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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
Sunshine Mining and Refining Company
Sunshine Precious Metals, Inc.
(Name of applicant)
877 W. Main Street, Suite 600
Boise, Idaho 83702
(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED:
Title of Class Amount
-------------- ------
8% Senior Exchangeable Notes due 2001 $25,975,000
---------------------------
Approximate date of proposed public offering: As soon as practicable following
the qualification of the indenture covered hereby under the Trust Indenture Act
of 1939, as amended.
Name and address of agent for service:
John S. Simko, Chief Executive Officer
877 W. Main Street, Suite 600
Boise, Idaho 83702
The obligors hereby amend this application for qualification on such
date or dates as may be necessary to delay its effectiveness until (i) the 20th
day after the filing of a further amendment which specifically states that it
shall supersede this amendment, or (ii) such date as the Commission, acting
pursuant to Section 307(c) of the Act, may determine upon the written request of
the obligor.
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GENERAL
1. General information.
(a) Form of organization. Both Sunshine Mining and Refining
Company ("SSC") and Sunshine Precious Metals, Inc. ("Company"
and, together with SSC, the ("Applicants")) are corporations.
(b) State or other sovereign power under the laws of which
organized. SSC is organized under the laws of the State of
Delaware. The Company is organized under the laws of the State
of Delaware.
2. Securities Act exemption applicable.
The Applicants are relying upon the exemption provided by Section
3(a)(9) of the Securities Act of 1933, as amended (the "Securities Act"), in
claiming that registration of the securities to be issued in connection with the
recapitalization of SSC (the "Recapitalization"), as described below, is not
required under the Securities Act. The Recapitalization contemplates, among
other things, (i) certain amendments to the Terms and Conditions (the "Terms
Amendment") of the 8% Senior Exchangeable Notes due 2000 of the Company and
guaranteed by SSC (the "Notes") as provided in an Extraordinary Resolution
proposed to be adopted by the holders of the Notes (the "Noteholders") and (ii)
certain amendments to that certain Trust Deed, dated March 21, 1996 (as amended
and supplemented, the "Trust Deed"), among SSC, the Company, and HSBC Bank USA
(formerly Marine Midland Bank) (the "Trustee"), as trustee for the holders of
the Notes, pursuant to the provisions of that certain First Supplement to the
Trust Deed (the "First Supplement"). Because the Recapitalization is being
conducted by SSC with respect to its existing security holders exclusively, the
transaction is exempt from registration pursuant to Section 3(a)(9) of the
Securities Act.
There have not been, and there will not be, any sales of the Notes made
by the Applicants or by or through an underwriter at or about the same time as
the Recapitalization. No consideration has been or is to be given, directly or
indirectly, to any person in connection with the transaction, except for
customary payments to be made in respect of preparation, printing and mailing of
the notice with respect to the meeting of the Noteholders with respect to the
approval of the Extraordinary Resolution and related documents. In addition, the
Applicants will pay remuneration to their financial, legal, and accounting
counsel for the provision of advisory, legal, and accountancy services,
respectively.
AFFILIATIONS
3. Affiliates.
(a) The following are wholly-owned subsidiaries of SSC:
(i) Sunshine Precious Metals, Inc.;
(ii) Sunshine International Exploration Company;
(iii) Woods Research & Development Corp.;
(iv) Sunshine Management, Inc.;
(v) Sunshine Argentina, Inc.;
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(vi) Sunshine Argentina Gold, Inc.;
(vii) Minera Sunshine de Mexico, SA DECV;
(viiii) Sunshine Peru, Inc.; and
(ix) Sunshine Exploration, Inc.
(b) The following are subsidiaries of the Company:
(i) Sunshine Gold Corporation; and
(ii) Chester Mining Company.
(c) See Item 4 for "Directors and Officers" of the Applicants,
some of whom may be deemed to be affiliates of the Applicants
by virtue of their positions.
MANAGEMENT AND CONTROL
4. Directors and executive officers.
<TABLE>
<CAPTION>
Name Address Position
---- ------- --------
<S> <C> <C>
G. Chris Anderson c/o Sunshine Mining and Refining Company Director of Sunshine
877 W. Main Street, Suite 600
Boise, Idaho 83702
V. Dale Babbitt c/o Sunshine Mining and Refining Company Director of SSC
877 W. Main Street, Suite 600
Boise, Idaho 83702
George M. Elvin c/o Sunshine Mining and Refining Company Director of SSC
877 W. Main Street, Suite 600
Boise, Idaho 83702
Daniel D. Jackson c/o Sunshine Mining and Refining Company Director of SSC
877 W. Main Street, Suite 600
Boise, Idaho 83702
Oren G. Shaffer c/o Sunshine Mining and Refining Company Director of SSC
877 W. Main Street, Suite 600
Boise, Idaho 83702
</TABLE>
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<TABLE>
<S> <C> <C>
John S. Simko c/o Sunshine Mining and Refining Company Director, Chairman of the Board and Chief
877 W. Main Street, Suite 600 Executive Officer of SSC; President of the
Boise, Idaho 83702 Company and Member of the Board
Robert B. Smith, Jr. c/o Sunshine Mining and Refining Company Director of SSC
877 W. Main Street, Suite 600
Boise, Idaho 83702
William W. Davis c/o Sunshine Mining and Refining Company Executive Vice President and Chief Financial
877 W. Main Street, Suite 600 Officer of SSC; Executive Vice President of the
Boise, Idaho 83702 Company and Board Member
Harry F. Cougher c/o Sunshine Mining and Refining Company Senior Vice President and Chief Operating
877 W. Main Street, Suite 600 Officer-Mining of SSC; Senior Vice President of
Boise, Idaho 83702 the Company
</TABLE>
5. Principal owners of voting securities.
As of March 27, 2000, and upon consummation of Recapitalization the
following persons will own (10%) or more of SSC's voting securities:
<TABLE>
<S> <C> <C> <C>
Elliott Associates, L.P. Common Stock 5,919,380 shares 11.75% of shares
Westgate International, L.P. Common Stock 3,117,254 shares 6.2% of shares
</TABLE>
Elliott Associates, L.P. and Westgate International, L.P. constitute a "group"
as defined in Rule 13-d(b)(1) with respect to their beneficial ownership of
Common Stock.
To the knowledge of the Applicants, no other person beneficially owns ten
percent (10%) or more of any class of SSC's voting securities at the time of the
filing of this Application, and, upon consummation of the Recapitalization, no
person will beneficially own ten percent (10%) or more of any class of SSC's
voting securities. SSC owns all of the outstanding voting securities of the
Company and will continue to own all of such voting securities upon consummation
of the Recapitalization.
UNDERWRITERS
6. Underwriters.
(a) The name and complete mailing address of each person who,
within three years prior to the date of the filing this
application, acted as an underwriter of any securities of the
Applicants which are outstanding on the date of filing this
application and the title of each class of the securities
underwritten follows:
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<TABLE>
<CAPTION>
Class of Securities Underwriter Complete Mailing Address
------------------- ----------- ------------------------
<S> <C> <C>
NONE NONE NONE
</TABLE>
CAPITAL SECURITIES
7. Capitalization.
(a) Authorized Classes of Securities.
As of March 14, 2000
<TABLE>
<CAPTION>
Title of Class Amount Authorized Amount Outstanding
-------------- ----------------- ------------------
<S> <C> <C>
SSC (1):
Common Stock, par value 75,000,000 40,478,320
$0.01 per share (2)
10% Senior Convertible Notes $15,000,000 $13,620,795
due November 24, 2002
9% Convertible Subordinated $74,750,000 $1,515,000
Debentures due July 15, 2008
5% Convertible Notes due $ 6,000,000 $299,440
January 28, 2001
Preferred Stock: 20,000,000 None
Company:
Common Stock, par value $.01 1000 1000
per share
8% Senior Exchangeable $30,000,000 $25,975,000
Notes due 2000
</TABLE>
(1) SSC is a guarantor of the Company's 8% Senior Exchangeable Notes due
2001.
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(2) Warrants outstanding as of March 14, 2000. 907,181 shares of Common
Stock at an exercise price of $11.04 per share, expires May 22, 2001;
104,348 shares of Common Stock at an exercise price of $23.00 per
share, expires March 20, 2001; and, 156,522 shares of Common Stock at
an exercise price of $3.75 per share, expires March 20, 2001.
(b) Voting Rights.
(i) The holders of SSC's common stock are entitled to one
vote per share for the election of directors and in
all other matters submitted to a vote of
stockholders. Holders of SSC's common stock are not
entitled to cumulate their votes for the election of
directors. Holders of SSC's common stock are not
entitled to preemptive rights. In order to approve
any business combination, including any merger or
consolidation or the sale, lease, exchange or other
disposition of all or substantially all of our
assets, including a disposition in connection with a
dissolution or winding up or liquidation, Article
Five of SSC's Certificate of Incorporation requires
the affirmative vote or consent of the holders of:
(i) a majority of the shares entitled to vote on the
business combination, and (ii) a majority of any
series or class of preferred stock entitled to vote
as a class on the business combination. Article Five
may not be amended 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 on the
amendment or repeal, and (ii) 66 2/3% of any series
or class of preferred stock, if the Board of
Directors gives such series or class of preferred
stock such right to vote as a class. These provisions
may have the effect of delaying, deterring or
preventing a change of control of our corporation.
(ii) Holders of the Company's common stock are entitled to
cast one vote for each share held of record on all
matters submitted to a vote of shareholders.
INDENTURE SECURITIES
8. Analysis of Indenture provisions.
Defined terms used in this Item 8 that are not otherwise defined in
this application shall have the meanings given to such terms in the Trust Deed.
(A) Events of Default; Withholding of Notice.
The Trustee at its discretion may, and if so requested in writing by
the holders of at least one-quarter in principal amount of the Notes then
outstanding or if so directed by an Extraordinary Resolution of the Noteholders
shall, give notice to the Company that the Notes are, and they shall accordingly
thereby forthwith become, immediately due and repayable at their principal
amount together with accrued interest (as provided in the Trust Deed) if any of
the following events (each an "Event of Default") shall have occurred (unless
(i)
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such events (including, without limitation, the Merger) are expressly permitted
or contemplated by the Trust Deed or (ii) such Event of Default has been
remedied to the satisfaction of the Trustee):
(1) if default is made for a period of 5 Business Days or more in the
payment of any principal or interest due in respect of the Notes or any of them;
or
(2) if the Company or SSC fails to perform or observe any of its other
obligations, covenants, conditions or provisions under the Notes or the Trust
Deed and (except where the Trustee shall have certified to the Company in
writing that it considers such failure to be incapable of remedy in which case
no such notice or continuation as is hereinafter mentioned will be required)
such failure continues for the period of 30 calendar days (or such longer period
as the Trustee may in its absolute discretion permit) next following the service
by the Trustee on the Company or SSC, as the case may be, of notice requiring
the same to be remedied; or
(3) if (i) any other Indebtedness of the Company, SSC or any Principal
Subsidiary becomes due and repayable prior to its stated maturity by reason of
an event of default (howsoever described) or (ii) any such Indebtedness is not
paid when due or, as the case may be, within any applicable grace period (as
originally provided) or (iii) the Company, SSC or any Principal Subsidiary fails
to pay when due (or, as the case may be, within any originally applicable grace
period) any amount payable by it under any present or future guarantee for, or
indemnity in respect of, any Indebtedness of any Person or any guarantee or
indemnity of Indebtedness of any Person or any guarantee or indemnity of
Indebtedness of any Person becomes enforceable by reason of default in relation
thereto and steps are taken to enforce such security save in any such case where
there is a bona fide dispute as to whether the relevant Indebtedness or any such
Indebtedness exceeds in the aggregate $1,000,000 and in each such case such
event continues unremedied for a period of 30 calendar days (or such longer
period as the Trustee may in its sole discretion consent to in writing upon
receipt of written notice from the Company or SSC); or
(4) if the Company, SSC or any Principal Subsidiary shall fail to pay
its debts as such debts become due (except debts which the Company, SSC or such
Principal Subsidiary, as the case may be) may contest in good faith generally or
shall be declared or adjudicated by a competent court to be insolvent or
bankrupt, consents to the entry of an order of relief against it in an
involuntary bankruptcy case, shall enter into any assignment or other similar
arrangement for the benefit of its creditors or consents to the appointment of a
custodian (including without limitation, a receiver, liquidator or trustee); or
(5) if a receiver, administrative receiver, administrator or other
similar official shall be appointed in relation to the Company, SSC or any
Principal Subsidiary or in relation to the whole or a substantial part of the
undertaking or assets of any of them or a distress, execution or other process
shall be levied or enforced upon or sued out against, or an encumbrancer shall
take possession of, the whole or a substantial part of the assets of any of them
and in any of the foregoing cases it or he shall not be paid out or discharged
within 90 calendar days (or such longer period as the Trustee may in its
absolute discretion consent to in writing upon receipt of written notice form
The Company or SSC); or
(6) if The Company, SSC or any Principal Subsidiary institutes
proceedings to be adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a petition
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or answer or consent seeking organization under the laws of the U.S. Federal
Bankruptcy Code or any similar applicable U.S. Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a receiver or liquidator or trustee or assignee (or other similar official)
in bankruptcy or insolvency of it or its property, or shall make an assignment
for the benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they come due; or
(7) if a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging The Company a bankrupt or insolvent, or
approving as properly filed a petition seeking the reorganization of The Company
under the U.S. Federal Bankruptcy Code or any other similar applicable U.S.
Federal or State law, and such decree or order shall have continued undischarged
or unstated for a period of 90 calendar days; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver or
liquidator or trustee or assignee (or other similar official) in bankruptcy or
insolvency of The Company or of all or substantially all of its property, or for
the winding up or liquidation of its affairs, shall have entered, and such
decree or order shall have continued undischarged and unstayed for a period of
90 calendar days; or
(8) if a warranty, representation or other statement made by or on
behalf of The Company or SSC contained in the Trust Deed, the Notes or any
certificate or other agreement furnished in compliance with such documents is
false in any material respect when made; or
(9) if SSC or its successor as permitted by Condition 3(C) of the Trust
Deed ceases to own all of the issued and outstanding shares of The Company or
shall at any time pledge, transfer, exchange or otherwise dispose of such
shares; or
(10) if there is any final judgment or judgments for the payment of
money exceeding in the aggregate $1,000,000 outstanding against The Company, SSC
or any Principal Subsidiary which has been outstanding for more than sixty (60)
calendar days from the date of its entry and shall not have otherwise been
discharged in full or stayed by appeal, bond or otherwise.
The Trustee may agree, without the consent of the Noteholders or
Couponholders to any modification (subject to certain exceptions) of, or to the
waiver or authorization of any breach or proposed breach of, any of the
Conditions or any of the provisions of the Trust Deed which is not, in the
opinion of the Trustee, materially prejudicial to the interests of the
Noteholders or Couponholders or to any modification which is of a formal, minor
or technical nature or to correct a manifest error.
If it is proved that, as regards any specified Note or Coupon, The
Company has made default in paying any sum due to the relevant Noteholder or
Couponholder, such proof will (unless the contrary be proved) be sufficient
evidence that the same default has been made as regards all other Notes or (as
the case may be) Coupons which are then payable.
The Trustee may at any time, at its discretion and with prior written
notice to The Company and SSC, take such proceedings against The Company or SSC
as it may think fit to enforce the provisions of the Trust Deed, the Notes and
the Coupons or the Guarantee but it shall not be bound to take any proceedings
or any
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other action in relation to the Trust Deed, the Notes or the Coupons or the
Guarantee unless (a) it shall have been so directed by an Extraordinary
Resolution of the Noteholders or so requested in writing by the holders of at
least one-quarter in principal amount of the Notes then outstanding, and (b) it
shall have been indemnified to its satisfaction. No Noteholder or Couponholder
shall be entitled to proceed directly against The Company unless the Trustee,
having become bound so to proceed, fails to do so within a reasonable period and
such failure shall be continuing.
Notices to holders of Registered Notes will be mailed to them at the
respective addresses in the Register and deemed to have been given on the fourth
Business Day after the date of mailing, provided that, if at any time by reason
of suspension or curtailment (or except suspension or curtailment) of postal
services within the U.S. or elsewhere The Company is unable effectively to give
notice to holders of Registered Notes through the post, notices to holders of
Registered Notes will be valid if given in the same manner as other notices as
set forth below.
Notices to all the Noteholders will be valid if published in a leading
English language daily newspaper published in London or such other English
language daily newspaper with general circulation in Europe as the Trustee may
approve (which is expected to be the Financial Times) and, so long as the Notes
are listed on the Luxembourg Stock Exchange and the rules of that Exchange
require, in a leading newspaper having general circulation in Luxembourg (which
is expected to be the Luxembourg Wort). Any notice shall be deemed to have been
given on the date of publication or, if so published more than once, on the date
of the first publication. If publication as provided above is not practicable,
notice will be given in such other manner, and shall be deemed to have been
given on such date, as the Trustee may approve. Couponholders will be deemed for
all purposes to have notice of the contents of any notice given to the
Noteholders in accordance with the above-described condition.
Any modification, waiver or authorization will be binding on the
Noteholders and the Couponholders and, unless the Trustee agrees otherwise, any
modification shall be notified by The Company to the Noteholders as soon as
practicable thereafter with the above-described provisions.
As used herein:
(a) "Group" means SSC and all its Subsidiaries.
(b) "Indebtedness" of any person, means any present or future
obligations, which shall include all obligations (i) which in
accordance with the generally accepted accounting principles
in the U.S., shall be classified upon the balance sheet of
such person as liabilities, (ii) for borrowed money, (iii)
which have been incurred in connection with the acquisition of
any property (including without limitation, all obligations
evidenced by any indenture, bond, note, commercial paper or
other similar security, but excluding, in any case,
obligations arising from the endorsement in the ordinary
course of business of negotiable instruments for deposit or
collection, (iv) obligations secured by any Lien existing on
property owned, even though such person has not assumed or
become liable for the payment of such obligations, (v)
obligations created or arising under conditional sale or other
title retention agreement with
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respect to property acquired by such person, notwithstanding
the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are
limited to repossession or sale of such property, (vi) for
capitalized leases, (vii) all reimbursement and other payment
obligations (whether contingent mature or otherwise) of such
person in respect of acceptance or documentary credit.
Notwithstanding the foregoing, Indebtedness shall not include
(i) Indebtedness incidental to the operation of the business
of the Person in the ordinary course and in the aggregate not
material to the business sand operations of the Person and
(ii) Indebtedness represented by purchase, rental or lease
obligations which would cause the direct or contingent
liabilities of the Person and its Subsidiaries, on a
consolidated basis, in respect of all such obligations, not to
exceed $1,000,000 in any period of 12 months.
(c) a "Principal Subsidiary" at any time means a Subsidiary of The
Company or SSC:
(A) whose gross assets represent 15 percent or more of
the consolidated gross assets of the Group as
calculated by reference to the then latest audited
financial statements of the Group; or
(B) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary
of The Company or SSC which immediately prior to such
transfer is a Principal Subsidiary, where upon the
transfer Subsidiary shall immediately cease to be a
Principal Subsidiary and the transferee Subsidiary
shall cease to be a Principal Subsidiary under the
provisions of this sub-paragraph (B) (but without
prejudice to the provisions of sub-paragraph (A)
above), upon publication of its next audited
financial statements;
all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a
Subsidiary of The Company or SSC is or is not or was
or was not at any particular time or throughout any
specified period a Principal Subsidiary shall, in the
absence of manifest error, be conclusive and binding
on all parties.
(d) "Subsidiary" means any corporation of which at least a
majority of the shares of stock having by the terms thereof
ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not
at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is directly or indirectly
owned or controlled by any one of or any combinations of The
Company, SSC or one or more of the Principal Subsidiaries.
(e) "Lien" means any mortgage, pledge, security interest, lien,
charge or other encumbrance, but shall not include any of the
foregoing types of encumbrances that are incidental to the
conduct of the business of The
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Company, SSC or any of its Subsidiaries or the ownership of
property and assets of any of them, including (i) pledges or
deposits made to secure obligations of The Company, SSC or any
of its Subsidiaries under the workmen's compensation laws or
similar legislation; (ii) liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's, vendors',
repairmens', governmental (Federal, state or municipal) liens
arising out of contracts for the purchase or lease of products
of The Company, SSC or a Subsidiary, and deposits or pledges
to obtain the release of any of the foregoing liens; (iii)
liens created by or resulting from any litigation or legal
proceedings currently being contested in good faith by
appropriate proceedings; (iv) leases made or existing on
property entered into in the ordinary course of business of
The Company, SSC or one of its Subsidiaries; (v) landlords'
liens under leases of property to which The Company, SSC or
one of its Subsidiaries is a party; (vi) zoning restrictions,
easements, licenses or restrictions on the use of property or
minor irregularities in the title thereto; (vii) deposits in
connection with bids, tenders, contracts (other than the
repayment of money) to which The Company, SSC or one of its
Subsidiaries is a party; (viii) deposits to secure public or
statutory obligations of The Company, SSC or one of its
Subsidiaries; (ix) deposits in connection with obtaining or
maintaining self-insurance or to obtain the benefits of any
law regulation or arrangement pertaining to unemployment
insurance, old age pensions, social security or similar
matters; (x) deposits or cash or obligations of the United
States of America to secure surety, appeal or customs bonds to
which The Company, SSC or any of its Subsidiaries is a party;
and (xi) liens for tax or assessments or government charges or
levies not yet due or delinquent or which can thereafter be
paid without penalty, or which are being contested in good
faith by appropriate proceedings.
(B) Authentication and Delivery; Application of Proceeds.
The Bearer Notes will be represented initially by the Global Bearer
Note in the principal amount of $30,000,000 which will be exchangeable for
definitive Bearer Notes in denominations of $1,000 and $10,000 each with Coupons
attached on issue as set out in the Global Bearer Note. Pending exchange of the
Global Bearer Note, its holder will, subject to its provisions, be deemed to be
the holder of the definitive Bearer Notes and the Coupons for all purposes save
that unless, upon due presentation of the Global Note for exchange, delivery of
Bearer Notes is improperly refused or withheld and such refusal or withholding
is continuing at the relevant time, the Global Bearer Note will not confer upon
its holder the right to receive interest or to exercise the Exchange Rights.
The Bearer Notes and the Coupons will be security printed in accordance
with the applicable stock exchange requirements and the Bearer Notes, Coupons,
Registered Notes and Global Bearer Note will be in or substantially in the
respective forms set out in Schedules 1 and 2 to the Trust Deed and the Notes
will be endorsed with the Conditions. The Registered Notes will be in
dominations of $1,000 each and integral multiples thereof without Coupons
attached. Title to the Registered Notes in definitive form shall pass upon the
registration of transfers in respect thereof in accordance with the provisions
of these presents and Schedule 4 of the Trust Deed.
The Bearer Notes and the Coupons will be signed manually or in
facsimile by a duly authorized officer of The Company and will be authenticated
by or on behalf of the Principal Paying, Exchange and Transfer
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Agent. The Registered Notes will be signed manually or in facsimile by a duly
authorized officer executed under the Common Seal of The Company and will be
authenticated by the Registrar. The Company may use the facsimile signature of
any person who is at the date of this Trust Deed a duly authorized officer of
The Company even if at the time of issue of any Notes and/or Coupons he no
longer holds such office. None of the Global Bearer Note, the Notes or the
Coupons shall be valid for any purpose unless and until so authenticated (if
applicable) and executed.
All moneys received by the Trustee in respect of the Notes or amounts
payable under the Trust Deed will, regardless of any appropriation of all or
part of them by The Company, be held by the Trustee upon trust to apply them in
accordance with the provisions of the Notes and the Trust Deed:
first, in payment of all costs, charges, expenses and liabilities
properly incurred by the Trustee (including remuneration payable to the
Trustee) in carrying out its functions under the Trust Deed;
secondly, in payment of any principal and interest and all other sums
owing in respect of the Notes and the Coupons pari passu and rateably;
and
thirdly, in payment of the balance (if any) to The Company for itself.
Without prejudice to the foregoing, if the Trustee holds any moneys which
represent principal or interest or other sums in respect of Notes or Coupons
which have become void or in respect of which claims have become prescribed
under Condition 12 of the Trust Deed, the Trustee will hold such moneys upon the
above trusts.
(C) Release and Substitution of Property Subject to the Lien of
the Indenture. Not applicable.
(D) Satisfaction and Discharge of the Indenture.
The Trust Deed shall cease and be of no further effect and the Trustee
shall, upon the request and cost of The Company, execute proper documents
acknowledging the termination, satisfaction and discharge of the Trust Deed,
when none of the Notes are Outstanding.
(E) Evidence as to Compliance.
The Company will, and SSC will procure that The Company will, send to
the Trustee, within 14 days after its annual audited consolidated balance sheet
and profit and loss account being made available to its members, and also within
14 days after any request by the Trustee of a certificate signed by two duly
authorized officers of The Company on behalf of The Company to the effect that,
having made all reasonable inquiries, to the best of the knowledge, information
and belief of The Company as at a date (the "Certification Date") being not more
than five days before the date of the certificate no Event of Default had
occurred since the date of the Trust Deed or the Certification Date of the last
such certificate (if any) or, if such an event had occurred, giving details of
it together with a list of Subsidiaries which are Principal Subsidiaries of The
Company and details of its Consolidated Net Worth as at the date of such
certificate.
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9. Other obligors.
None.
Contents of application for qualification. This application for qualification
comprises:
(a) Pages numbered 1 to 15, consecutively.
(b) The statement of eligibility and qualification of each trustee
under the Indenture to be qualified.
(c) The following exhibits in addition to those filed as a part of
the statement of eligibility and qualification of each
trustee:
(i) Exhibit T3A-1.1: Certificate of Incorporation, filed
as Exhibit 3.1 to SSC's Registration Statement on
Form S-4 (Registration No. 33-98876), which exhibit
is incorporated herein by reference.
Exhibit T3A-1.2: 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. 001-100121), which exhibit is
incorporated herein by reference.
Exhibit T3A-1.3: Amendment to Certificate of
Incorporation, filed as Exhibit 4.3 to the
Registrant's Registration Statement on Form S-3
(Registration No. 333-86327), which exhibit is
incorporated herein by reference.
Exhibit T3A-1.4: Articles of Incorporation of The
Company. Previously filed.
(ii) Exhibit T3B-1: Bylaws, filed as Exhibit 3.3 to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, which exhibit is
incorporated herein by reference.
Exhibit T3B-2: Bylaws of The Company. Previously
filed.
(iii) Exhibit T3C-1: Trust Deed, dated March 21, 1996, by
and among The Company, SSC and Marine Midland Bank.
Filed herewith.
First Supplement to the Trust Deed, dated __________,
____, by and among The Company, SSC and HSBC Bank USA
(formerly Marine Midland Bank). Amended and filed
herewith.
(iv) Exhibit T3D: Not applicable.
13
<PAGE> 14
(v) Exhibit T3E: Notice of Special Meeting of the Holders
of the Outstanding Notes previously filed.
(vi) Exhibit T3F: Section 2.8 of the First Supplement to
the Trust Deed previously filed.
14
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Sunshine Mining and Refining Company, a corporation organized and
existing under the laws of the State of Delaware, has duly caused this
application to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested, all in the city of
Boise, and State of Idaho, on the 15th day of March, 2000.
(SEAL)
SUNSHINE MINING AND REFINING COMPANY
By: /s/ MICHAEL OWENS
---------------------------------
Michael Owens
Vice President
ATTEST:
--------------------------
--------------------------
--------------------------
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Sunshine Precious Metals, Inc., a corporation organized and existing
under the laws of the State of Delaware, has duly caused this application to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the city of Boise, and State of
Idaho, on the 15th day of March, 2000.
(SEAL)
SUNSHINE PRECIOUS METALS, INC.
By: /s/ MICHAEL OWENS
---------------------------------
Michael Owens
Vice President
ATTEST:
--------------------------
--------------------------
--------------------------
15
<PAGE> 16
CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
HSBC BANK USA
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, NY 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Warren L. Tischler, SVP
HSBC Bank USA
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-5167
(Name, address and telephone number of agent for service)
SUNSHINE MINING AND REFINING COMPANY
SUNSHINE PRECIOUS METALS, INC.
(Exact name of obligor as specified in its charter)
Delaware 75-2618333
Delaware 82-0169150
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
877 W. Main Street, Suite 600
Boise, Idaho 83702
(208) 345-0660 (Zip Code)
(Address of principal executive offices)
8% Senior Exchangeable Notes due 2001
(Title of Indenture Securities)
<PAGE> 17
General
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington,
D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None
<PAGE> 18
Item 16. List of Exhibits
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C>
T1A(i) (1) Copy of the Organization Certificate of HSBC Bank
USA.
T1A(ii) (1) Certificate of the State of New York Banking
Department dated December 31, 1993 as to the authority
of HSBC Bank USA to commence business as amended
effective on March 29, 1999.
T1A(iii) Not applicable.
T1A(iv) (1) Copy of the existing By-Laws of HSBC Bank USA as
adopted on January 20, 1994 as amended on October 23,
1997.
T1A(v) Not applicable.
T1A(vi) (2) Consent of HSBC Bank USA required by Section 321(b) of
the Trust Indenture Act of 1939.
T1A(vii) Copy of the latest report of condition of
the trustee (September 30, 1999),
published pursuant to law or the
requirement of its supervisory or
examining authority.
T1A(viii) Not applicable.
T1A(ix) Not applicable.
</TABLE>
(1) Exhibits previously filed with the Securities and Exchange Commission
with registration No. 022-22429 and incorporated herein by reference
thereto.
(2) Exhibit previously filed with the Securities and Exchange Commission
with Registration No. 33-53693 and incorporated herein by reference
thereto.
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HSBC Bank USA, a banking corporation and trust company organized under the laws
of the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York on the 15th day of March, 2000.
HSBC BANK USA
By: /s/ Frank J. Godino
---------------------
Frank J. Godino
Vice President
<PAGE> 20
EXHIBIT T1A (vii)
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
- --------------------------------------------------------------------------------
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 2000
Please refer to page i, --
Table of Contents, for 1
the required disclosure --
of estimated burden.
- --------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
REPORT AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1999 19980930
----------
(RCRI 9999)
This report is required by law; 12 U.S.C. Section 324 (State member banks);
12 U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National Banks.
I, Gerald A. Ronning, Executive VP & Controller
--------------------------------------------------------------------------
Name and Title of Officer Authorized to sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with
the instructions issued by the appropriate Federal regulatory authority and
are true to the best of my knowledge and believe
/s/ Gerald A. Ronning
------------------------------------------------------------------------------
Signature of Officer Authorized to Sign Report
10/25/99
------------------------------------------------------------------------------
Date of Signature
------------------------------------------------------------------------------
SUBMISSION OF REPORTS
Each Bank must prepare its Reports of Condition and Income either:
(a) in electronic form and then file the computer data file directly with the
banking agencies' collection agent, Electronic Data System Corporation
(EDS), by modem or computer diskette; or
(b) in hard-copy (paper) form and arrange for another party to convert the
paper report to automated for. That party (if other than EDS) must
transmit the bank's computer data file to EDS.
- --------------------------------------------------------------------------------
FDIC Certificate Number 0 0 5 8 9
(RCRI 9030)
http://WWW.BANKING.US.HSBC.COM
- --------------------------------------------------------------------------------
Primary Internet Web Address of Bank (Home Page), if any (TEXT 4087)
(Example: www.examplebank.com)
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate
Federal regulatory authority and is true and correct.
/s/ Malcolm Burnett
------------------------------------------------------------------------------
Director (Trustee)
/s/ Bernard J. Kennedy
------------------------------------------------------------------------------
Director (Trustee)
/s/ Sal H. Alfieri
------------------------------------------------------------------------------
Director (Trustee)
- --------------------------------------------------------------------------------
For electronic filing assistance, contact EDS Call report Services, 2150 N.
Prospect Ave., Milwaukee, WI 53202, telephone (800) 255-1571.
To fulfill the signature and attestation requirement for the Reports of
Condition and Income for this report date, attach this signature page to the
hard-copy of the completed report that the bank places in its files.
- --------------------------------------------------------------------------------
HSBC Bank USA
- --------------------------------------------------------------------------------
Legal Title of Bank (TEXT 9010)
Buffalo
- --------------------------------------------------------------------------------
City (TEXT 9130)
N.Y. 14203
- --------------------------------------------------------------------------------
State Abbrev. (TEXT 9200) ZIP Code (TEXT 9220)
Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE> 21
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
<TABLE>
<S> <C>
HSBC Bank USA of Buffalo
- ------------- ----------
Name of Bank City
</TABLE>
in the state of New York, at the close of business September 30, 1999
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Non-interest-bearing balances currency and coin $ 866,729
Interest-bearing balances 2,218,984
Held-to-maturity securities --
Available-for-sale securities 3,287,909
Federal funds sold and securities purchased under agreements to resell 2,141,850
-----------
Loans and lease financing receivables:
Loans and leases net of unearned income $23,445,713
LESS: Allowance for loan and lease losses 358,494
LESS: Allocated transfer risk reserve --
-----------
Loans and lease, net of unearned income, allowance, and reserve $23,087,219
Trading assets 979,022
Premises and fixed assets (including capitalized leases) 197,729
Other real estate owned 1,875
Investments in unconsolidated subsidiaries and associated companies --
Customers' liability to this bank on acceptances outstanding 207,284
Intangible assets 482,189
Other assets 687,563
Total assets 34,158,353
-----------
LIABILITIES
Deposits:
In domestic offices
21,813,324
-----------
Non-interest-bearing 2,688,117
Interest-bearing 19,125,207
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 6,215,704
-----------
Non-interest-bearing --
Interest-bearing 6,215,704
-----------
Federal funds purchased and securities sold under agreements to repurchase 1,277,936
Demand notes issued to the U.S. Treasury 81,541
Trading Liabilities 56,045
Other borrowed money (including mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less 721,040
With a remaining maturity of more than one year through three years 65,932
With a remaining maturity of more than three years 236,298
Bank's liability on acceptances executed and outstanding 207,284
Subordinated notes and debentures 698,215
Other liabilities 576,673
Total liabilities 31,949,992
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus --
Common Stock 205,000
Surplus 1,988,948
Undivided profits and capital reserves 46,167
Net unrealized holding gains (losses) on available-for-sale securities (31,754)
Accumulated net gain (losses) on cash flow hedges --
Cumulative foreign currency translation adjustments --
Total equity capital 2,208,361
Total liabilities and equity capital 34,158,353
==========
</TABLE>
<PAGE> 22
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
(i) Exhibit T3A-1.1: Certificate of Incorporation, filed as
Exhibit 3.1 to Sunshine's Registration Statement on Form
S-4 (Registration No. 33-98876), which exhibit is
incorporated herein by reference.
Exhibit T3A-1.2: 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.
001-100121), which exhibit is incorporated herein by
reference.
Exhibit T3A-1.3: Amendment to Certificate of
Incorporation, filed as Exhibit 4.3 to the Registrant's
Registration Statement on Form S-3 (Registration No.
333-86327), which exhibit is incorporated herein by
reference.
Exhibit T3A-1.4: Articles of Incorporation of The
Company. Previously filed.
(ii) Exhibit T3B-1: Bylaws, filed as Exhibit 3.3 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998, which exhibit is
incorporated herein by reference.
Exhibit T3B-2: Bylaws of The Company. Previously filed.
(iii) Exhibit T3C-1: Trust Deed, dated March 21, 1996, by and
among The Company, Sunshine and Marine Midland Bank.
Filed herewith.
First Supplement to the Trust Deed, dated __________,
____ by and among The Company, Sunshine and HSBC Bank
USA (formerly Marine Midland Bank). Amended and filed
herewith.
(iv) Exhibit T3D: Not applicable.
(v) Exhibit T3E: Notice of Special Meeting of the Holders of
the Outstanding Notes. Previously filed.
(vi) Exhibit T3F: Section 2.8 of the First Supplement to the
Trust Deed. Previously filed.
16
<PAGE> 1
EXHIBIT iii
CONFORMED COPY
DATED 21st March, 1996
----------------------------------------------
SUNSHINE PRECIOUS METALS, INC. (1)
SUNSHINE MINING AND REFINING COMPANY (2)
and
MARINE MIDLAND BANK (3)
----------------------------------------------
TRUST DEED
constituting
US$30,000,000 8 percent Senior Exchangeable
Notes due 2000
----------------------------------------------
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
Clause Heading Page
<S> <C>
1 Interpretation...........................................................................................1
2 Amount of the Notes and covenant to pay..................................................................6
3 Guarantee................................................................................................8
4 Form of the Notes.......................................................................................10
5 Stamp duties and taxes..................................................................................11
6 Application of moneys received by the Trustee...........................................................12
7 Covenant to comply with provisions......................................................................12
8 Exchange................................................................................................13
9 Exchange on redemption and mandatory exchange...........................................................18
10 Covenants relating to exchange..........................................................................20
11 Covenants...............................................................................................22
12 Remuneration and indemnification of the Trustee.........................................................24
13 Provisions supplemental to the Trustee Act 1925.........................................................25
14 Trustee liable for gross negligence.....................................................................29
15 Waiver and proof of default.............................................................................29
16 Trustee not precluded from entering into contracts......................................................29
17 Modification and substitution...........................................................................30
18 Appointment, retirement and removal of the Trustee......................................................33
19 Couponholders...........................................................................................34
20 Enforcement.............................................................................................35
21 Termination, Satisfaction and Discharge of the Trust Deed...............................................35
22 Communications..........................................................................................35
23 Currency indemnity......................................................................................36
24 Governing law and jurisdiction..........................................................................37
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SCHEDULE
1 Forms of Bearer Note, Coupon and Registered Note........................................................38
2 Form of Global Bearer Note ............................................................................47
3 Provisions for Meetings of Noteholders ................................................................56
4 Register and Transfer of Registered Notes .............................................................65
5 Terms and Conditions of the Notes .....................................................................67
</TABLE>
ii
<PAGE> 4
THIS TRUST DEED is made on 21st March, 1996 BETWEEN:
(1) SUNSHINE PRECIOUS METALS, INC. (the "Company") whose registered office is
at 877 W. Main Street, Suite 600, Boise, Idaho 83702, U.S.A.;
(2) SUNSHINE MINING AND REFINING COMPANY ("SSC") whose registered office is at
877 W. Main Street, Suite 600, Boise, Idaho 83702, U.S.A.; and
(3) MARINE MIDLAND BANK whose registered office is at 140 Broadway, New York,
New York 10005-1180, USA (the "Trustee," which expression shall, where the
context so admits, include all persons for the time being the trustee or
trustees of this Trust Deed).
WHEREAS:
(A) The Company, incorporated in the State of Delaware, has by a written
resolution of its Board of Directors adopted on 27th February, 1996,
authorized the issue of US$30,000,000 8 percent Senior Exchangeable Notes
to be constituted by this Trust Deed.
(B) SSC, incorporated in the State of Delaware, has by a resolution of its
Board of Directors adopted on 27th February, 1996 authorized the giving of
the Guarantee and the exchange of the Notes into Shares.
(C) The Trustee has agreed to act as trustee of this Trust Deed on the terms
and conditions of this Trust Deed.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:-
1 Interpretation
(A) Definitions: The following expressions shall have the following meanings:-
"AGENCY AGREEMENT" means the Registrar, Paying and Exchange Agency
Agreement dated 21st March, 1996, as altered from time to time, between the
Company, SSC, the Trustee, the Principal Paying, Exchange and Transfer
Agent, the other Paying, Exchange and Transfer Agent named in the
Conditions and the Registrar whereby the initial Paying, Exchange and
Transfer Agents and the Registrar were appointed in relation to the Notes,
as altered from time to time, between the Company, SSC, the Trustee and any
Agents and includes any agreements appointing any successor agents or
relating to the duties of any Agents or altering any of the aforesaid
agreements, in each case, on terms approved by the Trustee;
<PAGE> 5
"AGENTS" means the Principal Paying, Exchange and Transfer Agent, the other
Paying, Exchange and Transfers Agents and the Registrar or,. as the context
requires, any of them;
"AUDITORS" means the auditors for the time being of the Company or SSC or,
if there shall be joint auditors, any one or more of such auditors or, in
the event of their being unable or unwilling to carry out any action
requested of them pursuant to this Trust Deed, such other accountants or
firm of accountants as may be nominated by the Company or SSC, as the case
may, be with the written approval of the Trustee or, in default of such
nomination and approval, nominated by the Trustee (after consultation with
the Company or SSC, as the case may be, where such consultation is not
prejudicial to the interests of the Noteholders) for the purpose;
"BEARER NOTE" means a Note which is for the time being in bearer form;
"CONDITIONS" means the Terms and Conditions of the Notes set forth in
Schedule 5 and on the back of the Notes;
"CONSOLIDATED NET WORTH" has the meaning specified in Condition 13(g);
"COUPONHOLDERS" means the bearers of Coupons and, in relation to a Coupon,
"holder" means the bearer of a Coupon;
"COUPONS" means the bearer interest coupons for the time being relating to
the Bearer Notes in definitive form or, as the context may require, a
specific number of them and includes any replacement Coupons issued
pursuant to Condition 16;
"CURRENT MARKET PRICE" has the meaning specified in Condition 8(C);
"EVENT OF DEFAULT" means any of the events described in Condition 13;
"EXCHANGE DATE" has the meaning specified in Condition 8(B);
"EXCHANGE NOTICE" has the meaning specified in Condition 8(B);
"EXCHANGE PERIOD" has the meaning specified in Condition 8(A);
"EXCHANGE PRICE" means the exchange price of the Shares determined in
accordance with Condition 8(A)(iii);
"EXCHANGE RIGHT" has the meaning specified in Condition 8(A)(i);
"EXTRAORDINARY RESOLUTION" has the meaning set out in paragraph 21 of
Schedule 3;
2
<PAGE> 6
"GLOBAL BEARER NOTE" means the temporary global bearer note for the Bearer
Notes in the form or substantially in the form set out in Schedule 2;
"GROUP" has the meaning specified in Condition 13(a);
"GUARANTEE" means the guarantee by SSC set out herein;
"INDEBTEDNESS" has the meaning specified in Condition 13(b);
"INTEREST PAYMENT DATE" has the meaning specified in Condition 6(A);
"LIEN" has the meaning specified in Condition 13(f);
"MANDATORY EXCHANGE DATE" has the meaning specified in Condition 8(E)(i),
"MERGER" has the meaning specified in condition 13(c);
"NOTES" means the notes (whether in bearer or registered form) comprising
the US$30,000,000 8 percent Senior Exchangeable Notes due 2000 constituted
by this Trust Deed and for the time being outstanding or, as the context
may require, a specific number of them and includes any replacement Notes
issued pursuant to Condition 16 and (except for the purposes of Clauses
4(A) and (B)), in relation to the Bearer Notes, the Global Bearer Note;
"NOTEHOLDER" and, in relation to a Note, "holder" means, in relation to a
Bearer Note, the bearer of a Bearer Note and, in relation to a Registered
Note, a person in whose name a Registered Note is registered;
"OUTSTANDING" means, in relation to the Notes, all the Notes issued other
than (a) those which have been redeemed or in respect of which Exchange
Rights have been exercised and which have been cancelled in accordance with
the Conditions, (b) those in respect of which the date for redemption in
accordance with the Conditions has occurred and the redemption moneys
(including all interest accrued on such Notes up to but excluding the date
fixed for such redemption and any interest payable under Condition 6 in
respect of any period commencing on or after such date) have been duly paid
to the relevant Noteholder (or to a person on behalf of such Noteholder) or
to the Trustee or to the Principal Paying, Exchange and Transfer Agent as
provided in Clause 2(B) and remain available for payment against
presentation and surrender of Notes and/or Coupons, as the case may be, (c)
those which have become void or those in respect of which claims have
become prescribed under Condition 12, (d) those mutilated or defaced Notes
which have been surrendered in exchange for replacement Notes pursuant to
Condition 16, (e) (for the purpose only of determining how many Notes are
outstanding and without prejudice to their status for any other purpose)
those Notes alleged to have been lost, stolen or destroyed and in respect
of which replacement Notes have been issued pursuant
3
<PAGE> 7
to Condition 16, (f) those which have been purchased and cancelled as
provided in Condition 9, (g) those Bearer Notes which have been exchanged
for Registered Notes and vice versa and (h) the Global Bearer Note to the
extent that it shall have been exchanged for definitive Notes pursuant to
its provisions, provided that for the purposes of (i) ascertaining the
right to attend and vote at any meeting of the Noteholders, (ii) the
determination of how many Notes are outstanding for the purposes of
Conditions 13, 14 and 17 and Schedule 3 and (iii) the exercise of any
discretion, power or authority which the Trustee is required, expressly or
impliedly, to exercise in or by reference to the interests of the
Noteholders, those Notes (if any) which are beneficially held by, or are
held on behalf of, the Company or any of its Subsidiaries and not yet
cancelled shall be deemed not to remain outstanding;
"PAYING, EXCHANGE AND TRANSFER AGENTS" means, in relation to the Notes, the
several institutions (including the Principal Paying, Exchange and Transfer
Agent) at their respective specified offices referred to in the Conditions
or, as the context requires, any of them or, as the context requires, any
of them and, in each case, any successor paying, exchange and transfer
agent at its specified office;
"PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT" means, in relation to the
Notes, Midland Bank plc of Mariner House, Pepys Street, London EC3N 4DA in
its capacity as Principal Paying, Exchange and Transfer Agent and, in each
case, any Successor principal paying, exchange and transfer agent at its
specified office;
"PRINCIPAL SUBSIDIARY" has the meaning specified in Condition 13(d);
"REGISTERED NOTES" means those Notes for the time being in registered form;
"REGISTRAR" means, in relation to the Notes, Marine Midland Bank in its
capacity as the Registrar and, any Successor registrar;
"RIGHTS" includes rights in whatsoever form;
"SHAREHOLDERS" means the holders of Shares;
"SHARES" means common stock par value US$0.01 per Share of SSC or its
survivor by reason of the Merger (and all other (if any) shares or stock
resulting from any sub-division, consolidation or re-classification of such
shares);
"SPECIFIED OFFICE" means, in relation to any Agent, either the office
identified with its name at the end of the Conditions or any other office
approved in writing by the Trustee and notified to the Noteholders pursuant
to Clause 11 (A)(vi);
"STOCK EXCHANGE BUSINESS DAY" has the meaning specified in Condition 8(B);
4
<PAGE> 8
"STOCK SPLIT" has the meaning specified in Condition 8(C);
"SUBSIDIARY" has the meaning specified in Condition 13(e);
"SUCCESSOR" means, in relation to the Agents, such other or further person
as may from time to time be appointed by the Company as an Agent with the
written approval of, and on terms approved in writing by, the Trustee and
notice of whose appointment is given to Noteholders pursuant to Clause 11
(A)(vi) and Condition 17;
"SUNSHINE MINE" has the meaning specified in Condition 11(C);
"THIS TRUST DEED" means this Trust Deed, including the Schedules and the
Conditions as from time to time altered in accordance with this Trust Deed
and any other document executed in accordance with this Trust Deed, as from
time to time so altered in accordance with this Trust Deed, and expressed
to be supplemental to this Trust Deed; and
"TRUST CORPORATION" means a corporation entitled by rules made under the
Public Trustee Act 1906 or entitled pursuant to any other legislation
applicable to a trustee in any jurisdiction other than England to carry out
the functions of a custodian trustee.
(B) Construction of certain references: References to:-
(1) costs, charges, remuneration or expenses shall include any value added
tax, turnover tax or similar tax charged in respect thereof;
(2) "U.S. Dollars", "Dollars", "dollars", "US$ and "$" shall be construed
as references to the lawful currency for the time being of United
States of America;
(3) any action, remedy or method of judicial proceedings for the
enforcement of rights of creditors shall include, in respect of any
jurisdiction other than England and Wales, references to such action,
remedy or method of judicial proceedings for the enforcement of rights
of creditors available or appropriate in such jurisdiction as shall
most nearly approximate thereto;
(4) words denoting the singular number only shall include the plural
number also and vice versa;
(5) words denoting one gender only shall include the other genders;
5
<PAGE> 9
(6) words denoting persons only shall include firms and corporations and
vice versa;
(7) any provision of any statute shall be deemed also to refer to any
statutory modification or re-enactment thereof or any statutory
instrument, order or regulation made thereunder or under such
modification or re-enactment;
(8) references in this Trust Deed to Clauses and Schedules are references
to Clauses of and Schedules to this Trust Deed;
(9) references to the issue of Shares or other securities or to issued or
to be issued Shares or other securities or to Shares or other
securities in issue or to the date of issue of any Shares or other
securities shall be construed as if the word "allotment" or "allotted"
or "allotment" (whichever the context shall require) were substituted
for the word or words "issue", "issue" or "in issue" (as the case may
be); and
(10) references to an issue or offer to holders of Shares "as a class" or
"by way of rights" shall be taken to be references to an issue or
offer to the majority of such holders other than holders to whom, by
reason of the laws of any territory or requirements of any recognized
regulatory body or any other stock exchange in any territory or in
connection with fractional entitlements, it is determined not to make
such issue or offer.
(C) Definitions in Conditions: Words and expressions defined in the Conditions
and not defined in the main body of this Trust Deed shall when used in this
Trust Deed have the same meanings as are given to them in the Conditions.
(D) Headings: Headings shall be ignored in c construing this Trust Deed.
(E) Schedules: The Schedules are part of this Trust Deed and shall have effect
accordingly.
(F) Enforceability: If at any time any provision of this Trust Deed is or
becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Trust Deed nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction
shall in any way be affected or impaired thereby.
2 Amount of the Notes and covenant to pay
(A) Amount of the Notes: The aggregate principal amount of the Notes which may
be authenticated ind delivered under this Trust Deed is limited to
US$30,000,000.
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<PAGE> 10
(B) Covenant to pay: The Company will by 12 noon (New York time) on any date
when the Notes or any of them become due to be redeemed unconditionally pay
to or to the order of the Trustee in Dollars -in immediately available
funds in New York the principal amount of the Notes becoming due for
redemption on that date and will (subject to the Conditions) until such
payment (both before and after judgment) unconditionally pay to or to the
order of the Trustee as aforesaid interest on the principal amount of the
Notes outstanding as set out in Conditions 6 and 7, provided that (1) every
payment of any sum due in respect of the Notes made to or to the account of
the Principal Paying, Exchange and Transfer Agent as provided in the Agency
Agreement shall, to such extent, satisfy such obligation except to the
extent that there is failure in its subsequent payment to the relevant
Noteholders or (as the case may be) Couponholders under the Conditions and
(2) in the event that, upon due presentation of any Note for redemption,
payment of principal is improperly withheld or refused, such Note will
continue to bear interest as aforesaid until and including the day after
the Noteholders have been or are deemed to have been notified, whichever is
earlier, of receipt by the Trustee or the Principal Paying, Exchange and
Transfer Agent of all sums due in respect of the Notes up to and including
that day (except to the extent that there is a failure in the subsequent
payment by any Agent to the relevant holders under the Conditions). The
Trustee will hold the benefit of this covenant on trust for the Noteholders
and Couponholders.
(C) Discharge: Subject to Clause 2(D), any payment to be made in respect of the
Notes or the Coupons by the Company or the Trustee may be made as provided
in the Conditions and any payment so made will to such extent be a good
-discharge to the Company or the Trustee, as the case may be in respect of
such payment.
(D) Payment after a default: At any time after an Event of Default has occurred
and is continuing the Trustee may:-
(1) by notice in writing to the Company, SSC and the Agents, require the
Agents, until notified in writing by the Trustee to the contrary, so
far as permitted by any applicable law:-
(a) to act, thereafter, as Agents of the Trustee under this Trust
Deed and the Notes on the term of the Agency Agreement (with
consequential amendments as necessary and except that the
Trustee's liability for the indemnification, remuneration and all
other out-of-pocket expenses of the Agents will be limited to the
amounts for the time being held by the Trustee in respect of the
Notes on the terms of this Trust Deed) and thereafter to hold all
Notes and Coupons and all moneys, documents and records held by
them in respect of Notes and Coupons on behalf of and to the
order of the Trustee; or
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<PAGE> 11
(b) to deliver all Notes and Coupons and all moneys, documents and
records held by them in respect of the Notes and Coupons to the
Trustee or as the Trustee directs in such notice, provided that
such notice shall be deemed not to apply to any documents or
records which the relevant Agent is obliged not to release by any
law or regulation; and
(2) by notice in writing to the Company require it to make all subsequent
payments in respect of the Notes and Coupons to or to the order of the
Trustee and not to the Principal Paying, Exchange and Transfer Agent
or the Registrar.
3 Guarantee
(A) SSC's liability: SSC hereby irrevocably and unconditionally guarantees to
the Trustee on behalf of and for the benefit of the Noteholders and the
Couponholders the due and punctual payment by the Company of all moneys
payable from time to time in respect of the Notes and the Coupons
(including, without prejudice to the generality of the foregoing, all
additional amounts payable pursuant to Condition 10) and all other moneys
payable from time to time under or pursuant to these presents as follows:
(i) if and whenever the Company shall make default in the payment of any
such moneys, SSC shall forthwith upon written demand therefor by the
Trustee irrevocably and unconditionally pay to or to the order of the
Trustee in Dollars the amount in respect of which such default has
been made and any payment so made shall to such extent cure such
default by the Company subject as provided in Clauses 2(B), 2(C) and
2(D), the provisions of which Clauses shall apply mutatis mutandis to
such payment;
(ii) as a separate and independent stipulation SSC agrees that any such
moneys which may not be recoverable from the Company by reason of any
legal limitation, disability or incapacity on or of the Company or
any other fact or circumstance shall nevertheless be recoverable from
SSC as though the same had been incurred by SSC and SSC were the sole
and principal debtor in respect thereof and shall be paid by SSC
forthwith upon written demand therefor by the Trustee. SSC shall not
be exonerated or discharged from liability by time being given, or
any other indulgence or concession being granted, to the Company by
the Trustee or by the Noteholders or the Couponholders or any of them
or by anything done by the Trustee in exercise of any of the trusts,
powers, authorities or discretions vested in it by these presents or
by anything which the Noteholders or the Couponholders or the Trustee
or any of them may do or omit or neglect to do or by any other
dealing or thing which, but for this provision, might operate to
exonerate or discharge SSC from its obligations hereunder.
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<PAGE> 12
It is further agreed as a separate and independent stipulation that
any sums of money which may not be recoverable from SSC on the basis
of a guarantee whether by reason of any legal limitation, disability
or any other fact or circumstances and whether or not known to the
Trustee or the Noteholders or the Couponholders or any of them shall
nevertheless be recoverable from SSC as sole or principal debtor in
respect thereof and shall be paid by SSC to the Trustee forthwith
upon written demand therefor by the Trustee;
(iii) the Guarantee shall be a continuing guarantee and accordingly shall
remain in operation until all such moneys have been paid or satisfied
in full and shall be in addition to and not in substitution for, and
shall not be affected by, any other rights which the Trustee or the
Noteholders or the Couponholders or any of them may have under or by
virtue of these presents and may be enforced without first having
recourse to any such rights and without taking any steps or
proceedings against the Company;
(iv) the Trustee may from time to time make any arrangement or compromise
with SSC in relation to the Guarantee which the Trustee and SSC may
think fit;
(v) prior to the liquidation of the Company, SSC shall not, without the
prior written consent of the Trustee, at any time after default has
been made by the Company in the payment of any such moneys and so
long as any moneys payable from time to time by SSC in respect of
such defaulted moneys remain unpaid, exercise in respect of any
amounts paid under the Guarantee any right of subrogation, indemnity
or reimbursement or any other right or remedy which SSC may have in
respect of or as a result of such payment;
(vi) in the event of the liquidation of the Company, if any moneys shall
then be payable by SSC under the Guarantee, SSC will, until all such
moneys payable from time to time in respect of the Notes and the
Coupons and a other moneys payable from time to time under or
pursuant to these presents have been paid in full, hold the benefit
of all its claims against the Company upon trust to pay the same to
the Trustee and shall prove for such claims against the Company and
SSC hereby irrevocably authorizes; the Company to pay to the Trustee,
to the extent that all such moneys payable from time to time in
respect of the Notes and the Coupons and all other moneys payable
under or pursuant to these presents shall not have been paid in full,
all moneys due in respect of such claims;
(vii) if any payment received by the Trustee or any Noteholder or
Couponholder pursuant to the provisions hereof shall be avoided under
any laws relating to
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<PAGE> 13
bankruptcy, insolvency, corporate reorganization or other similar
events, such payment shall not be considered as having discharged or
diminished the liability of SSC, and the Guarantee shall continue to
apply as if such payment had at all times remained owing by the
Company and SSC shall indemnify the Trustee and the Noteholders and
Couponholders in respect thereof.
(B) No payments by Company: If any moneys shall become payable by SSC under the
Guarantee, the Company shall not (save in the event of the liquidation of
the Company), so long as such moneys remain unpaid, pay any moneys for the
time being due by the Company to SSC.
(C) Consents and authorizations: If at any time any authorization or approval
becomes necessary to permit SSC to pay any moneys payable from time to time
in respect of the Notes or the Coupons or under or pursuant to these
presents in accordance with the terms of these presents as a result of any
change in, any change in the official application of, or any amendment to,
the laws or regulations of the United States, SSC shall forthwith apply for
the necessary authorization and approval and shall provide copies of such
application as soon as reasonably practicable to the Trustee. SSC shall
provide copies of such authorization and approval to the Trustee as soon as
they are obtained.
(D) Application of moneys received by the Trustee: Any amount from time to time
received by the Trustee under the Guarantee shall be applied by the Trustee
in accordance with the provisions of Clause 6.
(E) Nature of obligations: SSC hereby covenants with the Trustee that the
obligations of SSC Under the Guarantee constitute direct, unconditional
and unsecured obligations of SSC and rank and will rank senior to all other
outstanding unsecured and subordinated obligations of SSC, present and
future (including, without limitation, the Convertible Subordinated Reset
Debentures due July, 15 2008 issued by SSC but, in the event of the
bankruptcy or insolvency of SSC, only to the extent permitted by applicable
laws relating to creditors' rights.
4 Form of the Notes
(A) The Global Bearer Note: The Bearer Notes will be represented initially by
the Global Bearer Note in the principal amount of US$30,000,000 which will
be exchangeable for definitive Bearer Notes in denominations of US$1,000
and US$10,000 each with Coupons attached on issue as set out in the Global
Bearer Note. Pending exchange of the Global Bearer Note, its holder will,
subject to its provisions, be deemed to be the holder of the definitive
Bearer Notes and the Coupons for all purposes save that unless, upon due
presentation of the Global Bearer Note for exchange, delivery of Bearer
Notes is improperly refused or withheld and such refusal or withholding is
continuing at the
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<PAGE> 14
relevant time, the Global Bearer Note will not confer upon its holder the
right to receive interest or to exercise the Exchange Rights.
(B) The definitive Notes: The Bearer Notes and the Coupons will be security
printed in accordance with the applicable stock exchange requirements and
the Bearer Notes, Coupons, Registered Notes and Global Bearer Note will be
in or substantially in the respective forms set out in Schedules 1 and 2
and the Notes will be endorsed with the Conditions. The Registered Notes
will be in dominations of US$1,000 each and integral multiplies thereof
without Coupons attached. Title to the Registered Notes in definitive form
shall pass upon the registration of transfers in respect thereof in
accordance with the provisions of these presents and Schedule 4.
(C) Signature: The Bearer Notes and the. Coupons will be signed manually or in
facsimile by a duly authorized officer of the Company and will be
authenticated by or on behalf of the Principal Paying, Exchange and
Transfer Agent. The Registered Notes will be signed manually or in
facsimile by a duly authorized officer executed under the Common Seal of
the Company and will be authenticated by the Registrar. The Company may use
the facsimile signature of any person who is at the date of this Trust Deed
a duly authorized officer of the Company even if at the time of issue of
any Notes and/or Coupons he no longer holds such office. None of the Global
Bearer Note, the Notes or the Coupons shall be valid for any purpose unless
and until so authenticated (if applicable) and executed.
5 Stamp duties and taxes
(A) Stamp and other duties and taxes: The Company will pay any stamp, issue,
registration, documentary or offer similar taxes and duties, including
interest and penalties, payable in the United Kingdom and the United States
in respect of the creation and original issue and offering of the Notes and
the Coupons and the execution or delivery of this Trust Deed. The Company
will also indemnify the Trustee, the Noteholders and the Couponholders from
and against all stamp, issue, registration, documentary or other taxes paid
by any of them in any jurisdiction in relation to which the liability to
pay arises directly as a result of any action properly taken by or on
behalf of the Trustee or, as the case may be, (where entitled under
Condition 14 to do so) the Noteholders or the Couponholders to enforce the
obligations of the Company under this Trust Deed, the Notes or the Coupons.
(B) Change of taxing jurisdiction: If the Company becomes subject generally to
the taxing jurisdiction of any territory or any authority of or in that
territory having power to tax (other than the United States or any such
authority of or in the United States), then the Company will (unless the
Trustee otherwise agrees in writing and subject to any required
governmental or other consents or approvals) give to the Trustee an
undertaking in form satisfactory to the Trustee in terms corresponding to
the terms of Condition 10
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<PAGE> 15
with the substitution for the references in that Condition to the United
States of references to that other territory or authority to whose taxing
jurisdiction the Company has become so subject and in such event this Trust
Deed, the Notes and the Coupons will be construed accordingly.
6 Application of moneys received by the Trustee
Declaration of trust: All moneys received by the Trustee in respect of the
Notes or amounts payable under this Trust Deed will, regardless of any
appropriation of all or part of them by the Company, be held by the Trustee
upon trust to apply them in accordance with the provisions of the Notes and
this Trust Deed:-
first, in payment of all costs, charges, expenses and liabilities properly
incurred by the Trustee including remuneration payable to the Trustee) in
carrying out its functions under this Trust Deed;
secondly, in payment of any principal and interest and all other sums owing
in respect of the Notes and the Coupons pari passu and rateably; and
thirdly, in payment of the balance (if any) to the Company for itself.
Without prejudice to this Clause 6, if the Trustee holds any moneys which
represent principal or interest or other sums in respect of Notes or
Coupons which have become void or in respect of which claims have become
prescribed under Condition 12, the Trustee will hold such moneys upon the
above trusts.
7 Covenant to comply with provisions
(A) Compliance with this Trust Deed: Each of the Company and SSC hereby
covenants with the Trustee that it will comply with and perform and observe
all the provisions of this Trust Deed which are expressed to be binding on
it. The Conditions shall be binding on the Company, SSC, the Noteholders
and the Couponholders. The Trustee shall be entitled to enforce its rights
and the obligations of the Company under the Notes, the Coupons and the
Conditions and the same shall be deemed to be set out and contained in, and
shall form part of, this Trust Deed. The Schedules shall also form part of
this Trust Deed and have effect in the same manner as if herein set forth
(B) When Trustee required to act: The Trustee is hereby authorized and it
is declared that the Trustee shall be entitled to assume without enquiry
(in the absence of express written notice to the Trustee from the Company
or SSC, as the case may be, to the contrary) that the Company and SSC are
duly performing and observing all its obligations under, and all covenants
and provisions contained in this Trust Deed, the Notes and the Coupons and
on its part to be performed and observed. Notwithstanding knowledge by or
notice
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<PAGE> 16
to the Trustee of any breach of any such obligation, covenant or provision,
it shall be in the discretion of the Trustee whether or not to take any
action or proceedings to enforce the performance thereof and the Trustee
shall not be bound to enforce the same or any of the covenants or
provisions of these presents unless and until, in any of such cases (but
subject to Condition 13). the Trustee is directed to do so by an
Extraordinary Resolution or in writing by the holders of at least
one-quarter part in principal amount of the Notes for the time being
outstanding, and then only if the Trustee shall be indemnified to its
satisfaction against all actions, proceedings, costs, claims and demands to
which it may render itself liable and all costs, charges, damages and
expenses which it may incur by so doing.
8 Exchange
(A) Rights of exchange: The holder of each Note will have the right, subject to
the Conditions and in accordance with the provisions of Condition 8, to
exchange such Note into Shares, credited as fully paid and non-assessable.
(B) Adjustment of Exchange Price: Upon the happening of any event on which the
Exchange Price is to be adjusted in accordance with the Conditions, the
Exchange Price shall be adjusted in relation to subsequent exchanges of the
Notes as follows:
(i) If and whenever there shall be an alteration to the number of the
Shares as a result of consolidation, reclassification or subdivision
of the Shares, the Exchange Price shall be adjusted by multiplying the
Exchange Price in force immediately before such alteration by the
following fraction:-
A
-
B
where:
A is the number of Shares in issue immediately after such alteration;
and
B is the number of Shares in issue immediately before such alteration.
Such adjustment shall become effective on the date the alteration takes
effect.
(ii) If and whenever SSC shall issue any Shares credited as fully paid to
Shareholders by way of capitalization of profits or reserves
(including any share premium account and capital redemption reserve),
or may make any Stock Split the Exchange Price shall be adjusted by
multiplying the Exchange Price in force immediately before such issue
by the following fraction:-
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<PAGE> 17
A
-
B
where:
A is the aggregate nominal amount of the issued Shares immediately
before such issue; and
B is the aggregate nominal amount of the issued Shares immediately
after such issue.
Such adjustment shall become effective on the date of such issue.
(iii) If and whenever SSC shall issue Shares to Shareholders as a class by
way of rights, or shall issue or grant to Shareholders as a class by
way of rights securities (including options, warrants and other
rights) carrying rights to subscribe for or purchase any Shares, in
each case at a price per Share which is less than the Current Market
Price per Share on the dealing day last preceding the date on which
the terms of such issue or grant are publicly announced, the Exchange
Price shall be adjusted by multiplying the Exchange Price in force
immediately before such issue or grant by the following fraction:-
A + B
-----
A + C
where:
A is the number of Shares in issue immediately before such
announcement;
B is the number of Shares which the aggregate consideration receivable
for the Shares so issued, or for the maximum number of Shares to be
issued upon exercise in full of such rights, would purchase at such
Current Market Price per Share; and
C is the number of Shares so issued or such maximum number of Shares.
Such adjustment shall become effective on the date of such issue or grant.
(iv) If and whenever SSC shall issue any securities (other than Shares and
any securities, options, warrants or other rights referred to in
paragraph (iii) of this Clause 8(B)) to Shareholders as a class by
way of rights, or shall issue or grant to Shareholders as a class by
way of rights securities (including options, warrants and other
rights) carrying rights to subscribe for or purchase any
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<PAGE> 18
securities (other than Shares and any securities, options, warrants
or other rights referred to in such paragraph (iii)) or the
distribution by SSC of assets, cash or other property to Shareholders
(other than usual annual or interim dividends in cash), the Exchange
Price shall be adjusted by multiplying the Exchange Price in force
immediately before such issue or grant by the following fraction:-
A-B
---
A
where:
A is the Current Market Price per Share on the dealing day last
preceding, the date on which the terms of such issue or grant are
publicly announced; and
B is the fair market value on the date of such announcement, as
determine in good faith by a merchant bank in London of international
repute acting as an expert, appointed by SSC and approved in writing
by the Trustee or, in default of such appointment or in the absence of
such, approval, appointed by the Trustee, of the portion of the rights
attributable to one Share.
Such adjustment shall become effective on the date of such issue or grant.
(v) If and whenever SSC or (at the direction or request of or pursuant to
any arrangements with the Company or any Subsidiary), the Company, any
Subsidiary or any other company, person or entity (otherwise than as
mentioned in paragraph (iii) or (iv) of this Clause 8(B)) shall issue
or grant wholly for cash or for no consideration any securities (other
than the Notes but including options, warrants and other rights)
carrying rights of conversion into, or exchange or subscription for,
Shares, or securities which by their terms might be redesignated as
Shares or so as to carry rights of conversion into, or exchange or
subscription for Shares, where the consideration per Share receivable
upon exercise of such rights or upon such redesignation is less than
the Current Market Price per Share on the dealing day last preceding
the date on which the terms of such issue or grant are publicly
announced, the Exchange Price shall be adjusted by multiplying the
Exchange Price in force immediately before such issue or grant by the
following fraction:
A + B
-----
A + C
where:
A is the number of Shares in issue immediately before such issue or
grant;
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<PAGE> 19
B is the number of Shares which the aggregate consideration receivable
for the maximum number of Shams to be issued upon exercise in full of
such rights, or arising from such redesignation, would purchase at
such Current Market Price per Share; and
C is the maximum number of Shares to be issued upon exercise in full of
such rights at the initial conversion, exchange or subscription price
or rate or to arise upon such redesignation.
Such adjustment shall become effective on the date of such issue or grant.
(vi) If SSC (after consultation with the Trustee) or the Trustee
(after consultation with SSC determines that an adjustment should
be made to the Exchange Price as a result of one or more events
or circumstances not referred to in paragraphs (i) to (v) of this
Clause 8(B) (even if the relevant event or circumstance is
specifically excluded from the operation of those paragraphs or
any of them) SSC, shall, at its own expense and acting
reasonably, request the Auditors, acting as experts, to determine
as soon as practicable what adjustment (if any) to the Exchange
Price is fair and reasonable to take account of such event or
circumstance and the date on which such adjustment should take
effect, and upon such determination such adjustment (if any)
shall be made and shall take effect in accordance with such
determination, but so that an adjustment shall only be made
pursuant to this sub-paragraph (vi) if the Auditors are so
requested to make such a determination not more than 21 days
after the occurrence of the relevant event or circumstance.
Provided that where the circumstances giving rise to any adjustment
pursuant to this Clause 8(B) have already resulted or will result in
an adjustment to the Exchange Price or where the circumstances giving
rise to any adjustment arise by virtue of any other circumstances
which have already given or will give rise to an adjustment to the
Exchange Price, such modification (if any) shall be made to the
operation of the provisions of this Clause 8(B) as may be advised by
the Auditors, acting as experts, to be in their opinion appropriate in
order to give the intended effect.
(C) Calculation of consideration receivable: For the purpose of any
calculation of the consideration receivable pursuant to paragraphs
(iii) and (v) of Clause 8(B), the following provisions shall apply:-
(i) the aggregate consideration receivable for Shares issued for cash
shall be the amount of such cash received or receivable by SSC,
provided that in no case shall any deduction be made for any
commission or any expenses paid or incurred by SSC for any
underwriting of the issue or otherwise in connection therewith;
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<PAGE> 20
(ii) the aggregate consideration receivable for Shares to be issued
upon the exercise of rights of exchange or subscription shall be
the consideration received or receivable by SSC which is
attributed by SSC to such rights or, if no part of such
consideration is so attributed or the Trustee so requires by
notice in writing to SSC, the fair market value of such rights
as at the date on which the terms of issue of the relevant
securities (including options, warrants and other rights) are
publicly announced (as determined in good faith by an
independent merchant bank in London of international repute,
acting as an expert, appointed by SSC, and approved in writing
by the Trustee or, in default of such appointment or in the
absence of such approval, appointed by the Trustee) plus the
additional consideration to be received by SSC as a consequence
of such exercise, such additional consideration to be the amount
(including any premium) to be treated by SSC as paid up on the
Shares or other securities arising from such exercise (the
consideration in all such cases to be determined subject to the
proviso in paragraph (i) of this Clause 8(C); and
(iii) the consideration per Share receivable upon the exercise of
rights, exchange or subscription shall be the aggregate
consideration referred to in paragraph (ii) of this Clause 8(C),
converted into Dollars if such consideration is expressed in a
currency other than Dollars at such rate of exchange as may be
determined in good faith by an independent merchant bank in
London of international repute, acting as an expert, appointed
by SSC and approved in writing by the Trustee or, in default of
such appointment or in the absence of such approval, appointed
by the Trustee, to be the spot rate ruling at the close of
business on the date on which the terms of issue of the relevant
securities (including options, warrants and other rights) are
publicly announced, divided by the number of Shares to be issued
upon such exercise at the initial conversion, exchange or
subscription price or rate.
(D) Post-record date adjustments: If the Exchange Date in relation to any
Note shall be after the record date for any such issue, grant or offer
as is mentioned in Clause 8(B), but before the relevant adjustment
becomes effective under Clause 8(B), SSC shall (conditional upon such
adjustment becoming effective) procure that there shall be issued to
the exchanging Noteholder or in accordance with the instructions
contained in the Exchange Notice (subject to any applicable exchange
control or other laws or other regulations) such additional number of
Shares as, together with the Shares issued or to be issued on exchange
of the relevant Note, is equal to the number of Shares which would
have been required to be issued on exchange of such Note if the
relevant adjustment (more particularly referred to in such paragraphs)
to the Exchange Price had in fact been made and become effective
immediately after the relevant record date. Such additional Shares
will be allotted as at, and within one month after, the relevant
Exchange Date or of the date of issue of Shares if adjustment results
from the issue of Shares and certificates for such Shares (if the
Shares are in certificated form as defined in Clause 10) will be
despatched within such period of one month.
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(E) No adjustment
Notwithstanding the provisions of this clause 8 the Exchange Price will
not, be (i) adjusted by reason of the Merger other than pursuant to the
provisions of Condition 8(A)(iv) or (ii) reduced as a result of any such
adjustment, and the Company covenants not to take any action, if, after
giving effect thereto, the Exchange Price would be reduced to such an
extent that, under applicable law then in effect, Notes may not be
exchanged at such reduced Exchange Price for legally issued, fully paid and
non-assessable Shares. No adjustment will be made where such adjustment
would be less than 5 percent of the Exchange Price then in effect. Any
adjustment not so made will be carried forward and taken into account in
any subsequent adjustment. On any adjustment, the resultant Exchange Price,
if not an integral multiple of one cent shall be rounded down to the
nearest one cent.
(F) The Company shall give sufficient notice to the Trustee to enable it to
comply with its obligation under Condition 8(A)(iv) to give notice to the
Noteholders of any reset of the Exchange Price pursuant to Condition 17.
9 Exchange on redemption and mandatory exchange
(A) (i) Exchange by Trustee: The Trustee may, at its absolute discretion and
without any responsibility for any loss occasioned thereby, within the
period commencing on the date six Business Days prior to, and ending
at the close of business in New York prior to the date fixed for
redemption from time to time of any of the Notes (including any
redemption under Condition 9(A), (B) or (C) but subject as aforesaid),
elect by notice in writing to the Company and SSC to exchange the
aggregate number of Notes due for redemption on such date fixed for
redemption and in respect of which Exchange Rights have not been
exercised by Noteholders ("Unexercised Notes") into Shares at the
Exchange Price applicable at such redemption date if all necessary
consents (if any) have been obtained and the Trustee is satisfied or
is advised by an independent merchant bank that the net proceeds of an
immediate sale of the Shares arising from such exchange, disregarding
any liability (other than a liability of the Trustee) to taxation or
the payment of any capital, stamp, issue or registration duties
consequent thereon, would be likely to exceed by 5 percent or more the
amount of redemption moneys and interest which would otherwise be
payable in respect of interest accrued since the Interest Payment Date
last immediately preceding such redemption date or, if such date falls
on or before the first Interest Payment Date, since the Closing Date
in respect of such Unexercised Notes.
(ii) Allotment of Shares to Trustee: SSC undertakes to allot, within 10
Business Days after the relevant date fixed for redemption, to the
Trustee on behalf of the holders of the Unexercised Notes so exchanged
as of the relevant redemption
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<PAGE> 22
date the Shares required to be allotted pursuant to Clause 9(A) and
to deliver, within 15 Business Days after such Shares, in New York to
the Trustee.
(iii) Sale of Shares by Trustee: The Trustee shall, subject to applicable
law, on behalf of the holders of the Unexercised Notes, arrange for
the sale of the Shares issued on such exchange of the Unexercised
Notes as soon as practicable and (subject to any necessary consents
being obtained and to the deduction by the Trustee of any amount
which it determines to be payable in respect of its liability to
taxation and the payment of any capital, stamp, issue or registration
duties (if any) and any costs incurred by the Trustee in connection
with that allotment and sale thereof) the net proceeds of sale
together with accrued interest payable under Condition 8(B)(iv) (if
any) in respect of such Unexercised Notes (if any) shall be held by
the Trustee and distributed rateably to the holders of such
Unexercised Notes against due presentation of such Unexercised Notes
in accordance with Condition 7. The amount of such net proceeds of
sale shall be treated for all purposes as the full amount due by the
Company in respect of the Unexercised Notes (for this purpose
treating any Coupon expressed to be payable on the date fixed for
redemption of such Notes as an unmatured Coupon).
(B) (i) In the event the Company elects to exercise its right of mandatory
exchange under Condition 8(E)(i) the Company shall, not less than 30
and not more than 60 calendar days prior to the Mandatory Exchange
Date, cause written notice of the Mandatory Exchange Date to be given
to the Trustee, the Paying Agents, the Exchange Agents and the
holders of the Notes (in accordance with Condition 17 (such notice to
include a statement of the consequences of failure on the part of the
Noteholders to perform the obligations specified in Condition 8(E)).
Following such notice, each of the Noteholders will be required on or
before the Mandatory Exchange Date to deliver or procure delivery of
its Notes together with a duly completed Exchange Notice to the
specified office of any Exchange Agent, during its usual business
hours for such purposes and perform together with the Company and
SSC, the obligations applicable to it on exchange specified in
Condition 8.
(ii) If any Noteholder with respect to whose Notes mandatory exchange
(pursuant to Condition 8) is to take place shall fail to perform its
obligations specified in Condition 8 or shall have a registered
address in any territory where, in the absence of any registration
statement or other special formalities or legal requirements, the
issue, allotment, transfer or delivery of the Shares arising on
mandatory exchange in the reasonable opinion of the Trustee, is or
could be
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unlawful or impracticable, subject to applicable law, the Trustee
shall make arrangements for the sale of such Shares to a third party
at the best consideration reasonably obtainable by the Trustee and
pay to such Noteholder the consideration received by the Trustee in
respect of such Shares (after any deduction required to reimburse any
reasonable and proper expenses incurred in arranging any such sale or
any taxes payable in connection therewith arising solely as a result
of the Noteholder's failure to perform its obligations under
Condition 8(E)).
10 Covenants relating to exchange
(A) SSC hereby undertakes to and covenants with the Trustee that so long as any
Exchange Right remain exercisable, it will, save with the approval of an
Extraordinary Resolution or with the prior written approval of the Trustee
where, in the Trustee's opinion, it is not materially prejudicial to the
interests of the Noteholders to give such approval:-
(i) Issue and ensure sufficient share capital: issue Shares to
Noteholders on the exercise of Exchange Rights in accordance with the
Conditions and at all times keep available for issue free from
pre-emptive rights out of its authorized but unissued capital such
number of Shares as would enable the Exchange Rights and all other
rights of subscription and exchange for and exchange into Shares to
be satisfied in full;
(ii) Limited modification of rights: not in any way modify the rights
attaching to the Shares with respect to voting, dividends or
liquidation nor issue any other class of equity share capital
carrying any rights which are more favorable than the rights
attaching to the Shares;
(iii) Restricted action: not make any issue, grant or distribution or take
any other action if the effect thereof would be that, on the exchange
of Notes, Shares would have to be issued at a discount or otherwise
could not, under any applicable law then in effect, be legally issued
as fully paid;
(iv) Notice of adjustment to Exchange Price: simultaneously with the
announcement of the terms of any issue or grant referred to in
paragraph (i), (ii) or (iii) or (iv) of Clause 8(B) and the
announcement of any proposed modification referred to in paragraph
(iv) of Clause 8(B) give notice to the Noteholders in accordance with
Condition 17 advising them of the date on which the relevant
adjustment to the Exchange Price is likely to become effective and of
the effect of exercising their rights of exchange pending such date;
(v) Officers' certificate on adjustment of Exchange Price: upon the
happening of an event as a result of which the Exchange Price will be
adjusted pursuant to this
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Trust Deed as soon as reasonably practicable deliver to the Trustee
a certificate signed by two duly authorized officers of SSC on
behalf of SSC setting forth brief particulars of the event, the
adjusted. Exchange Price, the date on which such adjustment takes
effect and such other particulars and information as the Trustee may
reasonably require;
(vi) Consolidation: in the event that SSC consolidates with or merges
into any Person or sells, leases, conveys, transfers or otherwise
disposes of its properties or assets as an entirety or substantially
as an entirety to any Person, and as a result of such transaction
the Shares are no longer traded on the NYSE or an Alternative Stock
Exchange, then subject to compliance with applicable law, each
Noteholder may require the Company to redeem his or its outstanding
Notes at 100 percent of the principal amount, plus accrued and
unpaid interest thereon;
(vii) No Liens over shares in Company: will not create or permit to
subsist any Lien relating to or over the shares of the Company, held
or beneficially owned by SSC;
(viii) File Registration Statement: to the extent SSC and its counsel
determine it is required because an Exemption from registration is
not available, file with the Securities and Exchange Commission on
or before June 30, 1996, and keep effective a Registration Statement
in such form as SSC determines to be appropriate in respect of the
registration of the Shares to be issued pursuant to the Exchange
Rights to U.S. persons and any subsequent resale of such Shares to
U.S. persons; and
(ix) Maintain Listing:
(a) to maintain a listing for all the issued Shares on the NYSE, it
being understand that if SSC is unable to obtain or maintain
such listing of Shares, it will obtain and maintain a listing
for all the Shares issued on the exercise of the Exchange
Rights on any other stock exchange or authorized for quotation
on NASDAQ or by the National Quotation Bureau Incorporated
(each an "Alternative Stock Exchange") as SSC may from time to
time (with the written consent of the Trustee) determine and
will forthwith give notice to the Noteholders in accordance
with Condition 17 of the listing, de-listing or quotation or
lack of quotation of the Shares (as a class) by any such
Alternative Stock Exchange; and
(b) procure that the Company maintains a listing of the Notes on
the Luxembourg Stock Exchange.
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(B) Undertakings by the Company -
Whilst any Exchange Right remains exercisable, the Company will, save
with the approval of an Extraordinary Resolution or with the approval
of the Trustee where, in the Trustee's opinion, it is not materially
prejudicial to the interests of the Noteholders to give such
approval:
(i) not incur, create, assume or guarantee any Indebtedness other than
the Notes;
(ii) not create or permit to subsist any Lien or other encumbrance or
security interest over or otherwise dispose, sell or transfer any of
its assets, revenues, undertaking or property including, without
limitation, its interest in the Sunshine Mine;
(iii) maintain a listing for the Notes on the Luxembourg Stock Exchange;
and
(iv) in the event that either an Additional Amount or Shares equal thereto
are payable pursuant to Condition 6(B), notify the Trustee of the
Additional Amount payable or the Shares to be issued no later than
the 2 Business Days after the Anniversary Date (as defined in
Condition 6(B)).
11 Covenants
(A) So long as any Note is outstanding, the Company will and SSC will procure
that the Company will:-
(i) Books of account: keep, and procure that its Principal Subsidiaries
keep, proper books of account and, at any time after the occurrence
of an Event of Default or if the Trustee has reasonable grounds to
believe that any such event has occurred, so far as permitted by
applicable law, allow, and procure that each of its Principal
Subsidiaries will allow, the Trustee and anyone appointed by it to
whom the Company and/or the relevant Principal Subsidiary has no
reasonable objection, access to the books of account of the Company
and/or the relevant Principal Subsidiary respectively at all
reasonable times during normal business hours, provided that nothing
in this Clause 11(A) shall oblige the Company or any of its Principal
Subsidiaries to disclose confidential information concerning
customers;
(ii) Notice of Events of Default: notify the Trustee in writing
immediately upon becoming aware of the occurrence of any Event of
Default;
(iii) Information: so far as permitted by applicable law, give to the
Trustee such information as it reasonably requires for the
performance of its functions;
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(iv) Financial statements etc.: send to the Trustee four copies of every
consolidated balance sheet, profit and loss account, report and
notice of general meeting and every other document issued or sent to
- its shareholders, stockholders or creditors generally together
with any of the foregoing, and every document issued or sent to
holders of listed securities other than its shareholders (including
the Noteholders) or its creditors generally and in its or their
capacity as such, at the time of issue thereof or as soon is
practical thereafter;
(v) Officers' certificate concerning Events of Default: send to the
Trustee, within 14 days after its annual audited consolidated
balance sheet and profit and loss account being made available to
its members, and also within 14 days after any request by the
Trustee a certificate signed by two duly authorized officers of the
Company on behalf of the Company to the effect that, having made all
reasonable enquiries, to the best of the knowledge, information and
belief of the Company as at a date (the "Certification Date") being
not more than five days before the date of the certificate no Event
of Default had occurred since the date of this Trust Deed or the
Certification Date of the last such certificate (if any) or, if such
an event had occurred, giving details of it together with a list of
Subsidiaries which are Principal Subsidiaries of the Company and
details of its Consolidated Net Worth as at the date of such
certificate;
(vi) Notices to Noteholders: send to the Trustee before the date of
publication a copy of the form of each notice to the Noteholders to
be published in accordance with Condition 17 and upon publication
two copies of each notice so published (such notice to be in a form
approved in writing by the Trustee);
(vii) Further acts: so far as permitted by applicable law, do all such
further things as may be necessary in the reasonable opinion of the
Trustee having regard to the interests of Noteholders to give effect
to this Trust Deed;
(viii) Notice of late payment: forthwith upon request by the Trustee give
notice to the Noteholders of any unconditional payment to the
Principal Paying, Exchange and Transfer Agent or the Trustee of any
sum due in respect of the Notes or Coupons made after the due date
for such payment;
(ix) Change in Agents: give not less than 14 days' prior notice to the
Noteholders of any future appointment or any resignation or removal
of any Agent or of any change by any Agent of its specified office
or, if later, notice as soon as reasonably practicable after
becoming aware thereof and not make any such appointment or removal
without the written approval of the Trustee;
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(x) Notes held by the Company etc.: send to the Trustee as soon as
practicable after being so requested by the Trustee a certificate of
the Company signed by any two duly authorized officers on behalf of
the Company setting out the total number of Notes which, at the date
of such certificate, were held by or on behalf of the Company or its
Subsidiaries and which had not been cancelled; and
(xi) Early redemption: give prior notice to the Trustee of any proposed
redemption pursuant to Condition 9(B) or 9(C), make drawings (if
appropriate) and redeem Notes accordingly.
(B) Covenants by SSC: SSC hereby covenants with the Trustee in the terms of
Clauses 11.1(i), (ii), (iii), (iv), (v) and (vii) as if references to the
Company therein were references to SSC.
12 Remuneration and indemnification of the Trustee
(A) Normal remuneration: So long as any Note is Outstanding the Company
(failing which SSC will pay to the Trustee by way of remuneration for its
services as Trustee such fees as have been previously provided in writing
to the Company or as may from time to time be agreed between them. Such
remuneration will accrue from day to day from the date of this deed and
shall be payable on such dates as may be agreed between the Company and the
Trustee.
(B) Extra remuneration: At any time after the occurrence of an Event of Default
or if the Trustee finds it expedient in the interests of Noteholders or
necessary, or is requested by the Company or SSC, to undertake duties which
the Trustee and the Company or SSC, as the case may be, agree to be of an
exceptional nature or otherwise outside the scope of the normal duties of
the Trustee under this Trust Deed, the Company (failing which SSC will pay
such additional remuneration as may be agreed between them or, failing
agreement as to any of the matters in this Clause 12(B) (or as to such sums
referred to in Clause 12(A)), as determined by a merchant bank in London of
international repute, acting as an expert, selected by the Trustee and
approved by the Company or, in the absence of such approval, nominated by
the President for the time being of The Law Society of England and Wales,
the expenses involved in such selection and approval and the fee of such
merchant bank being shared equally between the Trustee and the Company. The
determination of such merchant bank will, in the absence of manifest error,
be conclusive and binding on the Company, the Trustee, SSC, the Noteholders
and the Couponholders.
(C) Expenses: The Company (failing which SSC) will also pay or discharge all
reasonable costs, charges, liabilities and expenses incurred by the Trustee
in relation to the preparation and execution of this Trust Deed and the
carrying out of its functions under this Trust Deed including, but not
limited to, legal and traveling expenses and any
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stamp, registration, documentary or other taxes or duties paid by the
Trustee in connection with any legal proceedings brought by the Trustee
against the Company for enforcing any obligation under this Trust Deed, the
Notes or the Coupons.
(D) Payment of expenses: all such reasonable costs, charges, liabilities and
expenses incurred and payments made by the Trustee reasonably necessary in
relation to the preparation and execution of this Trust Deed and in the
lawful performance of its functions under this Trust Deed will be payable
or reimbursable by the Company (failing which SSC) within 14 days of demand
by the Trustee and:-
(1) in the case of payments made by the Trustee prior to such demand will
(if not paid within 14 days of such demand) carry interest from and
including the date on which the demand is made at the rate of two
percent. per annum over the base rate of Marine Midland Bank for the
time being; and
(2) in all other cases will carry interest at such rate from and including
the thirtieth day after the date on which the demand is made or (where
the demand properly specifies that payment is to be made on an earlier
date) from and including such earlier date.
(E) Indemnity: The Company (failing which SSC) will, subject to Clause 14,
indemnify the Trustee in respect of all liabilities and expenses properly
incurred by it in the proper fulfilment of its obligations under this Trust
Deed or by anyone appointed by it or to whom any of its functions may be
delegated by it in the carrying out of its functions in the fulfilment of
its obligations under this Trust Deed and against any loss, liability,
cost, claim, action, demand or expense (including, but not limited to, all
reasonable costs, charges and expenses paid or properly incurred in
disputing or defending any of the foregoing) which any of them may properly
incur or which may be made against any of them arising out of or in
relation to or in connection with its appointment or the exercise of its
functions, provided that such indemnity shall not extend to any such loss,
liability, cost, claim, action, demand or expense incurred or suffered by
any agent or delegate appointed by the Trustee in connection with the
performance of its functions hereunder in the event of gross negligence or
wilful default of such agent or delegate.
(F) Provisions continuing: The provisions of Clauses 12(C), 12(D) and 12(E)
will continue in full and effect in relation to the Trustee even if it may
have ceased to be Trustee.
13 Provisions supplemental to the Trustee Act 1925
By way of supplement to the Trustee Act 1925 and subject to Clause 14 it is
expressly declared as follows:
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(A) Advice: In performing its duties hereunder, the Trustee may act on the
opinion or advice of, or information obtained from, any expert and will not
be responsible to anyone for any loss occasioned by so acting. Any such
opinion, advice or information may be sent or obtained by letter, telex or
facsimile transmission and the Trustee will not be liable to anyone for
acting in good faith on any opinion, advice or information purporting to be
conveyed by such means even if it contains some error or is not authentic.
(B) Trustee to assume due performance: The Trustee need not notify anyone of
the execution of this Trust Deed or do anything to ascertain whether any
Event of Default has occurred and, until it has actual written knowledge to
the contrary, the Trustee may assume that no such event has occurred.
(C) Resolutions of Noteholders: The Trustee will not be responsible for having
acted in good faith upon a resolution purporting to have been passed at a
meeting of Noteholders in respect of which minutes have been made and
signed even though it may later be found that there was a defect in the
constitution of such meeting or the passing of such resolution or that such
resolution was not valid or binding upon the Noteholders or the
Couponholders.
(D) Officers' certificate: The Trustee may call for and may accept as
sufficient evidence of any fact or matter or of the expediency of any act a
certificate signed by any two authorized officers of the Company or SSC on
behalf of the Company or SSC (including any calculation of the Consolidated
Net Worth of SSC) as to any fact or matter upon which the Trustee may, in
the exercise of any of its functions, require to be satisfied or to have
information to the effect that, in the opinion of the persons so
certifying, any particular act is expedient and the Trustee need not call
for further evidence and will not be responsible for any loss that may be
occasioned by it failing to do so or by it acting or not acting on any such
certificate.
(E) Deposit of documents: The Trustee may deposit this Trust Deed and any other
documents in any part of the world with any banker or banking company or
entity whose business includes undertaking the safe custody of documents or
with any lawyer or firm of lawyers believed by it to be of good repute and
may pay all sums to be paid on account of or in respect of any such
deposit, provided that, unless in the opinion of the Trustee it is required
in connection with the enforcement of any obligation of the Company or SSC
under this Trust Deed, the Notes or the Coupons or otherwise in connection
with the performance of the duties of the Trustee hereunder or thereunder
or unless it comprises the holding or placing of such documents in the
United Kingdom, the Trustee may not take any such action if a liability to
stamp duty or other duties or taxes would thereby arise.
(F) Discretion of Trustee: Save as expressly provided in this Trust Deed, the
Trustee will have absolute and uncontrolled discretion as to the exercise
of its functions and will not be
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responsible for any loss, liability, cost, claim, action, demand, expenses
or inconvenience which may result from their exercise or non-exercise.
(G) Delegation: Whenever it considers it expedient in the best interests of the
Noteholders the Trustee may delegate to any person and on any terms
(including power to sub-delegate) all or any of its functions including to
any agent employed and paid by it. If the Trustee exercises reasonable care
in the selection of such delegate, it will not be under any obligation to
supervise such delegate or be responsible for any loss, liability, cost,
claim, action, demand or expense incurred by reason of any misconduct or
default by any such delegate or sub-delegate. Notwithstanding the general
power of delegation in this Clause 13(G) the Trustee may not delegate the
right to give any notice under Condition 13 that the Notes are immediately
due and repayable unless prior to such delegation the Trustee provides to
the Company and SSC confirmation in writing that the Trustee has been
advised by its legal advisers that it should delegate that right (with or
without any other rights, trusts, powers, authorities and discretions) to
another person or fluctuating body of persons because of the conflict of
interest or possible conflict of interest and/or other similar
circumstances which the Trustee might face, or be subjected to, as the
Trustee of this Trust Deed if it were not to delegate that right.
(H) Forged Notes: The Trustee will not be liable to the Company, SSC or any
Noteholder or Couponholder by reason of having accepted as valid or not
having rejected any Note or Coupon purporting to be such and later found to
be forged or not authentic.
(I) Confidentiality: Unless ordered to do so by a court of competent
jurisdiction, the Trustee shall not be required to disclose to any
Noteholder or Couponholder any confidential financial, price sensitive or
other information made available to the Trustee by the Company or SSC and
no Noteholder or Couponholder shall be entitled to take any action to
obtain from the Trustee any such information.
(J) Determinations conclusive: As between itself and the Noteholders and
Couponholders the Trustee may determine all questions and doubts arising in
relation to any of the provisions of this Trust Deed. Every such
determination, whether made upon such a question actually raised or implied
in the acts or proceedings of the Trustee, will be conclusive in the
absence of manifest error and shall bind the Trustee, the Noteholders and
the Couponholders.
(K) Currency conversion: Subject as provided in this Trust Deed, where it is
necessary or desirable to convert any sum from one currency to another, it
will (unless otherwise provided hereby or required by law) be converted at
such rate or rates, in accordance with such method and as at such date as
may reasonably be specified by the Trustee but
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having regard to current rates of exchange, if available. Any rate, method
and date so specified will be binding on the Company, SSC, the Noteholders
and the Couponholders.
(L) Events of default: The Trustee may determine whether or not a default in
the performance or observance by the Company or SSC of any obligation is in
its opinion capable of remedy and/or whether or not any event is in its
opinion materially prejudicial to the interests of the Noteholders or has a
material adverse effect on the Company's or SSC's ability to perform or
comply with any of its obligations under this Trust Deed, the Notes or the
Coupons. Any such determination will be conclusive and binding upon the
Company, SSC, the Noteholders and the Couponholders.
(M) Payment for and delivery of Notes: The Trustee will not be responsible for
the receipt or application by the Company of the proceeds of the issue of
the Notes, the exchange of the Global Bearer Note for the definitive Notes
or the delivery of definitive Notes to the persons entitled to them.
(N) Notes held by the Company etc.: In the absence of actual knowledge in
writing to the contrary, the Trustee may assume without enquiry that no
Notes are for the time being held by or on behalf of the Company, SSC or
any of its Subsidiaries.
(O) Interests of Noteholders: In connection with the exercise of its powers,
trusts, authorities or discretions (including, but not limited to, those in
relation to any proposed modification, waiver or authorization of any
breach or proposed breach of any of the Conditions or any of the provisions
of this Trust Deed or any proposed substitution in accordance with Clause
17(B) or 17(C) or any modification made pursuant to Clause 17(A)), the
Trustee shall have regard to the interests of the Noteholders as a class
and in particular, but without limitation, shall not have regard to the
consequences of such exercise for individual Noteholders or Couponholders
resulting from their being for any purpose domiciled or resident in, or
otherwise connected with, or subject to the jurisdiction of, any particular
territory and the Trustee shall not be entitled to require, nor shall any
Noteholder or Couponholder be entitled to claim from the Company, SSC or
the Trustee or any other person, any indemnification or payment of any tax
arising in consequence of any such exercise upon individual Noteholders or
Couponholders except to the extent provided for in Condition 10 and/or in
any undertakings given in addition thereto or in substitution therefor
pursuant to this Trust Deed.
(P) No responsibility for values etc.: The Trustee shall not at any time be
under any duty or responsibility to any Noteholders to determine whether
any facts exist which may require any adjustment to the Exchange Price or
with respect to the nature or extent of any such adjustment when made, or
with respect to the method employed, or in this Trust Deed provided to be
employed, in making the same. The Trustee shall not at any time be under
any duty or responsibility in respect of the validity or value (or the kind
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or amount) of any Shares or of any other securities, property or cash,
which may at any time be made available or delivered upon the conversion of
any Note, and it makes no representation with respect thereto. The Trustee
shall not be responsible for any failure of the Company to make available
or deliver any Shares or share certificates or other securities or property
or make any payment upon the exercise of the Exchange Right in respect of
any Note or of the Company to comply with any of the provisions contained
in this Trust Deed.
14 Trustee liable for gross negligence
Nothing in this Trust Deed shall in any case in which the Trustee has
failed to show the degree of care and diligence required of it as trustee
having regard to the provisions of this Trust Deed relieve or indemnify it
from or against any liability which by virtue of any rule of law would
otherwise attach to it in respect of any gross negligence, bad faith,
default, breach of duty or breach of trust of which it may be liable.
15 Waiver and proof of default
(A) Waiver: The Trustee may agree, without the consent of the Noteholders or
Couponholders to any modification (subject to certain exceptions) of, or to
the waiver or authorization of any breach or proposed breach of, any of the
Conditions or any of the provisions of this Trust Deed which is not, in the
opinion of the Trustee, materially prejudicial to the interests of the
Noteholders or Couponholders or to any modification which is of a formal,
minor or technical nature or to correct a manifest error.
(B) Proof of default: If it is proved that, as regards any specified Note or
Coupon the Company made default in paying any sum due to the relevant
Noteholders or Couponholder, such proof will (unless the contrary be
proved) be sufficient evidence that the same default has been made as
regards all other Notes or (as the case may be) Coupons which are then
payable.
16 Trustee not precluded from entering into contracts
Neither the Trustee nor any director or officer of a corporation acting as
a Trustee, whether acting for itself or in any other capacity, will be
precluded from becoming the owner of, or acquiring any interest in, or
holding, or disposing of, any Note or Coupon or any shares or securities of
the Company or any of its Subsidiaries, holding or associated companies
with the same rights as it would have had if the Trustee were not Trustee
or from entering into or being interested in any contracts or transactions
with the Company or any of its Subsidiaries, holding or associated
companies or from acting on, or as depositary or agent for, any committee
or body of holders of any securities of the
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Company or any of its Subsidiaries, holding or associated companies and
will not be liable to account for any profit.
17 Modification and substitution
(A) Modification: The Trustee, the Company and SSC may mutually agree. without
the consent of the Noteholders or Couponholders, to any modification to the
Conditions, the Notes, the Coupons or any other provisions of this Trust
Deed which in its opinion is of a formal, minor or technical nature, or
which is made to correct a manifest error. The Trustee, the Company and SSC
may also mutually agree to any modification to the Conditions, the Notes,
the Coupons or any other provisions of this Trust Deed which is in the
opinion of the Trustee not materially prejudicial to the interests of the
Noteholders, but such power does not extend to any such modification as is
mentioned in the proviso to paragraph 19 of Schedule 3. Any such
modification permitted by this Clause 17(A) shall be binding upon the
Noteholders and Couponholders.
(B) Substitution:
(1) Substitution by Substituted Obligor: The Trustee may, without the
consent of the Noteholders or Couponholders, agree to the substitution
of a Subsidiary or a holding company of the Company or any Subsidiary
of such holding company (the "Substituted Obligor") in place of the
Company (or of any previously substituted company under this Clause
17(B)) as the principal debtor under this Trust Deed, the Notes and
the Coupons, provided that:-
(a) a trust deed is executed or some other form of undertaking is
given by the Substituted Obligor to the Trustee, in form and
manner reasonably satisfactory to the Trustee, agreeing to be
bound by the terms of this Trust Deed, the Notes and the Coupons,
including the Exchange Rights, with any consequential amendments
which the Trustee may reasonably deem appropriate as fully as if
the Substituted Obligor had been named in this Trust Deed and on
the Notes and Coupons as the principal debtor in place of the
Company;
(b) where the Substituted Obligor is subject generally to the taxing
jurisdiction of any territory or any authority of or in that
territory having power to tax (the "Substituted Territory") other
than the taxing jurisdiction of any territory to which (or to any
such authority of or in which) the Company is subject generally
(the "Company's Territory"), the Substituted Obligor will (unless
the Trustee otherwise agrees) give to the Trustee an undertaking
in form and manner reasonably satisfactory to the Trustee in
terms corresponding to the terms of Condition 10 with the
substitution for the references in that Condition to the
Company's Territory of references to the Substituted Territory
and in such event the Trust Deed, the Notes and the Coupons will
be read accordingly;
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(c) if any two authorized officers of the Substituted Obligor certify
on behalf of the Substituted Obligor that it will be solvent
immediately after such substitution, the Trustee need not have
regard to the financial condition, profits or prospects of the
Substituted Obligor or compare them with those of the Company;
(d) the Company and the Substituted Obligor comply with such other
requirements, as the Trustee may direct in the interests of the
Noteholders; and
(e) any other documentation requested by the Trustee, including an
opinion of counsel which it deems appropriate.
In the case of any such substitution, the Trustee may agree, without
the consent of the Noteholders and the Couponholders, to a change of
law governing the Notes, the Coupons and/or the Trust Deed provided
that such change would not, in the opinion of the Trustee, be
materially prejudicial to the interests of the Noteholders.
(2) Release of substituted company: Any such agreement by the Trustee
pursuant to this Clause 17(B) will, if so expressed, operate to
release the Company (or any such previously substituted company under
this Clause 17(B)) from any or all of its obligations under this Trust
Deed, the Notes and the Coupons. Not later than 14 days after the
execution of any such documents and after compliance with such
requirements, notice of the substitution will be given by the Company
to the Noteholders.
(3) Completion of substitution: Upon the execution of such documents and
compliance with such requirements, the Substituted Obligor will be
deemed to be named in this Trust Deed and on the Notes and Coupons as
the principal debtor in place of the Company (or of any previously
substituted company under this Clause 17(B)) and this Trust Deed, the
Notes and the Coupons will be deemed to be modified in such manner as
shall be necessary to give effect to the substitution.
(C) (a) The Trustee may, without the consent of the Noteholders or the
Couponholders, but so as to bind the Noteholders and the
Couponholders, agree with the Company and SSC to the substitution of
any Subsidiary or holding company of SSC or any subsidiary of such
holding company (the "Substituted Guarantor") in place of SSC (or of
any previous substitute under this Clause 17(B)) as the
31
<PAGE> 35
guarantor of the obligations of the Company (or any previous
substitute under Clause 17(C) under these presents guaranteed by SSC
(or if any previous substitute under this Clause 17(C) under these
presents, provided that:
(i) the Trustee is satisfied that such substitution is not
materially prejudicial to the interests of the Noteholders;
(ii) a trust deed is executed or some other form of undertaking is
given by the Substituted Guarantor to the Trustee, in a form
and manner satisfactory to the Trustee, agreeing to be bound by
the provisions of this Trust Deed, the Notes and the Coupons
binding on SSC with any consequential amendments which the
Trustee may deem appropriate as fully as if the Substituted
Guarantor had been named in these presents as the guarantor of
such obligations of the Company (or of any previous substitute
under Clause 17(B)) in place of SSC (or of any previous
substitute under this Clause 17(C);
(iii) where the Substituted Guarantor is subject generally to the
taxing jurisdiction of any territory or any authority of or in
that territory having power to tax (for the purpose of this
Clause 17(C), the "SUBSTITUTED TERRITORY") other than the
taxing jurisdiction of any territory to which (or to any
authority of or in which) SSC (or any previous substitute under
this Clause 17(C) is subject generally (for the purpose of this
Clause 17(C), the "EXISTING TERRITORY"), the Substituted
Guarantor will (unless the Trustee otherwise agrees) give to
the Trustee an undertaking in form and manner satisfactory to
the Trustee in term corresponding to the terms of Condition 10
with the substitution for the references in that Condition to
the Existing Territory of references to the Substituted
Territory and in such event this Trust Deed, the Notes and the
Coupons will be read accordingly;
(iv) if any two authorized officers of the Substituted Guarantor
certify on behalf of the Substituted Guarantor to the Trustee
that it will be solvent immediately after such substitution,
the Trustee need not have regard to the financial condition,
profits or prospects of the Substituted Guarantor or compare
them with those of SSC (or of any previous substitute under
this Clause 17(C)); and
(v) the Company (and any previous substitute under Clause 17(B)),
SSC and the Substituted Guarantor (and any previous substitute
under this Clause 17(C)) comply with such other requirements
as the Trustee may direct in the interests of the Noteholders.
32
<PAGE> 36
In the case of such substitution, the Trustee may agree,
without the consent of the Noteholders or the Couponholders, to
a change of law governing these presents provided that such
change would not, in the opinion of the Trustee, be materially
prejudicial to the interests of the Noteholders. Any such
substitution as is permitted by this Clause 17(C) shall be
binding upon the Noteholders and the Couponholders.
(b) Release of existing obligor: Any such agreement by the Trustee
pursuant to this Clause 17(C) will, if so expressed, operate to
release SSC (or any such previous substitute) from any or all of its
obligations under this Trust Deed save with respect to its obligations
relating to the exchange of Notes for Shares. Not later than 14 days
after the execution of any such documents and after compliance with
such requirements, notice of the substitution will be given by the
Substituted Guarantor to the Noteholders in accordance with Condition
17 as soon as practicable.
(c) Completion of substitution: Upon the execution of such documents and
compliance with such requirements, the Substituted Guarantor will be
deemed to be named in this Trust Deed as the guarantor of the
obligations aforesaid of the Company (or of any previous substitute
under Clause 17(B)) in place of SSC (or of any previous substitute
under this Clause 17(C) and this Trust Deed will be deemed to be
modified in such manner as shall be necessary to give effect to the
substitution.
18 Appointment, retirement and removal of the Trustee
(A) Appointment: The Company will have the power of appointing any new Trustee
but no person will be so appointed unless previously approved by an
Extraordinary Resolution of Noteholders. A trust corporation will at all
times be a Trustee and may be the sole Trustee. Any appointment of a new
Trustee will be notified by the Company to the Noteholders as soon as
practicable.
(B) Retirement and removal: Any Trustee may retire at any time on giving not
less than three months notice in writing to the Company without giving any
reason and without being responsible for any costs occasioned by such
retirement and the Noteholders may by Extraordinary Resolution remove any
Trustee, provided that the retirement or removal of any sole Trustee or
sole trust corporation will not become effective until a trust corporation
is appointed as successor Trustee. If a sole Trustee gives notice of
retirement or an Extraordinary Resolution is passed for its removal under
this Clause 18(B), it will use all reasonable endeavors to procure that
another trust corporation be appointed as Trustee.
(C) Co-Trustees: The Trustee may, notwithstanding Clause 18(A), by notice in
writing to the Company, appoint anyone to act as an additional Trustee
jointly with the Trustee:
33
<PAGE> 37
(a) if the Trustee considers such appointment to be in the interests of
the Noteholders and/or the Couponholders;
(b) for the purpose of conforming with any legal requirement. restriction
or condition in any jurisdiction in which any particular act is to be
performed; or
(c) for the purpose of obtaining a judgment in any jurisdiction or the
enforcement in any jurisdiction against the Company of either a
judgment already obtained or any of the provisions of this Trust Deed.
Subject to the provisions of this Trust Deed, the Trustee may confer on any
person so appointed such functions as it think fit. The Trustee may by
notice in writing to the Company and such person remove any person so
appointed. At the request of the Trustee, the Company will do all things as
may be required to perfect such appointment or removal and it irrevocably
appoints the Trustee to be its attorney in its name and on its behalf to do
so.
(D) Competence of a majority of Trustees: If there are more than two Trustees
the majority of such Trustees will (provided such majority includes a trust
corporation) be competent to carry out all or any of the Trustee's
functions.
19 Couponholders
(A) Notices: Neither the Trustee nor the Company need give any notice to the
Couponholders and the Couponholders will be deemed to have notice of the
contents of any notice given to the Noteholders.
(B) Noteholders assumed to hold Coupons: Even if it has notice to the contrary,
whenever the Trustee is required to exercise any of its functions by
reference to the interests of the Noteholders, the Trustee will assume that
each Noteholder is the holder of all Coupons relating to each Note of which
he is the bearer.
34
<PAGE> 38
20 Enforcement
No holder of any Note or Coupon shall have any right to institute any
proceeding judicial or otherwise, with respect to, this Trust Deed, or for
the appointment of a receiver or trustee or for any other remedy hereunder.
unless:
(a) such holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the holders of not less than 25 per cent, in principal amount of the
Outstanding Note shall have made written request to or an
Extraordinary Resolution has directed the Trustee to institute
proceeding in respect of such Event of Default in its own name as
Trustee hereunder;
(c) the Trustee has been given reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 30 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 30 day period by the holders of a majority in
principal amount of the Outstanding Notes;
it being understood and intended that no one or more holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provisions of this Trust Deed to affect, disturb or prejudice the rights of
any other holders of Notes or to obtain or seek to obtain priority or
preference over any other holders or to enforce any right under this Trust
Deed, except in the manner herein provided and for the equal and ratable
benefit of all the holders of Notes and/or Coupons.
21 Termination, Satisfaction and Discharge of the Trust Deed
This Trust Deed shall cease and be of no further effect and the Trustee
shall, upon the request and cost of the Company, execute proper documents
acknowledging the termination, satisfaction and discharge of this Trust
Deed, when none of the Notes are Outstanding.
22 Communications
Any communication shall be by letter delivered personally or facsimile
transmission:-
35
<PAGE> 39
in the case of the Company, to it at:
877 W. Main Street, Suite 600
Boise
Idaho, 83702
U.S.A.
Fax no. 001 214 265 0324
Attention: John Simko
in the case of SSC, to it at:
877 W. Main Street, Suite 600
Boise
Idaho 83702
U.S.A.
Fax no. 001 214 265 0324
Attention: John Simko
and in the case of the Trustee, to it at:-
140 Broadway-12th Floor
New York
New York 10005-1180
USA
Fax no. 001 212 658 6425
Attention: Corporate Trust Administration
Any such communication will take effect, in the case of delivery, at the
time of delivery or, in the case of facsimile transmission, at the time of
despatch.
23 Currency indemnity
(A) Currency of account and payment: Dollars (the "Contractual Currency") is
the sole currency of account and payment for all sums payable by the
Company and SSC under or in connection with this Trust Deed, the Notes and
the Coupons, including damages.
(B) Extent of discharge: Any amount received or recovered in a currency other
than the Contractual Currency (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding-up or dissolution of the Company or otherwise) by the Trustee, any
Noteholders or any Couponholder in respect of any sum
36
<PAGE> 40
expressed to be due to it from the Company will only constitute a discharge
to the Company to the extent of the Contractual Currency amount which the
recipient is able to purchase with the amount so received or recovered in
that other currency on the date of that receipt or recovery (or, if it is
not practicable to make that purchase on that date, on the first date on
which it is practicable to do so).
(C) Indemnities: If that Contractual Currency amount is less than the
Contractual Currency amount expressed to be due to the recipient under this
Trust Deed, the Notes or the Coupons, the Company will indemnify such
recipient against any loss sustained by it as a result. In any event, the
Company will indemnify the recipient against the cost of making any such
purchases.
(D) Indemnities separate: These indemnities constitute a separate and
independent obligation from other obligations in this Trust Deed, will give
rise to a separate and independent cause of action, will apply irrespective
of any indulgence granted by the Trustee and/or any Noteholders or
Couponholder and will continue in full force and effect despite any
judgment, order, claim or proof for a liquidated amount in respect of any
sum due under this Trust Deed, the Notes and/or the Coupons or any judgment
or order. No proof of evidence of any actual loss may be required.
24 Governing law and jurisdiction
(A) Governing law: This Trust Deed shall be governed by and construed in
accordance with English law.
(B) Each of the Company and SSC irrevocably agrees for the benefit of the
Trustee, the Noteholders and the Couponholders that the courts of England
are to have jurisdiction to settle any disputes which may arise out of or
in connection with these presents and that accordingly any suit, action or
proceedings arising out of or in connection therewith (together referred to
as "Proceedings") may be brought in such courts. Each of the Company and
SSC irrevocably waives any objection which it may have now or hereafter to
the laying of the venue of any Proceedings in any such court and any claim
that any Proceedings have been brought in an inconvenient forum and further
irrevocably agrees that a judgment in any Proceedings brought in the courts
of England shall be conclusive and binding upon the Company and SSC and may
be enforced in the courts of any other jurisdiction. Nothing contained in
this clause shall limit any right to take Proceedings against the Company
or SSC in any other court of competent jurisdiction, nor shall the taking
of Proceedings in one or more jurisdictions preclude the taking of
Proceedings in any other jurisdiction, whether concurrently or not. Each of
the Company and SSC hereby irrevocably designates, appoints and empowers
The Law Debenture Trust Corporation p. I.e. at present of Princes House, 95
Gresham Street, London EC2V 7LY to receive for it and on its behalf,
service of process issued out of the English courts in any such legal
action or proceedings. Nothing in these presents shall affect the right to
serve process in any other manner permitted by law.
IN WITNESS whereof, this Trust Deed has been executed as a deed by the Company,
SSC and the Trustee and entered into the day and year first above written.
37
<PAGE> 41
SCHEDULE I
Forms of Bearer Note, Coupon and
Registered Note
FORM OF BEARER NOTE
<TABLE>
<CAPTION>
Denomination ISIN Serves Certif. No. U.S.$
<S> <C> <C> <C> <C>
</TABLE>
SUNSHINE PRECIOUS METALS, INC.
U.S.$30,000,000
8 percent Senior Exchangeable Notes due 2000
THIS IS TO CERTIFY that SUNSHINE PRECIOUS METALS, INC., a corporation
organized under the laws of the State of Delaware (the "Company") will pay to
the bearer of this Note on 21st March, 2000 (or on such earlier date as the
principal sum hereinafter mentioned may become repayable in accordance with the
Terms and Conditions endorsed hereon) the principal sum of
U.S.$ (United States dollars)
together with interest on the said principal sum at the rate of 8 percent per
annum from and including 21st March, 1996, payable semi-annually in arrears on
21st March and 21st September in each year, save that the first payment of
interest payable on 21st September, 1996 shall be in respect of the period from,
and including, 21st March, 1996 to, but excluding, 21st September, 1996, and
such additional amounts (if any) as may be payable under the same Terms and
Conditions, all subject to and in accordance with the said Terms and Conditions.
This note forms one of a series of Notes in the aggregate principal amount
of U.S.$30,000,000 (the "Notes") which have been issued pursuant to resolutions
of the Board of Directors of the Company passed on 27th February, 1996 and are
constituted by a Trust Deed (the "Trust Deed") dated 21st March, 1996 made
between the Company, Sunshine Mining and Refining Company and Marine Midland
Bank as Trustee. The Notes are issued subject to and with benefit of the
provisions of such Trust Deed.
This Note is guaranteed by and exchangeable into shares of common stock of
Sunshine Mining and Refining Company in accordance with and subject to the said
Terms and Conditions.
This Note and the coupons appertaining hereto shall not be valid or become
binding for any purpose unless and until this Note is authenticated by or on
behalf of the Principal Paying Agent (as defined in the Trust Deed).
IN WITNESS WHEREOF the Company has caused this note and the coupons
appertaining hereto to be duly executed.
Issued as of , 1996.
---------------------
38
<PAGE> 42
CERTIFICATE OF AUTHENTICATION
This Note is authenticated by or on behalf of the Principal Paying Agent.
SUNSHINE PRECIOUS METALS, INC.
By: By:
-------------------------------- --------------------------------------
(Name and Title)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) and 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW IS AVAILABLE.
39
<PAGE> 43
On the back:
Terms and Conditions
Here will be set out the Terms and Conditions
as set out in Schedule 5.
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
Marine Midland Bank
140 Broadway New York 10005-1180
U.S.A.
40
<PAGE> 44
FORM OF COUPON
On the front:
SUNSHINE PRECIOUS METALS, INC
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$30,000,000
8 percent Senior Exchangeable Notes due 2000
Coupon for US$___________ due on o 6/7/8/9/2000/ o
This Coupon is payable to bearer (subject to the Terms and Conditions
endorsed on the Note to which this Coupon appertains, which shall be binding
upon the holder of this Coupon whether or not it is for the time being attached
to such Note) at the specified offices of the Paying Agents set out on the
reverse hereof (or any further or other Paying and Exchange Agents or specified
offices duly appointed or nominated from time to time and notified to the
Noteholders).
If the Bearer Note to which this Coupon relates shall have become due and
payable before the maturity date of this Coupon, this Coupon shall become void
and no payment shall be made in respect of it.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 1650 AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------------
41
<PAGE> 45
On the back:
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
42
<PAGE> 46
FORM OF REGISTERED NOTE
On the front:
SUNSHINE PRECIOUS METALS, INC.
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$___,000,000
o percent Senior Exchangeable Notes due 2000
This Note is a Registered Note and forms part of a series designated as
specified in the title ("Notes") of Sunshine Precious Metals, Inc. (the
"Company") and constituted by the Trust Deed referred to on the reverse hereof.
The Notes are subject to, and have the benefit of, that Trust Deed and the terms
and conditions (the "Conditions") set out on the reverse hereof.
The Company hereby certifies that ___________________ is/are, at the date
hereof, entered in the Register as the holder(s) of Notes in the principal
amount of US$ ________________. Interest on such principal amount at the rate of
o percent per annum is payable annually in arrear on o in each year.
This Registered Note is exchangeable into registered Shares of US$0.01 each in
the capital of Sunshine Mining and Refining Company subject to and in accordance
with the Conditions and the Trust Deed.
This Registered Note is evidence of entitlement only. Title to Registered Notes
passes only on due registration on the Register and only the duly registered
holder is entitled to payments in respect of this Note.
This Registered Note shall not be valid for any purpose until signed on behalf
of the Company and authenticated by or on behalf of the Registrar.
In witness whereof the Company has caused this Registered Note to be signed on
its behalf by a Director of the Company by his facsimile signature this
.
- ---------------------
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------------
43
<PAGE> 47
This Registered Note is authenticated by
or on behalf of the Registrar
without warranty, recourse or liability
By: .
--------------------------------
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WELL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) and 1297(a) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAW IS AVAILABLE.
44
<PAGE> 48
On the back:
Terms and Conditions
Here will be set out the Terms and Conditions
as set out in Schedule 5
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
Marine Midland Bank
140 Broadway
New York 10005-1180
U.S.A.
45
<PAGE> 49
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby transfers to
---------------------------------------------------
---------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE
[not more than four names may appear as joint holders])
US$ __________________ principal amount of this Note, and all rights under it,
and irrevocably requests the Registrar to transfer this Note on the books kept
for registration thereof.
Dated
------------------------------
Signed
-----------------------------
Note:
(i) The signature to this transfer must correspond with the name as it appears
on the face of this Note.
(ii) A representative of the Noteholder should state the capacity in which he
signs e. g. executor.
(iii) The signature of the person effecting a transfer shall conform to any list
of duly authorized specimen signatures supplied by the registered holder
or be certified by a recognized bank, notary public or in such other
manner as the Registrar may require.
46
<PAGE> 50
SCHEDULE 2
Form of Global Bearer Note
SUNSHINE PRECIOUS METALS, INC.
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$30,000,000
8 percent Senior Exchangeable Notes due 2000
TEMPORARY GLOBAL BEARER NOTE
Sunshine Precious Metals, Inc. (the "Company") for value received hereby
promises to pay to bearer the sum of
US$___,000,000 (o Dollars)
on 21st March, 2000 (or such earlier date as such principal sum may become
payable in accordance with the Trust Deed (as defined below) and with the terms
and conditions (the "Conditions") of the Notes designated above (the "Notes")
set out in Schedule 5 to the Trust Deed dated 21st March, 1996 (the "Trust
Deed") between the Company, Sunshine Mining and Refining Company ("SSC") and
Marine Midland Bank (as trustee) upon presentation and surrender of this
Temporary Global Bearer Note.
This Temporary Global Bearer Note is exchangeable in accordance with the
terms hereof for definitive Notes (the "Definitive Notes") in bearer form with
Coupons attached to be known as 8 percent, Senior Exchangeable Notes due 2000,
and, until so exchanged, is subject to the Conditions and the Trust Deed. The
Company hereby irrevocably undertakes to deliver the Definitive Notes in
exchange for this Temporary Global Bearer Note on and after the Request Date.
On or after the Request Date this Temporary Global Bearer Note may be
exchanged in whole or in part for Definitive Notes in an aggregate principal
amount not exceeding the principal amount of this Temporary Global Bearer Note
submitted for exchange with respect to which there shall be presented to the
Principal Paying, Exchange and Transfer Agent a certificate from Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euroclear System
("Euroclear") or Cedel Bank societe anonyme ("Cedel") substantially to the
following effect:
47
<PAGE> 51
"CERTIFICATE OF CLEARING SYSTEM
SUNSHINE PRECIOUS METALS, INC.
US$30,000,000
8 percent, Senior Exchangeable Notes due 2000 (the "Notes")
This is to certify that, based solely on certificates we have received in
writing, by tested telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the principal
amount set forth below (our "Member Organizations") substantially to the effect
set forth in the Temporary Global Bearer Note in respect of the Notes the form
of which is set out in Schedule 2 to the Trust Deed relating to the Notes, as of
the date hereof, US$30,000,000 principal amount of the above-captioned Notes (i)
is owned by persons that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source or U.S. persons (as defined under Regulation S of the Securities Act of
1933, as amended) ("United States persons"), (ii) is owned by United States
persons that are (a) foreign branches of United States financial institutions
(as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) ("financial
institutions")) purchasing for their own account or for resale or (b) United
States persons who acquired the Notes through foreign branches of United States
financial institutions and who hold the Notes through such United States
financial institutions on the date hereof (and in either case (a) or (b) each
such United States financial institution has agreed, on its own behalf or
through its agent, that we may advise the Company or the Company's agent that it
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder) or
(iii) is owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in U.S. Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)) and to the further effect that United States or
foreign financial institutions described in (iii) above (whether or not also
described in (i) or (ii) above) have certified that they have not acquired the
Notes for purposes of resale directly or indirectly to a United States person or
to a person within the United States or its possessions.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the Temporary Global Bearer Note excepted in such certificates and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organization with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection with certain
securities and tax laws of the United States. In connection therewith, if
administrative or legal proceedings are
48
<PAGE> 52
commenced or threatened in connection with which this certificate is or would be
relevant, we irrevocably authorize you to produce this certificate to any
interested party in such proceedings.
Date: , 19 *
--------------------- ----
Yours faithfully,
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
Brussels Office,
as operator of the Euroclear System]
49
<PAGE> 53
or
[Cedel Bank societe anonyme]
By:
-------------------
*To be dated no earlier than the Request Date."
Any Person appearing in the records maintained by Cedel or Euroclear as entitled
to any interest in this Temporary Global Bearer Note shall be entitled to
require the exchange of an appropriate part of this Temporary Global Bearer Note
for a Definitive Note or Notes in bearer form by delivering or causing to be
delivered to Cedel or Euroclear a certificate or certificates in substantially
the following form (copies of which certificate will be available at the office
of Cedel in Luxembourg and Euroclear in Brussels and the specified office of
each of the Agents):
CERTIFICATE OF CLEARING SYSTEM PARTICIPANT
SUNSHINE PRECIOUS METALS, INC.
US$30,000,000
8 percent Senior Exchangeable Notes due 2000 (the "Notes")
To: [Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euroclear System] or [Cedel Bank societe anonyme]
This is to certify that as of the date hereof, and except as set forth below,
the above captioned Notes held by you for our account (i) are owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source or U.S. persons
(as defined under Regulation S of the Securities Act of 1933, as amended)
("United States person(s)") or (ii) are owned by United States person(s) that
are (a) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v) ("financial institutions"))
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Notes through foreign branches of United States financial
institutions and who hold the Notes through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution hereby agrees, on its own behalf or through its
agent, that you may advise the Company or the Company's agent that it will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder) or (iii) are
owned by United States or foreign financial institution(s) for purposes of
resale during the restricted period (as defined in U.S. Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)) and, in addition, if the owner of the Notes is a
United States or foreign financial institution described
50
<PAGE> 54
in (iii) above (whether or not also described in (i) or (ii) above), this is to
certify further that such financial institution has not acquired the Notes for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein "United States" means the United States of America (including the
States and the District of Columbia) and its "Possessions" include Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern
Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certificate relating to the Notes held by you
for our account in accordance with your documented procedures if any applicable
statement herein is not correct on such date, and in the absence of any such
notification it may be assumed that this certificate applies as of such date.
This certificate excepts and does not relate to US$_______ principal amount of
such interest in the above Notes in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Notes (or, if
relevant, exercise of any rights or collection of any interest) cannot be made
until we do so certify.
We understand that this certificate is required in connection with certain
securities and tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings.
Dated: , 19 *
------------------- ---
By:
------------------------------
[Name of person giving certificate]
as, or as agent for, the beneficial owner(s)
of the above Notes to which this
certificate relates.
*To be dated no earlier than the fifteenth day prior to the "Request Date."
As used herein "Request Date" means 1st May, 1996.
Until the exchange of the appropriate part of this Temporary Global Bearer Note
pursuant to the foregoing provisions, no such person as aforesaid shall (except
as stated herein) be entitled to receive any payment by way of principal of or
interest on this Temporary Global Bearer Note (unless, upon due presentation of
this Temporary Global Bearer Note for exchange, delivery of any Definitive Notes
shall be improperly withheld or refused) or. to receive the Shares which he
would otherwise be entitled to receive.
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<PAGE> 55
Upon any exchange of a part of this Temporary Global Bearer Note for a
Definitive Note or Notes, the portion of the principal amount hereof so
exchanged shall be endorsed by the Principal Paying, Exchange and Transfer Agent
in the Schedule hereto, whereupon the principal amount hereof shall be reduced
for all purposes by the amount so exchanged and endorsed.
Subject to the second preceding paragraph, no provisions of this Temporary
Global Bearer Note shall alter or impair the obligation of the Company to pay
the principal and interest on the Notes when due in accordance with the
Conditions.
This Temporary Global Bearer Note shall not be valid for any purpose until
signed on behalf of the Company and authenticated by or on behalf of the
Principal Paying, Exchange and Transfer Agent.
This Temporary Global Bearer Note shall be governed by and construed in
accordance with English law.
In witness whereof the Company has caused this Temporary Global Bearer Note to
be signed on its behalf.
Dated 21st March, 1996
- -----------------------------------
Authorized Signatory
For and on behalf of
SUNSHINE PRECIOUS METALS, INC.
This Temporary Global Bearer Note is authenticated
by or on behalf of the Principal Paying,
Exchange and Transfer Agent without warranty,
recourse or liability.
By:
--------------------------------
Authorized Signatory
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<PAGE> 56
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
THIS TEMPORARY GLOBAL BEARER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") AND ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF ANY U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAW IS AVAILABLE.
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<PAGE> 57
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES
AND PURCHASES AND CANCELLATIONS
The following exchanges of a part of this Global Bearer Note for Definitive
Notes and/or purchases and cancellations of a part of this Temporary Global Note
have been made:-
<TABLE>
<CAPTION>
Amount of
Amount of decrease in Principal amount
decrease in principal amount of this Temporary
principal amount of this Temporary Global Bearer
of this Temporary Global Bearer Note following
Date made Global Bearer Note following such decrease Notation made
- --------- Note following purchase and ------------- -------------
exchange cancellation
-------- ------------
<S> <C> <C> <C> <C>
</TABLE>
54
<PAGE> 58
SCHEDULE OF INTEREST AND PRINCIPAL PAID
<TABLE>
<CAPTION>
Date of payment Amount of interest and principal Notation made
- --------------- -------------------------------- -------------
<S> <C> <C>
</TABLE>
55
<PAGE> 59
SCHEDULE 3
Provisions for Meetings of Noteholders
1. The following expressions shall have the following meanings:
"voting certificate" means a certificate in the English language issued by
a Paying, Exchange and Transfer Agent and dated in which it is stated:
(a) that on that date Bearer Notes (not being Notes in respect of which a
block voting instruction has been issued and is outstanding in respect
of the meeting specified in such voting certificate or any adjournment
of such meeting) bearing specified serial numbers were deposited with
such Paying, Exchange and Transfer Agent (or to its order at a bank or
other depositary) and that such Notes will not be released until the
earlier of:
(i) the conclusion of the meeting specified in such certificate or
any adjournment of it; and
(ii) the surrender of the certificate to the Paying, Exchange and
Transfer Agent which issued it; and
(b) that its bearer is entitled to attend and vote at such meeting or any
adjournment of it in respect of the Notes represented by such
certificate;
"block voting instruction" means a document in the English language issued
by a Paying, Exchange and Transfer Agent and dated in which:
(a) it is certified that Bearer Notes (not being Notes in respect of which
a voting certificate has been issued and is outstanding in respect of
the meeting specified in such block voting instruction or any
adjournment of it) have been deposited with such Paying, Exchange and
Transfer Agent (or to its order at a bank or other depositary) and
that such Notes will not be released until the earlier of:
(i) the conclusion of the meeting specified in such document or any
adjournment of it; and
(ii) the surrender, not less than 48 hours before the time fixed for
such meeting or adjournment, of the receipt for each such
deposited Note which is to be released to the Paying, Exchange
and Transfer Agent which issued it and the notification of such
surrender by such Agent to the Company;
(b) it is certified that each depositor of such Notes or a duly authorized
agent on his behalf has instructed such Paying, Exchange and Transfer
Agent that the votes attributable
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<PAGE> 60
to his Notes so deposited should be cast in a particular way in
relation to the resolution to be put to such meeting or any
adjournment of it and that all such instructions are, during the
period of 48 hours before the time fixed for such meeting or adjourned
meeting, neither revocable nor subject to amendment;
(c) the total number and the serial numbers of the Notes so deposited are
listed, distinguishing with regard to each such resolution between
those in respect of which instructions have been so given (i) to vote
for, and (ii) to vote against, the resolution; and
(d) any person named in such document (a "proxy") is authorized and
instructed by such Paying, Exchange and Transfer Agent to vote in
respect of the Notes so listed in accordance with the instructions
referred to in (c) above as set out in such document.
References to paragraphs are references to paragraphs of this Schedule.
2 (A) A holder of a Bearer Note may obtain a voting certificate from a
Paying, Exchange and Transfer Agent or require a Paying, Exchange and
Transfer Agent to issue a block voting instruction by depositing his
Note with such Paying and Exchange Agent not later than 48 hours
before the time fixed for any meeting. Voting certificates and block
voting instructions shall be valid until the relevant Notes are
released pursuant to paragraph I and until then the holder of any such
voting certificate or (as the case may be) the proxy named in any such
block voting instruction shall, for all purposes in connection with
any meeting or proposed meeting of Noteholders, be deemed to be the
holder of the Notes to which such voting certificate or block voting
instruction relates and the Paying, Exchange and Transfer Agent with
which (or to the order of which) such Notes have been deposited shall
be deemed for such purposes not to be the holder of those Notes.
(B) (i) A holder of a Registered Note may by an instrument in writing (a
"form of proxy") in the form available from the specified office
of the Registrar in the English language signed by the holder or,
in the case of 'a corporation, executed under its common seal or
signed on its behalf by an attorney or a duly authorized officer
of the corporation and delivered to the Registrar not later than
24 hours before the time fixed for any meeting, appoint any
person (a "proxy") to act on his or its behalf in connection with
any meeting or proposed meeting of Noteholders.
(ii) Any holder of a Registered Note which is a corporation may by
delivering to the Registrar not later than 24 hours before the
time fixed for any meeting a resolution of its directors or other
governing body in the English language
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<PAGE> 61
authorize any person to act as its representative (a
"representative") in connection with any meeting or proposed
meeting of Noteholders.
(iii) Any proxy appointed pursuant to sub-paragraph (a) above or
representative appointed pursuant to sub-paragraph (b) above
shall so long as such appointment remains in force be deemed for
all purposes in connection with any meeting or proposed meeting
of Noteholders specified in such appointment, to be the holder
of the Registered Notes to which such appointment relates and
the holder of the Registered Note shall be deemed for such
purposes not to be the holder.
3. Each of the Company and the Trustee at any time may, and the Trustee
(subject to it being indemnified to its satisfaction against all costs and
expenses thereby occasioned) upon a request in writing of Noteholders
holding not less than one tenth in principal amount of the Notes for the
time being outstanding shall, convene a meeting of Noteholders. Whenever
any such party is about to convene any such meeting it shall forthwith give
notice in writing to the other party of the day, time and place of the
meeting and of the nature of the business to be transacted at it. Every
such meeting shall be held at such time and place as the Trustee may
approve.
4. At least 21 days' notice (exclusive of the day on which the notice is given
and of the day on which the meeting is held) specifying the day, time and
place of meeting shall be given to the Noteholders. A copy of the notice
shall in all cases be given by the party convening the meeting to the other
party. Such notice shall also specify, unless in any particular case the
Trustee otherwise agrees in writing, the nature of the resolutions to be
proposed and shall include a statement to the effect that Bearer Notes may
be deposited with (or to the order of) any Paying, Exchange and Transfer
Agent for the purpose of obtaining voting certificates or appointing
proxies not later than 48 hours before the time fixed for the meeting and
that the holders of Registered Notes may appoint proxies by executing and
delivering a form of proxy in the English language to the specified office
of the Registrar not later than 24 hours before the time fixed for the
meeting or, in the case of corporations, may appoint representatives by
resolution in the English language of their directors or other governing
body and by delivering an executed copy of such resolution to the Registrar
not later than 24 hours before the time fixed for the meeting.
5. A person (who may, but need not, be a Noteholder) nominated in writing by
the Trustee may take the chair at every such meeting but if no such
nomination is made or if at any meeting the person nominated shall not be
present within 15 minutes after the time fixed for the meeting the
Noteholders present shall choose one of their number to be chairman,
failing which the Company may appoint a chairman. The chairman of an
adjourned meeting need not be the same person as was chairman of the
original meeting.
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<PAGE> 62
6. At any such meeting any one or more persons present in person holding Notes
or voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than one-tenth in principal amount
of the Notes for the time being outstanding shall (except for the purpose
of passing an Extraordinary Resolution) form a quorum for the transaction
of business and no business (other than the choosing of a chairman) shall
be transacted at any meeting unless the requisite quorum be present at the
commencement of business. The quorum at any such meeting for passing an
Extraordinary Resolution shall (subject as provided below) be one or more
persons present in person holding Notes or voting certificates or being
proxies or representatives and holding or representing in the aggregate a
clear majority in principal amount of the Notes for the time being
outstanding provided that at any meeting the business of which includes any
of the matters specified in the proviso to paragraph 19 the quorum shall be
one or more persons present in person holding Notes or voting certificates
or being proxies or representatives and holding or representing in the
aggregate not less than two-thirds in principal amount of the Notes for the
time being outstanding.
7. If within 15 minutes from the time fixed for any such meeting a quorum is
not present the meeting shall, if convened upon the requisition of
Noteholders, be dissolved. In any other case it shall stand adjourned
(unless the Company and the Trustee agree that it be dissolved) for such
period, not being less than 14 days nor more than 42 days, and to such
place, as may be decided by the chairman. At such adjourned meeting one or
more persons present in person holding Notes or voting certificates or
being proxies or representatives (whatever the principal amount of the
Notes so held or represented) shall form a quorum and may pass any
resolution and decide upon all matters which could properly have been dealt
with at the meeting from which the adjournment took place had a quorum been
present at such meeting provided that at any adjourned meeting at which is
to be proposed an Extraordinary Resolution for the purpose of effecting any
of the modifications specified in the proviso to paragraph 19 the quorum
shall be one or more persons present holding Notes or voting certificates
or being proxies or representatives and holding or representing in the
aggregate not less than one third in principal amount of the Notes for the
time being outstanding.
8. The chairman may with the consent of (and shall if directed by) any meeting
adjourn such meeting from time to time and from place to place but no
business shall be transacted at any adjourned meeting except business which
might lawfully have been transacted at the meeting from which the
adjournment took place.
9. At least 10 days' notice of any meeting adjourned through want of a quorum
shall be given in the same manner as for an original meeting and such
notice shall state the quorum required at such adjourned meeting. It shall
not, however, otherwise be necessary to give any notice of an adjourned
meeting.
10. Every question submitted to a meeting shall be decided in the first
instance by a show of hands and in case of equality of votes the chairman
shall both on a show of hands and on
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<PAGE> 63
a poll have a casting vote in addition to the vote or votes (if any) which
he may have as a Noteholder or as a holder of a voting certificate or as a
proxy or representative.
11. At any meeting, unless a poll is (before or on the declaration of the
result of the show of hands) demanded by the chairman, the Company, the
Trustee or by one or more persons holding one or more Notes or voting
certificates or being proxies or representatives and holding or
representing in the aggregate not less than one-fiftieth in principal
amount of the Notes for the time being outstanding, a declaration by the
chairman that a resolution has been carried or carried by a particular
majority or lost or not carried by any particular majority shall be
conclusive evidence of the fact without proof of the number or proportion
of the votes recorded in favor of or against such resolution.
12. If at any meeting a poll is so demanded, it shall be taken in such manner
and (subject as provided below) either at once or after such an adjournment
as the chairman directs and the result of such poll shall be deemed to be
the resolution of the meeting at which the poll was demanded as at the date
of the taking of the poll. The demand for a poll shall not prevent the
continuation of the meeting for the transaction of any business other than
the question on which the poll has been demanded.
13. Any poll demanded at any meeting on the election of a chairman or on any
question of adjournment shall be taken at the meeting without adjournment.
14. The Company and the Trustee (through their respective representatives) and
their respective financial and legal advisers may attend and speak at any
meeting of Noteholders. No one else may attend at any meeting of
Noteholders or join with others in requesting the convening of such a
meeting unless he is the holder of a Note or a voting certificate or is a
proxy or a representative.
15. At any meeting on a show of hands every person who is present in person and
who produces a Note or voting certificate or is a proxy or a representative
shall have one vote and on a poll every person who is so present shall have
one vote in respect of each such principal amount as is equal to the lowest
common denomination of the Notes forming a particular series. Without
prejudice to the obligations of proxies named in any block voting
instruction, any person entitled to more than one vote need not use all his
votes or cast all the votes to which he is entitled in the same way.
16. The proxy named in any block voting instruction need not be a Noteholder.
17. Each block voting instruction shall be deposited at the registered office
of the Company, or at such other place as the Trustee shall designate or
approve, not less than 24 hours before the time appointed for holding the
meeting or adjourned meeting at which the proxy named in the block voting
instruction proposes to vote and in default the block voting instruction
shall not be treated as valid unless the chairman of the meeting decides
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<PAGE> 64
otherwise before such meeting or adjourned meeting proceeds to business. A
notarially certified copy of each such block voting instruction and
satisfactory proof (if applicable) shall, if required by the Trustee, be
produced by the proxy at the meeting or adjourned meeting but the Trustee
shall not thereby be obliged to investigate or be concerned with the
validity of, or the authority of, the proxy named in any such block voting
instruction.
18. Any vote given in accordance with the terms of a block voting instruction
shall be valid even if the block voting instruction or any of the
Noteholders' instructions pursuant to which it was executed has been
previously revoked or amended, provided that no intimation in writing of
such revocation or amendment shall have been received from the relevant
Paying, Exchange and Transfer Agent by the Company or the Trustee at its
registered office or by the chairman of the meeting in each case not less
than 24 hours before the time fixed for the meeting or adjourned meeting at
which the block voting instruction is used.
19. A meeting of Noteholders shall subject to the Conditions, in addition to
the powers given above, but without prejudice to any powers conferred on
other persons by this Trust Deed, have power exercisable by Extraordinary
Resolution:
(a) to sanction any proposal by the Company for any modification,
abrogation, variation or compromise of, or arrangement in respect of,
the rights of the Noteholders and/or the Couponholders against the
Company, SSC or against any of its property whether such rights shall
arise under this Trust Deed or otherwise;
(b) to sanction any scheme or proposal for the exchange, substitution or
sale of the Notes for, or the conversion of the Notes into, or the
cancellation of the Notes in consideration of, shares, stock, notes,
bonds, debentures, debenture stock and/or other obligations and/or
securities of the Company, SSC or any other body corporate formed or
to be formed, or for or into or in consideration of cash, or partly
for or into or in consideration of such shares, stock, notes, bonds,
debentures, debenture stock and/or other obligations and/or securities
as aforesaid and partly for or into or in consideration of cash;
(c) to assent to any modification of this Trust Deed, the Notes or the
Coupons which shall be proposed by the Company or the Trustee;
(d) to authorize anyone to concur in and do all such things as may be
necessary to carry out and give effect to any Extraordinary
Resolution;
(e) to give any authority, direction or sanction which under this Trust
Deed or the Notes is required to be given by Extraordinary Resolution;
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<PAGE> 65
(f) to appoint any persons (whether Noteholders or not) as a committee or
committees to represent the interests of the Noteholders and to confer
upon such committee or committees any powers or discretions which the
Noteholders could themselves exercise by Extraordinary Resolution;
(g) to approve a person proposed to be appointed as a new Trustee and to
remove any Trustee;
(h) to approve the substitution of any entity for the Company (or any
previous substitute) as principal debtor under this Trust Deed; and
(i) to discharge or exonerate the Trustee from any liability in respect of
any act or omission for which it may become responsible under this
Trust Deed, the Notes or the Coupons;
provided that the special quorum provisions contained in the proviso to
paragraph 6 and, in the case of an adjourned meeting, in the proviso to
paragraph 7 shall apply in relation to any Extraordinary Resolution for the
purpose of paragraph 19(b) or (h) or for the purpose of making any
modification to the provisions contained in this Trust Deed, the Notes or
the Coupons which would have the effect of:
(i) postponing the maturity of the Notes or the dates on which interest
is payable in respect of the Notes;
(ii) modifying the status and exchange terms of the Notes;
(iii) reducing or cancelling the principal amount of, or interest on, or
other amounts in respect of or reducing the rate of interest on, the
Notes;
(iv) changing the currency of payment of the Notes;
(v) modifying the provisions contained in this Schedule concerning the
quorum required at any meeting of Noteholders or the majority
required to pass an Extraordinary Resolution; or
(vi) amending this proviso.
20. An Extraordinary Resolution passed at a meeting of Noteholders duly
convened and held in accordance with this Trust Deed shall be binding upon
all the Noteholders, whether or not present at such meeting and whether or
not they vote in favor, and upon all the Couponholders and each of the
Noteholders and Couponholders shall be bound to give effect to it
accordingly. The passing of any such resolution shall be conclusive
evidence that the circumstances of such resolution justify the passing of
it.
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<PAGE> 66
21. The expression "Extraordinary Resolution" means a resolution passed at a
meeting of Noteholders duly convened and held in accordance with these
provisions by a majority consisting of not less than two thirds of the
Notes their Outstanding.
22. Minutes of all resolutions and proceedings at every such meeting shall be
made and entered in the books to be from tune to time provided for that
purpose by the Company or the Trustee and any such minutes, if purporting
to be signed by the chairman of the meeting at which such resolutions were
passed or proceedings transacted or by the chairman of the next succeeding
meeting of Noteholders, shall be conclusive evidence of the matters
contained in them and until the contrary is proved every such meeting in
respect of the proceedings of which minutes have been so made and signed
shall be deemed to have been duly convened and held and all resolutions
passed or proceedings transacted at it to have been duly passed and
transacted.
23. Subject to all other provisions contained in this Trust Deed, the Trustee
may without the consent of the Noteholders prescribe such further
regulations regarding the holding of meetings of Noteholders and attendance
and voting at them as the Trustee may in its sole discretion determine,
including particularly (but without prejudice to the generality of the
foregoing) such regulations and requirements as the Trustee thinks
reasonable: -
(a) so as to satisfy itself that persons who purport to requisition a
meeting in accordance with paragraph 3 or who purport to make any
requisition to the Trustee in accordance with this Trust Deed are in
fact Noteholders; and
(b) as to the form of voting certificates or block voting instructions to
be issued pursuant to paragraph 1 so as to satisfy itself that persons
who purport to attend or vote at any meeting of Noteholders are
entitled to do so in accordance with this Trust Deed.
24. (A) If and whenever the Company shall have issued and have outstanding any
Notes which are not identical and do not form one single series, then
those Notes which are in all respects identical shall be deemed to
constitute a separate series of the Notes and the foregoing provisions
of this Schedule shall have effect subject to the following
modifications:-
(i) a resolution which in the opinion of the Trustee affects one
series only of the Notes shall be deemed to have been duly passed
if passed at a separate meeting of the holders of the Notes of
that series;
(ii) a resolution which in the opinion of the Trustee affects more
than one series of the Notes but does not give rise to a conflict
of interest between the holders of Notes of any of the series so
affected shall be deemed to have been duly passed if passed at a
single meeting of the holders of the Notes of all the series so
affected;
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<PAGE> 67
(iii) a resolution which in the opinion of the Trustee affects more
than one series of the Notes and gives or may give rise to a
conflict of interest between the holders of the Notes of any of
the series so affected shall be deemed to have been duly passed
only if it shall be duly passed at separate meetings of the
holders of the Notes of each series so affected; and
(iv) to all such meetings as aforesaid all the preceding provisions
of this Schedule shall mutatis mutandis apply as though
references therein to Notes and holders were references to the
Notes of the series or group of series in question and to the
holders of such Notes respectively.
(B) If the Company shall have issued and have outstanding (a) Notes which
are not denominated in Dollars or (b) more than one series of Notes
denominated in Dollars but in differing denominations, the following
provisions shall apply. In the case of any meeting of holders of Notes
of more than one currency the principal amount of such Notes not
denominated in Dollars shall (i) for the purposes of paragraph 3 be
the equivalent in Dollars at the spot rate of a bank nominated by the
Trustee for the conversion of the relevant currency or currencies into
Dollars on the seventh dealing day prior to the day on which the
request in writing is received by the Trustee and (ii) for the
purposes of paragraphs 6, 7, 11 and 15 (whether in respect of the
meeting or any adjourned such meeting or any poll resulting therefrom)
be the equivalent in Dollars at such spot rate on the seventh dealing
day (as defined above) prior to the day of such meeting or, if
applicable, the taking of such poll. In such circumstances, and where
separate series of Notes denominated in sterling but of different
denominations are to be treated together for the purposes of this
Schedule, on any poll each person present shall have one vote for each
US$1.00 in principal amount of the Notes (converted as above) which he
holds.
25. Nothing in this Trust Deed shall prevent any of the proxies named in any
block voting instruction or form of proxy from being a director, managing
director, officer or representative of, or otherwise connected with, the
Company, or any of its Subsidiaries.
26. References in this Schedule to Paying, Exchange and Transfer Agents shall,
where the context requires, be taken to be references to Agents.
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<PAGE> 68
SCHEDULE 4
Register and Transfer of Registered Notes
1 The Company and SSC shall at all times ensure that the Registrar maintains
in New York, or at such other place as the Trustee may agree, a register
showing the amount of the Registered Notes from time to time Outstanding
and the dates of issue and all subsequent transfers and changes of
ownership thereof and the names and addresses of the holders of the
Registered Notes. The Trustee and the holders of the Registered Notes or
any of them and any person authorized by it or any of them may at all
reasonable times during office hours inspect the register and take copies
of or extracts from it. The register may be closed by the Company for such
periods at such times (not exceeding in total 30 business days in any one
year) as it may think fit.
2 Each Registered Note shall have an identifying serial number which shall be
entered on the register.
3 The Registered Notes are transferable by execution of the form of transfer
endorsed thereon under the hand of the transferor or, where the transferor
is a corporation, under its common seal or under the hand of two of its
officers duly authorized in writing. In each case the signature(s) must be
guaranteed by a commercial bank with a correspondent bank in New York City,
Luxembourg or London or by an institution which is a member of The New York
Stock Exchange or The American Stock Exchange in New York City or the
Luxembourg Stock Exchange or London Stock Exchange Limited.
4 The Registered Notes to be transferred must be delivered for registration
to the specified office of the Registrar or any Transfer Agent with the
form of transfer endorsed thereon duly completed and executed and must be
accompanied by such documents, evidence and information as may be required
pursuant to the Conditions and such other evidence as the Company may
reasonably require to prove the tide of the transferor or his right to
transfer the Registered Notes and, if the form of transfer is executed by
some other person on his behalf or in the case of the execution of a form
of transfer on behalf of a corporation by its officers, the authority of
that person or those persons to do so.
5 The executors or administrators of a deceased holder of Registered Notes
(not being one of several joint holders) and in the case of the death of
one or more of several joint holders the survivor or survivors of such
joint holders shall be the only person or persons recognized by the Company
as having any title to such Registered Notes.
6 Any person becoming entitled to Registered Notes in consequence of the
death or bankruptcy of the holder of such Registered Notes may upon
producing such evidence that he holds the position in respect of which he
proposes to act under this paragraph or of his tide as the Company shall
require be registered himself as the holder of such
65
<PAGE> 69
Registered Notes or, subject to the preceding paragraphs as to transfer may
transfer such Registered Notes. The Company shall be at liberty to retain
any amount payable upon the Registered Notes to which any person is so
entitled until such person shall be registered as aforesaid or shall duly
transfer the Registered Notes.
7 Unless otherwise requested by him, the holder of Registered Notes of any
series shall be entitled to receive only one Registered Note in respect of
his entire holding of such series.
8 The joint holders of Registered Notes of any series shall be entitled to
one Registered Note only in respect of their joint holding of such series
which shall, except where they otherwise direct, be delivered to the joint
holder whose name appears first in the register of the holders of
Registered Notes in respect of such joint holding.
9 Where a holder of Registered Notes has transferred part only of his holding
of any series there shall be delivered to him without charge a Registered
Note in respect of the balance of such holding.
10 The Company shall make no charge to the Holders for the registration of any
holding of Registered Notes or any transfer thereof or for the issue
thereof or for the delivery thereof at the specified office of the
Registrar or of any Transfer Agent or by post to the address specified by
the Holder. If any Holder entitled to receive a Registered Note wishes to
have the same delivered to him otherwise than at the specified office of
the Registrar or of any Transfer Agent, such delivery shall be made, upon
his written request to the Registrar or such Transfer Agent, at his risk
and (except where sent by post to the address specified by the Holder) at
his expense.
11 The Holder of a Registered Note may (to the fullest extent permitted by
applicable laws) be treated at all times, by all persons and for all
purposes as the absolute owner of such Registered Note notwithstanding any
notice any person may have of the right, title, interest or claim of any
other person thereto. The Company and the Trustee shall not be bound to see
to the execution of any trust to which any Registered Note may be subject
and no notice of any trust shall be entered on the register. The Holder of
a Registered Note will be recognized by the Company as entitled to his
Registered Note free from any equity, set-off or counterclaim on the part
of the Company against the original or any intermediate holder of such
Registered Note.
66
<PAGE> 70
SCHEDULE 5
Terms and Conditions of the Notes
67
<PAGE> 71
EXECUTED and DELIVERED )
as a DEED by )
SUNSHINE PRECIOUS )
METALS, INC. )
by: )
WILLIAM DAVIES
Authorised Officer
EXECUTED and DELIVERED )
as a DEED by )
SUNSHINE PRECIOUS )
METALS, INC. )
by: )
WILLIAM DAVIES
Authorised Officer
EXECUTED and DELIVERED )
as a DEED by )
MARINE MIDLAND BANK )
by: )
JULIE BETTS as ATTORNEY
Assistant Vice President
68
<PAGE> 72
FIRST SUPPLEMENT TO TRUST DEED
This First Supplement to Trust Deed (this "FIRST SUPPLEMENT") is made
entered into on this ____ day of ______________, 2000, AMONG:
1. Sunshine Precious Metals Inc. (the "COMPANY") whose registered
office is at 877 W. Main Street, Suite 600, Boise, Idaho, 83702, USA;
2. Sunshine Mining and Refining Company ("SSC") whose registered office
is at 877 W. Main Street, Suite 600 Boise, Idaho 83702 USA; and,
3. HSBC Bank USA (formerly Marine Midland Bank), whose registered
office is at 140 Broadway, New York, New York 10005-1180 USA (the "TRUSTEE",
which expression shall, where the context admits, include all persons for the
time being the trust or trustees of the Trust Deed and this First Supplement).
All references in the Trust Deed and schedules thereto, to Marine Midland Bank
shall be construed to mean HSBC Bank USA.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Trust Deed.
WHEREAS,
1. On March 21, 1996, the Company, SSC and Trustee executed a Trust
Deed, pursuant to which the Company issued U.S. $30,000,000 8 percent Senior
Exchange Notes due March 21, 2000, guaranteed by SSC (hereinafter, the "Trust
Deed").
2. The Trustee agreed to act as trustee of the Trust Deed pursuant to
the terms and conditions therein.
3. Now, the Company and SSC propose to recapitalize the Company and SSC
by issuing eight (8) million shares of SSC common stock for the benefit of
Noteholders, in consideration for which the Noteholders will agree to forego the
March 21, 2000, scheduled, interest payment and provide for future interest
payments on the Notes through the issuance of SSC common stock, extend the
maturity date of the Notes to May 1, 2001, or later as provided for herein, and
amend the Exchange Price and Exchange Period.
4. In order to effectuate the recapitalization of SSC and the Company,
the parties desire to amend certain provisions of the Trust Deed, pursuant to
this First Supplement and the Terms and Conditions, pursuant to the Restated
Terms and Conditions.
Hereinafter, all references to the Trust Deed incorporate the Trust
Deed as amended by the First Supplement and the Schedules thereto.
<PAGE> 73
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, the mutual covenants
and agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties thereto by their execution hereof, the parties hereby agree as follows:
ARTICLE I
AMENDMENTS TO TRUST DEED
1.1 Clause 1 of the Trust Deed is hereby amended as follows:
Definitions: The following expressions will be deleted in their
entirety and shall be replaced with the following:
'"Conditions" means the Restated Terms and Conditions of the
Notes, set forth in Schedule 5 herein, and affixed to the back of the
Notes;
"Extraordinary Resolution" has the meaning set out in
paragraph 21 of Schedule 3, as amended;
"Notes" means the notes (whether bearer or registered form)
comprising the US $30,000,000, 8 percent Senior Exchangeable Notes due
May 1, 2001, as amended by this First Supplement, unless otherwise
provided in the Restated Terms and Conditions, constituted by the Trust
Deed and for the time being outstanding or, as the context may require,
a specific number of them and includes any New Notes or other Notes
issued pursuant to Condition 16, and (except for the purpose of Clauses
4(A) and (B)), in relation to the Bearer Notes, the Global Bearer
Notes;
"Outstanding" means, in relation to the Notes, all Notes issued
other than (a) those that have been surrendered and exchanged for New
Notes pursuant to the recapitalization of the Company and SSC; (b)
those which have been redeemed or in respect of which Exchange Rights
have been exercised and which have been canceled in accordance with the
Conditions; (c) those in respect of which the date for redemption in
accordance with the Conditions has occurred and the redemption moneys
(including all interest accrued on such Notes up to but excluding the
date fixed for such redemption and any interest payable under Condition
6 in respect of any period commencing on or after such date) have been
duly paid to the relevant Noteholder (or a person on behalf of such
Noteholder) or to the Trustee or to the principal Paying, Exchange and
Transfer Agent as provided in Clause 2(B) and remain available for
payment against presentation and surrender of Notes and/or Coupons, as
the case may be; (d) those which have become void or those in respect
of which claims have become prescribed under Condition 12; (e) those
mutilated or defaced Notes which have been surrendered in exchange for
replacement Notes pursuant to Condition 16; (f) (for the purposes only
of determining how many Notes are
2
<PAGE> 74
outstanding and without prejudice to their status for another purpose)
those Notes alleged to have been lost, stolen or destroyed and in
respect of which New Notes have been issued pursuant to Condition 16;
(g) those which have been purchased and canceled as provided in
Condition 9; (h) those Bearer Notes which have been exchanged for
Registered Notes and vice versa; and, (i) the Global Bearer Note to the
extent that it shall have been exchanged for definitive Notes pursuant
to its provision, provided that for the purposes of ascertaining; the
right to attend and vote at any meeting of the Noteholders; (ii) the
determination of how many Notes are outstanding for the purposes of
Conditions 13, 14, and 17 and Schedule 3; and, (iii) the exercise of
any discretion, power, or authority which the Trustee is required,
expressly or impliedly, to exercise in or any reference to the
interests of the Noteholders, those Notes (if any) which are
beneficially held by or are held on behalf of, the Company or any of
its Subsidiaries and not yet canceled, shall be deemed not to remain
outstanding;
The following expressions shall be added to the definitions:
"Change in Control Transaction" shall mean the occurrence of (x)
any consolidation or merger of the Company with or into any other
corporation or other entity or person (whether or not the Company is
the surviving corporation), or any other corporate reorganization or
transaction or series of related transactions in which in excess of 50%
of the Company's voting power is transferred through a merger,
consolidation, tender offer or similar transaction, or (y) any person
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), together with its affiliates and
associates (as such terms are defined in Rule 405 under the Securities
Act of 1933, as amended (the "Securities Act"), beneficially owns or is
deemed to beneficially own (as described in Rule 13d-3 under the
Exchange Act without regard to the 60-day exercise period) in excess of
50% of the Company's voting power.
"Recapitalization Date" means the date that this First
Supplement becomes effective.
"New Notes" means those Notes issued pursuant to the
recapitalization of the Company upon which will be affixed the Restated
Terms and Conditions.
The term "Merger" and its definition shall be deleted from the
definitions.
1.2 To Clause 2(B) of the Trust Deed, a new paragraph shall be added as
follows:
"Effective as of the Recapitalization Date and for so long as
the Shares are traded on the New York Stock Exchange Inc., interest
payments will be paid in Shares. The Shares to be issued shall be
valued at 90% of the average of the daily
3
<PAGE> 75
high and low for the five (5) days prior to the Interest Payment Date.
The interest payments shall be paid in cash if, (i) the Shares are no
longer traded on the New York Stock Exchange Inc. and the holders of a
majority of the principal amount of Outstanding Notes request that
interest payments be paid in cash; or (ii) upon the occurrence of an
Event of Default."
1.3 To Clause 2 of the Trust Deed, a new paragraph (E) shall be added
as follows:
"As soon as practicable following the Recapitalization Date,
SSC shall call a meeting of its shareholders in an effort to obtain
shareholder approval for the issuance of the additional Shares required
by the recapitalization plan approved by the Noteholders."
1.4 To Clause 2 of the Trust Deed, a new paragraph (F) shall be added
as follows:
(F) Receipt of New Shares.
(1) As a condition to the Trustee's execution of this
First Supplement, the Company shall have authorized American
Stock & Transfer Company to issue and cause to be delivered
eight (8) million shares of SSC common stock (the "New
Shares") to the nominees for the benefit of the Noteholders,
as directed by the Trustee.
(2) SSC hereby represents to the holders of the Notes
that:
(i) The New Shares have been duly authorized and
are fully paid and non-assessable and are being
issued free and clear of any liens and
encumbrances;
(ii) No consent, approval or authorization of or
designation, declaration or filing with any
court, governmental authority, regulatory agency,
self-regulatory organization, stock exchange or
market, other than the listing of the New Shares
on the New York Stock Exchange Inc. and the
qualification of the Trust Deed under the Trust
Indenture Act of 1939, as amended (the "Trust
Indenture Act"), on the part of SSC or the
Company, is required in connection with the
issuance of the New Shares;
(iii) The New Shares will be listed for trading
on the New York Stock Exchange Inc.;
(iv) The issuance of the New Shares does not and
will not
4
<PAGE> 76
conflict with or result in a breach or default by
SSC or the Company of any of the terms or
provisions of: (a) their respective Certificates
of Incorporation or Bylaws; (b) any existing
applicable decree, judgment or order of any
court, regulatory body, administrative agency, or
other governmental body having jurisdiction over
SSC or the Company or any of their properties or
assets; (c) conflict with, or constitute a
default (or an event which with notice or lapse
of time or both would become a default) under, or
give to others any rights of termination,
amendment, acceleration or cancellation of, any
agreement, indenture or instrument to SSC or the
Company is a party; or (d) applicable laws or
rules or regulations.
(v) The New Shares are being issued free and
clear of any liens, claims or encumbrances;
(vi) The issuance of the New Shares does not
require registration under the Securities Act, by
section of 3(a)(9) thereof; and
(vii) The New Shares may be resold without any
restriction imposed under the Securities Act,
except for limitations imposed on an "affiliate"
as such term is defined in Rule 144(a) of the
Securities Act.
1.5 Clause 8 (B) (i) shall be deleted in its entirety and replaced as
follows:
"If and whenever there shall be an alteration to the number of
the Shares as a result of consolidation, reclassification or
subdivision of the Shares, the Exchange Price shall be adjusted by
multiplying the Exchange Price in force immediately before such
alternation by the following fraction:
A
---
B
where:
A is the number of Shares in issue immediately before such
alteration; and
B is the number of Shares in issue immediately after
such alteration.
Such adjustment shall become effective on the date the alteration takes
effect.
5
<PAGE> 77
1.6 Clause 10 (A) (i) shall be deleted in its entirety and replaced as
follows:
"(i) Issue and ensure sufficient share capital: provided SSC
shareholder approval is obtained on or before June 1, 2000, issue
Shares to Noteholders on the exercise of Exchange Rights, the payment
of interest in Shares, and at all times keep available for issue, free
from pre-emptive rights out of its authorized but unissued capital,
such number of Shares as would enable Exchange Rights, interest
payments and all other rights of subscription and exchange for and
exchange into Shares to be satisfied in full;"
1.7 Clauses 10 (A)(ix)(b) and 10(B) (iii) are hereby deleted in their
entirety.
1.8 Schedule 3 is amended as follows.
(a) Paragraph 6 shall be deleted in its entirety and replaced
with the following:
"At any such meeting any one or more persons present
in person holding Notes or voting certificates or being
proxies or representatives and holding or representing in the
aggregate not less than one-tenth in principal amount of the
Notes for the time being outstanding shall form a quorum for
the transaction of business and no business (other than the
choosing of a chairman) shall be transacted at any meeting
unless the requisite quorum be present at the commencement of
business. The quorum at any such meeting for passing an
Extraordinary Resolution shall (subject as provided below) be
one or more persons present in person holding Notes or voting
certificates or being proxies or representatives and holding
or representing in the aggregate a clear majority in principal
amount on the Notes for the time being outstanding."
(b) Paragraph 21 shall be deleted in its entirety and replaced
with the following:
"The expression "Extraordinary Resolution" means a
resolution passed by Noteholders holding not less than a
majority of the Notes then Outstanding
(i) at a meeting of Noteholders duly convened and
held in accordance with these provisions, or
(ii) by written consent of Noteholders."
1.9 Schedules 1, 2 and 5 and are deleted in their entirety and replaced
with
6
<PAGE> 78
Schedules 1, 2 and 5 attached.
ARTICLE II
MISCELLANEOUS
2.1 Further Assurances. The parties will execute and deliver such
further instruments and do such further acts and things as maybe reasonably
required to carry out the intent and purpose of the Trust Deed and this First
Supplement.
2.2 SSC Guarantee. SSC hereby re-affirms its Guarantee to the Trustee
on behalf of and for the benefit of the Noteholders, as set out in Clause 3 of
the Trust Deed.
2.3 Counterparts. This First Supplement may be executed in counterparts
and all such counterparts executed shall constitute one agreement binding on all
the parties hereto notwithstanding that all the parties hereto are not
signatories to the original or to the same counterpart.
2.4 Captions. Captions contained in this First Supplement are inserted
only as a matter of convenience and in no way define, limit, extend or describe
the scope of this First Supplement or the intent of any provision hereof.
2.5 Successors and Assigns. All agreements of the Company in the Trust
Deed and this First Supplement shall bind its successor. All agreement of the
Trustee in the Trust Deed and this First Supplement shall bind its successor.
2.6 Severability. In case any provision of this First Supplement should
be invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
2.7 Trust Deed Remains in Full Force and Effect. Except to the extent
amended hereby or in connection therewith, all terms, provisions and conditions
of the Trust Deed and all documents executed in connection therewith, shall
continue in full force and effect and shall remain enforceable and binding in
accordance with their respective terms. Except as specifically modified herein,
the Trust Deed remains unchanged and in full force and effect.
2.8 Incorporation by Reference of Trust Indenture Act; Trust Indenture
Act Controls. Sections 310 through 318 of the Trust Indenture Act are
incorporated by reference in their entirety into the Trust Deed and this First
Supplement, and the provisions of such Sections of the Trust Indenture Act,
whether such provisions are mandatory or permissive, shall be deemed to be
applicable after the effective date of this First Supplement. Notwithstanding
anything in the Trust Deed or this First Supplement to the contrary, if any
provision of the Trust Deed or this First Supplement limits, qualifies or
conflicts with any
7
<PAGE> 79
provision of the Trust Indenture Act that is incorporated by reference herein,
such provision of the Trust Indenture Act shall control.
The Company and the Trustee may without the consent of, or notice to,
any of the Noteholders, enter into a trust deed or supplement to the Trust Deed
which shall not be inconsistent with the terms and provisions of the Trust Deed
or this First Supplement to modify, amend or supplement the Trust Deed, this
First Supplement or any supplement to the Trust Deed in such manner as to permit
the qualification of the Trust Deed, this First Supplement or any such
supplement to the Trust Deed under the Trust Indenture Act or any similar
Federal statute of the United States of America hereafter in effect or to permit
the qualification of the Notes for sale under the securities laws of any of the
states of the United States of America, and, if they so determine, to add to the
Trust Deed, this First Supplement or any such supplement to the Trust Deed such
other terms, conditions and provisions as may be required by the Trust Indenture
Act or similar Federal statute.
8
<PAGE> 80
IN WITNESS WHEREOF, the parties have executed this First Supplement to
be effective on the date first set forth above.
HSBC BANK USA, AS TRUSTEE
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
SUNSHINE MINING AND REFINING
COMPANY
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
9
<PAGE> 81
SCHEDULE 1
Forms of Bearer Note, Coupon and Registered Note
FORM OF BEARER NOTE
Denomination ISIN Series Certif. No.
U.S.$
SUNSHINE PRECIOUS METALS, INC.
U.S.$30,000,000
8 PERCENT SENIOR EXCHANGEABLE NOTES DUE MAY 1, 2001
THIS IS TO CERTIFY that SUNSHINE PRECIOUS METALS, INC., a corporation
organized under the laws of the State of Delaware (the "Company") will pay to
the bearer of this Note on May 1, 2001 (or on such earlier date as the principal
sum hereinafter mentioned may become repayable in accordance with the Terms and
Conditions endorsed hereon) the principal sum of
U.S. $__________ (UNITED STATES DOLLARS)
together with interest on the said principal sum at the rate of 8 percent per
annum from and including the Recapitalization Date, payable semi-annually in
arrears on March 21 and September 21 in each year, save that the first payment
of interest payable on September 21, 2000 shall be in respect of the period
from, and including the Recapitalization Date to, but excluding, September 21,
2000, and such additional amounts (if any) as may be payable under the same
Terms and Conditions, all subject to and in accordance with the said Terms and
Conditions.
As used herein, "Recapitalization Date" means the date that the First
Supplement to Trust Deed becomes effective.
This Note forms one of a series of Notes in the aggregate principal
amount of U.S.$30,000,000 (the "Notes") which have been issued pursuant to
resolutions of the Board of Directors of the Company passed on
___________________ and are constituted by a Trust Deed (the "Trust Deed") dated
21st March, 1996, as amended by a First Supplement to Trust Deed, dated as of
____________________, 2000 made between the Company, Sunshine Mining and
Refining Company and HSBC Bank USA as Trustee. The Notes are issued subject to
and with benefit of the provisions of such Trust Deed.
This Note is guaranteed by and exchangeable into shares of common stock
of Sunshine Mining and Refining Company in accordance with and subject to the
said Terms and Conditions.
This Note and the coupons appertaining hereto shall not be valid or
become binding for any
10
<PAGE> 82
purpose unless and until this Note is authenticated by or on behalf of the
Principal Paying Agent (as defined in the Trust Deed).
IN WITNESS WHEREOF the Company has caused this Note and the coupons
appertaining hereto to be duly executed.
Issued as of ______________________, 2000.
<TABLE>
<S> <C>
CERTIFICATE OF AUTHENTICATION SUNSHINE PRECIOUS METALS, INC.
This Note is authenticated by
or on behalf of the Principal
Paying Agent.
By: By:
------------------------------- -------------------------------
[Name and Title]
</TABLE>
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND 1237(A) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT 1933. AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE
STATE SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES OR BLUE SKY LAW IS AVAILABLE.
11
<PAGE> 83
On the back:
Terms and Conditions
Here will be set out the Terms and Conditions
as set out in Schedule 5.
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
HSBC Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
HSBC Bank USA
140 Broadway
New York 10005-1180 U.S.A.
12
<PAGE> 84
FORM OF COUPON
On the front:
SUNSHINE PRECIOUS METALS, INC
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US$30,000,000
8 percent Senior Exchangeable Notes due May 1, 2000
Coupon for US $__________ due on __________, 2000/__________, 2001
This Coupon is payable to bearer (subject to the Terms and Conditions
endorsed on the Note to which this Coupon appertains, which shall be binding
upon the holder of this Coupon whether or not it is for the time being attached
to such Note) at the specified offices of the Paying Agents set out on the
reverse hereof (or any further or other Paying and Exchange Agents or specified
offices duly appointed or nominated from time to time and notified to the
Noteholders).
If the Bearer Note to which this Coupon relates shall have become due
and payable before the maturity date of this Coupon, this Coupon shall become
void and no payment shall be made in respect of it.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
13
<PAGE> 85
On the back:
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
HSBC Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
14
<PAGE> 86
FORM OF REGISTERED NOTE
On the front:
SUNSHINE PRECIOUS METALS, INC.
(Incorporated with limited liability in the State of Delaware,
the United States of America)
US $___,000,000
__________ percent Senior Exchangeable Notes due May 1, 2001
This Note is a Registered Note and forms part of a series designated as
specified in the title (the "Notes") of Sunshine Precious Metals, Inc. (the
"Company") and constituted by the Trust Deed referred to on the reverse hereof.
The Notes are subject to, and have the benefit of, that Trust Deed and the terms
and conditions (the "Conditions") set out on the reverse hereof.
The Company hereby certifies that __________ is/are, at the date
hereof, entered in the Register as the holder(s) of Notes in the principal
amount of US $__________ Interest on such principal amount at the rate of _____
percent per annum is payable semi-annually in arrear on _____ and _______ in
each year.
This Registered Note is exchangeable into registered Shares of US $0.01
each in the capital of Sunshine Mining and Refining Company subject to and in
accordance with the Conditions and the Trust Deed.
This Registered Note is evidence of entitlement only. Title to
Registered Notes passes only on due registration on the Register and only the
duly registered holder is entitled to payments in respect of this Note.
This Registered Note shall not be valid for any purpose until signed on
behalf of the Company and authenticated by or on behalf of the Registrar.
In witness whereof the Company has caused this Registered Note to be
signed on its behalf by a Director of the Company by his facsimile signature
this ________________________.
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
15
<PAGE> 87
THIS REGISTERED NOTE IS AUTHENTICATED
BY OR ON BEHALF OF THE REGISTRAR
WITHOUT WARRANTY, RECOURSE OR LIABILITY
SUNSHINE PRECIOUS METALS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) and 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT 1933. AS AMENDED (THE "SECURITIES ACT") AND ANY APPLICABLE
STATE SECURITIES OR BLUE SKY LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, EXCHANGED OR OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES OR BLUE SKY LAW IS AVAILABLE.
16
<PAGE> 88
On the back:
Terms and Conditions
Here will be set out the Terms and Conditions
as set out in Schedule 5
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
HSBC Bank plc
Mariner House
Pepys Street
London
EC3N 4DA
PAYING EXCHANGE AND TRANSFER AGENTS
Banque Generale du Luxembourg
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
HSBC Bank USA
140 Broadway
New York 10005-1180 U.S.A.
17
<PAGE> 89
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby transfers to
=======================================
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE
[not more than four names may appear as joint holders])
US $__________ principal amount of this Note, and all rights under it,
and irrevocably requests the Registrar to transfer this Note on the books kept
for registration thereof
Dated
------------------
Signed
-------------------------------
Note:
(i) The signature to this transfer must correspond with the
name as it appears on the face of this Note.
(ii) A representative of the Noteholder should state the
capacity in which he signs e.g. executor.
(iii) The signature of the person effecting a transfer shall
conform to any list of duly authorized specimen signatures supplied by
the registered holder or be certified by a recognized bank, notary
public or in such other manner as the Registrar may require.
18
<PAGE> 90
SCHEDULE 2
Form of Global Bearer Note
SUNSHINE PRECIOUS METALS, INC.
(incorporated with limited liability in the State of Delaware,
the United States of America)
US $30,000,000
8 percent Senior Exchangeable Notes due 2001
TEMPORARY GLOBAL BEARER NOTE
Sunshine Precious Metals, Inc. (the "Company") for value received
hereby promises to pay to bearer the sum of
US$___,000,000 (__________Dollars)
on May 1, 2001 (or such earlier date as such principal sum may become payable in
accordance with the Trust Deed (as defined below) and with the terms and
conditions (the "Conditions") of the Notes designated above (the "Notes") set
out in Schedule 5 to the Trust Deed dated 21st March, 1996 as amended by a First
Supplement to Trust Deed, dated as of_______________, 2000 (the "Trust Deed")
between the Company, Sunshine Mining and Refining Company ("SSC") and HSBC Bank
USA (as trustee) upon presentation and surrender of this Temporary Global Bearer
Note..
This Temporary Global Bearer Note is exchangeable in accordance with
the terms hereof for definitive Notes (the "Definitive Notes") in bearer form
with Coupons attached to be known as 8 percent. Senior Exchangeable Notes due
2001, and, until so exchanged, is subject to the Conditions and the Trust Deed.
The Company hereby irrevocably undertakes to deliver the Definitive Notes in
exchange for this Temporary Global Bearer Note as soon as practicable after the
Recapitalization Date.
On or after the Recapitalization Date, this Temporary Global Bearer
Note may be exchanged in whole or in part for Definitive Notes in an aggregate
principal amount not exceeding the principal amount of this Temporary Global
Bearer Note submitted for exchange.
As used herein, "Recapitalization Date" means the date that the First
Supplement to Trust Deed becomes effective.
Any person appearing in the records maintained by Cedel or Euroclear as
entitled to any interest in this Temporary Global Bearer Note shall be entitled
to require the exchange of an appropriate part of this Temporary Global Bearer
Note for a Definitive Note or Notes in bearer form.
Until the exchange of the appropriate part of this Temporary Global
Bearer Note pursuant to the foregoing provisions, no such person as aforesaid
shall (except as stated herein) be entitled to
19
<PAGE> 91
receive any payment by way of principal of or interest on this Temporary Global
Bearer Note (unless, upon due presentation of this Temporary Global Bearer Note
for exchange, delivery of any Definitive Notes shall be improperly withheld or
refused) or, to receive the Shares which he would otherwise be entitled to
receive.
Upon any exchange of a part of this Temporary Global Bearer Note for a
Definitive Note or Notes, the portion of the principal amount hereof so
exchanged shall be endorsed by the Principal Paying, Exchange and Transfer Agent
in the Schedule hereto, whereupon the principal amount hereof shall be reduced
for all purposes by the amount so exchanged and endorsed.
Subject to the second preceding paragraph, no provisions of this
Temporary Global Bearer Note shall alter or impair the obligation of the Company
to pay the principal and interest on the Notes when due in accordance with the
Conditions.
This Temporary Global Bearer Note shall not be valid for any purpose
until signed on behalf of the Company and authenticated by or on behalf of the
Principal Paying, Exchange and Transfer Agent.
This Temporary Global Bearer Note shall be governed by and construed in
accordance with English law.
In witness whereof the Company has caused this Temporary Global Bearer
Note to be signed on its behalf.
Dated , 2000
---------------------------------
AUTHORIZED
SIGNATORY FOR AND ON BEHALF OF
SUNSHINE PRECIOUS METALS, INC.
THIS TEMPORARY GLOBAL BEARER NOTE IS
AUTHENTICATED BY OR ON BEHALF OF THE
PRINCIPAL PAYING, EXCHANGE AND
TRANSFER AGENT WITHOUT WARRANTY,
RECOURSE OR LIABILITY.
By:
------------------------------
AUTHORIZED SIGNATORY
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE
CODE.
20
<PAGE> 92
THIS TEMPORARY GLOBAL BEARER NOTE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE
"SECURITIES ACT") AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAW, AND MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, EXCHANGED OR OTHERWISE DISPOSED OF
IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF ANY "U.S. PERSON"
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) UNLESS REGISTERED UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAW IS AVAILABLE.
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES
AND PURCHASES AND CANCELLATIONS
The following exchanges of a part of this Global Bearer Note for
Definitive Notes and/or purchases and cancellations of a part of this Temporary
Global Note have been made:
<TABLE>
<CAPTION>
Amount of
Amount of decrease in
decrease in principal amount
principal amount of this Temporary Principal amount
of this Temporary Global Bearer of this Temporary
Global Bearer Note following Global Bearer
Note following purchase and Note following
Date made exchange cancellation such decrease Notation made
--------- -------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
</TABLE>
21
<PAGE> 93
SCHEDULE OF INTEREST AND PRINCIPAL PAID
<TABLE>
<CAPTION>
Date of Payment Amount of Interest and Principal Notation Made
--------------- -------------------------------- -------------
<S> <C> <C>
</TABLE>
22
<PAGE> 94
SCHEDULE 5
Restated Terms and Conditions of the Notes
The following, save for the paragraphs in italics, is the text of the
terms and conditions of the Notes which will be endorsed on each Note in
definitive form:
The U.S. $30,000,000 8 percent Senior Exchangeable Notes (the "Notes")
of Sunshine Precious Metals, Inc, (the "Company") are constituted by a trust
deed dated March 21, 1996 (the "Trust Deed") and by a First Supplement to Trust
Deed dated__________, 2000 (the "First Supplement") made among the Company,
Sunshine Mining and Refining Company ("SSC", which shall include for all
purposes hereof any successor corporation) and HSBC Bank USA (formerly Marine
Midland Bank) (the "Trustee", which expression shall include all persons for the
time being the trustee or trustees under the Trust Deed and the First Supplement
to Trust Deed) as trustee for the holders of the Notes (the "Noteholders"). The
issue of the Notes was authorized by a written resolution of the board of
directors of the Company adopted February 27, 1996. The giving of the guarantee
by SSC (the "Guarantee') was authorised by a resolution of the board of
directors of SSC adopted on February 27, 1996. These Restated Terms and
Conditions were authorized by a board of director resolution on March 1, 2000.
The statements in these Restated Terms and Conditions include summaries
of, and are subject to, the detailed provisions of and definitions in the Trust
Deed and the First Supplement. Copies of the Trust Deed, the First Supplement,
and of an agency agreement dated March 21, 1996, (the "Agency Agreement") made
between the Company, SSC, HSBC Bank plc (formerly Midland Bank plc) as principal
paying, exchange and transfer agent (the "Principal Paying Agent", "Principal
Exchange Agent" and "Principal Transfer Agent" respectively, which expressions
shall include any successors), the other paying, exchange, and transfer agents
named therein (together with the Principal Paying Agent, the "Paying Agents",
together with the Principal Exchange Agent, the "Exchange Agents" and together
with the Principal Transfer Agent, the "Transfer Agent", respectively which
expression shall include any additional or successor paying agents, exchange
agents or transfer agents as the case may be), the registrar referred to below
(the "Registrar", which expression shall include any successor registrar) and
the Trustee are available for inspection during normal business hours by the
Noteholders and the holders of the interest coupons appertaining to the Notes in
bearer form (respectively, the "Couponholders" and the "Coupons"), at the
registered office for the time being of the Trustee, being at the date of issue
of the Notes at 140 Broadway, New York, New York 10005-1180, USA and at the
specified office of each of the Paying Agents and the Registrar. The Noteholders
and the Couponholders are entitled to the benefit of, and are bound by, and are
deemed to have notice of, all of the provisions of the Trust Deed, the First
Supplement, and the Agency Agreement.
23
<PAGE> 95
The Noteholders, by affirmative vote of not less than two-thirds of the
principal amount of Notes Outstanding, passed an Extraordinary Resolution,
binding on all the Noteholders, approving a recapitalization of the Company
whereby the Noteholders agreed to forego the March 21, 2000, scheduled, interest
payment and provide for future interest payments on the Notes through the
issuance of SSC common stock, extend the maturity date of the Notes to May 1,
2001, or later as provided for herein, and amend the Exchange Price and Exchange
Period, in exchange for the issuance of eight (8) million shares of the SSC
common stock for the benefit of Noteholders. The terms of the recapitalization
are set out further in the First Supplement and in these Restated Terms and
Conditions of the Notes.
Capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the Trust Deed and in the First Supplement.
1. FORM, DENOMINATIONS, AND TITLE
All Outstanding Notes will be exchanged and replaced with new notes
(the "New Notes") pursuant to the following procedure:
(A) The Notes are either in bearer form ("Bearer Notes"),
serially numbered, in denominations of U.S. $1,000 and U.S. $10,000
each with Coupons attached on issue, or in registered form ("Registered
Notes"), in principal amounts of U.S. $1,000 or integral multiples
thereof ("Authorised Denominations") without Coupons attached. Bearer
Notes of one denomination may not be exchanged for Bearer Notes of the
other denomination.
(B) Title to the Bearer Notes and to the Coupons will pass by
delivery. Title to the Registered Notes will pass by transfer and
registration as described in these Terms and Conditions and the Agency
Agreement. The Company, any Paying Agent or Exchange Agent and the
Trustee may (to the fullest extent permitted by applicable laws) deem
and treat the holder of any Bearer Notes and the holder of any Coupon
as the absolute owner thereof for all purposes (whether or not the
Bearer Note or Coupon shall be overdue and notwithstanding any notice
of ownership or writing on the Bearer Note or Coupon or any notice of
previous loss or theft of the Bearer Note or Coupon). In these
conditions, (in relation to a Note) "Noteholder" and (in relation to a
Note or Coupon) "Holder" means the bearer of any Bearer Note or Coupon
(as the case may be) or the person in whose name a Registered Note is
registered, as the case may be.
The Bearer Notes will be represented initially by a temporary global
note (the "Global Note"), without interest coupons, which will be deposited with
a common depository (the "Common Depository") and held on behalf of Morgan
Guaranty Trust Company of New York, as operator of the Euroclear System
("Euroclear"), and Clearstream Banking, societe
24
<PAGE> 96
anonyme ("Clearstream") for credit to the accounts designated by the Noteholders
at Euroclear and Clearstream. The Company undertakes to make definitive Bearer
Notes available for exchange for the Global Note, in whole or in part, on or
after May 1, 1996.
The Registered Notes will be issued in definitive registered form and
delivered as soon as practicable after the Recapitalization Date to the Lead
Managers for the account of the subscribers thereof as specified by the Lead
Managers upon certification that (i) the holders of the relevant Registered
Notes are not U.S. persons and, (ii) the proposed holder of the relevant
Registered Notes (a) is not, nor is it a nominee for Euroclear or Clearstream or
any other person providing a clearance service within Section 96 of the Finance
Act 1986 of the United Kingdom and (b) is not, nor is it a nominee or agent for,
a person whose business is or includes issuing depository receipts within
Section 93 of the Finance Act 1986 of the United Kingdom.
The Notes and any Coupons will bear the following legend: "Any United
States person who holds this obligation will be subject to limitations under the
U.S. income tax laws, including the limitations provided in Section 165 (j) and
1287 (a) of the United States Internal Revenue Code of 1986, as amended."
2. STATUS
(A) The Notes and any Coupons are direct, unconditional and
unsecured obligations of the Company and rank and will rank pari passu,
without any preference among themselves, and such obligations will rank
senior to all other outstanding unsecured and subordinated obligations
of the Company, present and future, but, in the event of bankruptcy or
insolvency of the Company, only to the extent permitted by the
applicable laws relating to creditors' rights.
(B) SSC has, in the Trust Deed, unconditionally and irrevocably
guaranteed the due and punctual payment of the principal of, and
interest on the Notes as and when the same shall become due and payable
together with any additional amounts payable pursuant to Condition 10
and all other moneys payable under the Trust Deed. The obligations of
SSC under the terms of the Guarantee constitute direct, unconditional
and unsecured obligations of SSC and such obligations rank and will
rank senior to all other outstanding unsecured and subordinated
obligations of SSC present and future (including without limitation,
the Convertible Subordinated Reset Debentures due July 15, 2008, issued
by SSC) but, in the event of bankruptcy or insolvency of SSC, only to
the extent permitted by applicable laws relating to creditors' rights.
(C) Following recapitalization, the number of Shares issued and
outstanding will be approximately 50,400,000.
25
<PAGE> 97
(D) Shares issued to satisfy obligations hereunder shall be
validly issued, free and clear of any legends, transfer restrictions,
and stop orders, fully paid, and non- assessable, free and clear of any
and all liens, claims, and encumbrances, entitled to be resold without
any restriction imposed under the Securities Act, except for
limitations imposed on an "affiliate" as such term is defined in Rule
144(a) of the Securities Act, and that the holders of such Shares shall
be entitled to all rights and preferences accorded to a holder of
Shares. As of the date of this First Supplement, the Shares outstanding
are currently listed on the New York Stock Exchange Inc."
3. COVENANTS
(A) So long as any Note remains Outstanding (as defined in the
Trust Deed), the Company will not create or permit to subsist any Lien
(as defined below) or create, assume or guarantee any Indebtedness (as
defined below).
(B) The Company will not merge or consolidate with or sell,
convey or otherwise dispose of all or substantially all of its assets
to any other corporation, partnership or other legal entity unless
(i)(A) the Company shall be the surviving corporation, partnership or
other legal entity in the case of a merger or (B) (I) the surviving,
resulting or transferee corporation, partnership or other legal entity
("the successor corporation") shall expressly assume the due and
punctual payment of the principal of and interest on all the Notes,
according to their tenor, and due and punctual performance of all of
the covenants and obligations of the Company under the Notes and (II)
if the successor corporation is not organised under the laws of the
U.S. or any State thereof or the District of Columbia, it shall agree
to indemnify and hold harmless the holder of each Note or Coupon
against the then existing or future tax, assessment or governmental
charge imposed on such holder by a jurisdiction other than the U.S. or
any political subdivision or taxing authority thereof or therein with
respect to and withheld on the making of, any payment of principal of
or interest on such Note which would not have been so imposed and
withheld had such merger, consolidation, sale or conveyance not been
made and any tax, assessment or governmental charge imposed on or
relating to, and any costs and expenses involved in such merger,
consolidation, sale or conveyance and (ii) the Company or such
successor corporation, as the case may be, shall not immediately after
such merger, consolidation, sale or conveyance be in default in the
performance of any covenants or obligations of the Company under the
Notes.
(C) Without prejudice to the provisions of Condition 8(F), SSC
may not merge or consolidate with or sell, convey or otherwise dispose
of all, or substantially all of its assets to any other corporation,
partnership or other legal entity unless (A) SSC shall be the surviving
corporation, partnership or other legal entity in the case of a merger
or (B) (I) the successor corporation, partnership or other legal entity
shall expressly assume the obligations of SSC under the Trust Deed and
(II) the successor
26
<PAGE> 98
corporation, partnership or other legal entity (together with its
subsidiaries, if any) on a consolidated basis shall have a Consolidated
Net Worth (as defined below) following the transaction equal to or
greater than the Consolidated Net Worth of SSC before the transaction.
(D) Upon any merger, consolidation, sale or conveyance as
provided above, the successor or surviving corporation shall succeed to
and be substituted for and may exercise every right and power of and be
subject to all of the obligations of the Company under the Notes or SSC
under the Trust Deed referred to in Condition 2(B), as the case may be,
with the same effect as if the successor or surviving corporation had
been named as the Company or SSC therein and herein and the Company or
SSC, as the case may be, shall be released from its liability as
obligor under the Notes and/or the Trust Deed.
4. REGISTRATION
The Company will cause to be kept at the specified office of the
Registrar a register (the "Register") on which shall be entered the names and
addresses of the holders of the Registered Notes and the particulars of the
Registered Notes held by them and or all transfers of Registered Notes and
exchanges of Registered Notes. Holders of Registered Notes will be entitled to
receive only one Registered Note in respect of their holding.
5. EXCHANGE BETWEEN BEARER AND REGISTERED NOTES
(A) Exchange of Bearer Notes for Registered Notes. At the option
of the holder thereof upon presentation, at any time on or after the
Recapitalization Date, of a duly completed and signed request for
exchange in the form for the time being currently obtainable from the
specified office of the Registrar or a Transfer Agent (a "Registration
Request") together with the relevant Bearer Note, subject to the terms
of the Agent Agreement and to Conditions 5(E) and 5(F), Bearer Notes
are exchangeable for the same aggregate principal amount of Registered
Notes provided that (save as provided below) all unmatured Coupons
relating thereto are attached thereto or are surrendered therewith.
Bearer Notes surrendered in exchange for Registered Notes from and
including the Record Date (as defined below) in respect of any Interest
Payment Date (as defined below) up to and including such Interest
Payment Date will not be required to be surrendered with the Coupon
relating to the interest payable on such Interest Payment Date.
Interest on a Registered Note issued in exchange will accrue as from
the immediately preceding Interest Payment Date or, none, on the
Recapitalization Date, except where issued in respect of a Bearer Note
surrendered during the period from and including the Record Date in
respect of an Interest Payment Date up to and including such Interest
Payment Date, in which event interest shall accrue as from such
last-mentioned Interest Payment Date. Bearer Notes may only be
surrendered in exchange for Registered Notes at the specified
27
<PAGE> 99
office of the Registrar or of a Transfer Agent.
The Registrar or the relevant Transfer Agent will within three
Business Days (as defined below) of the presentation of any
Registration Request together with the relevant Bearer Note deliver a
Registered Note to the Noteholder at its specified office, or (at the
risk and, if mailed at the request of the Noteholder otherwise than by
ordinary mail at the expense of the Noteholder), mail the Registered
Note by uninsured mail to such address as the Noteholder may request. A
Noteholder will receive only one Registered Note for all of the Bearer
Notes which are the subject of a single Registration Request.
(B) Exchange of Registered Notes for Bearer Notes. At the option
of the holder thereof, upon presentation at any time on or after the
Recapitalization Date, of a duly completed and signed request for
exchange in the form for the time being obtainable from the specified
office of the Registrar or a Transfer Agent (a "Bearer Request")
together with the relevant Registered Note, subject to the terms of the
Agency Agreement and to Conditions 5(E) and 5(F), Registered Notes are
exchangeable in whole or in part in an Authorised Denomination for the
same aggregate principal amount of Bearer Notes. Interest on a
Registered Note surrendered for exchange will cease to accrue as from
the Interest Payment Date immediately preceding the date of surrender
or, if none, the Recapitalization Date, except where the date of
surrender falls during any period from and including the Record Date in
respect of an Interest Payment Date up to and including such Interest
Payment Date, in which event interest will cease to accrue as from such
last-mentioned Interest Payment Date. Registered Notes may only be
surrendered in exchange for Bearer Notes at the specified office of the
Registrar or a Transfer Agent.
The Registrar or the relevant Transfer Agent will within three
Business Days of the presentation of any Bearer Request together with
the relevant Registered Note deliver the Bearer Note or Bearer Notes
requested together with all Coupons in respect of all Interest Payment
Dates after the date of presentation (other than the Coupon in respect
of the next Interest Payment Date after the date of presentation in the
case of a Registered Note presented for exchange during any period from
and including the Record Date in respect of such Interest Payment Date
and up to and including such Interest Payment Date) and, in the case of
exchange of part only of a Registered Note, a Registered Note for the
balance after such exchange, in each case at the specified office of
the Registrar or the relevant Transfer Agent, or (at the risk and, if
mailed at the request of the Noteholder otherwise than by ordinary
mail, at the expense of the Noteholder) mail the Bearer Note or Bearer
Notes together with all Coupons as aforesaid and any such Registered
Note by uninsured mail to such address as the Noteholder may request.
(C) Transfer of Registered Notes. Registered Notes, may,
subject to the terms
28
<PAGE> 100
of the Agency Agreement and to Conditions 5 (E) and 5 (F) be
transferred in whole or in part in an Authorised Denomination by
lodging the relevant Registered Note (with the application for transfer
in respect thereof duly executed and duly stamped where applicable) at
the specified office of the Register or a Transfer Agent. No transfer
of a Registered Note will be valid unless and until entered on the
Register. A Registered Note may be registered only in the name of, and
transferred only to, a named person (or persons, not exceeding four in
number).
The Registrar or the relevant Transfer Agent will within three
Business Days of any duly made application for the transfer of a
Registered Note deliver a Registered Note to the transferee (and, in
the case of a transfer of part only of a Registered Note, deliver a
Registered Note for the untransferred balance to the transferor), at
the specified office of the Register or the relevant Transfer Agent, or
(at the risk and, if mailed at the request of the transferee or, as the
case may be, the transferor otherwise than by ordinary mail, at the
expense of the transferee or, as the case may be, the transferor) mail
the Registered Note by uninsured mail to such address as the transferee
or, as the case may be, the transferor may request.
(D) Formalities Free of Charge. Such exchange or transfer will
be effected without charge subject to (i) the person making such
request for exchange or such application for transfer paying or
procuring the payment of any taxes, duties and other governmental
charges payable in connection therewith, (ii) the Registrar or the
relevant Transfer Agent (in the case of exchange of Registered Notes
for Bearer Notes or the transfer of Registered Notes) being satisfied
with the documents of title and/or identity of the person making the
request or application and (iii) such reasonable regulations as the
Company may from time to time agree with the Registrar. The exchange of
Bearer Notes for Registered Notes and Registered Notes for Bearer Notes
will be subject to the provisions of all applicable fiscal or other
laws and regulations in effect at the time of such exchange.
(E) Closed Periods. Neither the Company, the Registrar, nor any
Transfer Agent will be required (i) to register the transfer of any
Registered Note, (ii) to exchange any Bearer Note for a Registered Note
or (iii) to exchange any Registered Note (or part thereof) for a Bearer
Note (a) during the period of seven calendar days immediately prior to
May 1, 2001, or any earlier date fixed for redemption of the Notes
pursuant to Condition 9, (b) in respect of which an Exchange Notice (as
defined below) has been delivered in accordance with Condition 8 or (c)
in respect of which the Trustee or the Company have exercised Exchange
Rights under Condition 8(D) or 8(E), as the case may be. A Bearer Note
or Registered Note called for redemption may, however, be exchanged for
a Registered Note or Bearer Note, as the case may be, which is
simultaneously surrendered not later than the relevant Record Date.
29
<PAGE> 101
(F) Certification of Non-U.S. Person Status. Neither the Company
nor the Registrar will be required to register the transfer of any
Registered Note prior to the Recapitalization Date unless the
transferee provides written certification that such transferee is not a
U.S. person or unless the transfer of the Registered Notes is exempt
from the registration under the Securities Act and any applicable state
securities laws. In addition, the transferee of a Registered Note will
be required to complete certain documentation to ensure the Company's
compliance with U.S. federal income tax laws.
6. INTEREST AND ADDITIONAL INTEREST
As of the Recapitalization Date, the Notes bear interest from (and
including) the Recapitalization Date, at the rate of 8 percent per annum,
payable in Shares, semiannually on March 21 and September 21 in each year (each
an "Interest Payment Date"), the first such payment to be made on September 21,
2000, in respect of the period from and including the Recapitalization Date to
(but excluding) September 21, 2000, with value of the Shares to be issued being
equal to 90% of the average of the high and low trading prices for the five (5)
trading days immediately prior to the Interest Payment Date. However, if:
(i) Shares are not listed on the New York Stock Exchange Inc., and the
holders of a majority of the principal amount of the Notes Outstanding
have requested that interest payments be made in cash; or,
(ii) upon the occurrence of an Event of Default
the interest shall be paid in cash and will amount to U.S. $40.00 per U.S.
$1,000 principal amount of the Notes. The number of Shares to be issued shall be
made available by SSC to the Trustee and/or the Transfer Agent and shall be
rounded down to the nearest whole number. Receipt of the Shares will be made
upon presentation of a Bearer Note to Paying Agent, which Note shall be stamped
to reflect such payment or issuance or in the case of Registered Notes, to the
Holders shown on the Register on the Anniversary Date.
Each Note will cease to bear interest (i) from its due date for
redemption unless, upon due presentation, payment of the principal in respect of
the Note is improperly withheld or refused or unless default is otherwise made
in respect of such payment, in which event interest shall continue to accrue as
provided in the Trust Deed and (ii) where the Exchange Right (as defined below)
shall have been exercised, or the Trustee or the Company shall have exercised
Exchange Rights pursuant to Conditions 8(D) and 8(E), respectively, from the
Interest Payment Date last preceding the relevant Exchange Date or, if the Notes
are exchanged before the first Interest Payment Date, since the Recapitalization
Date.
When interest is required to be calculated in respect of a period of
less than a full year, it shall be calculated on the basis of a 360 day year
consisting of 12 months of 30 days each
30
<PAGE> 102
and, in the case of an incomplete month, the number of days elapsed.
7. PAYMENTS
(A) Payments of principal in respect of each Bearer Note and any
net proceeds payable under Conditions 8(D) and 8(E) will only be made,
in the case of Bearer Notes, against presentation and surrender (or, in
the case of part payment only, endorsement) of the relevant Bearer Note
at the specified office of any of the Paying Agents or in the case of
Registered Notes, to the persons shown on the Register at the close of
business seven Business Days prior to the relevant payment date (the
"Record Date") and subject to surrender of the Registered Notes at the
specified office of the Registrar or any Transfer Agent. Each such
payment and any payment of net proceeds pursuant to Conditions 8(D) or
8(E) will be made at the specified office of any Paying Agent, at the
Holder's option, by U.S. dollar cheque drawn on, or by transfer to a
U.S. dollar account maintained by the payee with, a bank in London,
England and in the case of Registered Notes, by U.S. dollar cheque
drawn on a bank in London, England and mailed, not later than the due
date for payment (at the risk and, if mailed at the request of the
holder otherwise than by ordinary mail, expense of the holder) to the
holder or to the first named of joint holders of the relevant
Registered Notes at his registered address outside the United States
and its possessions or in accordance with mandate instructions
acceptable to the Registrar, subject in all cases to any applicable
fiscal or other laws and regulations, but without prejudice to the
provisions of Condition 12.
(B) Shares issued on an Interest Payment Date pursuant to
interest due on the Bearer Notes will be made against presentation and
surrender (or, if applicable, endorsement) of the relevant Coupons at
the specified office of any of the Paying Agents or, in the case of
Registered Notes, to the persons shown on the Register at the close of
business on the Record Date. Delivery of Shares will be made at the
specified office of any Paying Agent at the Holder's option. In the
event that interest is paid in cash, such interest payments will be
made at the specified office of any Paying Agent, at the Holder's
option, by U.S. dollar cheque drawn on, or by transfer to a U.S. dollar
account maintained by the payee with, a bank in London, England and in
the case of Registered Notes, by U.S. dollar cheque drawn on a bank in
London, England and mailed, not later than the due date for payment (at
the risk and, if mailed at the request of the holder otherwise than by
ordinary mail, expense of the holder) to the holder or to the first
named of joint holders of the relevant Registered Notes at his
registered address outside the United States and its possessions or in
accordance with mandate instructions acceptable to the Registrar,
subject in all cases to any applicable fiscal or other laws and
regulations, but without prejudice to the provisions of Condition 12.
(C) Each Bearer Note should be presented for redemption
together with all
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unmatured Coupons relating to such Note, failing which the full amount
of any missing unmatured Coupon (or, in the case of payment not being
made in full, that proportion of the full amount of the missing
unmatured Coupons which the amount so paid bears to the total amount
due) will be deducted from the amount due for payment. Each amount so
deducted will be paid in the manner mentioned above against
presentation and surrender (or, in the case of part payment only,
endorsement) of such missing Coupon at any time before the expiry of 10
years after the Relevant Date (as defined in Condition 10) in respect
of the relevant Note (whether or not such Coupon would otherwise have
become void pursuant to Condition 12), or, if later, five years after
the date on which such Coupon would have become due, but not
thereafter.
A holder shall be entitled to present a Bearer Note or Coupon
for payment only on a Presentation Date and shall not be entitled to
any further interest or other payment if a Presentation Date is after
the due date.
"Presentation Date" means a day which (subject to Condition 12):
(a) is or falls after the relevant due date but, if the due date
is not or was not a Business Day in New York, is or falls after
the next following such Business Day, and
(b) is a Business Day in the place of the specified office of
the Paying Agent at which the Bearer Note or Coupon is presented
for payment and in the case of payment by transfer to a U.S.
dollar account in London as referred to above, in London.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the City
of New York, New York. are authorised or obliged by law, regulation or
executive order to close and, as the context may require, the day on
which commercial banks are open for business in the relevant place of
presentation or payment.
When making cash payments to Noteholders or Couponholders,
fractions of one cent will be rounded down to the nearest whole cent.
When issuing Shares to Noteholders or Couponholders, Shares shall be
rounded up to the nearest whole number.
The names of the initial Paying Agents, Exchange Agents and
Transfer Agents and Registrar and their initial specified offices are
set out at the end of the "Terms and Conditions of the Notes." The
Company reserves the right, subject to the prior written approval of
the Trustee, at any time to vary or terminate the appointment of any
Paying Agent, Exchange Agent or the Registrar and to appoint additional
or other
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<PAGE> 104
Paying Agents, Exchange Agents or Registrar, provided that it will at
times maintain (i) at least two Paying Agents, two Exchange Agents and
two Transfer Agents having specified offices in separate European
cities approved by the Trustee, one of which, shall be in London and
(ii) a Registrar with a specified office in New York. Notice of any
termination or appointment and of any changes in specified offices will
be given to the Noteholders promptly by the Company in accordance with
Condition 17.
8. EXCHANGE
(A) Exchange Period and Price
(i) Noteholders shall have the right, upon the approval of
Noteholders holding a clear majority in principal amount of the
Notes for the time being Outstanding and subject to Condition
9(G), any other applicable restrictions provided herein, and
applicable laws and regulations, to require SSC to exchange all
or any of their Notes at their principal amount in exchange for
Shares at any time during the Exchange Period, as defined below.
The right of a Noteholder to exchange any Note into Shares is
hereinafter called the "Exchange Right." Upon exchange, the
right of the exchanging Noteholder to repayment of the principal
amount of the Note to be exchanged (and, subject as provided in
Condition 8(B) (iv), accrued interest thereon) shall be
extinguished and released, and in consideration and in exchange
therefore, SSC shall allot and issue Shares credited as paid up
in full as provided in this Condition 8. Subject to and upon
compliance with the provisions of these Conditions, the Exchange
Right attaching to any Note maybe be exercised, at the option of
the holder thereof, during the Exchange Period.
"Exchange Period" means, provided SSC shareholders
approve, on or before June 1, 2000, the authorization and
issuance of the requisite number of Shares to Noteholders:
(i) any time on and after 120 days from the
Recapitalization Date (or such later date as agreed by the
affirmative vote of a majority of the principal amount of Notes
Outstanding), up to the close of business on the second Business
Day preceding the Maturity Date; or,
(ii) if such Note shall have been called for redemption
pursuant to Condition 9 (B), the date seven calendar days prior
to the date fixed for redemption thereof.
The number of Shares to be issued on exchange of a Note
will be determined by dividing the principal amount of the Note
to be exchanged (or, in the case of exchange of part only of the
principal amount of the relevant
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<PAGE> 105
Note, the principal amount thereof being exchanged) by the
Exchange Price (as defined below) in effect on the Exchange
Date, with the result being rounded down to the nearest whole
number.
(ii) An Exchange Right may only be exercised in respect of
an authorised denomination of Notes. If more than one Note is
exchanged at any one time by the same holder, the number of
Shares to be issued upon such exchange will be calculated on the
basis of the aggregate principal amount of the Notes to be
exchanged. Fractions of Shares will not be issued on exchange
and no cash adjustments will be made in respect thereof.
(iii) The price at which Shares will be issued upon
exchange (the "Exchange Price") will initially be U.S. $1.50 per
Share but will be subject to adjustment in the manner provided
in Condition 8(C).
(iv) Notwithstanding the provisions of paragraph (i) of
this Condition 8(A), if the Company shall default in making
payment in full in respect of any Note which shall have been
called for redemption prior to the Maturity Date, the Exchange
Right attaching to such Note will continue to be exercisable
(unless already exercised by the Trustee pursuant to Condition
8(D) or by the Company pursuant to Condition 8(E) up to, and
including the close of business (at the place where the Note is
deposited in connection with the exercise of the Exchange
Right), on the date upon which the full amount of the moneys
payable in respect on such Note has been duly received by the
Trustee or the Principal Paying Agent or, if earlier, the
Maturity Date.
"Maturity Date" means May 1, 2001, unless extended
pursuant to Condition 9(A).
(v) As used in the Conditions, the expression "Shares"
means common stock U.S. $0.01, of SSC or its survivor (and all
other (if any) shares or stock resulting from any subdivision,
consolidation or re-classification of such shares).
(vi) In the case of a Bearer Note, an Exchange Right may
only be exercised in respect of the total principal amount of
such Bearer Note and, in the case of a Registered Note an
Exchange Right may only be exercised in respect of an Authorised
Denomination. Where an Exchange Right is exercised in respect of
part only of a Registered Note, the old Registered Note shall be
canceled and a new Registered Note for the balance thereof shall
be issued in lieu thereof without charge but upon payment by the
Holder of any taxes, duties and other governmental charges
payable in connection therewith and the Registrar will within
seven Business Days of the relevant Exchange Date deliver such
new Registered Note to the Noteholder at the specified office of
the
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<PAGE> 106
Registrar or (at the risk and, if mailed at the request of the
Noteholder otherwise than by ordinary mail, at the expense of
the Noteholder) mail the new Registered Note by uninsured mail
to such address as the Noteholder may request.
In the case of a Registered Note, an Exchange Right may
not be exercised by the Noteholder during the period commencing
on the Record Date in respect of any payment and ending on the
due date for such payment (both days inclusive).
(B) Procedure for Exchange
(i) To exercise the Exchange Right attaching to any Note,
the holder thereof must complete, execute and deposit at his own
expense during normal business hours at the specified office of
the Principal Exchange Agent or any of the other Exchange Agents
or, in the case of a Registered Note, the Registrar, a notice of
exchange (an "Exchange Notice") in duplicate in the form (for
the time being current) obtainable from the specified office of
each Exchange Agent, together with the relevant Note and any
amount to be paid by the Noteholder pursuant to this Condition
8(B)(i).
The exchange date in respect of a Note (the "Exchange
Date") must fall at a time when the Exchange Right attaching to
that Note is expressed in these Conditions to be exercisable and
will be deemed to be the Business Day immediately following the
date of the surrender of the Note and delivery of such Exchange
Notice and, if applicable, any payment to be made or indemnity
given under these Conditions in connection with the exercise of
such Exchange Right or, in the case of an automatic exchange on
redemption pursuant to Condition 8(D), the relevant redemption
date. An Exchange Notice once delivered shall be irrevocable.
"Stock Exchange Business Day" means any day (other than a
Saturday or Sunday) on which The New York Stock Exchange Inc. or
the Alternative Stock Exchange (as defined in Condition
11(A)(v)(a)), as the case may be, is open for business.
A Noteholder or the Trustee delivering a Note for exchange
must pay (in the case of the Trustee, by way of deduction from
the net proceeds of sale referred to in Condition 8(D)) any
taxes and capital, stamp, issue and registration duties arising
on exchange (other than any taxes or capital, or stamp duties
payable in the U.S. or in the place of the Alternative Stock
Exchange, as the case may be, by SSC in respect of the allotment
and issue of Shares and listing of the Shares on exchange) and
such Noteholder or the Trustee (as the case may be) must pay (in
the case of the Trustee, by way of deduction from the net
proceeds of sale as aforesaid) all, if any, taxes arising by
reference to any
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<PAGE> 107
disposal or deemed disposal of a Note in connection with
such exchange.
Until such time as SSC shall have either, to the
satisfaction of the Trustee, complied with its obligations under
or made the determination referred to in Condition 11(A)(iii), a
Noteholder or the Trustee delivering a Note for exchange on
behalf of a Noteholder must either (i) provide a written
certification that the Noteholder is not a U.S. person, that the
Note is not being exchanged on behalf of a U.S. person, and that
such persons are located outside the U.S., acquired the Notes to
be exchanged outside the U.S., and are not affiliates of SSC or
persons acting on behalf of an affiliate of SSC; or (ii) provide
a written opinion of U.S. legal counsel, in form and substance
acceptable to SSC, to the effect that the exchange of the Note
for Shares is exempt from registration under the Securities Act
and any applicable state securities law.
(ii) As soon as practicable, and in any event not later
than 14 calendar days after the Exchange Date, SSC will in the
case of Notes exchanged on exercise of the Exchange Right,
whether by the Noteholder or by the Trustee, or a Note being
exchanged in accordance with Condition 8(E) and in respect of
which an Exchange Notice has been delivered and the relevant
Note and amounts payable by the relevant Noteholder, or, as the
case may be, the Trustee deposited as permitted by sub-paragraph
(i) above, cause the person or persons designated for the
purpose in the Exchange Notice to be registered as Holder(s) of
the relevant number of Shares and will make a certificate or
certificates for the relevant Shares available for collection at
SSC's principal office in Boise, Idaho or, if so requested in
the relevant Exchange Notice, will deliver such certificate or
certificates to the person and at the place specified in the
Exchange Notice together with any other securities, property or
cash required to be delivered upon exchange and such assignments
and other documents (if any) as may be required by law to effect
the transfer thereof.
(iii) The person or persons specified for that purpose
will be deemed for all purposes to be the holder of record of
the number of Shares issuable upon exchange with effect from the
Exchange Date. The Shares issued upon exchange of the Notes will
in all respects rank pari passu with the issued and outstanding
Shares in issue on the relevant Exchange Date except for any
right excluded by mandatory provisions of applicable law. A
Holder of Shares issued on exchange of Notes shall not be
entitled to any rights the Record Date for which precedes the
relevant Exchange Date.
(iv) If any notice requiring the redemption of any Notes
is given pursuant to Condition 9(B) on or after the fifteenth
calendar day prior to the Record Date in respect of any dividend
payable in respect of the Shares where such notice
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<PAGE> 108
specifies a date for redemption falling on or prior to the next
following Interest Payment Date, interest shall (subject as
hereinafter provided) accrue on Notes (i) which shall be been
delivered for exchange on or after such Record Date or (ii) to
which the election by the Trustee provided for in Condition 8(D)
applied on or after such Record Date, in each case from the
preceding Interest Payment Date (or, if the relevant Exchange
Date falls before the first Interest Payment Date, from the
Recapitalization Date, to the relevant Exchange Date) provided
that the relevant Noteholder's entitlement to interest shall on
any Note, in the event the Shares allotted on exchange thereof
shall carry an entitlement to receive such dividend, be limited
to the amount by which the interest he or it would have received
had no exchange taken place exceeds the amount of the dividend
received on such Shares. Any such interest shall be paid by the
Company not later than 14 calendar days after the relevant
Exchange Date by issuance of Shares in accordance with
instructions given by the relevant Noteholder or, in the case of
such election by the Trustee, the Trustee.
Save as provided in this sub-paragraph (iv), no payment or
adjustment will be made on exchange for any interest accrued on
exchanged Notes since the Interest Payment Date last preceding
the relevant Exchange Date, or, if the Notes are exchanged
before the first Interest Payment Date, since the
Recapitalization Date, including any payment or issuance of
Shares pursuant to Condition 6(B).
(C) Adjustments in Exchange Price
The Exchange Price will be subject to adjustment in certain
events set out in the Trust Deed, including:
(i) the making of a Stock Split;
(ii) the consolidation and reclassification of Shares;
(iii) the grant, issue or offer, to the holders of Shares,
of rights or warrants entitling them to subscribe for or
purchase Shares or any securities exchangeable for Shares, at a
consideration per Share less than the Current Market Price per
Share;
(iv) the distribution, to the holders of Shares, of shares
of capital stock of SSC, evidence of indebtedness of SSC, assets
(other than annual or interim dividends in cash) or rights or
warrants to subscribe for or purchase securities (other than
those rights and warrants mentioned in (iii) above);
(v) the issue of securities (other than the Notes or in
any of the
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circumstances mentioned in (iii) above) exchangeable for Shares
or of rights or warrants to subscribe for or purchase Shares or
securities exchangeable for Shares (other than those rights and
warrants mentioned in (iii) above), at a consideration per Share
less than the Current Market Price per Share; and
(vi) the issue of Shares (other than Shares issued on
conversion or exchange of any exchangeable securities issued by
SSC (including the Notes) or on the exercise of any rights or
warrants granted issued or offered by SSC or in any of the
circumstances described in (i) and (ii) above or Shares issued
to stockholders of any company which merges into or consolidates
with SSC, in proportion to their shareholding in such company
immediately prior to such merger, upon such merger) at a
consideration per Share less than the Current Market Price per
Share; provided, however, that the Exchange Price will not be
reduced as a result of any such adjustment, and the Company
covenants in the Trust Deed not to take any action, if, after
giving effect thereto, the Exchange Price would be reduced to
such an extent that, under applicable law then in effect Notes
may not be exchanged at such reduced Exchange Price for legally
issued, fully paid and assessable Shares. No adjustment will be
made where such adjustment would be less than 5 percent of the
Exchange Price then in effect. Any adjustment not so made will
be carried forward and taken into account in any subsequent
adjustment. On any adjustment, the resultant Exchange Price, if
not an integral multiple of one cent shall be rounded down to
the nearest we cent. Any adjustment will be notified by the
Trustee to the Noteholders in accordance with Condition 17.
"Stock Split" means any kind of stock split in relation to
the Shares and includes a free share distribution, a stock
dividend and a sub-division.
"Current Market Price" means in respect of a Share on a
particular Stock Exchange Business Day the average of the high
and low sale prices (or, if no sales prices are reported, the
average of the high and low bid prices) as reported in the New
York Stock Exchange Inc.'s Composite Transactions (or the
equivalent quotations of an Alternative Stock Exchange, as the
case may be).
The Exchange Price may not be reduced so that, on exchange
of Notes, Shares would be issued at a discount to their par
value.
Where more than one event which gives or may give rise to
an adjustment to the Exchange Price occurs within such a short
period of time that in the opinion of the Company's auditors
(the "Auditors") the foregoing provisions would need to be
operated subject to some modification in order to give the
intended result, such modification shall be made to the
operation of the foregoing provisions as may be advised by the
Auditors to be in their opinion
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<PAGE> 110
appropriate in order to give such intended result.
No adjustment will be made to the Exchange Price when
Shares or other securities (including rights or options) are
issued, offered or granted to employees; (including directors
holding executive office) of SSC or any Subsidiary or any
associated company of SSC pursuant to any Employee Share Scheme
(as defined in the Trust Deed).
(D) Exchange on Redemption
The Trust Deed provides that the Trustee may, at its absolute
discretion (and without any responsibility for any loss occasioned
thereby), within the period commencing on the date six Business Days
prior to, and ending at the close of business in New York City prior
to, the date fixed for redemption of any of the Notes (including any
redemption under Conditions 9(A), 9(B) and 9(C)), elect by notice in
writing to the Company and SSC to exchange as of such redemption date
the aggregate number of Notes due for redemption on such date and in
respect of which Exchange Rights have not been exercised by Noteholders
("Unexercised Notes") into Shares at the Exchange Price applicable at
such redemption date if all necessary consents (if any) have been
obtained and the Trustee is satisfied or is advised by a reputable
independent merchant bank appointed by it that the net proceeds of an
immediate sale of the Shares arising from such exchange (disregarding
any liability other than a liability of the Trustee) to taxation or the
payment of any capital, stamp, issue or registration duties consequent
thereon) would likely to exceed by 5 percent or more the amount of
redemption moneys and interest Shares which would otherwise be payable
in respect of interest accrued since the Interest Payment Date
immediately preceding such redemption date or, if such date falls
before the first Interest Payment Date, since the Recapitalization Date
in respect of such Unexercised Notes.
Subject to applicable law, the Trustee shall arrange for the
sale on behalf of the holders of the Unexercised Notes of the Shares
issued on such exchange as soon as practicable, and (subject to any
necessary consents being obtained and to the deduction by the Trustee
of any amount which it determines to be payable in respect of its
liability to taxation or the payment of any capital, stamp, issue or
registration duties (if any) and any costs incurred by the Trustee in
connection with that allotment and sale thereof) the net proceeds of
sale together with accrued interest payable under Condition 8(B)(iv) in
respect of such Unexercised Notes (if any) shall be held by the Trustee
and distributed by the Principal Paying Agent rateably to the holders
of such Unexercised Notes against due presentation in accordance with
Condition 7. The amount of such net proceeds of sale shall be treated
for all purposes as the full amount due by the Company in respect of
such Unexercised Notes.
(E) Mandatory Exchange
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(i) Each Noteholder acknowledges and agrees that the
Company may, at its own cost (save those expenses or taxes
referred to in Condition 8 (E) (iii)), at any time on or after
March 21, 1997, elect to exercise Exchange Right on behalf of
each and every Noteholder in respect of Notes in whole or in
part outstanding at the date of such election (the "Mandatory
Exchange Date"), provided that the Current Market Price of the
Shares for each of the 30 consecutive Stock Exchange Business
Days, the last of which, falls on a day not more than 30
calendar days prior to the date on which notice is given to
Noteholders of the mandatory exchange under this Condition 8 (E)
(the "Mandatory Exchange Measuring Period"), is equal to or
greater than 150 percent of the Exchange Price at the time such
notice is given. The foregoing right of the Company to exercise
the Exchange Right (the "Mandatory Exchange Right"), is subject
to compliance with the provisions of paragraph (iv) below.
(ii) Not less than 30 and not more than 60 calendar days
prior to such Mandatory Exchange Date, the Company shall cause
written notice of the Mandatory Exchange Date to be given to the
Trustee, the Paying Agents, the Exchange Agents and the holders
of the Notes (in accordance with Condition 17 (such notice to
include a statement of the consequences of failure on the part
of the Noteholders to perform the obligations specified in this
Condition (E)). Following such notice each of the Noteholders
will be required on or before the Mandatory Exchange Date to
deliver or procure delivery of its Notes together with a duly
completed Exchange Notice to the specified office of any
Exchange Agent, during its usual business hours for such
purposes and perform together with the Company and SSC, the
obligations applicable to it on exchange specified in this
Condition 8.
(iii) If any Noteholder with respect to whose Notes
mandatory exchange (pursuant to this Condition 8) is to take
place shall fail to perform its obligations specified in this
Condition 8 or shall have a registered address in any territory
where, in the absence of any registration statement or other
special formalities or legal requirements, the issue, allotment
transfer or delivery of the Shares arising on mandatory exchange
in the reasonable opinion of the Trustee, is or could be
unlawful or impracticable, subject to applicable law, the
Trustee shall make arrangements for the sale of such Shares to a
third party at the best consideration reasonably obtainable by
the Trustee and arrange for the Principal Paying Agent to pay to
such Noteholder the consideration received by the Trustee in
respect of such Shares (after any deduction required to
reimburse any reasonable and proper expenses incurred in
arranging any such sale or any taxes payable in connection
therewith arising solely as a result of the Noteholder's failure
to perform its obligations under this Condition 8(E)).
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(iv) Notwithstanding anything herein to the contrary, the
Company may not exercise the Mandatory Exchange Right unless at
all times during: (i) the Mandatory Exchange Measuring Period
and (ii) the period from the end of the Mandatory Exchange
Measuring Period until and including the Mandatory Exchange
Date, the Noteholders shall have had the ability to exercise
their Exchange Rights in full.
(F) Consolidation, Amalgamation or Merger
Without limiting the provisions of Condition 3(C) hereof, in the
case of any consolidation, amalgamation or merger of SSC with any other
corporation (other than a consolidation, amalgamation or merger in
which SSC is the continuing corporation), or in the case of any sale or
transfer of all or substantially all, of the assets of SSC, SSC will
forthwith notify the Noteholders of such event in accordance with
Condition 17 and (so far as legally possible) cause the corporation
resulting from such consolidation, amalgamation or merger or the
corporation which shall have acquired such assets, as the case may be,
to execute a trust deed supplemental to the Trust Deed to ensure that
the holder of each Note then outstanding will have the right (during
the period in which such Note shall be exchangeable) to exchange such
Note into the class and amount of shares and other securities and
property receivable upon such consolidation, amalgamation, merger, sale
or transfer by a holder of the number of Shares which would have become
liable to be issued upon exchange of such Note immediately prior to
such consolidation, amalgamation, merger, sale or transfer. Such
supplemental trust deed will provide for adjustments which will be as
nearly equivalent as may be practicable to the adjustments provided for
in the foregoing provisions of this Condition. The above provisions of
this Condition (F) will apply in the same way to any subsequent
consolidations, amalgamations, mergers, sales or transfers.
(G) Limitation on Holder's Right to Exchange
(i) Notwithstanding anything to the contrary contained
herein, no Note may be exchanged to the extent that, after
giving effect to Shares to be issued pursuant to an Exchange
Notice, the total number of Shares deemed beneficially owned by
such Holder (other than by virtue of the ownership of Notes or
ownership of other securities that have limitation on a Holder's
right to exchange or exercise, similar to those limitations set
forth herein), together with all Shares deemed beneficially
owned by the Holder's affiliates, (as defined in Rule 144 of the
Act) that would be aggregated for purposes of determining
whether there exists a group under Section 13 (d) of the
Securities Exchange Act of 1934, as amended, would exceed 9.9%
of the issued and outstanding Shares of SSC (the "Restricted
Ownership Percentage"); provided that, (w) each Holder shall
have the right at any time and from time to time to reduce its
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<PAGE> 113
Restricted Ownership Percentage immediately upon notice to the
Company, (x) each Holder shall have the right at any time and
from time to time, to increase its Restricted Ownership
Percentage and otherwise waive in whole or in part the
restrictions of this Condition 8(G)(i) upon 61 days' prior
notice to the Company or immediately in the event of the
announcement of a pending or proposed Change in Control
Transaction, (y) each holder can make subsequent adjustments
pursuant to (w) or (x) any number of times and from time to time
(which adjustment shall be effective immediately if it results
in a decrease in the percentage or shall be effective upon 61
days' prior written notice or immediately in the event of the
announcement of a pending or proposed Change in Control
Transaction if it results in an increase in the percentage) and
(z) each Holder may eliminate or reinstate this limitation at
any time and from time to time (which elimination will be
effective upon 61 days' prior notice and which reinstatement
will be effective immediately). Without limiting the foregoing,
in the event of the announcement of a pending or proposed Change
in Control Transaction, any Holder may reinstate immediately (in
whole or in part) the requirement that any increase in its
Restricted Ownership Percentage be subject to 61 days' prior
written notice, notwithstanding such Change in Control
Transaction, without imposing such requirement on, or otherwise
changing such Holder's rights with respect to, any other Change
in Control Transaction. For this purpose, any material
modification of the terms of a Change in Control Transaction
will be deemed to result in a new Change in Control Transaction.
The term "deemed beneficially owned" as used in this Trust Deed
shall exclude shares that might otherwise be deemed beneficially
owned by reason of the exchangeability of the Trust Deed. The
Company shall provide all Holders with the earlier of (i) 20
days' prior written notice of any such Change in Control
Transaction, to the extent the Company has prior knowledge of a
Change in Control Transaction; or (ii) notice on the day
immediately following the Company's learning of any such
transaction, but only after, in the case of (i) and (ii), such
Change in Control Transaction has been publicly disclosed.
(ii) Each time (a "Covenant Time") the Holder makes a
Triggering Acquisition (as defined below) of Shares (the
"Triggering Shares"), the Holder will be deemed to covenant that
it will not, during the balance of the day on which such
Triggering Acquisition occurs, and during the 61-day period
beginning immediately after that day, acquire additional Shares
pursuant to its rights to acquire existing at that Covenant
Time, if the aggregate amount of such additional Shares so
acquired (without reducing that amount by any dispositions)
would exceed 9.9% of the number of Shares outstanding at that
Covenant Time (including the Triggering Shares) minus the number
of Shares actually owned by the Holder at that Covenant Time
(regardless of how or when acquired, and including the
Triggering Shares). A "Triggering Acquisition" means the giving
of an Exchange Notice or any other acquisition of Shares by the
Holder or an aggregation party; provided, however, that with
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respect to the giving of such Exchange Notice, if the associated
issuance of Shares does not occur, such event shall cease to be
a Triggering Acquisition and the related covenant under this
paragraph shall terminate. At each Covenant Time, the Holder
shall be deemed to waive any right it would otherwise have to
acquire Shares to the extent that such acquisition would violate
any covenant given by the Holder under this paragraph. For the
avoidance of doubt:
(i) The covenant to be given pursuant to this
Condition 8(G)(ii) will be given at every Covenant
Time and shall be calculated based on the
circumstances then in effect. The making of a
covenant at one Covenant Time shall not terminate
or modify any prior covenants.
(ii) The Holder may therefore from time to time be
subject to multiple such covenants, each one having
been made at a different Covenant Time, and some
possibly being more restrictive than others. The
Holder must comply with all such covenants then in
effect.
9. REDEMPTION AND PURCHASE
(A) Unless previously redeemed, exchanged, or purchased
and canceled as provided herein, the Company will redeem the
Notes at their principal amount on the May 1, 2001.
Notwithstanding the foregoing, the Company has the option to
postpone the maturity of the Notes to May 1, 2002, if, the Company
delivers to Noteholders, on April 1, 2001, Shares equal to 25% of the
principal amount of the Notes then Outstanding, (assuming that the
Shares are valued at 90% of the average of the daily high and low for
the ten trading days prior to April 1, 2001). The Company shall notify
Noteholders of its intent to postpone the Maturity Date, at least 20
Trading Days prior to the issuance of the such Shares. As used herein,
"Trading Days" means any day in which the New York Stock Exchange Inc.
is open for business. This option may be exercised by the Company only
if (i) the Shares remain listed on the New York Stock Exchange Inc.;
(ii) appropriate stockholder approval is obtained; and, (iii) SSC's
market capitalization exceeds U.S. $50,000,000. At the request of any
Noteholder, the Company shall provide an officer's certificate signed
by any two officers of the Company, certifying the following:
(i) The Shares have been duly authorized and are
fully paid and non-assessable and are being issued free
and clear of any liens and encumbrances;
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(ii) No consent, approval or authorization of or
designation, declaration or filing with any court,
governmental authority, regulatory agency, self-regulatory
organization, stock exchange or market, other than the
listing of the Shares on the New York Stock Exchange Inc.
and the qualification of the Trust Deed under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture
Act"), on the part of SSC or the Company, is required in
connection with the issuance of the Shares;
(iii) The Shares will be duly listed for trading on
the New York Stock Exchange Inc.;
(iv) The issuance of the Shares does not and will
not conflict with or result in a breach of default by SSC
or the Company of any of the terms or provisions of: (a)
their respective Certificates of Incorporation or Bylaws;
(b) any existing applicable decree, judgment or order of
any court, regulatory body, administrative agency, or
other governmental body having jurisdiction over SSC or
the Company or any of their properties or assets; (c) to
our knowledge, conflict with, or constitute a default (or
an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to SSC or the
Company is a party; or (d) applicable laws or rules or
regulations.
(v) The Shares are being issued free and clear of
any liens, claims or encumbrances;
(vi) The issuance of the Shares does not require
registration under the Securities Act of 1933, as amended
(the "Securities Act"); and
(vii) The Shares may be resold without any
restriction imposed under the Securities Act, except for
limitations imposed on an "affiliate" as such term is
defined in Rule 144(a) of the Securities Act.
(B) If as a result of any change in, or amendment to, the
laws or regulations of the U.S. or any political sub-division
of, or any authority in, or of, the U.S. having power to tax, or
any change in the application or official interpretation of such
laws or regulations, which change or amendment becomes effective
after March 21, 1996, the Company has or will become obliged to
pay additional amounts as provided or referred to in Condition
10 (and such amendment or change has been evidenced by the
delivery by the Company to the Trustee (who shall, in the
absence of manifest error, accept such certificate and opinion
as sufficient evidence thereof) of (i) a certificate signed by
two
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officers of the Company on behalf of the Company stating that
such amendment or change has occurred (irrespective of whether
such amendment or change is then effective), describing the
facts leading thereto and stating that such obligation cannot be
avoided by the Company taking reasonable measures available to
it and (ii) an opinion in a form satisfactory to the Trustee of
independent legal advisers of recognised standing to whom the
Trustee shall have no reasonable objection to the effect that
such amendment or change has occurred (irrespective of whether
such amendment or change is then effective)), the Company may at
its option, having given not less than 30 nor more than 60
calendar days' notice to the Noteholders in accordance with
Condition 17 (which notice shall be irrevocable), redeem all the
Notes but not some only, at their principal amount together with
interest (if any) accrued to (but excluding) the date of
redemption, provided that no notice of redemption shall be given
earlier than 90 calendar days before the earliest date on which
the Company would be required to pay such additional amounts
were a payment in respect of the Notes then due.
Upon expiry of any such notice period as is referred to in
this Condition 9(B) (and subject as provided above), the Company
shall be bound to redeem the Notes at their principal amount
together with interest accrued to but excluding the redemption
date.
(C) Redemption at the Option of Noteholders
Any Noteholder may on or after a Cessation of Listing, by
completing, signing and depositing at the specified office of
any of the Paying Agents during normal business hours of such
Agent at any time after notice of a Cessation of Listing has
been given by the Company, a notice of redemption in the form
(for the time being current) obtainable from any of the Paying
Agents specifying a date for redemption together with the Bearer
Note or the Registered Note, as the case may be, to be redeemed,
require the Company to redeem in U.S. dollars all or some only
of the Notes held by it at their principal amount, plus accrued
interest to the date of redemption.
Any such notice of redemption will be irrevocable unless
its revocation is approved in writing by the Company not later
than five days prior to the relevant date for redemption of the
relevant Note and will bind the Company to redeem the Note to
which such notice relates. Certificates for Registered Notes and
Bearer Notes will not be returned to Noteholders except in the
limited circumstances set out in the Agency Agreement. The
Company shall notify Noteholders of a Cessation of Listing no
later than five Business Days after its occurrence in accordance
with Condition 17. For the purposes of this Condition 9(C)
"Cessation of Listing" means the consolidation with or merger
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into any Person by SSC or the sale, lease, conveyance, transfer
or other disposal by SSC of its property or assets as an
entirety or substantially as an entirety to a Person and as a
result of such transaction the Shares are no longer listed on
the New York Stock Exchange Inc. or an Alternative Stock
Exchange.
(D) Subject to applicable law, the Company, SSC or any of
their Subsidiaries or Affiliates (as defined in the Trust Deed)
may at any time purchase Notes together, in the case of Bearer
Notes, with unmatured Coupons in any manner and at any price in
the open market or by private treaty. If purchases are made by
tender, tenders must be available to all Noteholders alike.
Notes purchased by the Company, SSC or any of their Subsidiaries
will forthwith be surrendered for cancellation and shall no
longer be deemed Outstanding.
(E) All Notes which are redeemed by the Company will
forthwith be canceled (together with all relative unmatured
Coupons attached to or surrendered with the Bearer Notes), and
may not be reissued or resold.
10. TAXATION.
All payments or Shares issued in respect of the Notes by the Company
or, as the case may be, SSC shall be made without withholding or deduction for,
or on account of, any present or future taxes, duties, assessments or
governmental charges of whatever nature ("Taxes") imposed or levied by or on
behalf of the U.S. or any political sub-division of, or any authority in, or of,
the U.S. having power to tax, unless the withholding or deduction of the Taxes
is required by law. In that event, the Company or, as the case may be, SSC will
pay such additional amounts as may be necessary in order that the net amounts
received by the Noteholders and Couponholders after the withholding or deduction
shall equal the respective amounts which would have been receivable in respect
of the Notes or, as the case may be, Coupons in the absence of the withholding
or deduction; except that no additional amounts shall be payable in relation to
any payment in respect of any Note or Coupon:
(A) to, or to a third party on behalf of, a holder who is
liable for the Taxes in respect of the Note or Coupon by reason of his
having some connection with the U.S. other than the mere holding of the
Note or Coupon; and
(B) presented for payment more than 30 calendar days after the
Relevant Date except to the extent that a holder would have been
entitled to additional amounts on presenting the same for payment on
the last day of such period of 30 calendar days; or
(C) to, or to a third party on behalf of, a holder who would
not be liable or subject to the withholding or deduction by making a
declaration of non-residence
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or other similar claim for exemption to the relevant tax authority.
As used herein, "Relevant Date" means the date on which the
payment first becomes due but, if the full amount of the money payable
has not been received in New York by the Principal Paying Agent or the
Trustee on or before the due date, it means the date on which, the full
amount of the money having been so received, notice to that effect
shall have been duly given to the Noteholders by the Company in
accordance with Condition 17.
Any reference in these Terms and Conditions to any amounts in
respect of the Notes shall be deemed also to refer to any additional
amounts which may be payable under this Condition or under any
undertakings given in addition to, or in substitution for, this
Condition pursuant to the Trust Deed.
11. ADDITIONAL COVENANTS
(A) Undertakings by SSC
Whilst any Exchange Right remains exercisable, SSC will, save
with the approval of an Extraordinary Resolution (as defined in the
Trust Deed) or with the approval of the Trustee where, in its opinion,
it is not materially prejudicial to the interests of the Noteholders to
give such approval:
(i) at all times, provided SSC shareholder approval is
obtained on or before June 1, 2000, keep available for
issuance free from any pre-emptive rights out of its
authorised but unissued capital such number of Shares as would
enable the Exchange Rights interest payments and all other
rights of subscription and exchange for and exchange into
Shares to be satisfied in full;
(ii) will not create or permit to subsist any Lien
relating to or over the shares of the Company, held or
beneficially owned by SSC;
(iii) to the extent SSC and its counsel determine it is
required because an exemption from registration is not
available, file with the Securities and Exchange Commission on
or before June 30, 1996, and keep effective a Registration
Statement on such form as SSC determines to be appropriate in
respect of the registration of the Shares to be issued
pursuant to the Exchange Rights to U.S. persons and any
subsequent resale of such Shares to U.S. persons;
(iv) (a) to maintain a listing for all the issued
Shares on the New York Stock Exchange Inc., it being
understood that if SSC is unable to obtain or maintain
such listing of Shares to obtain and maintain a listing
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for all the Shares issued on the exercise of the
Exchange Rights on any other stock exchanges or
authorised for quotation on NASDAQ or by the National
Quotation Bureau Incorporated (each an "Alternative
Stock Exchange") as SSC may from time to time (with the
written consent of the Trustee) determine and will
forthwith give notice to the Noteholders in accordance
with Condition 17 of the listing, de-listing or
quotation or lack of quotation of the Shares as a
class) by any such Alternative Stock Exchange.
(v) not in any way modify the rights attaching to the
Shares with respect to voting, dividends or liquidation nor
issue any class of equity share capital carrying any rights
which are more favorable than such rights;
(vi) by June 1, 2000, obtain SSC shareholder approval
and authorization to effect the following:
(a) increase the number of authorized Shares to
250,000,000 and,
(b) change the Exchange Price to $1.50 per Share,
subject to adjustment in the manner provided in
Condition 8(C), to New York Stock Exchange Inc.
requirements for shareholder approval.
(vii) SSC's 10% Senior Convertible Notes due November
24, 2002, will not be amended and will remain a debt
obligation payable through the issuance of Shares.
(B) Undertakings by the Company
Whilst any Exchange Right remains exercisable, the Company
will, save with the approval of an Extraordinary Resolution or with the
approval of the Trustee where, in its opinion, it is not materially
prejudicial to the interests of the Noteholders to give such approval:
(i) not incur any Indebtedness other than the Notes;
and,
(ii) not create or permit to subsist any Lien or other
encumbrance or security interest over or otherwise dispose,
sell or transfer its interest in the Sunshine Mine.
(C) For the purposes of this condition, "Sunshine Mine" means
that certain real property location in Shoshone County, Idaho, known as
the "Sunshine Mine", consisting of the ownership rights of the Company
in the real property, together with
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the ownership rights of the Company in equipment, plant, machinery and
other property located thereon and all patented and unpatented mining
claims and interests therein owned by the Company.
12. PRESCRIPTION
Bearer Notes and Coupons will become void unless presented for payment
within periods of 10 years (in the case of principal) and five years (in the
case of interest) from the Relevant Date in respect of the Notes or, as the case
may be, the Coupons, subject to the provisions of Condition 7.
Claims for the payment of principal and issuance of Shares based on
accrued interest and other sums payable in respect to Registered Notes shall be
prescribed unless made within 10 years (in the case of principal) and 5 years
(in the case of interest) from the Relevant Date.
13. EVENTS OF DEFAULT
The Trustee at its discretion may, and if so requested in writing by
the Holders of at least one-quarter in principal amount of the Notes then
Outstanding, or if so directed by an Extraordinary Resolution of the Noteholders
shall, give notice to the Company that the Notes are and they shall accordingly
thereby forthwith become, immediately due and repayable at their principal
amount together with accrued interest (as provided in the Trust Deed) if any of
the following events (each an "Event of Default") shall have occurred (unless
(i) such events are expressly permitted or contemplated by the Trust Deed or
(ii) such Event of Default has been remedied to the satisfaction of the
Trustee):
(A) if default is made for a period of 5 Business Days or more
in the payment of any principal or interest due in respect of the Notes
or any of them; or
(B) if the Company or SSC fails to perform or observe any of
its other obligations, covenants, conditions or provisions under the
Notes or the Trust Deed and (except where the Trustee shall have
certified to the Company in writing that it considers such failure to
be incapable of remedy in which case no such notice or continuation as
is hereinafter mentioned will be required) such failure continues for
the period of 30 calendar days (or such longer period as the Trustee
may in its absolute discretion permit) next following the service by
the Trustee on the Company or SSC, as the case may be, of notice
requiring the same to be remedied; or
(C) if (i) any other Indebtedness of the Company, SSC or any
Principal Subsidiary (as defined below) becomes due and repayable prior
to its stated maturity by reason of an event of default (howsoever
described) or (ii) any such Indebtedness is not paid when due or, as
the case may be, within any applicable grace period (as originally
provided) or (iii) the Company, SSC or any Principal Subsidiary fails
to pay
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when due (or, as the case may be within any originally applicable grace
period) any amount payable by it under any present or future guarantee
for, or indemnity in respect of, any Indebtedness of any Person or (iv)
any security given by the Company, SSC or any Principal Subsidiary for
any Indebtedness of any Person or any guarantee or indemnity of
Indebtedness of any Person or any guarantee or indemnity of
Indebtedness of any Person becomes enforceable by reason of default in
relation thereto and steps are taken to enforce such security save in
any such case where there is a bona fide dispute as to whether the
relevant Indebtedness or any such guarantee or indemnity as aforesaid
shall be due and payable, provided that in each such case the
Indebtedness exceeds in the aggregate US $1,000,000 and in each such
case such event continues unremedied for a period of 30 calendar days
(or such longer period as the Trustee may in its sole discretion
consent to in writing upon receipt of written notice from the Company
or SSC); or
(D) if the Company, SSC or any Principal Subsidiary shall fail
to pay its debts as such debts become due (except debts which the
Company, SSC or such Principal Subsidiary, as the case may be) may
contest in good faith generally or shall be declared or adjudicated by
a competent court to be insolvent or bankrupt, consents to the entry of
an order of relief against it in an involuntary bankruptcy case, shall
enter into any assignment or other similar arrangement for the benefit
of its creditors or consents to the appointment of a custodian
(including, without limitation, a receiver, liquidator or trustee); or
(E) if a receiver, administrative receiver, administrator or
other similar official shall be appointed in relation to the Company,
SSC or any Principal Subsidiary or in relation to the whole or a
substantial part of the undertaking or assets of any of them or a
distress, execution or other process shall be levied or enforced upon
or sued out against or an encumbrancer shall take possession of, the
whole or a substantial part of the assets of any of them and in any of
the foregoing cases it or he shall not be paid out or discharged within
90 otherwise calendar days (or such longer period as the Trustee may in
its absolute discretion consent to in writing upon receipt of written
notice from the Company or SSC); or
(F) if the Company, SSC or any Principal Subsidiary institutes
proceedings to be adjudicated a voluntary bankrupt, or shall consent to
the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking organization under the laws of
the U.S. Federal Bankruptcy Code or any similar applicable U.S. Federal
or State law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a receiver or liquidator or trustee
or assignee (or other similar official) in bankruptcy or insolvency of
it or its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
generally as they come due; or
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(G) if a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking the
reorganisation of the Company under the U.S. Federal Bankruptcy Code or
any other similar applicable U.S. Federal or State law, and such decree
or order shall have continued undischarged or unstated for a period of
90 calendar days; or a decree or order of a court having jurisdiction
in the premises for the appointment of a receiver or liquidator or
trustee or assignee (or other similar official) in bankruptcy or
insolvency of the Company or of all or substantially all of its
property, or for the winding up or liquidation of its affairs, shall
have been entered, and such decree or order shall have continued
undischarged and unstayed for a period of 90 calendar days; or
(H) if a warranty, representation or other statement made by
or on behalf of the Company or SSC contained in the Trust Deed, the
Notes or any certificate or other agreement furnished in compliance
with such documents is false in any material respect when made; or
(I) if SSC or its successor as permitted by Condition 3(C)
ceases to own all of the issued and outstanding shares of the Company
or shall at any time pledge, transfer, exchange or otherwise dispose of
such shares; or
(J) if there is any final judgments or judgment for the
payment of money exceeding in the aggregate US $1,000,000 outstanding
against the Company, SSC or any Principal Subsidiary which has been
outstanding for more than sixty (60) calendar days from the date of its
entry and shall not have otherwise been discharged in full or stayed by
appeal, bond or otherwise.
Notwithstanding anything herein to the contrary, in the event that SSC
fails to obtain shareholder authorization by June 1, 2000, of the items set out
in Condition 11(A)(vi), the Trustee at its discretion may, and if so requested
in writing by the Holders of at least one- quarter in principal amount of the
Notes then Outstanding, or if so directed by an Extraordinary Resolution of the
Noteholders shall, give notice to the Company and enforce the Super Remedy. The
Super Remedy with respect to each Noteholder shall be the greater of (i) the
principal amount with accrued interest thereon of such Noteholder's Notes or
(ii) the product of (a) the principal amount and accrued interest thereon of
such Noteholder's Notes divided by the Exchange Price multiplied by (b) the
Current Market Price per Share.
For the purposes of these Terms and Conditions:
(a) "Group" means SSC and all its Subsidiaries.
(b) "Indebtedness" of any person, means any present or future
obligations, which shall include all obligations (i) which in
accordance with the generally accepted
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accounting principles in the U.S., shall be classified upon the balance
sheet of such person as liabilities, (ii) for borrowed money, (iii)
which have been incurred in connection with the acquisition of any
property (including without limitation, all obligations evidenced by
any indenture, bond, note, commercial paper or other similar security,
but excluding, in any case, obligations arising from the endorsement in
the ordinary course of business of negotiable instruments for deposit
or collection, (iv) obligations secured by any Lien existing on
property owned even though such person has not assumed or become liable
for the payment of such obligations, (v) obligations created or arising
under conditional sale or other title retention agreement with respect
to property acquired by such person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such
agreement in the event of default are limited to repossession or sale
of such property, (vi) for capitalised leases, (vii) for all guarantees
whether or not reflected in the balance sheet of such person, and
(viii) all reimbursement and other payment obligations (whether
contingent mature or otherwise) of such person in respect of acceptance
or documentary credit. Notwithstanding the foregoing, Indebtedness
shall not include (i) Indebtedness incidental to the operation of the
business of the Person in the ordinary course and in the aggregate not
material to the business and operations of the Person and (ii)
Indebtedness represented by purchase, rental or lease obligations which
would cause the direct or contingent liabilities of the Person and its
Subsidiaries, on a consolidated basis, in respect of all such
obligations, not to exceed US $1,000,000 in any period of 12 months.
(c) a "Principal Subsidiary" at any time means a Subsidiary of
the Company or SSC:
(A) whose gross assets represent 15 percent or more of
the consolidated gross assets of the Group as calculated by
reference to the then latest audited financial statements of
the Group; or
(B) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary of the
Company or SSC which immediately prior to such transfer is a
Principal Subsidiary, whereupon the transferor Subsidiary
shall immediately cease to be a Principal Subsidiary and the
transferee Subsidiary shall cease to be a Principal Subsidiary
under the provisions of this sub-paragraph (B) (but without
prejudice to the provisions of sub-paragraph (A) above), upon
publication of its next audited financial statements;
all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a Subsidiary of
the Company or SSC is or is not or was or was not at any particular
time or throughout any specified
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period a Principal Subsidiary shall, in the absence of manifest error,
be conclusive and binding on all parties; and
(d) "Subsidiary" means any corporation of which at least a
majority of the shares of stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is directly
or indirectly owned or controlled by any one of or any combinations of
the Company, SSC or one or more of the Principal Subsidiaries.
(e) "Lien" means any mortgage, pledge, security interest,
lien, charge or other encumbrance, but shall not include any of the
foregoing types of encumbrances that are incidental to the conduct of
the business of the Company, SSC or any of its Subsidiaries or the
ownership of property and assets of any of them including (i) pledges
or deposits made to secure obligations of the Company, SSC or any of
its Subsidiaries under the workmen's compensation laws or similar
legislation; (ii) liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's, vendors', repairments', governmental
(Federal, state or municipal) liens arising out of contracts for the
purchase or lease of products of the Company, SSC or a Subsidiary, and
deposits or pledges to obtain the release of any of the foregoing
liens; (iii) liens created by or resulting from any litigation or legal
proceedings currently being contested in good faith by appropriate
proceedings; (iv) leases made or existing on property entered into in
the ordinary course of business of the Company, SSC or one of its
Subsidiaries; (v) landlords' liens under leases of property to which
the Company, SSC or one of its Subsidiaries is a party; (vi) zoning
restrictions, easements, licenses or restrictions on the use of
property or minor irregularities in the title thereto; (vii) deposits
in connection with bids, tenders, contracts (other than the repayment
of money) to which the Company, SSC or one of its Subsidiaries is a
party; (viii) deposits to secure public or statutory obligations of the
Company, SSC or one of its Subsidiaries; (ix) deposits in connection
with obtaining or maintaining self-insurance or to obtain the benefits
of any law regulation or arrangement pertaining to unemployment
insurance, old age pensions, social security or similar matters; (x)
deposits or cash or obligations of the United States of America to
secure surety, appeal or customs bonds to which the Company, SSC or any
of its Subsidiaries is a party; and, (xi) liens for tax or assessments
or government charges or levies not yet due or delinquent or which can
thereafter be paid without penalty, or which are being contested in
good faith by appropriate proceedings.
(f) "Consolidated Net Worth" means at any time, the total
consolidated stockholders' equity determined on a consolidated basis in
accordance with the U.S. generally accepted accounting principles, plus
there shall be added thereto when determined with respect to SSC and
its Subsidiaries (or any successor entity thereof)
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(i) the principal amount of the Notes then outstanding, (ii) if not
otherwise included, the book value of any mandatorily redeemable
preferred stock, except for the aggregate liquidation preference of any
portion thereof which has a stated Maturity Date or a mandatory
redemption requirement due on or prior to the final Maturity Date of
the Notes, (iii) if not otherwise included, the book value of any
shares of preferred stock then outstanding mandatorily redeemable for
shares of Common Stock, and (iv) the principal amount of any other
exchangeable subordinated Indebtedness then outstanding, or the
principal amount of any portion of any such exchangeable subordinated
Indebtedness, except for the principal amount which has a stated
Maturity Date or mandatory redemption requirement due on or prior to
the final Maturity Date of the Notes.
14. ENFORCEMENT
The Trustee may at any time, at its discretion and with prior written
notice to the Company and SSC, take such proceedings against the Company or SSC
as it may think fit to enforce the provisions of the Trust Deed, the Notes and
the Coupons or the Guarantee but it shall not be bound to take any proceedings
or any other action in relation to the Trust Deed, the Notes or the Coupons or
the Guarantee unless (a) it shall have been so directed by an Extraordinary
Resolution of the Noteholders or so requested in writing by the holders of at
least one-quarter in principal amount of the Notes then Outstanding, and (b) it
shall have been indemnified to its satisfaction. No Noteholder or Couponholders
shall be entitled to proceed directly against the Company unless the Trustee,
having become bound so to proceed, fails so to do within a reasonable period and
such failure shall be continuing.
15. SUBSTITUTION
The Trustee may, without the consent of the Noteholders or
Couponholders, agree with the Company to the substitution in place of the
Company (or of any previous substitute under this Condition) as the principal
debtor under the Notes, the Coupons and the Trust Deed of any Subsidiary or
holding company (being a corporation holding (directly or indirectly) at least a
majority of shares of stock having by the terms ordinary voting power to elect a
majority of the board of directors of the Company (or such previous substitute)
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency)) of the Company or any Subsidiary of such holding
company, subject to (a) the Notes continuing to be unconditionally and
irrevocably guaranteed by SSC and exchangeable into Shares of SSC, (b) the
Trustee being satisfied that the interests of the Noteholders will not be
materially prejudiced by the substitution, and (c) certain other conditions set
out in the Trust Deed being complied with.
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16. REPLACEMENT OF NOTES AND COUPONS
Should any Note or Coupon be lost, stolen, mutilated, defaced or
destroyed, it may be replaced at the specified office of the Paying Agent in
London, in the case of Bearer Notes or Coupons, or the Registrar, in the case of
Registered Notes, upon payment by the claimant of the expenses incurred in
connection with the replacement and on such terms as to evidence indemnity and
security as the Company may reasonably require. Mutilated or defaced Notes or
Coupons must be surrendered before replacements will be issued.
17. NOTICES
(A) Notices to holders of Registered Notes will be mailed to
them at the respective addresses in the Register and deemed to have
been given on the fourth Business Day after the date of mailing,
provided that, if at any time by reason of suspension or curtailment
(or except suspension or curtailment) of postal services within the
U.S. or elsewhere the Company is unable effectively to give notice to
holders of Registered Notes through the post, notices to holders of
Registered Notes will be valid if given in the same manner as other
notices as set forth below.
(B) Notices to all the Noteholders will be valid if published
in a leading English language daily newspaper published in London or
such other English language daily newspaper with general circulation in
Europe as the Trustee may approve (which is expected to be the
Financial Times. Any notice shall be deemed to have been given on the
date of publication or, if so published more than once, on the date of
the first publication. If publication as provided above is not
practicable, notice will be given in such other manner, and shall be
deemed to have been given on such date, as the Trustee may approve.
(C) Couponholders will be deemed for all purposes to have
notice of the contents of any notice given to the Noteholders in
accordance with this Condition.
18. NOTEHOLDER APPROVALS, MODIFICATION, WAIVER AND AUTHORISATION
(A) All items to be decided by Noteholders, including but not
limited to Extraordinary Resolutions, may be passed by written consent
of Noteholders holding a clear majority in principal amount of the
Notes for the time being Outstanding, or by convening a meeting of the
Noteholders with one or more persons present holding or representing a
clear majority of the Notes for the time being Outstanding, or at any
adjourned such meeting, one or more person present, whatever the
principal amount of the Notes held or represented by him or them. Any
item once passed pursuant hereto, will be binding on all Noteholders
and on all Couponholders.
(B) The Trustee may agree, without the consent of the
Noteholders or
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Couponholders, to any modification (subject to certain exceptions) of,
or to the waiver or authorisation of any breach or proposed breach of,
any of these Conditions or any of the provisions of the Trust Deed
which is not, in the opinion of the Trustee, materially prejudicial to
the interests of the Noteholders or to any modification which is of a
formal, minor or technical nature or to correct a manifest error.
(C) In connection with the exercise by it of any of its
trusts, powers, authorities or discretions (including, without
limitation, any modification, waiver, authorisation or substitution),
the Trustee shall have regard to the interests of the Noteholders as a
class and, in particular but without limitation, shall not have regard
to the consequences of the exercise of its trusts, powers, authorities
or discretions for individual Noteholders and Couponholders resulting
from their being for any purpose domiciled or resident in, or otherwise
connected with, or subject to the jurisdiction of, any particular
territory and the Trustee shall not be entitled to require, nor shall
any Noteholder or Couponholders be entitled to claim, from the Company,
the Trustee or any other person any indemnification or payment in
respect of any tax consequences of any such exercise upon individual
Noteholders or Couponholders except to the extent already provided for
in Condition 10 and/or any undertaking given in addition to, or in
substitution for, Condition 10 pursuant to the Trust Deed.
(D) Any modification, waiver or authorisation shall be binding
on the Noteholders and the Couponholders and, unless the Trustee agrees
otherwise, any modification shall be notified by the Company to the
Noteholders as soon as practicable thereafter in accordance with
Condition 17.
19. INDEMNIFICATION OF THE TRUSTEE
The Trust Deed contains provisions for the indemnification of the
Trustee and for its relief from responsibility, including provisions relieving
it from taking action unless indemnified to its satisfaction.
20. GOVERNING LAW
The Trust Deed, the Agency Agreement, the Notes and the Coupons are
governed by, and will be construed in accordance with, English law. In relation
to any legal action or proceedings arising out of or in connection with the
Trust Deed, the Agency Agreement, the Notes, the Coupons or the Guarantee, the
Company and SSC have irrevocably submitted to the jurisdiction of the Courts of
England and in relation thereto have appointed The Law Debenture Trust
Corporation plc, now at Princes House, 95 Gresham Street, London EC2 V7LY as its
agent for service of process in England.
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PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
HSBC Bank plc
Mariner House
Pepys Street
London EC3 N4DA
PAYING, EXCHANGE AND TRANSFER AGENT
Banque Generale du Luxembourg, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
HSBC Bank USA
140 Broadway
New York, New York 10005-1180
U.S.A.
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EXECUTED AND DELIVERED AS A DEED BY
SUNSHINE PRECIOUS METALS
BY:
--------------------------------
NAME: WILLIAM DAVIES
TITLE: AUTHORISED OFFICER
EXECUTED AND DELIVERED AS A DEED BY
SUNSHINE MINING AND DEFINING COMPANY
BY:
--------------------------------
NAME: WILLIAM DAVIES
TITLE: AUTHORISED OFFICER
EXECUTED AND DELIVERED AS A DEED BY
HSBC BANK USA, AS TRUSTEE
BY:
--------------------------------
NAME:
------------------------------
TITLE:
-----------------------------
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