of shares purchasable on the exercise of the Warrants so
presented. In lieu of fractional shares, there shall be paid to the holder of
this Warrant Certificate at the time such Warrant Certificate is exercised an
amount in cash equal to the product of such fraction times the Quoted Price (as
defined in the Warrant Agreement) for such share on the business day next
preceding this effective date of exercise of such Warrant Certificate.
Warrant Certificates, when surrendered at the offices of the Company by the
holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged for a new Warrant Certificate or new Warrant
Certificates evidencing a like number of Warrants, in the manner and subject to
the limitations provided in the Warrant Agreement.
The Company may deem and treat the registered holder hereof as the absolute
owner of this Warrant Certificate (notwithstanding any notation of ownership or
other writing hereon made by anyone) for the purpose of any exercise hereof and
for all other purpose, and the Company shall not be affected by any notice to
the contrary.
The term "business day" means any Monday, Tuesday, Wednesday, Thursday or
Friday on which (i) banking institutions in the City of New York, (ii) the
principal national securities exchange or inter-dealer quotation system, if any,
on which the Common Stock is listed or quoted and (iii) the principal national
securities exchange or inter-dealer quotation system, if any, on which the
Warrants are listed or quoted, are open for business and not authorized or
obligated by law, regulation or executive order to close.
The terms of the Warrants include those stated in the Warrant Agreement.
The terms of the Warrants are subject to all such terms, and Warrantholders are
referred to the Warrant Agreement for a statement of those terms.
<TABLE>
<S> <C>
ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise this Warrant Certificate)
The undersigned, the registered holder of this Warrant Certificate, hereby certifies that it (i) is not a U.S. person (as defined
in Regulation S promulgated under the Securities Act of 1933, as amended (the "Act")) and that the Warrant is not being exercised on
behalf of a U.S. person or (ii) has delivered to the Company a written opinion of counsel to the effect that the Warrant and the
securities delivered upon exercise thereof have been registered under the Act or are exempt from registration thereunder. The
undersigned hereby irrevocably elects to exercise Warrants represented by this Warrant Certificate and acquire ____ shares and
herewith tenders payment for such shares in the amount of $____ (by certified check or official bank check) in accordance with the
terms hereof. The undersigned requires that a certificate or certificates representing such shares be registered in the name of
______________________________ whose address is ____________________________________________________________________________________
and that such certificate or certificates, and any cash payment to be made in lieu of any fractional share, be delivered to
______________________________ whose address is ____________________________________________________________________________________
Dated:
Name of registered holder of Warrant Certificate: __________________________________________________________________________________
(Please Print)
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX INFORMATION NUMBER FOR REGISTERED HOLDER:
- ---------------------------------------------
- ---------------------------------------------
Address of registered holder: ______________________________________________________________________________________________________
Signature: ____________________________________________________ Signature Guaranteed ______________________________________________
NOTICE: The signature to the foregoing Election must correspond
to the name as written upon the face of the Warrant Certificate
in every particular, without alteration or any change
whatsoever.
ASSIGNMENT
FOR VALUE RECEIVED ________________________________________________________________________ hereby sells, assigns and transfers unto
____________________________________________________________________________________________________________________________________
(Please print name and address of transferee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX INFORMATION NUMBER FOR REGISTERED HOLDER:
- ---------------------------------------------
- ---------------------------------------------
this Warrant Certificate, together with all right, title and interest herein, and does hereby irrevocably constitute and appoint
___________________________________________________________________________________________________________________________ Attorney
to transfer this security on the Warrant Register, with full power of substitution.
Signature: ___________________________________________
Signature Guaranteed: ________________________________
NOTICE: The signature to the foregoing Assignment must
correspond to the name as written upon the face of this Warrant
Certificate in every particular, without alteration or any
change whatsoever.
</TABLE>
<PAGE> 1
Exhibit 5.1
August 14, 1996
Sunshine Mining and Refining Company
877 W. Main Street
Suite 600
Boise, Idaho 83702
Ladies and Gentlemen:
We have acted as counsel to Sunshine Mining and Refining Company, a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company with the Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended, with respect to (i) the sale by certain
stockholders of the Company of up to an aggregate of 30,000,000 shares of Common
Stock, par value $.01 per share, of the Company (the "Common Stock"), to be
issued upon exchange of 8% Senior Exchangeable Notes due 2000 issued by Sunshine
Precious Metals, Inc. ("SPMI") and guaranteed by the Company (the "Notes"); (ii)
the sale by certain holders of securities of the Company (the "Selling
Securityholders") of warrants to purchase the Common Stock of the Company (the
"Warrants"); and (iii) the sale by the Selling Securityholders of up to
2,086,957 shares of the Common Stock issuable upon exercise of the Warrants.
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement and all exhibits thereto; (ii)
the Certificate of Incorporation of the Company and any amendments to date
certified by the Secretary of State of the State of Delaware; (iii) the Bylaws
of the Company and any amendments to date certified by the Secretary of the
Company; (iv) the Trust Deed, dated March 21, 1996, among the Company, SPMI and
Marine Midland Bank (the "Trust Deed"); (v) the Warrant Agreement, dated June
20, 1996, among the Company, HSBC Investment Bank PLC and Rauscher Pierce &
Clark Limited (the "Warrant Agreement"); and (vi) such corporate records,
agreements, documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them by the Registration Statement.
<PAGE> 2
Sunshine Mining and Refining Company
August 14, 1996
Page 2
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to
all questions of fact material to this opinion that have not been independently
established, we have relied upon certificates of officers and representatives
of the Company. Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that:
1. The Common Stock to be issued by the Company in exchange for
the Notes, as described in the Registration Statement, has
been duly authorized and when issued in accordance with the
terms of the Trust Deed will be validly issued, fully paid and
non-assessable.
2. The Common Stock to be issued by the Company upon exercise of
the Warrants, as described in the Registration Statement, has
been duly authorized for issuance and when issued in
accordance with the terms of the Warrant Agreement will be
validly issued, fully paid and non-assessable.
3. The Warrants, as described in the Registration Statement,
have been duly authorized, validly issued and are fully paid
and non-assessable.
We are members of the Bar of the State of Texas and do not purport to
be experts on, or generally familiar with, or qualified to express legal
conclusions based upon, laws other than the laws of the State of Texas, the
General Corporation Law of the State of Delaware, and the federal laws of the
United States of America. Accordingly, all opinions expressed herein are
specifically limited to the laws of the State of Texas, the General Corporation
Law of the State of Delaware, and the federal laws of the United States of
America.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference of our firm under
the caption "Legal Matters" in the Prospectus constituting a part of the
Registration Statement.
<PAGE> 3
Sunshine Mining and Refining Company
August 14, 1996
Page 3
Very truly yours,
Haynes and Boone, LLP
<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 reference in the Pre-Effective
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-06537) and
related Prospectus of Sunshine Mining and Refining Company as filed with the
Securities and Exchange Commission on August 14, 1996.
ERNST & YOUNG LLP
Dallas, Texas
August 14, 1996
