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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 16, consecutively.
(b) The statement of eligibility and qualification of each trustee
under the Indenture to be qualified: TO BE FILED BY AMENDMENT.
(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.
(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.
(iii) Exhibit T3C-1: Trust Deed, dated March 21, 1996, by
and among The Company, SSC and Marine Midland Bank.
TO BE FILED BY AMENDMENT.
First Supplement to the Trust Deed, dated March 27,
2000, by and among The Company, SSC and HSBC Bank USA
(formerly Marine Midland Bank).
(iv) Exhibit T3D: Not applicable.
13
<PAGE> 14
(v) Exhibit T3E: Notice of Special Meeting of the Holders
of the Outstanding Notes.
(vi) Exhibit T3F: Section 2.8 of the First Supplement to
the Trust Deed.
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
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.
(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.
(iii) Exhibit T3C-1: Trust Deed, dated March 21, 1996, by and
among The Company, Sunshine and Marine Midland Bank. TO
BE FILED BY AMENDMENT.
First Supplement to the Trust Deed, dated March 27,
2000, by and among The Company, Sunshine and HSBC Bank
USA (formerly Marine Midland Bank).
(iv) Exhibit T3D: Not applicable.
(v) Exhibit T3E: Notice of Special Meeting of the Holders of
the Outstanding Notes.
(vi) Exhibit T3F: Section 2.8 of the First Supplement to the
Trust Deed.
16
<PAGE> 1
EXHIBIT (ii)
BY-LAWS
OF
SUNSHINE PRECIOUS METALS, INC.
ARTICLE 1
OFFICES
Section 1.1. Registered Office. The registered office of the corporation in
the State of Delaware shall be in the City of Wilmington, County of New Castle,
and the name of its registered agent shall be The Corporation Trust Company.
Section 1.2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1. Place of Meeting. All meetings of stockholders for the
election of directors shall be held at such place, either within or without the
State of Delaware, as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting.
Section 2.2. Annual Meeting. The annual meeting of stockholders shall be
held at such date and time as shall be designated from time to time by the Board
of Directors and stated in the notice of the meeting.
Section 2.3. Voting List. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place of the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledgers, the list required by this
Section 2.3 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
Section 2.4. Special Meeting. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board, the
President or by the Board of Directors or by written order of a majority of the
directors. The President or directors so calling any such meeting shall fix the
time and any place, either within or without the State of Delaware, as the place
for holding such meeting.
Section 2.5. Notice of Meeting. Written notice of each meeting of
stockholders, stating the place, date and hour of the meeting, and in the case
of a special meeting, the purpose or purposes for which the meeting is called,
shall be given to each stockholder entitled to vote thereat not less than ten
(10) nor more than sixty (60) days before the meeting.
Section 2.6. Quorum. The holders of a majority of the shares of capital
stock issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a
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quorum at any meeting of stockholders for the transaction of business, except
as otherwise provided by statute or by the Certificate of Incorporation.
Notwithstanding the other provisions of these by-laws, the holders of a
majority of the shares of capital stock entitled to vote thereat, present in
person or represented by proxy, whether or not a quorum is present, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. If
the adjournment is for more than thirty (30) days, or if after the adjournment
a new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the original meeting.
Section 2.7. Voting. When a quorum is present at any meeting of the
stockholders, the vote of the holders of a majority of the shares of capital
stock entitled to vote thereon, present in person or represented by proxy,
shall decide any question brought before such meeting, unless the question is
one upon which, by express provision of the statutes, of the Certificate of
Incorporation or of these by-laws, a different vote is required, in which case
such express provision shall govern and control the decision of such question.
Every stockholder having the right to vote shall be entitled to vote in person,
or by proxy appointed by an instrument in writing subscribed by such
stockholder, bearing a date not more than three years prior to voting, unless
such instrument provides for a longer period, and filed with the Secretary of
the corporation before, or at the time of, the meeting. If such instrument
shall designate two or more persons to act as proxies, unless such instrument
shall provide to the contrary, a majority of such persons present at any
meeting at which their powers thereunder are to be exercised shall have and may
exercise all the powers of voting or giving consents thereby conferred, or if
only one be present, then such powers may be exercised by that one, or, if an
even number attend and a majority do not agree on any particular issue, each
proxy so attending shall be entitled to exercise such powers in respect of the
shares proportionately.
Section 2.8. Consent of Stockholders. Any action required by statute to be
taken at any annual or special meeting of stockholders, or any action which may
be taken at any annual or special meeting of stockholders, may be taken without
a meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be required by
statue, the Certificate of Incorporation or these by-laws to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted, provided, however, that prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
Section 2.9. Voting of Stock of Certain Holders. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the by-laws of such corporation may prescribe, or in the
absence of such provision, as the Board of Directors or a duly authorized
managing director of such corporation may determine. Shares standing in the name
of a deceased person may be voted by the executor or administrator of such
deceased person, either in person or by proxy. Shares standing in the name of a
guardian, conservator or trustee may be voted by such fiduciary, either in
person or by proxy, but no such fiduciary shall be entitled to vote shares held
in such fiduciary capacity without a transfer of such shares into the name of
such fiduciary. Shares standing in the name of a receiver may be voted by such
receiver. A stockholder whose shares are pledged shall be entitled to vote such
shares, unless in the transfer by the pledgor on the books of the corporation he
has expressly empowered the pledgee to vote thereon, in which case only the
pledgee, or his proxy, may represent the stock and vote thereon.
Section 2.10. Treasury Stock. The corporation shall not vote, directly or
indirectly, shares of its own stock owned by it, and such shares shall not be
counted in determining the total number of issued and outstanding shares for
the purposes of determining the presence of a quorum at any meeting of
stockholders.
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Section 2.11 Fixing Record Date. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock of
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, no more than sixty (60) days
prior to any other action, for the determination of the stockholders entitled to
notice of and to vote at, any such meeting or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action. If the Board
of Directors fix, in advance, a record date as herein provided, then, in such
case, such stockholders, and only such stockholders, as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote at,
any such meeting or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date is fixed as aforesaid.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1 Powers. The business and affairs of the corporation shall be
managed by or under the direction of its Board of Directors, which may
exercise all such powers of the corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
by-laws directed or required to be exercised or done by the stockholders.
Section 3.2 Number, Selection and Term. The number of directors which
shall constitute the whole Board shall from time to time be fixed and determined
by resolution adopted by the Board of Directors. The number to be elected at any
meeting of stockholders shall be set forth in the notice of any meeting of
stockholders held for such purpose. The directors shall be elected at the annual
meeting of stockholders, except as provided in Section 3.3, and each director
elected shall hold office until his successor shall be elected and shall
qualify, or until his earlier death, resignation, retirement, disqualification
or removal. Directors need not be residents of Delaware or stockholders of the
corporation.
Section 3.3 Vacancies, Additional Directors and Removal From Office. If any
vacancy occurs in the Board of Directors caused by the death, resignation,
retirement, disqualification or removal from office of any director, or
otherwise, or if any new directorship is created by an increase in the
authorized number of directors, a majority of the directors then in office,
though less than a quorum, or a sole remaining director, may choose a successor
to fill such vacancy or the newly created directorship; and a director so
chosen shall hold office until the term of the director whose vacancy is filled
expires and until his successor shall be duly elected and shall qualify, or
until his earlier death, resignation, retirement, disqualification or removal,
or until the next annual meeting of stockholders, whichever shall first occur.
Any director may be removed, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors at
any special meeting of stockholders duly called and held for such purpose.
Section 3.4. Resignation. Any directors may resign at any time by written
notice to the corporation. Any such resignation shall take effect at the date
of receipt of such notice or at any later time specified therein, and, unless
otherwise specified therein, the acceptance of such resignation shall not
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be necessary to make it effective. Any director who does not, for any reason
whatsoever, stand for election at any meeting of stockholders called for such
purpose shall be conclusively deemed to have resigned, effective as of the date
of such meeting, for the purposes of these by-laws, and the corporation need
not receive any written notice to evidence such resignation.
Section 3.5 Regular Meeting. A regular meeting of the Board of Directors
shall be held each year, without other notice than this by-law, at the place of,
and immediately following, the annual meeting of stockholders; and other regular
meetings of the Board of Directors shall be held each year, at such time and
place as the Board of Directors may provide, by resolution, either within or
without the State of Delaware, without other notice than such resolution.
Section 3.6 Special Meeting. A special meeting of the Board of Directors
may be called by the Chairman of the Board or by the President. The Chairman or
President so calling any such meeting shall fix the time and any place, either
within or without the State of Delaware, as the place for holding such meeting.
Section 3.7 Notice of Special Meeting. Written notice of special meetings
of the Board of Directors shall be given to each director at least forty-eight
(48) hours prior to the time of such meeting. Any director may waive notice of
any meeting. The attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
solely for the purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any special meeting of the Board of Directors
need be specified in the notice or waiver of notice of such meeting, except that
notice shall be given with respect to any matter to be acted upon at such
special meeting where notice is required by statute.
Section 3.8 Quorum. A majority of the Board of Directors shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors,
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute, by the Certificate of Incorporation
or by these by-laws. If a quorum shall not be present at any meeting of the
Board of Directors, a majority of the directors present thereat, though less
than a quorum, may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
Section 3.9 Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof as provided in Article IV of these by-laws, may be taken without a
meeting, if a written consent thereto is signed by all members of the Board or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
Section 3.10 Compensation. Directors, as such, shall not be entitled to any
stated salary for their services unless voted by the stockholders or the Board
of Directors; but by resolution of the Board of Directors, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board of Directors or any meeting of a committee of
directors. No provision of these by-laws shall be construed to preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
COMMITTEE OF DIRECTORS
Section 4.1 Designation, Powers and Name. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, including, if they shall so determine, an Executive Committee, each
such committee to consist of two or more of the directors of the corporation.
The committee shall have and may exercise such of the powers of
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the Board of Directors in the management of the business and affairs of the
corporation as may be provided to such resolution, provided, however, that no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution,
or amending the by-laws of the corporation; and, provided further, that, unless
the resolution establishing the committee expressly so provides, no such
committee shall have the power or authority to declare a dividend or so
authorize the issuance of stock. The committee may authorize the seal of the
corporation to be affixed to all papers which may require it. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting.
Section 4.2. Minutes. Each committee of directors shall keep regular
minutes of its proceedings and report the name to the Board of Directors when
required.
Section 4.3. Compensation. Members of special or standing committees may
be allowed compensation for attending committee meetings, if the Board of
Directors shall so determine.
ARTICLE V
NOTICE
Section 5.1. Methods of Giving Notice. Whenever under the provisions of
any statute, the Certificate of Incorporation or these by-laws notice is
required to be given to any director, member of any committee or stockholder,
such notice shall be in writing and delivered personally or mailed to such
director, member or stockholder; provided, however, that in the case of a
director or a member of any committee, such notice, unless required by statute,
the Certificate of Incorporation or these by-laws to be in writing, may be
given orally or by telephone or telegram. If mailed, notice to a director,
member of a committee or stockholder shall be deemed to be given when deposited
in the United States mail first class in a sealed envelope, with postage
thereon prepaid, addressed, in the case of a stockholder, to the stockholder at
the stockholder's address as it appears on the records of the corporation or,
in the case of a director or a member of a committee, to such person at his
business address. If sent by telegraph, notice to a director or member of a
committee shall be deemed to be given when the telegram, so addressed, is
delivered to the telegraph company.
Section 5.2. Written Waiver. Whenever any notice is required to be given
under the provisions of any statute, the Certificate of Incorporation or these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE VI
OFFICERS
Section 6.1. Officers. The officers of the corporation shall be a Chairman
of the Board (who may also be designated the Chief Executive Officer or the
Chief Operating Officer) and a Vice Chairman of the Board (if such office be
created by resolution adopted by the Board), a President (who may also be
designated the Chief Executive Officer or the Chief Operating Officer), one or
more Vice Presidents (any one or more of whom may be designated Executive Vice
President or Senior Vice President and any one of whom may also be designated
as the Chief Operating Officer or the Chief Financial Officer), a Secretary and
a Treasurer. The Board of Directors may by resolution create the office of Vice
Chairman of the Board and define the duties of such office. The Board of
Directors may appoint such other officers and agents, including Assistant Vice
Presidents, Assistant Secretaries and Assistant Treasurers, as it shall deem
necessary, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined by the Board. Any two or
more offices, other than
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the offices of President and Secretary, may be held by the same person. No
officer shall execute, acknowledge, verify or countersign any instrument on
behalf of the corporation in more than one capacity, if such instrument is
required by law, by these by-laws or by any act of the corporation to be
executed, acknowledged, verified or countersigned by two or more officers. The
Chairman and Vice Chairman of the Board and the President shall be elected from
among the directors. With the foregoing exceptions, none of the other officers
need to be a director, and none of the officers need be a stockholder of the
corporation.
Section 6.2. Election and Term of Office. The officers of the corporation
shall be elected annually by the Board of Directors at its first regular meeting
held after the annual meeting of stockholders or as soon thereafter as
conveniently practicable. Each officer shall hold office until his successor
shall have been elected or appointed and shall have qualified or until his death
or the effective date of his resignation or removal, or until he shall cease to
be a director in the case of the Chairman and Vice Chairman of the Board or the
President.
Section 6.3. Removal and Resignation. Any officer or agent elected or
appointed by the Board of Directors may be removed without cause by the
affirmative vote of a majority of the Board of Directors whenever, in its
judgment, the best interests of the corporation shall be served thereby, but
such removal shall be without prejudice to the contractual rights, if any , of
the person so removed. Any officer may resign at any time by giving written
notice to the corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein, and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 6.4. Vacancies. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
Section 6.5. Salaries. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors or pursuant to its
direction; and no officer shall be prevented from receiving such salary by
reason of his also being a director.
Section 6.6. Chairman of the Board. The Chairman of the Board (who may also
hold the office of President or other offices) shall preside at all meetings of
the Board of Directors or of the stockholders of the corporation. In the
Chairman's absence, such duties shall be attended to by the Vice Chairman of the
Board or the President. The Chairman shall formulate and submit to the Board of
Directors or the Executive Committee matters of general policy for the
corporation and shall perform such other duties as usually appertain to the
office and such other duties as may be prescribed by the stockholders, the Board
of Directors or the Executive Committee from time to time. If the Chairman be so
designated, he shall also serve as the chief executive officer of the
corporation and shall perform such other duties and exercise such other powers
as usually appertain to such title, including, without limitation, the power to
appoint and remove subordinate officers, agents and employees, including
Assistant Secretaries and Assistant Treasurers, except that the Chairman may not
remove those elected or appointed by the Board of Directors. The Chairman of the
Board may sign, with the Secretary or any other officer of the corporation
thereunto authorized by the Board of Directors, certificates for shares of the
corporation and any deed, bonds, mortgages, contracts, checks, notes, drafts or
other instruments the issue or execution of which shall have been authorized by
resolution of the Board of Directors, except in cases where the signing and
execution thereof has been expressly delegated by these by-laws or by the Board
of Directors to some other officer or agent of the corporation, or shall be
required by law to be otherwise executed.
Section 6.7. President. In the absence of the Chairman of the Board or the
Vice Chairman of the Board (if such office be created by the Board), or in the
event of their inability or refusal to act, the President shall preside at all
meetings of the Board of Directors and of the stockholders. The President may
also preside at any such meeting attended by the Chairman or Vice Chairman of
the Board if so designated by the Chairman, or in the Chairman's absence, by the
Vice Chairman. If the President be designated as the chief executive officer of
the corporation, the President shall perform
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such duties and exercise such powers as usually appertain to such title and
such other duties as may be prescribed by the stockholders, the Board of
Directors or the Executive Committee from time to time. The President, if
designated as the chief executive officer of the corporation, shall have the
power to appoint and remove subordinate officers, agents and employees,
including Assistant Secretaries and Assistant Treasurers, except that the
President may not remove those elected or appointed by the Board of Directors.
The President shall keep the Board of Directors and the Executive Committee
fully informed and shall consult them concerning the business of the
corporation. The President may sign, with the Secretary or any other officer of
the corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation and any deeds, bonds, mortgages, contracts, checks,
notes, drafts or other instruments the issue or execution of which shall have
been authorized by resolution of the Board of Directors, except in cases where
the signing and execution thereof has been expressly delegated by these by-laws
or by the Board of Directors to some other officer or agent of the corporation,
or shall be required by law to be otherwise executed. The President shall vote,
or give a proxy to any other officer of the corporation to vote, all shares of
stock of any other corporation standing in the name of the corporation. In
general, the President shall perform all other duties normally incident to or
as usually appertain to the office of President and such other duties as may be
prescribed by the stockholders, the Board of Directors or the Executive
Committee from time to time.
Section 6.8. Vice Presidents. In the absence of the President, or in the
event of his inability or refusal to act, the Executive Vice President (or in
the event there shall be no Vice President designated Executive Vice President,
any Vice President designated by the Board) shall perform the duties and
exercise the powers of the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the corporation and
any deeds, bonds, mortgages, contracts, checks, notes, drafts or other
instruments the issue or execution of which shall have been authorized by
resolution of the Board of Directors, except in cases where the signing and
execution thereof has been expressly delegated by these by-laws or by the Board
of Directors to some other officer or agent of the corporation, or shall be
required by law to be otherwise executed. The Vice Presidents shall perform such
other duties as from time to time may be assigned to them by the Chairman of the
Board, the President, the Board of Directors or the Executive Committee.
Section 6.9. Secretary. The Secretary shall (a) record the proceedings of
the meetings of the stockholders, the Board of Directors and committees of
directors in the permanent minute books of the corporation kept for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these by-laws and as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, and see that the seal of
the corporation or a facsimile thereof is affixed to all certificates for shares
of the corporation prior to the issue thereof and to all documents, the
execution of which on behalf of the corporation under its seal is duly
authorized in accordance with the provisions of these by-laws; (d) keep or cause
to be kept a register of the post office address of each stockholder which shall
be furnished by such stockholder; (e) sign with the Chairman of the Board, the
President, or an Executive Vice President or Vice President, certificates for
shares of the corporation and any deeds, bonds, mortgages, contracts, checks,
notes, drafts or other instruments the issue or execution of which shall have
been authorized by resolution of the Board of Directors, except in cases where
the signing and execution thereof has been expressly delegated by these by-laws
or by the Board of Directors to some other officer or agent of the corporation,
or shall be required by law to be otherwise executed; (f) have general charge of
the stock transfer books of the corporation; and (g) in general, perform all
duties normally incident to the office of Secretary and such other duties as
from time to time may be assigned by the Chairman of the Board, the President,
the Board of Directors or the Executive Committee.
Section 6.10. Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his or her duties in
such sum and with such surety or surities as the Board of Directors shall
determine. The Treasurer shall (a) have charge and custody of and be responsible
for all funds and securities of the corporation; receive and give receipts for
moneys due and payable to the corporation from any source whatsoever and deposit
all such moneys in the name of the corporation in such banks, trust companies or
other depositories as shall be selected in
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accordance with the provisions of Section 7.3 of these by-laws, (b) prepare, or
cause to be prepared, for submission at each regular meeting of the Board of
Directors, at each annual meeting of the stockholders, and at such other times
as may be required by the Board of Directors, the Chairman of the Board, the
President or the Executive Committee, a statement of financial condition of
the corporation in such detail as may be required, (c) sign with the Chairman
of the Board, the President, or an Executive Vice President or Vice President,
certificates for shares of the corporation and any deeds, bonds, mortgages,
contracts, checks, notes, drafts or other instruments the issue or execution of
which shall have been authorized by resolution of the Board of Directors,
except in cases where the signing and execution thereof has been expressly
delegated by these by-laws or by the Board of Directors to some other officer
or agent of the corporation, or shall be required by law to be otherwise
executed and (d) in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned by the
Chairman of the Board, the President, the Board of Directors or the Executive
Committee.
Section 6.11. Assistant Secretary or Treasurer. The Assistant Secretaries
and Assistant Treasurers shall, in general, perform such duties as shall be
assigned to them by the Secretary or the Treasurer, respectively, or by the
Chairman of the Board, the President, the Board of Directors or the Executive
Committee. The Assistant Secretaries and Assistant Treasurers shall, in the
absence of the Secretary or Treasurer, respectively, or in their respective
inability or refusal to act, perform all functions and duties which such absent
officers may delegate, but such delegation shall not relieve the absent officer
from the responsibilities and liabilities of their office. The Assistant
Secretaries may sign, with the Chairman of the Board, the President or
Executive Vice President or Vice President, certificates for shares of the
corporation and any deeds, bonds, mortgages, contracts, checks, notes, drafts or
other instruments the issue or execution of which shall have been authorized by
a resolution of the Board of Directors, except in cases where the signing and
execution thereof has been expressly delegated by these by-laws or by the Board
of Directors to some other offices or agent of the corporation, or shall be
required by law to be otherwise executed. The Assistant Treasures shall
respectively, if required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the Board of
Directors shall determine.
ARTICLE VII
CONTRACTS, CHECKS AND DEPOSITS
Section 7.1. Contracts. Subject to the provisions of Section 6.1, the Board
of Directors may authorize any officer, officers, agent or agents, to enter into
any contract or execute and deliver any instrument for and in the name of and
on behalf of the corporation, and such authority may be general or confined
to specific instances.
Section 7.2. Checks, etc. All checks, demands, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers or such
agent or agents of the corporation, and in such manner, as shall be determined
by the Board of Directors.
Section 7.3. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VIII
CERTIFICATES OF STOCK
Section 8.1. Issuance. Each stockholder of this corporation shall be
entitled to a certificate or certificates showing the number of shares of stock
registered in such stockholder's name on the books of the corporation. The
certificates shall be in such form as may be determined by the Board of
Directors, shall be issued in numerical order and shall be entered in the books
of the corporation as they are issued. They shall exhibit the holder's name and
number of shares and shall be signed by the Chairman of the Board, the
President or a Vice President and by the Secretary or an Assistant Secretary.
Any or all the signatures on the certificate may be a facsimile. If the
corporation shall
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be authorized to issue more than one class of stock or more than one series of
any class, the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and rights
shall be set forth in full or summarized on the face or back of the certificate
which the corporation shall issue to represent such class or series of stock;
provided, however, that, except as otherwise provided by statute, in lieu of
the foregoing requirements, there may be set forth on the face or back of the
certificate which the corporation shall issue to represent such class or series
of stock, a statement that the corporation will furnish without charge to each
stockholder who so requests a copy of the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights. All certificates surrendered to the corporation
for transfer shall be cancelled and no new certificate shall be issued until
the former certificate for a like number of shares shall have been surrendered
and cancelled, except that in the case of a lost, stolen, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and with
such indemnity, if any, to the corporation as the Board of Directors may
prescribe. Certificates shall not be issued representing fractional shares of
stock.
Section 8.2 Lost Certificates. The corporation may issue a new certificate
or certificates in place of any certificate or certificates theretofore issued
by the corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. The corporation may in its discretion
and a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require or to
give the corporation a bond sufficient to indemnify it against any claim that
may be made against the corporation with respect to the certificate or
certificates alleged to have been lost, stolen or destroyed or the issuance of
such new certificate.
Section 8.3. Transfers. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Transfers of shares shall be made only on the books
of the corporation by the registered holder thereof, or by such holder's
attorney thereunto authorized by power of attorney and filed with the Secretary
of the corporation or the transfer agent.
Section 8.4. Registered Stockholders. The corporation shall be entitled to
treat the holder of record of any share of shares of stock as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Delaware.
ARTICLE IX
DIVIDENDS
Section 9.1. Declaration. Dividends upon the capital stock of the
corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property or in
shares of capital stock, subject to the provisions of the Certificate of
Incorporation.
Section 9.2. Reserve. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the Board of Directors shall think conducive to the
interests of the corporation, and the Directors may modify or abolish any such
reserve in the manner in which it was created.
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ARTICLE X
INDEMNIFICATION
Section 10.1. Third Party Actions. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that such person is or was a
director, trustee, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding had reasonable cause to believe that such person's
conduct was unlawful.
Section 10.2. Derivative Actions. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in the corporation's favor by reason of the
fact that such person is or was a director, trustee, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to amounts paid in settlement, the settlement of
the suit or action was in the best interests of the corporation; provided,
however, that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for gross
negligence or wilfull misconduct in the performance of such person's duty to the
corporation unless and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of such liability, but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnify for such
expenses as such court shall deem proper. The termination of any action or suit
by judgment or settlement shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the corporation.
Section 10.3. Successful Defense. To the extent that a director, trustee,
officer, employee or agent of the corporation has been successful on the merits
or otherwise, in whole or in part, in defense of any action, suit or proceeding
referred to Sections (1) and (2) of this Article X, or in defense of any claim,
issue, or matter therein, such person shall be indemnified against expenses
(including attorney's fees) actually and reasonably incurred by such person
in connection therewith.
Section 10.4. Authorization. Any indemnification under Sections (1) and (2)
of this Article X (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, trustee, officer, employee or agent is proper
in the circumstances because such person has met the applicable standard of
conduct set forth above in Sections (1) and (2) of this Article X. Such
determination shall be made (a) by the Board of Directors of the corporation by
a majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (b) if such a quorum is not obtainable, by a
majority vote of directors who were not parties to such action, suit or
proceeding, or (c) by inde-
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pendent legal counsel (selected by one or more of the directors, whether or not
a quorum and whether or not disinterested) in a written opinion, or (d) by the
shareholders. Anyone making such a determination under this Section (4) may
determine that a person has met the standard therein set forth as to some
claims, issues or matters but not as to others, and may reasonably prorate
amounts to be paid as indemnification.
Section 10.5. Advances. Expenses incurred in defending a civil or criminal
action, suit or proceeding shall be paid by the corporation, at any time or
from time to time in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in Section 10.4 of this Article
X upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee or agent to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation as
authorized in this Article X.
Section 10.6. Non-Exclusivity. The indemnification provided by this Article
X shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any law, by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee or agent and shall insure to the benefit of the
heirs, executors, and administrators of such a person.
Section 10.7. Insurance. The corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
trustee, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, trustee, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against such person and incurred by
such person in any such capacity or arising out of such person's status as such,
whether or not the corporation would have the power to indemnify such person
against such liability.
Section 10.8. "Corporation" Defined. For purposes of this Article X,
references to the "corporation" shall include, in addition to the corporation,
any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
trustees, officers, employees or agents, so that any person who is or was a
director, trustee, officer, employee or agent of such constituent corporation or
of any entity a majority of the voting stock of which is owned by such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article X with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Seal. The corporate seal shall have inscribed thereon the
name of the corporation, and the words "Corporate Seal, Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
otherwise reproduced.
Section 11.2. Books. The books of the corporation may be kept (subject to
any provision contained in the statutes) outside the State of Delaware at the
offices of the corporation at Dallas, Texas, or at such other place or places as
may be designated from time to time by the Board of Directors.
ARTICLE XII
AMENDMENT
These by-laws may be altered, amended or repealed at any regular or special
meeting of the Board of Directors, without prior notice, by resolution adopted
thereat.
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SECRETARY'S CERTIFICATE
I, Sharon K. Huston, Secretary of Sunshine Mining Company, do hereby
certify that the following resolution was adopted by the Board of Directors on
July 30, 1985:
Resolved, that pursuant to Section 3.2 of Article III of the
By-Laws of the company, the number of Directors which shall
constitute the whole Board of the Company shall be eight persons.
Such persons shall be elected at the next Annual Meeting of
Shareholders of the Company and each Director so elected shall
hold office until his successor shall be elected and shall
qualify.
IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of July,
1986.
/s/ SHARON K. HUSTON
---------------------------
Sharon K. Huston, SECRETARY
<PAGE> 13
SECRETARY'S CERTIFICATE
I, Sharon K. Huston, Secretary of Sunshine Mining Company, do hereby
certify that the following resolutions were adopted by the Board of Directors
on June 11, 1987:
RESOLVED, that pursuant to Article VI, Section 6.1 of the
Bylaws of the Company, there is hereby created the office of
Vice Chairman of the Board of Directors.
RESOLVED, that Article VI, Section 6.1 is hereby amended to
add the General Counsel as an officer of the Company, and Article
VI is further amended by the addition of Section 6.12 as follows:
SECTION 6.12 General Counsel. The General Counsel
shall be the chief legal officer of the corporation;
shall advise the Board of Directors and officers on
all legal matters, and shall perform such other
additional duties as may be assigned to him by the
Board of Directors, chairman or chief executive
officer.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of July,
1987.
/s/ SHARON K. HUSTON
---------------------------
Sharon K. Huston, Secretary
<PAGE> 14
SECRETARY'S CERTIFICATE
The undersigned, Assistant Secretary of Sunshine Precious Metals, Inc.
hereby certifies that the attached resolution was approved by the Board of
Directors on the 10th day of October, 1990.
IN WITNESS WHEREOF, I have hereunto set my hand as Assistant Secretary of
said corporation, and have attached hereto the official seal of said
corporation, this 14th day of May, 1991.
/s/ L. STEPHEN RIZZIERI
-----------------------
L. Stephen Rizzieri
Assistant Secretary
<PAGE> 15
RESOLVED, that pursuant to Article III, Section 2, of the bylaws of the
Corporation, the number of directors, which shall constitute the whole Board of
Directors of the Corporation, be, and hereby shall be, three (3) persons; and
<PAGE> 1
EXHIBIT (iii)
FIRST SUPPLEMENT TO TRUST DEED
This First Supplement to Trust Deed (this "FIRST SUPPLEMENT") is made
entered into on this 27th day of March, 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 SSC and the Company
by issuing eight (8) million shares of SSC common stock for the benefit of
Noteholders, extending the maturity date of the Notes to May 1, 2001 or later as
provided for herein, amending the Exchange Price and Exchange Period and
providing for payment of interest on the Notes through the issuance of SSC
common stock.
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.
1
<PAGE> 2
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, 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
2
<PAGE> 3
determining how many Notes are 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;
"Recapitalization Date" means March 27, 2000.
"New Notes" means those Notes issued pursuant to the
recapitalization of the Company. On March 27, 2000, all Outstanding
Notes shall be surrendered and replaced with New Notes, upon which will
be affixed the Restated Terms and Conditions.'
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 high and low for the five (5)
days prior to the Interest Payment Date. In the event that 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, the interest payments
shall be paid in cash."
1.3 To Clause 2 of the Trust Deed, a new paragraph (E) shall be added
as follows:
"As soon as practicable following the March 27, 2000, meeting of
Noteholders, 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 execution of this First Supplement
by the Trustee, the Trustee shall have received eight
(8) million shares of SSC common stock (the "New
Shares") from SSC.
(2) Upon receipt of the New Shares by the Trustee, the
Trustee shall cause the New Shares to be delivered to
the holders of the Notes.
1.5 To Clause 4 of the Trust Deed, a new paragraph (D) shall be added
as follows:
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<PAGE> 4
"(D) Shares freely tradeable: SSC and Company shall ensure that all
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 traded, 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 are currently listed on the New York Stock Exchange Inc."
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 Representations and Warranties
(A) SCC hereby represents to the holders of the Notes that:
(i) The New Shares have been duly authorized and are fully
paid and nonassessable 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 [AND THE QUALIFICATION OF
THE TRUST DEED UNDER THE TRUST INDENTURE ACT] on the
part of SCC or the Company is required in connection
with the issuance of the New Shares;
(iii) The New Shares have been duly listed for trading on
the New York Stock Exchange;
(iv) The issuance of the New Shares does not and will not
conflict with or result in a breach of default by SCC
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 SCC 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 right 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 of 1933, as
amended (the "Securities Act");
(vii) The New Shares may be resold without any restriction
imposed by Rule 144 under the Securities Act.
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
4
<PAGE> 5
(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 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 provision 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.
5
<PAGE> 6
2.8 Incorporation by Reference of Trust Indenture Act; Trust Indenture
Act Controls. Sections 310 through 318 of the Trust Indenture Act of 1939 (as
amended, 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. 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
provision of the Trust Indenture Act that is incorporated by reference herein,
such provision of the Trust Indenture Act shall control.
The Issuer and the Trustee may without the consent of, or notice to,
any of the Noteholders, but only with the prior written consent of the Company
and SSC in each case, 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 permitted by the Trust
Indenture Act or similar Federal statute.
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:
---------------------------------
6
<PAGE> 7
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 March 27, 2000, payable semi-annually in arrears on
March 27 and September 27 in each year, save that the first payment of interest
payable on September 27, 2000 shall be in respect of the period from, and
including 27 March, 2000 to, but excluding, September 27, 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.
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
March 27, 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 purpose unless and until this Note is authenticated by or
on behalf of the Principal Paying Agent (as defined in the Trust Deed).
7
<PAGE> 8
IN WITNESS WHEREOF the Company has caused this Note and the coupons
appertaining hereto to be duly executed.
Issued as of ______________________, 2000.
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]
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.
8
<PAGE> 9
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.
9
<PAGE> 10
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:
------------------------------
10
<PAGE> 11
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
11
<PAGE> 12
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:
------------------------------
12
<PAGE> 13
THIS REGISTERED NOTE IS AUTHENTICATED
BY OR ON BEHALF OF THE REGISTRAR
WITHOUT WARRANTY, RECOURSE OR LIABILITY
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.
13
<PAGE> 14
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.
14
<PAGE> 15
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.
15
<PAGE> 16
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 March 27, 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 on and 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.
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 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.
16
<PAGE> 17
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 March 27, 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.
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
17
<PAGE> 18
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 decrease
Amount of decrease in principal
in principal amount of this Principal amount
amount of this Temporary Global of this Temporary
Temporary Global Bearer Note Global Bearer
Bearer Note following purchase Note following
Date made following exchange and cancellation such decrease Notation made
--------- ------------------ ------------------- ----------------- -------------
<S> <C> <C> <C> <C>
</TABLE>
18
<PAGE> 19
SCHEDULE OF INTEREST AND PRINCIPAL PAID
<TABLE>
<CAPTION>
Date of Payment Amount of Interest and Principal Notation Made
--------------- -------------------------------- -------------
<S> <C> <C>
</TABLE>
19
<PAGE> 20
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 March 27, 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 authorized 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 Notes are listed on the Luxembourg Stock Exchange.
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 (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.
20
<PAGE> 21
On March 27, 2000, at a meeting of the Noteholders, 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,
whereby a recapitalization of the Company was approved in exchange for the
issuance of eight (8) million shares of the SSC common stock. The terms of the
recapitalization are set out in the First Supplement and reflected 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
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.
21
<PAGE> 22
The Registered Notes will be issued in definitive registered form
and delivered on or about 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) SSC hereby asserts that on March 27, 2000 (the
"Recapitalization Date"), the number of authorized Shares outstanding
was 40,000,000.
22
<PAGE> 23
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 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
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<PAGE> 24
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 March
27, 2000 (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 (as defined below), except where
issued in respect of a Bearer Note surrendered during the period from
and including the Record Date in respect of an Interest Payment Date up
to and including such Interest Payment Date, in which event interest
shall accrue as from such last-mentioned Interest Payment Date. Bearer
Notes may only be surrendered in exchange for Registered Notes at the
specified office of the Registrar or of a Transfer Agent.
The Registrar or the relevant Transfer Agent will within three
Business Days (as defined below) of the presentation of any
Registration Request together with the relevant Bearer Note deliver a
Registered Note to the Noteholder at its specified office, or (at the
risk and, if mailed at the request of the Noteholder otherwise than by
ordinary mail at the expense of the Noteholder), mail the Registered
Note by uninsured mail to such address as the Noteholder may request. A
Noteholder will
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<PAGE> 25
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 Authorized 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 of the Agency Agreement and to Conditions 5(E) and 5(F)
be transferred in whole or in part in an Authorized 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).
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<PAGE> 26
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.
(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.
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<PAGE> 27
6. INTEREST AND ADDITIONAL INTEREST
As of March 27, 2000, the Notes bear interest from (and including)
March 27, 2000, (the "Recapitalization Date") at the rate of 8 percent per
annum, payable in Shares, semiannually on March 27 and September 27 in each year
(each an "Interest Payment Date"), the first such payment to be made on
September 27, 2000, in respect of the period from and including the
Recapitalization Date to (but excluding) September 27, 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 in Luxembourg 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 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
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<PAGE> 28
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 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
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<PAGE> 29
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 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, so long as the
Notes are listed on the Luxembourg Stock Exchange, shall be Luxembourg
or such other place as the rules of the Luxembourg Stock Exchange may
approve and one of which shall be in London and (ii) a Registrar with a
specified office in New York. Notice of any termination or appointment
and of any changes
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<PAGE> 30
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 July 27, 2000 (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 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.
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(iii) 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.
(iv) 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).
(v) Notwithstanding the provisions of paragraph (i) of
this Condition 8(A), if the Company shall default in making
payment in full in respect of any Note which shall have been
called for redemption prior to 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).
(vi) 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).
(vii) In the case of a Bearer Note, an Exchange Right may
only be exercised in respect of the total principal amount of
such Bearer Note and, in the case of a Registered Note an
Exchange Right may only be exercised in respect of an Authorised
Denomination. Where an Exchange Right is exercised in respect of
part only of a Registered Note, the old Registered Note shall be
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 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.
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<PAGE> 32
In the case of a Registered Note, an Exchange Right may
not be exercised by the Noteholder during the period commencing
on the Record Date in respect of any payment and ending on the
due date for such payment (both days inclusive).
(B) Procedure for Exchange
(i) To exercise the Exchange Right attaching to any Note,
the holder thereof must complete, execute and deposit at his own
expense during normal business hours at the specified office of
the Principal Exchange Agent or any of the other Exchange Agents
or, in the case of a Registered Note, the Registrar, a notice of
exchange (an "Exchange Notice") in duplicate in the form (for
the time being current) obtainable from the specified office of
each Exchange Agent, together with the relevant Note and any
amount to be paid by the Noteholder pursuant to this Condition
8(B)(i).
The exchange date in respect of a Note (the "Exchange
Date") must fall at a time when the Exchange Right attaching to
that Note is expressed in these Conditions to be exercisable and
will be deemed to be the Business Day immediately following the
date of the surrender of the Note and delivery of such Exchange
Notice and, if applicable, any payment to be made or indemnity
given under these Conditions in connection with the exercise of
such Exchange Right or, in the case of an automatic exchange on
redemption pursuant to Condition 8(D), the relevant redemption
date. An Exchange Notice once delivered shall be irrevocable.
"Stock Exchange Business Day" means any day (other than a
Saturday or Sunday) on which The New York Stock Exchange, Inc.
(the "NYSE") or the Alternative Stock Exchange (as defined in
Condition 11(A)(v)(a)), as the case may be, is open for
business.
A Noteholder or the Trustee delivering a Note for exchange
must pay (in the case of the Trustee, by way of deduction from
the net proceeds of sale referred to in Condition 8(D)) any
taxes and capital, stamp, issue and registration duties arising
on exchange (other than any taxes or capital, or stamp duties
payable in the U.S. or in the place of the Alternative Stock
Exchange, as the case may be, by SSC in respect of the allotment
and issue of Shares and listing of the Shares on exchange) and
such Noteholder or the Trustee (as the case may be) must pay (in
the case of the Trustee, by way of deduction from the net
proceeds of sale as aforesaid) all, if any, taxes arising by
reference to any disposal or deemed disposal of a Note in
connection with such exchange.
Until such time as SSC shall have either, to the
satisfaction of the Trustee, complied with its obligations under
or made the determination referred to in
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<PAGE> 33
Condition 11(A)(iii), a Noteholder or the Trustee delivering a
Note for exchange on behalf of a Noteholder must either (i)
provide a written certification that the Noteholder is not a
U.S. person, that the Note is not being exchanged on behalf of a
U.S. person, and that such persons are located outside the U.S.,
acquired the Notes to be exchanged outside the U.S., and are not
affiliates of SSC or persons acting on behalf of an affiliate of
SSC; or (ii) provide a written opinion of U.S. legal counsel, in
form and substance acceptable to SSC, to the effect that the
exchange of the Note for Shares is exempt from registration
under the Securities Act and any applicable state securities
law.
(ii) As soon as practicable, and in any event not later
than 14 calendar days after the Exchange Date, SSC will in the
case of Notes exchanged on exercise of the Exchange Right,
whether by the Noteholder or by the Trustee, or a Note being
exchanged in accordance with Condition 8(E) and in respect of
which an Exchange Notice has been delivered and the relevant
Note and amounts payable by the relevant Noteholder, or, as the
case may be, the Trustee deposited as permitted by sub-paragraph
(i) above, cause the person or persons designated for the
purpose in the Exchange Notice to be registered as Holder(s) of
the relevant number of Shares and will make a certificate or
certificates for the relevant Shares available for collection at
SSC's principal office in Boise, Idaho or, if so requested in
the relevant Exchange Notice, will deliver such certificate or
certificates to the person and at the place specified in the
Exchange Notice together with any other securities, property or
cash required to be delivered upon exchange and such assignments
and other documents (if any) as may be required by law to effect
the transfer thereof.
(iii) The person or persons specified for that purpose
will be deemed for all purposes to be the holder of record of
the number of Shares issuable upon exchange with effect from the
Exchange Date. The Shares issued upon exchange of the Notes will
in all respects rank pari passu with the issued and outstanding
Shares in issue on the relevant Exchange Date except for any
right excluded by mandatory provisions of applicable law. A
Holder of Shares issued on exchange of Notes shall not be
entitled to any rights the Record Date for which precedes the
relevant Exchange Date.
(iv) If any notice requiring the redemption of any Notes
is given pursuant to Condition 9(B) on or after the fifteenth
calendar day prior to the Record Date in respect of any dividend
payable in respect of the Shares where such notice specifies a
date for redemption falling on or prior to the next following
Interest Payment Date, interest shall (subject as hereinafter
provided) accrue on Notes (i) which shall 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
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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 convertible into or
exchangeable for Shares, at a consideration per Share less than
the Current Market Price per Share;
(iv) the distribution, to the holders of Shares, of shares
of capital stock of SSC, evidence of indebtedness of SSC, assets
(other than annual or interim dividends in cash) or rights or
warrants to subscribe for or purchase securities (other than
those rights and warrants mentioned in (iii) above);
(v) the issue of securities (other than the Notes or in
any of the circumstances mentioned in (iii) above) convertible
into or exchangeable for Shares or of rights or warrants to
subscribe for or purchase Shares or securities convertible into
or exchangeable for Shares (other than those rights and
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warrants mentioned in (iii) above), at a consideration per Share
less than the Current Market Price per Share; and
(vi) the issue of Shares (other than Shares issued on
conversion or exchange of any convertible or exchangeable
securities issued by SSC (including the Notes) or on the
exercise of any rights or warrants granted issued or offered by
SSC or in any of the circumstances described in (i) and (ii)
above or Shares issued to stockholders of any company which
merges into or consolidates with SSC, in proportion to their
shareholding in such company immediately prior to such merger,
upon such merger) at a consideration per Share less than the
Current Market Price per Share; provided, however, that the
Exchange Price will not be 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
NYSE's Composite Transactions (or the equivalent quotations of
an Alternative Stock Exchange, as the case may be).
The Exchange Price may not be reduced so that, on exchange
of Notes, Shares would be issued at a discount to their par
value.
Where more than one event which gives or may give rise to
an adjustment to the Exchange Price occurs within such a short
period of time that in the opinion of the Company's auditors
(the "Auditors") the foregoing provisions would need to be
operated subject to some modification in order to give the
intended result, such modification shall be made to the
operation of the foregoing provisions as may be advised by the
Auditors to be in their opinion appropriate in order to give
such intended result.
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No adjustment will be made to the Exchange Price when
Shares or other securities (including rights or options) are
issued, offered or granted to employees; (including directors
holding executive office) of SSC or any Subsidiary or any
associated company of SSC pursuant to any Employee Share Scheme
(as defined in the Trust Deed).
(D) Exchange on Redemption
The Trust Deed provides that the Trustee may, at its absolute
discretion (and without any responsibility for any loss occasioned
thereby), within the period commencing on the date six Business Days
prior to, and ending at the close of business in New York City prior
to, the date fixed for redemption of any of the Notes (including any
redemption under Conditions 9(A), 9(B) and 9(C)), elect by notice in
writing to the Company and SSC to exchange as of such redemption date
the aggregate number of Notes due for redemption on such date and in
respect of which Exchange Rights have not been exercised by Noteholders
("Unexercised Notes") into Shares at the Exchange Price applicable at
such redemption date if all necessary consents (if any) have been
obtained and the Trustee is satisfied or is advised by a reputable
independent merchant bank appointed by it that the net proceeds of an
immediate sale of the Shares arising from such exchange (disregarding
any liability other than a liability of the Trustee) to taxation or the
payment of any capital, stamp, issue or registration duties consequent
thereon) would 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.
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(E) Mandatory Exchange
(i) Each Noteholder acknowledges and agrees that the
Company may, at its own cost (save those expenses or taxes
referred to in Condition 8(E)(iii)), at any time on or after
March 21, 1997, elect to exercise 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 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
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payable in connection therewith arising solely as a result of
the Noteholder's failure to perform its obligations under this
Condition 8(E)).
(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 converted 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, convert or excise, 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.
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(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 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
CONDITION 9 (A) shall be deleted in its entirety and replaced with the
following:
(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 them, no later than 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
days prior
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to the issuance of the such Shares. 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 that
the Shares to be issued pursuant to the Maturity Date postponement have
been authorized and that their issuance to Noteholders has been
approved by SSC shareholders.
(B) If as a result of any change in, or amendment to, the laws
or regulations of the U.S. or any political sub-division of, or any
authority in, or of, the U.S. having power to tax, or any change in the
application or official interpretation of such laws or regulations,
which change or amendment becomes effective after March 21, 1996, the
Company has or will become obliged to pay additional amounts as
provided or referred to in Condition 10 (and such amendment or change
has been evidenced by the delivery by the Company to the Trustee (who
shall, in the absence of manifest error, accept such certificate and
opinion as sufficient evidence thereof) of (i) a certificate signed by
two officers of the Company on behalf of the Company stating that such
amendment or change has occurred (irrespective of whether such
amendment or change is then effective), describing the facts leading
thereto and stating that such obligation cannot be avoided by the
Company taking reasonable measures available to it and (ii) an opinion
in a form satisfactory to the Trustee of independent legal advisers of
recognised standing to whom the Trustee shall have no reasonable
objection to the effect that such amendment or change has occurred
(irrespective of whether such amendment or change is then effective)),
the Company may at its option, having given not less than 30 nor more
than 60 calendar days' notice to the Noteholders in accordance with
Condition 17 (which notice shall be irrevocable), redeem all the Notes
but not some only, at their principal amount together with interest (if
any) accrued to (but excluding) the date of redemption, provided that
no notice of redemption shall be given earlier than 90 calendar days
before the earliest date on which the Company would be required to pay
such additional amounts were a payment in respect of the Notes then
due.
Upon expiry of any such notice period as is referred to in this
Condition 9(B) (and subject as provided above), the Company shall be
bound to redeem the Notes at their principal amount together with
interest accrued to but excluding the redemption date.
(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
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been given by the Company, a notice of redemption in the form (for the
time being current) obtainable from any of the Paying Agents specifying
a date for redemption together with the Bearer Note or the Registered
Note, as the case may be, to be redeemed, require the Company to redeem
in U.S. dollars all or some only of the Notes held by it at their
principal amount, plus accrued interest to the date of redemption.
Any such notice of redemption will be irrevocable unless its
revocation is approved in writing by the Company not later than five
days prior to the relevant date for redemption of the relevant Note and
will bind the Company to redeem the Note to which such notice relates.
Certificates for Registered Notes and Bearer Notes will not be returned
to Noteholders except in the limited circumstances set out in the
Agency Agreement. The Company shall notify Noteholders of a Cessation
of Listing no later than five Business Days after its occurrence in
accordance with Condition 17. For the purposes of this Condition 9(C)
"Cessation of Listing" means the consolidation with or merger into any
Person by SSC or the sale, lease, conveyance, transfer or other
disposal by SSC of its property or assets as an entirety or
substantially as an entirety to a Person and as a result of such
transaction the Shares are no longer listed on the NYSE or an
Alternative Stock Exchange.
(D) Subject to applicable law, the Company, SSC or any of their
Subsidiaries or Affiliates (as defined in the Trust Deed) may at any
time purchase Notes together, in the case of Bearer Notes, with
unmatured Coupons in any manner and at any price in the open market or
by private treaty. If purchases are made by tender, tenders must be
available to all Noteholders alike. Notes purchased by the Company, SSC
or any of their Subsidiaries will forthwith be surrendered for
cancellation and 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;
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except that no additional amounts shall be payable in relation to any payment in
respect of any Note or Coupon:
(A) to, or to a third party on behalf of, a holder who is
liable for the Taxes in respect of the Note or Coupon by reason of his
having some connection with the U.S. other than the mere holding of the
Note or Coupon; and
(B) presented for payment more than 30 calendar days after the
Relevant Date except to the extent that a holder would have been
entitled to additional amounts on presenting the same for payment on
the last day of such period of 30 calendar days; or
(C) to, or to a third party on behalf of, a holder who would
not be liable or subject to the withholding or deduction by making a
declaration of non-residence or other similar claim for exemption to
the relevant tax authority.
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;
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(ii) will not create or permit to subsist any Lien
relating to or over the shares of the Company, held or
beneficially owned by SSC;
(iii) to the extent SSC and its counsel determine it is
required because an exemption from registration is not
available, file with the Securities and Exchange Commission on
or before June 30, 1996, and keep effective a Registration
Statement on such form as SSC determines to be appropriate in
respect of the registration of the Shares to be issued
pursuant to the Exchange Rights to U.S. persons and any
subsequent resale of such Shares to U.S. persons;
(iv)(a) to maintain a listing for all the issued Shares
on the NYSE, it being understood that if SSC is unable to
obtain or maintain such listing of Shares to obtain and
maintain a listing for all the Shares issued on the exercise
of the Exchange Rights on any other stock exchanges or
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;
(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 effect the following:
(a) increase the number of authorized Shares to
XX,000,000 and,
(b) approve the Exchange Price for Shares at
$1.50 per Share, subject to adjustment in the
manner provided in Condition 8(C); and,
(vii) the 10% Senior Convertible Notes will not be
amended and will remain a debt obligation payable through the
issuance of stock.
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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 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;
(ii) not create or permit to subsist any Lien or other
encumbrance or security interest over or otherwise dispose,
sell or transfer its interest in the Sunshine Mine; and
(iii) maintain a listing for the Notes on the
Luxembourg Stock Exchange.
(C) For the purposes of this condition, "Sunshine Mine"
means that certain real property location in Shoshone County, Idaho,
known as the "Sunshine Mine", consisting of the ownership rights of the
Company in the real property, together with the ownership rights of the
Company in equipment, plant, machinery and other property located
thereon and all patented and unpatented mining claims and interests
therein owned by the Company.
12. PRESCRIPTION
Bearer Notes and Coupons will become void unless presented for payment
within periods of 10 years (in the case of principal) and five years (in the
case of interest) from the Relevant Date in respect of the Notes or, as the case
may be, the Coupons, subject to the provisions of Condition 7.
Claims for the payment of principal and 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):
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(A) if default is made for a period of 5 Business Days or more
in the payment of any principal or interest due in respect of the Notes
or any of them; or
(B) if the Company or SSC fails to perform or observe any of
its other obligations, covenants, conditions or provisions under the
Notes or the Trust Deed and (except where the Trustee shall have
certified to the Company in writing that it considers such failure to
be incapable of remedy in which case no such notice or continuation as
is hereinafter mentioned will be required) such failure continues for
the period of 30 calendar days (or such longer period as the Trustee
may in its absolute discretion permit) next following the service by
the Trustee on the Company or SSC, as the case may be, of notice
requiring the same to be remedied; or
(C) if (i) any other Indebtedness of the Company, SSC or any
Principal Subsidiary (as defined below) becomes due and repayable prior
to its stated maturity by reason of an event of default (howsoever
described) or (ii) any such Indebtedness is not paid when due or, as
the case may be, within any applicable grace period (as originally
provided) or (iii) the Company, SSC or any Principal Subsidiary fails
to pay when due (or, as the case may be within any originally
applicable grace period) any amount payable by it under any present or
future guarantee for, or indemnity in respect of, any Indebtedness of
any Person or (iv) any security given by the Company, SSC or any
Principal Subsidiary for any Indebtedness of any Person or any
guarantee or indemnity of Indebtedness of any Person or any guarantee
or indemnity of Indebtedness of any Person becomes enforceable by
reason of default in relation thereto and steps are taken to enforce
such security save in any such case where there is a bona fide dispute
as to whether the relevant Indebtedness or any such guarantee or
indemnity as aforesaid shall be due and payable, provided that in each
such case the Indebtedness exceeds in the aggregate US $1,000,000 and
in each such case such event continues unremedied for a period of 30
calendar days (or such longer period as the Trustee may in its sole
discretion consent to in writing upon receipt of written notice from
the Company or SSC); or
(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
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<PAGE> 46
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
(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.
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Notwithstanding anything herein to the contrary, in the event that SCC
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 is either (i) the principal value of the Notes plus any accrued
interest, or (ii) the exchange value of the Notes, whichever is greater.
For the purposes of these Terms and Conditions:
(a) "Group" means SSC and all its Subsidiaries.
(b) "Indebtedness" of any person, means any present or future
obligations, which shall include all obligations (i) which in
accordance with the generally accepted accounting principles in the
U.S., shall be classified upon the balance sheet of such person as
liabilities, (ii) for borrowed money, (iii) which have been incurred in
connection with the acquisition of any property (including without
limitation, all obligations evidenced by any indenture, bond, note,
commercial paper or other similar security, but excluding, in any case,
obligations arising 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
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(B) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary of the
Company or SSC which immediately prior to such transfer is a
Principal Subsidiary, whereupon the transferor Subsidiary
shall immediately cease to be a Principal Subsidiary and the
transferee Subsidiary shall cease to be a Principal Subsidiary
under the provisions of this sub-paragraph (B) (but without
prejudice to the provisions of sub-paragraph (A) above), upon
publication of its next audited financial statements;
all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a Subsidiary of
the Company or SSC is or is not or was or was not at any particular
time or throughout any specified period a Principal Subsidiary shall,
in the absence of manifest error, be conclusive and binding on all
parties; and
(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
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<PAGE> 49
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) (i) the principal
amount of the Notes then outstanding, (ii) if not otherwise included,
the book value of any mandatorily redeemable preferred stock, except
for the aggregate liquidation preference of any portion thereof which
has a stated Maturity Date or a mandatory redemption requirement due on
or prior to the final Maturity Date of the Notes, (iii) if not
otherwise included, the book value of any shares of preferred stock
then outstanding mandatorily redeemable for shares of Common Stock, and
(iv) the principal amount of any other convertible subordinated
Indebtedness then outstanding, or the principal amount of any portion
of any such convertible subordinated Indebtedness, except for the
principal amount which has a stated Maturity Date or mandatory
redemption requirement due on or prior to the final Maturity Date of
the Notes.
14. ENFORCEMENT
The Trustee may at any time, at its discretion and with prior written
notice to the Company and SSC, take such proceedings against the Company or SSC
as it may think fit to enforce the provisions of the Trust Deed, the Notes and
the Coupons or the Guarantee but it shall not be bound to take any proceedings
or any other action in relation to the Trust Deed, the Notes or the Coupons or
the Guarantee unless (a) it shall have been so directed by an Extraordinary
Resolution of the Noteholders or so requested in writing by the holders of at
least one-quarter in principal amount of the Notes then Outstanding, and (b) it
shall have been indemnified to its satisfaction. No Noteholder or 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
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<PAGE> 50
Deed of any Subsidiary or holding company (being a corporation holding (directly
or indirectly) at least a majority of shares of stock having by the terms
ordinary voting power to elect a majority of the board of directors of the
Company (or such previous substitute) (irrespective of whether or not at the
time stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency)) of the Company or
any Subsidiary of such holding company, subject to (a) the Notes continuing to
be unconditionally and irrevocably guaranteed by SSC and exchangeable into
Shares of SSC, (b) the Trustee being satisfied that the interests of the
Noteholders will not be materially prejudiced by the substitution, and (c)
certain other conditions set out in the Trust Deed being complied with.
16. REPLACEMENT OF NOTES AND COUPONS
Should any Note or Coupon be lost, stolen, mutilated, defaced or
destroyed, it may be replaced at the specified office of the Paying Agent in
London, in the case of Bearer Notes or Coupons, or the Registrar, in the case of
Registered Notes, upon payment by the claimant of the expenses incurred in
connection with the replacement and on such terms as to evidence indemnity and
security as the Company may reasonably require. Mutilated or defaced Notes or
Coupons must be surrendered before replacements will be issued.
17. NOTICES
(A) Notices to holders of Registered Notes will be mailed to
them at the respective addresses in the Register and deemed to have
been given on the fourth Business Day after the date of mailing,
provided that, if at any time by reason of suspension or curtailment
(or except suspension or curtailment) of postal services within the
U.S. or elsewhere the Company is unable effectively to give notice to
holders of Registered Notes through the post, notices to holders of
Registered Notes will be valid if given in the same manner as other
notices as set forth below.
(B) Notices to all the Noteholders will be valid if published
in a leading English language daily newspaper published in London or
such other English language daily newspaper with general circulation in
Europe as the Trustee may approve (which is expected to be the
Financial Times) and, so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of that Exchange require, in a leading
newspaper having general circulation in Luxembourg (which is expected
to be the Luxemburger Wort). Any notice shall be deemed to have been
given on the date of publication or, if so published more than once, on
the date of the first publication. If publication as provided above is
not practicable, notice will be given in such other manner, and shall
be deemed to have been given on such date, as the Trustee may approve.
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<PAGE> 51
(C) Couponholders will be deemed for all purposes to have
notice of the contents of any notice given to the Noteholders in
accordance with this Condition.
18. MEETINGS OF NOTEHOLDERS, MODIFICATION, WAIVER AND
AUTHORISATION
(A) An Extraordinary Resolution, to be passed, shall require
the approval of Noteholders holding a clear majority in principal
amount of the Notes for the time being Outstanding. An Extraordinary
Resolution 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. An Extraordinary Resolution once
passed will be binding on all Noteholders and on all Couponholders.
(B) The Trustee may agree, without the consent of the
Noteholders or Couponholders, to any modification (subject to certain
exceptions) of, or to the waiver or authorisation of any breach or
proposed breach of, any of these Conditions or any of the provisions of
the Trust Deed which is not, in the opinion of the Trustee, materially
prejudicial to the interests of the Noteholders or to any modification
which is of a formal, minor or technical nature or to correct a
manifest error.
(C) In connection with the exercise by it of any of its
trusts, powers, authorities or discretions (including, without
limitation, any modification, waiver, authorisation or substitution),
the Trustee shall have regard to the interests of the Noteholders as a
class and, in particular but without limitation, shall not have regard
to the consequences of the exercise of its trusts, powers, authorities
or discretions for individual Noteholders and Couponholders resulting
from their being for any purpose domiciled or resident in, or otherwise
connected with, or subject to the jurisdiction of, any particular
territory and the Trustee shall not be entitled to require, nor shall
any Noteholder or 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.
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<PAGE> 52
19. INDEMNIFICATION OF THE TRUSTEE
The Trust Deed contains provisions for the indemnification of the
Trustee and for its relief from responsibility, including provisions relieving
it from taking action unless indemnified to its satisfaction.
20. GOVERNING LAW
The Trust Deed, the Agency Agreement, the Notes and the Coupons are
governed by, and will be construed in accordance with, English law. In relation
to any legal action or proceedings arising out of or in connection with the
Trust Deed, the Agency Agreement, the Notes, the Coupons or the Guarantee, the
Company and SSC have irrevocably submitted to the jurisdiction of the Courts of
England and in relation thereto have appointed The Law Debenture Trust
Corporation plc, now at Princes House, 95 Gresham Street, London EC2 V7LY as its
agent for service of process in England.
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
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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<PAGE> 53
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
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
53
<PAGE> 54
TERMS AND CONDITIONS OF THE NOTES
The following, save for the paragraphs in italics, is the text of the terms
and conditions of the Notes which will be endorsed on each Note in definitive
form:
The U.S.$30,000,000 8 percent Senior Exchangeable Notes due 2000 (the
"Notes") of Sunshine Precious Metals, Inc. (the "Company") are constituted by a
trust deed dated March 21, 1996 (the "Trust Deed", which expression shall
wherever the context so admits include any deed supplemental thereto) made
between the Company, Sunshine Mining and Refining Company ("SSC", which shall
include for all purposes hereof any successor corporation created pursuant to
the Merger) and Marine Midland Bank (the "Trustee", which expression shall
include all persons for the time being the trustee or trustees under the Trust
Deed) as trustee for the holders of the Notes (the "Noteholders"). The issue of
the Notes was authorised by a written resolution of the board of directors of
the Company adopted on February 27, 1996. The giving of the guarantee by SSC
(the "Guarantee") was authorised by a resolution of the board of directors of
SSC adopted on February 27, 1996. Application has been made to list the Notes on
the Luxembourg Stock Exchange.
The statements in these Terms and Conditions include summaries of, and are
subject to, the detailed provisions of and definitions in the Trust Deed. Copies
of the Trust Deed and of an agency agreement dated March 21, 1996 (the "Agency
Agreement") made between the Company, SSC, Midland Bank plc, as principal
paying, exchange and transfer agent (the "Principal Paying Agent", "Principal
Exchange Agent" and "Principal Transfer Agent", respectively, which expressions
shall include any successors), the other paying, exchange and transfer agents
named therein (together with the Principal Paying Agent, the "Paying Agents",
together with the Principal Exchange Agent, the "Exchange Agents" and together
with the Principal Transfer Agent, the "Transfer Agent", respectively, which
expression shall include any additional or successor paying agents, exchange
agents or transfer agents, as the case may be), the registrar referred to below
(the "Registrar," which expression shall include any successor registrar) and
the Trustee are available for inspection during normal business hours by the
Noteholders and the holders of the interest coupons appertaining to the Notes in
bearer form (respectively, the "Couponholders" and the "Coupons"), at the
registered office for the time being of the Trustee, being at the date of issue
of the Notes at 140 Broadway, New York, New York 10005-1180, USA and at the
specified office of each of the Paying Agents and the Registrar. The Noteholders
and the Couponholders are entitled to the benefit of, and are bound by, and are
deemed to have notice of, all the provisions of the Trust Deed and the Agency
Agreement.
1. FORM, DENOMINATIONS AND TITLE
(A) The Notes are either in bearer form ("Bearer Notes"), serially numbered,
in denominations of U.S.$1,000 and U.S.$10,000 each with Coupons attached on
issue, or in registered form ("Registered Notes"), in principal amounts of
U.S.$1,000 or integral multiples thereof ("Authorised Denominations") without
Coupons attached. Bearer Notes of one denomination may not be exchanged for
Bearer Notes of the other denomination.
(B) Title to the Bearer Notes and to the Coupons will pass by delivery.
Title to the Registered Notes will pass by transfer and registration as
described in these Terms and Conditions and the Agency Agreement. The Company,
any Paying Agent or Exchange Agent and the Trustee may (to the fullest extent
permitted by applicable laws) deem and treat the holder of any Bearer Note and
the holder of any Coupon as the absolute owner thereof for all purposes (whether
or not the Bearer Note or Coupon shall be overdue and notwithstanding any notice
of ownership or writing on the Bearer Note or Coupon or any notice of previous
loss or theft of the Bearer Note or Coupon). In these conditions, (in relation
to a Note) "Noteholder" and (in relation to a Note or Coupon) "Holder" means the
bearer of any Bearer Note or Coupon (as the case may be) or the person in whose
name a Registered Note is registered, as the case may be.
The Bearer Notes will be represented initially by a temporary global note
(the "Global Note"), without interest coupons, which will be deposited with a
common depository (the "Common Depository") and held on behalf of Morgan
Guaranty Trust Company of New York, as operator of the Euroclear System
("Euroclear"), and Cedel Bank, societe anonyme ("Cedel") for credit to the
accounts designated by the Noteholders at Euroclear and Cedel. The Company
undertakes to make definitive Bearer Notes available for exchange for the Global
Note, in whole or in part, on or after May 1, 1996.
Definitive Bearer Notes will only be delivered upon issuance following
certification that the holder of such Bearer Notes is not a U.S. person (as
defined in Regulation S under the Securities Act of 1993, as amended) (a "U.S.
person").
<PAGE> 55
The Registered Notes will be issued in definitive registered form and
delivered on or about the Closing Date to the Lead Managers for the account of
the subscribers thereof as specified by the Lead Managers upon certification
that (i) the holders of the relevant Registered Notes are not U.S. persons and
(ii) the proposed holder of the relevant Registered Notes (a) is not, nor is it
a nominee for, Euroclear or Cedel or any other person providing a clearance
service within Section 96 of the Finance Act 1986 of the United Kingdom and (b)
is not, nor is it a nominee or agent for, a person whose business is or includes
issuing depository receipts within Section 93 of the Finance Act 1986 of the
United Kingdom.
In addition to other legends required by the Securities Act, the Notes and
any Coupons will bear the following legend: "Any United States person who holds
this obligation will be subject to limitations under the U.S. income tax laws,
including the limitations provided in Section 165(j) and 1287(a) of the United
States Internal Revenue Code of 1986, as amended."
2. STATUS
(A) The Notes and any Coupons are direct, unconditional and unsecured
obligations of the Company and rank and will rank pari passu, without any
preference among themselves, and such obligations will rank senior to all other
outstanding unsecured and subordinated obligations of the Company, present and
future, but, in the event of bankruptcy or insolvency of the Company, only to
the extent permitted by the applicable laws relating to creditors' rights.
(B) SSC has, in the Trust Deed, unconditionally and irrevocably guaranteed
the due and punctual payment of the principal of and interest on the Notes as
and when the same shall become due and payable together with any additional
amounts payable pursuant to Condition 10 and all other moneys payable under the
Trust Deed. The obligations of SSC under the terms of the Guarantee constitute
direct, unconditional and unsecured obligations of SSC and such obligations rank
and will rank senior to all other outstanding unsecured and subordinated
obligations of SSC present and future (including, without limitation, the
Convertible Subordinated Reset Debentures due July 15, 2008 issued by SSC) but,
in the event of bankruptcy or insolvency of SSC, only to the extent permitted by
applicable laws relating to creditors' rights.
3. COVENANTS
(A) So long as any Note remains Outstanding (as defined in the Trust Deed),
the Company will not create or permit to subsist any Lien (as defined below) or
create, assume or guarantee any Indebtedness (as defined below).
(B) The Company will not merge or consolidate with or sell, convey or
otherwise dispose of all, or substantially all of its assets to any other
corporation, partnership or other legal entity unless (i)(A) the Company shall
be the surviving corporation, partnership or other legal entity in the case of a
merger or (B)(I) the surviving, resulting or transferee corporation, partnership
or other legal entity ("the successor corporation") shall expressly assume the
due and punctual payment of the principal of and interest on all the Notes,
according to their tenor, and due and punctual performance of all of the
covenants and obligations of the Company under the Notes and (II) if the
successor corporation is not organised under the laws of the U.S. or any State
thereof or the District of Columbia, it shall agree to indemnify and hold
harmless the holder of each Note or Coupon against the then existing or future
tax, assessment or governmental charge imposed on such holder by a jurisdiction
other than the U.S. or any political subdivision or taxing authority thereof or
therein with respect to and withheld on the making of, any payment of principal
of or interest on such Note which would not have been so imposed and withheld
had such merger, consolidation, sale or conveyance not been made and any tax,
assessment or governmental charge imposed on or relating to, and any costs and
expenses involved in such merger, consolidation, sale or conveyance and (ii) the
Company or such successor corporation, as the case may be, shall not immediately
after such merger, consolidation, sale or conveyance be in default in the
performance of any covenants or obligations of the Company under the Notes.
(C) Without prejudice to the provisions of Condition 8(F), SSC may not merge
or consolidate with or sell, convey or otherwise dispose of all, or
substantially all of its assets to any other corporation, partnership or other
legal entity unless (A) SSC shall be the surviving corporation, partnership or
other legal entity in the case of a merger or (B)(I) the successor corporation,
partnership or other legal entity shall expressly assume the obligations of SSC
under the Trust Deed and (II) the successor corporation, partnership or other
legal entity (together with its subsidiaries, if any) on a consolidated basis
shall have a Consolidated Net Worth (as defined below) following the transaction
equal to or greater than the Consolidated Net Worth of SSC before the
transaction.
(D) Upon any merger, consolidation, sale or conveyance as provided above,
the successor or surviving corporation shall succeed to and be substituted for
and may exercise every right and power of and be subject to all of the
obligations of the Company under the Notes
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<PAGE> 56
or SSC under the Trust Deed referred to in Condition 2(B), as the case may be,
with the same effect as if the successor or surviving corporation had been named
as the Company or SSC therein and herein and the Company or SSC, as the case may
be, shall be released from its liability as obligor under the Notes and/or the
Trust Deed.
4. REGISTRATION
The Company will cause to be kept at the specified office of the Registrar a
register (the "Register") on which shall be entered the names and addresses of
the holders of the Registered Notes and the particulars of the Registered Notes
held by them and of all transfers of Registered Notes and exchanges of
Registered Notes. Holders of Registered Notes will be entitled to receive only
one Registered Note in respect of their holding.
5. EXCHANGE BETWEEN BEARER AND REGISTERED NOTES
(A) Exchange of Bearer Notes for Registered Notes. At the option of the
holder thereof upon presentation, at any time on or after May 1, 1996 (the
"Request Date"), of a duly completed and signed request for exchange in the form
for the time being currently obtainable from the specified office of the
Registrar or a Transfer Agent (a "Registration Request") together with the
relevant Bearer Note, subject to the terms of the Agency Agreement and to
Conditions 5(E) and 5(F), Bearer Notes are exchangeable for the same aggregate
principal amount of Registered Notes provided that (save as provided below) all
unmatured Coupons relating thereto are attached thereto or are surrendered
therewith. Bearer Notes surrendered in exchange for Registered Notes from and
including the Record Date (as defined below) in respect of any Interest Payment
Date (as defined below) up to and including such Interest Payment Date will not
be required to be surrendered with the Coupon relating to the interest payable
on such Interest Payment Date. Interest on a Registered Note issued in exchange
will accrue as from the immediately preceding Interest Payment Date or, if none,
the Closing Date (as defined below), except where issued in respect of a Bearer
Note surrendered during the period from and including the Record Date in respect
of an Interest Payment Date up to and including such Interest Payment Date, in
which event interest shall accrue as from such last-mentioned Interest Payment
Date. Bearer Notes may only be surrendered in exchange for Registered Notes at
the specified office of the Registrar or of a Transfer Agent.
The Registrar or the relevant Transfer Agent will within three Business Days
(as defined below) of the presentation of any Registration Request together with
the relevant Bearer Note deliver a Registered Note to the Noteholder at its
specified office, or (at the risk and, if mailed at the request of the
Noteholder otherwise than by ordinary mail at the expense of the Noteholder),
mail the Registered Note by uninsured mail to such address as the Noteholder may
request. A Noteholder will receive only one Registered Note for all of the
Bearer Notes which are the subject of a single Registration Request.
(B) Exchange of Registered Notes for Bearer Notes. At the option of the
holder thereof, upon presentation at any time on or after the Request Date, of a
duly completed and signed request for exchange in the form for the time being
obtainable from the specified office of the Registrar or a Transfer Agent (a
"Bearer Request") together with the relevant Registered Note, subject to the
terms of the Agency Agreement and to Conditions 5(E) and 5(F), Registered Notes
are exchangeable in whole or in part in an Authorised Denomination for the same
aggregate principal amount of Bearer Notes. Interest on a Registered Note
surrendered for exchange will cease to accrue as from the Interest Payment Date
immediately preceding the date of surrender or, if none, the Closing Date,
except where the date of surrender falls during any period from and including
the Record Date in respect of an Interest Payment Date up to and including such
Interest Payment Date, in which event interest will cease to accrue as from such
last-mentioned Interest Payment Date. Registered Notes may only be surrendered
in exchange for Bearer Notes at the specified office of the Registrar or a
Transfer Agent.
The Registrar or the relevant Transfer Agent will within three Business Days
of the presentation of any Bearer Request together with the relevant Registered
Note deliver the Bearer Note or Bearer Notes requested together with all Coupons
in respect of all Interest Payment Dates after the date of presentation (other
than the Coupon in respect of the next Interest Payment Date after the date of
presentation in the case of a Registered Note presented for exchange during any
period from and including the Record Date in respect of such Interest Payment
Date and up to and including such Interest Payment Date) and, in the case of
exchange of part only of a Registered Note, a Registered Note for the balance
after such exchange, in each case at the specified office of the Registrar or
the relevant Transfer Agent, or (at the risk and, if mailed at the request of
the Noteholder otherwise than by ordinary mail, at the expense of the
Noteholder) mail the Bearer Note or Bearer Notes together with all Coupons as
aforesaid and any such Registered Note by uninsured mail to such address as the
Noteholder may request.
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<PAGE> 57
(C) Transfer of Registered Notes. Registered Notes, may, subject to the
terms of the Agency Agreement and to Conditions 5(E) and 5(F) be transferred in
whole or in part in an Authorised Denomination by lodging the relevant
Registered Note (with the application for transfer in respect thereof duly
executed and duly stamped where applicable) at the specified office of the
Registrar or a Transfer Agent. No transfer of a Registered Note will be valid
unless and until entered on the Register. A Registered Note may be registered
only in the name of, and transferred only to, a named person (or persons, not
exceeding four in number).
The Registrar or the relevant Transfer Agent will within three Business Days
of any duly made application for the transfer of a Registered Note deliver a
Registered Note to the transferee (and, in the case of a transfer of part only
of a Registered Note, deliver a Registered Note for the untransferred balance to
the transferor), at the specified office of the Registrar or the relevant
Transfer Agent, or (at the risk and, if mailed at the request of the transferee
or, as the case may be, the transferor otherwise than by ordinary mail, at the
expense of the transferee or, as the case may be, the transferor) mail the
Registered Note by uninsured mail to such address as the transferee or, as the
case may be, the transferor may request.
(D) Formalities Free of Charge. Such exchange or transfer will be effected
without charge subject to (i) the person making such request for exchange or
such application for transfer paying or procuring the payment of any taxes,
duties and other governmental charges payable in connection therewith, (ii) the
Registrar or the relevant Transfer Agent (in the case of exchange of Registered
Notes for Bearer Notes or the transfer of Registered Notes) being satisfied with
the documents of title and/or identity of the person making the request or
application and (iii) such reasonable regulations as the Company may from time
to time agree with the Registrar. The exchange of Bearer Notes for Registered
Notes and Registered Notes for Bearer Notes will be subject to the provisions of
all applicable fiscal or other laws and regulations in effect at the time of
such exchange.
(E) Closed Periods. Neither the Company, the Registrar, nor any Transfer
Agent will be required (i) to register the transfer of any Registered Note, (ii)
to exchange any Bearer Note for a Registered Note or (iii) to exchange any
Registered Note (or part thereof) for a Bearer Note (a) during the period of
seven calendar days immediately prior to March 21, 2000, or any earlier date
fixed for redemption of the Notes pursuant to Condition 9, (b) in respect of
which an Exchange Notice (as defined below) has been delivered in accordance
with Condition 8 or (c) in respect of which the Trustee or the Company have
exercised Exchange Rights under Condition 8(D) or 8(E), as the case may be. A
Bearer Note or Registered Note called for redemption may, however, be exchanged
for a Registered Note or Bearer Note, as the case may be, which is
simultaneously surrendered not later than the relevant Record Date.
(F) Certification of Non-U.S. Person Status. Neither the Company nor the
Registrar will be required to register the transfer of any Registered Note prior
to the Request Date unless the transferee provides written certification that
such transferee is not a U.S. person or unless the transfer of the Registered
Notes is exempt from the registration under the Securities Act and any
applicable state securities laws. In addition, the transferee of a Registered
Note will be required to complete certain documentation to ensure the Company's
compliance with U.S. federal income tax laws.
6. INTEREST AND ADDITIONAL INTEREST
(A) The Notes bear interest from (and including) March 21, 1996 (the
"Closing Date") at the rate of 8 percent per annum, payable semi-annually in
arrears on March 21 and September 21 in each year (each an "Interest Payment
Date"), the first such payment to be made on September 21, 1996 in respect of
the period from (and including) the Closing Date to (but excluding) September
21, 1996 and will amount to U.S.$40.00 per U.S.$1,000 principal amount of the
Notes.
Each Note will cease to bear interest (i) from its due date for redemption
unless, upon due presentation, payment of the principal in respect of the Note
is improperly withheld or refused or unless default is otherwise made in respect
of such payment, in which event interest shall continue to accrue as provided in
the Trust Deed and (ii) where the Exchange Right (as defined below) shall have
been exercised, or the Trustee or the Company shall have exercised Exchange
Rights pursuant to Conditions 8(D) and 8(E), respectively, from the Interest
Payment Date last preceding the relevant Exchange Date or, if the Notes are
exchanged before the first Interest Payment Date, since the Closing Date.
When interest is required to be calculated in respect of a period of less
than a full year, it shall be calculated on the basis of a 360 day year
consisting of 12 months of 30 days each and, in the case of an incomplete month,
the number of days elapsed.
(B) In the event that during the period commencing on the fortieth calendar
day after the Closing Date and ending on the third anniversary of the Closing
Date (the "Anniversary Date") there is not any period consisting of forty-five
consecutive Stock Exchange
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Business Days (as defined below) during which on each such Stock Exchange
Business Day the Current Market Price (as defined below) of the Shares (as
defined below) is equal to or greater than 133 percent of the Exchange Price in
effect for the Shares on each such Stock Exchange Business Day, the Company
shall, no later than five Business Days after the Anniversary Date at its
option, either:
(i) pay to each Noteholder a one time additional payment on the Notes
equal to 22.5 percent (the "Additional Amount") of the principal amount of
Notes held by such Noteholder; or
(ii) procure the issue by SSC to such Noteholder of Shares which have an
average Current Market Price per Share for the previous ten Stock Exchange
Business Days preceding the Anniversary Date equal to the Additional Amount.
In the event an Additional Amount is to be paid or Shares are to be issued
in lieu thereof, notice shall be given by the Trustee to the Noteholders in
accordance with Condition 17(B) and, so long as the Notes are listed on the
Luxembourg Stock Exchange, to the Luxembourg Stock Exchange two Business Days
after the Anniversary Date, and the Trustee shall also calculate the Additional
Amount or number of Shares due and owing. The number of Shares to be issued
shall be made available by SSC to the Trustee and/or the Transfer Agent in
Luxembourg and shall be rounded down to the nearest whole number. Receipt of the
Additional Amount or Shares will be made upon presentation of a Bearer Note to a
Paying Agent, which Note shall be stamped to reflect such payment or issuance,
or, in the case of Registered Notes, to the Holders shown on the Register on the
Anniversary Date.
7. PAYMENTS
Payments of principal in respect of each Bearer Note and any additional
interest payable under Condition 6(B) and any net proceeds payable under
Conditions 8(D) or 8(E) will only be made, in the case of Bearer Notes, against
presentation and surrender (or, in the case of part payment only, endorsement)
of the relevant Bearer Note at the specified office of any of the Paying Agents
or in the case of Registered Notes, to the persons shown on the Register at the
close of business seven Business Days prior to the relevant payment date (the
"Record Date") and subject to surrender of the Registered Notes at the specified
office of the Registrar or any Transfer Agent. Payments of interest due on the
Bearer Notes on an Interest Payment Date will be made against presentation and
surrender (or, in the case of part payment only, endorsement) of the relevant
Coupons, at the specified office of any of the Paying Agents or, in the case of
Registered Notes, to the persons shown on the Register at the close of business
on the Record Date. Each such payment and any payment of the net proceeds of the
sale of Shares pursuant to Conditions 8(D) or 8(E) will be made at the specified
office of any Paying Agent, at the option of the holder, by U.S. dollar cheque
drawn on, or by transfer to a U.S. dollar account maintained by the payee with,
a bank in London, England and in the case of Registered Notes, by U.S. dollar
cheque drawn on a bank in London, England and mailed, not later than the due
date for payment (at the risk and, if mailed at the request of the holder
otherwise than by ordinary mail, expense of the holder) to the holder or to the
first named of joint holders of the relevant Registered Notes at his registered
address outside the United States and its possessions or in accordance with
mandate instructions acceptable to the Registrar, subject in all cases to any
applicable fiscal or other laws and regulations, but without prejudice to the
provisions of Condition 12.
Each Bearer Note should be presented for redemption together with all
unmatured Coupons relating to such Note, failing which the full amount of any
missing unmatured Coupon (or, in the case of payment not being made in full,
that proportion of the full amount of the missing unmatured Coupons which the
amount so paid bears to the total amount due) will be deducted from the amount
due for payment. Each amount so deducted will be paid in the manner mentioned
above against presentation and surrender (or, in the case of part payment only,
endorsement) of such missing Coupon at any time before the expiry of 10 years
after the Relevant Date (as defined in Condition 10) in respect of the relevant
Note (whether or not such Coupon would otherwise have become void pursuant to
Condition 12), or, if later, five years after the date on which such Coupon
would have become due, but not thereafter.
A holder shall be entitled to present a Bearer Note or Coupon for payment
only on a Presentation Date and shall not be entitled to any further interest or
other payment if a Presentation Date is after the due date.
"Presentation Date" means a day which (subject to Condition 12):
(a) is or falls after the relevant due date but, if the due date is not or
was not a Business Day in New York, is or falls after the next following
such Business Day; and
(b) is a Business Day in the place of the specified office of the Paying
Agent at which the Bearer Note or Coupon is presented for payment and,
in the case of payment by transfer to a U.S. dollar account in London as
referred to above, in London.
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"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 payments to Noteholders or Couponholders, fractions of one cent
will be rounded down to the nearest whole cent.
The names of the initial Paying Agents, Exchange Agents and Transfer Agents
and Registrar and their initial specified offices are set out at the end of the
"Terms and Conditions of the Notes". The Company reserves the right, subject to
the prior written approval of the Trustee, at any time to vary or terminate the
appointment of any Paying Agent, Exchange Agent or the Registrar and to appoint
additional or other Paying Agents, Exchange Agents or Registrar, provided that
it will at all times maintain (i) at least two Paying Agents, two Exchange
Agents and two Transfer Agents having specified offices in separate European
cities approved by the Trustee, one of which, so long as the Notes are listed on
the Luxembourg Stock Exchange, shall be Luxembourg or such other place as the
rules of the Luxembourg Stock Exchange may approve and one of which shall be in
London and (ii) a Registrar with a specified office in New York. Notice of any
termination or appointment and of any changes in specified offices will be given
to the Noteholders promptly by the Company in accordance with Condition 17.
8. EXCHANGE
(A) Exchange Period and Price
(i) Noteholders have the right, subject as provided herein and to any
applicable laws and regulations, to require SSC to exchange all or any of
their Notes at their principal amount in exchange for Shares at any time
during the Exchange Period referred to below. The right of a Noteholder to
exchange any Note into Shares is hereinafter called the "Exchange Right."
Upon exchange, the right of the exchanging Noteholder to repayment of the
principal amount of the Note to be exchanged (and, subject as provided in
Condition 8(B)(iv), accrued interest thereon) shall be extinguished and
released, and in consideration and in exchange therefor SSC shall allot and
issue Shares credited as paid up in full as provided in this Condition 8.
Subject to and upon compliance with the provisions of these Conditions, the
Exchange Right attaching to any Note may be exercised, at the option of the
holder thereof, at any time on and after the Request Date up to the close of
business on the second Business Day preceding March 21, 2000 (but in no
event thereafter) or, if such Note shall have been called for redemption
pursuant to Condition 9(B) on the date seven calendar days prior to the date
fixed for redemption thereof (the "Exchange Period").
The number of Shares to be issued on exchange of a Note will be
determined by dividing the principal amount of the Note to be exchanged (or,
in the case of exchange of part only of the principal amount of the relevant
Note, the principal amount thereof being exchanged) by the Exchange Price
(as defined below) in effect on the Exchange Date, with the result being
rounded down to the nearest whole number.
(ii) An Exchange Right may only be exercised in respect of an authorised
denomination of Notes. If more than one Note is exchanged at any one time by
the same holder, the number of Shares to be issued upon such exchange will
be calculated on the basis of the aggregate principal amount of the Notes to
be exchanged. Fractions of Shares will not be issued on exchange and no cash
adjustments will be made in respect thereof.
(iii) The price at which Shares will be issued upon exchange (the
"Exchange Price") will initially be U.S.$1.4375 per Share but will be
subject to adjustment in the manner provided in Condition 8(C).
(iv) In the event that the Exchange Price in effect on the first
anniversary of the Merger (the "Reset Date") is greater than the average
Current Market Price of the Common Stock for the 90 Stock Exchange Business
Days immediately preceding the Reset Date (the "Reset Exchange Price"), the
Exchange Price shall be adjusted by the Company to equal the Reset Exchange
Price, save that if the Reset Exchange Price would be less than U.S.$1.00
per Share, the adjusted Exchange Price shall be U.S.$1.00. (provided,
however, that this minimum Exchange Price of U.S.$1.00 per Share shall be
subject to adjustment pursuant to Condition 8(C)).
Notice of any reset of the Exchange Price shall be given by the Trustee in
accordance with Condition 17 within ten Business Days of the Reset Date.
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(v) Notwithstanding the provisions of paragraph (i) of this Condition
8(A), if the Company shall default in making payment in full in respect of
any Note which shall have been called for redemption prior to March 21, 2000
on the date fixed for redemption thereof, the Exchange Right attaching to
such Note will continue to be exercisable (unless already exercised by the
Trustee pursuant to Condition 8(D) or by the Company pursuant to Condition
8(E)) up to, and including the close of business (at the place where the
Note is deposited in connection with the exercise of the Exchange Right), on
the date upon which the full amount of the moneys payable in respect on such
Note has been duly received by the Trustee or the Principal Paying Agent or,
if earlier, March 21, 2000.
(vi) As used in these Conditions, the expression "Shares" means common
stock, par value U.S.$0.01, of SSC or its survivor by reason of the Merger
(and all other (if any) shares or stock resulting from any sub-division,
consolidation or re-classification of such shares).
(vii) In the case of a Bearer Note, an Exchange Right may only be
exercised in respect of the total principal amount of such Bearer Note and,
in the case of a Registered Note an Exchange Right may only be exercised in
respect of an Authorised Denomination. Where an Exchange Right is exercised
in respect of part only of a Registered Note, the old Registered Note shall
be cancelled and a new Registered Note for the balance thereof shall be
issued in lieu thereof without charge but upon payment by the holder of any
taxes, duties and other governmental charges payable in connection therewith
and the Registrar will within seven Business Days of the relevant Exchange
Date deliver such new Registered Note to the Noteholder at the specified
office of the Registrar or (at the risk and, if mailed at the request of the
Noteholder otherwise than by ordinary mail, at the expense of the
Noteholder) mail the new Registered Note by uninsured mail to such address
as the Noteholder may request.
In the case of a Registered Note, an Exchange Right may not be exercised by
the Noteholder during the period commencing on the Record Date in respect of any
payment and ending on the due date for such payment (both days inclusive).
(B) Procedure for Exchange
(i) To exercise the Exchange Right attaching to any Note, the holder
thereof must complete, execute and deposit at his own expense during normal
business hours at the specified office of the Principal Exchange Agent or
any of the other Exchange Agents or, in the case of a Registered Note, the
Registrar, a notice of exchange (an "Exchange Notice") in duplicate in the
form (for the time being current) obtainable from the specified office of
each Exchange Agent, together with the relevant Note and any amount to be
paid by the Noteholder pursuant to this Condition 8(B)(i).
The exchange date in respect of a Note (the "Exchange Date") must fall
at a time when the Exchange Right attaching to that Note is expressed in
these Conditions to be exercisable and will be deemed to be the Business Day
immediately following the date of the surrender of the Note and delivery of
such Exchange Notice and, if applicable, any payment to be made or indemnity
given under these Conditions in connection with the exercise of such
Exchange Right or, in the case of an automatic exchange on redemption
pursuant to Condition 8(D), the relevant redemption date. An Exchange Notice
once delivered shall be irrevocable. "Stock Exchange Business Day" means any
day (other than a Saturday or Sunday) on which The New York Stock Exchange,
Inc. (the "NYSE") or the Alternative Stock Exchange (as defined in Condition
11(A)(v)(a)), as the case may be, is open for business.
A Noteholder or the Trustee delivering a Note for exchange must pay (in
the case of the Trustee, by way of deduction from the net proceeds of sale
referred to in Condition 8(D)) any taxes and capital, stamp, issue and
registration duties arising on exchange (other than any taxes or capital, or
stamp duties payable in the U.S. or in the place of the Alternative Stock
Exchange, as the case may be, by SSC in respect of the allotment and issue
of Shares and listing of the Shares on exchange) and such Noteholder or the
Trustee (as the case may be) must pay (in the case of the Trustee, by way of
deduction from the net proceeds of sale as aforesaid) all, if any, taxes
arising by reference to any disposal or deemed disposal of a Note in
connection with such exchange.
Until such time as SSC shall have either, to the satisfaction of the
Trustee, complied with its obligations under or made the determination
referred to in Condition 11(A)(iii), a Noteholder or the Trustee delivering
a Note for exchange on behalf of a Noteholder must either (i) provide a
written certification that the Noteholder is not a U.S. person, that the
Note is not being exchanged on behalf of a U.S. person, and that such
persons are located outside the U.S., acquired the Notes to be exchanged
outside the U.S., and are not affiliates of SSC or persons acting on behalf
of an affiliate of SSC; or (ii) provide a written opinion of U.S. legal
counsel, in form and substance acceptable to SSC, to the effect that the
exchange of the Note for Shares is exempt from registration under the
Securities Act and any applicable state securities law.
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(ii) As soon as practicable, and in any event not later than 14 calendar
days after the Exchange Date, SSC will in the case of Notes exchanged on
exercise of the Exchange Right, whether by the Noteholder or by the Trustee,
or a Note being exchanged in accordance with Condition 8(E) and in respect
of which an Exchange Notice has been delivered and the relevant Note and
amounts payable by the relevant Noteholder, or, as the case may be, the
Trustee deposited as permitted by sub-paragraph (i) above, cause the person
or persons designated for the purpose in the Exchange Notice to be
registered as holder(s) of the relevant number of Shares and will make a
certificate or certificates for the relevant Shares available for collection
at SSC's principal office in Boise, Idaho or, if so requested in the
relevant Exchange Notice, will deliver such certificate or certificates to
the person and at the place specified in the Exchange Notice together with
any other securities, property or cash required to be delivered upon
exchange and such assignments and other documents (if any) as may be
required by law to effect the transfer thereof.
(iii) The person or persons specified for that purpose will be deemed
for all purposes to be the holder of record of the number of Shares issuable
upon exchange with effect from the Exchange Date. The Shares issued upon
exchange of the Notes will in all respects rank pari passu with the issued
and outstanding Shares in issue on the relevant Exchange Date except for any
right excluded by mandatory provisions of applicable law. A holder of Shares
issued on exchange of Notes shall not be entitled to any rights the Record
Date for which precedes the relevant Exchange Date.
(iv) If any notice requiring the redemption of any Notes is given
pursuant to Condition 9(B) on or after the fifteenth calendar day prior to
the Record Date in respect of any dividend payable in respect of the Shares
where such notice specifies a date for redemption falling on or prior to the
next following Interest Payment Date, interest shall (subject as hereinafter
provided) accrue on Notes (i) which shall have been delivered for exchange
on or after such Record Date or (ii) to which the election by the Trustee
provided for in Condition 8(D) applied on or after such Record Date, in each
case from the preceding Interest Payment Date (or, if the relevant Exchange
Date falls before the first Interest Payment Date, from the Closing Date, to
the relevant Exchange Date) provided that the relevant Noteholder's
entitlement to interest shall on any Note, in the event that the Shares
allotted on exchange thereof shall carry an entitlement to receive such
dividend, be limited to the amount by which the interest he or it would have
received had no exchange taken place exceeds the amount of the dividend
received on such Shares. Any such interest shall be paid by the Company not
later than 14 calendar days after the relevant Exchange Date by U.S. dollar
cheque drawn on, or by transfer to U.S. dollar account maintained by the
payee with, a bank in London, England in accordance with instructions given
by the relevant Noteholder or, in the case of such election by the Trustee,
the Trustee, including any payment of any Additional Amount or Shares in
lieu thereof pursuant to Condition 6(B).
Save as provided in this sub-paragraph (iv), no payment or adjustment will
be made on exchange for any interest accrued on exchanged Notes since the
Interest Payment Date last preceding the relevant Exchange Date, or, if the
Notes are exchanged before the first Interest Payment Date, since the Closing
Date, including any payment of any Additional Amount or Shares in lieu thereof
pursuant to Condition 6(B).
(C) Adjustments in Exchange Price
The Exchange Price will be subject to adjustment in certain events set out
in the Trust Deed, including:
(i) the making of a Stock Split;
(ii) the consolidation and reclassification of Shares;
(iii) the grant, issue or offer, to the holders of Shares, of rights or
warrants entitling them to subscribe for or purchase Shares or any
securities convertible into or exchangeable for Shares, at a consideration
per Share less than the Current Market Price per Share;
(iv) the distribution, to the holders of Shares, of shares of capital
stock of SSC, evidence of indebtedness of SSC, assets (other than annual or
interim dividends in cash) or rights or warrants to subscribe for or
purchase securities (other than those rights and warrants mentioned in (iii)
above);
(v) the issue of securities (other than the Notes or in any of the
circumstances mentioned in (iii) above) convertible into or exchangeable for
Shares, or of rights or warrants to subscribe for or purchase Shares or
securities convertible into or exchangeable for Shares (other than those
rights and warrants mentioned in (iii) above), at a consideration per Share
less than the Current Market Price per Share; and
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(vi) the issue of Shares (other than Shares issued on conversion or
exchange of any convertible or exchangeable securities issued by SSC
(including the Notes) or on the exercise of any rights or warrants granted,
issued or offered by SSC or in any of the circumstances described in (i) and
(ii) above or Shares issued to stockholders of any company which merges into
or consolidates with SSC, in proportion to their shareholding in such
company immediately prior to such merger, upon such merger) at a
consideration per Share less than the Current Market Price per Share;
provided, however, that the Exchange Price will not be (i) adjusted by
reason of the Merger (other than pursuant to Condition 8(A)(iv)) or (ii)
reduced as a result of any such adjustment, and the Company covenants in the
Trust Deed not to take any action, if, after giving effect thereto, the
Exchange Price would be reduced to such an extent that, under applicable law
then in effect, Notes may not be exchanged at such reduced Exchange Price
for legally issued, fully paid and non-assessable Shares. No adjustment will
be made where such adjustment would be less than 5 percent of the Exchange
Price then in effect. Any adjustment not so made will be carried forward and
taken into account in any subsequent adjustment. On any adjustment, the
resultant Exchange Price, if not an integral multiple of one cent shall be
rounded down to the nearest one cent. Any adjustment will be notified by the
Trustee to the Noteholders in accordance with Condition 17.
"Stock Split" means any kind of stock split in relation to the Shares and
includes a free share distribution, a stock dividend and a sub-division.
"Current Market Price" means in respect of a Share on a particular Stock
Exchange Business Day the average of the high and low sale prices (or, if no
sales prices are reported, the average of the high and low bid prices) as
reported in the NYSE's Composite Transactions (or the equivalent quotations of
an Alternative Stock Exchange, as the case may be).
The Exchange Price may not be reduced so that, on exchange of Notes, Shares
would be issued at a discount to their par value.
Where more than one event which gives or may give rise to an adjustment to
the Exchange Price occurs within such a short period of time that in the opinion
of the Company's auditors (the "Auditors") the foregoing provisions would need
to be operated subject to some modification in order to give the intended
result, such modification shall be made to the operation of the foregoing
provisions as may be advised by the Auditors to be in their opinion appropriate
in order to give such intended result.
No adjustment will be made to the Exchange Price when Shares or other
securities (including rights or options) are issued, offered or granted to
employees (including directors holding executive office) of SSC or any
Subsidiary or any associated company of SSC pursuant to any Employee Share
Scheme (as defined in the Trust Deed).
(D) Exchange on Redemption
The Trust Deed provides that the Trustee may, at its absolute discretion
(and without any responsibility for any loss occasioned thereby), within the
period commencing on the date six Business Days prior to, and ending at the
close of business in New York City prior to, the date fixed for redemption of
any of the Notes (including any redemption under Conditions 9(A), 9(B) and
9(C)), elect by notice in writing to the Company and SSC to exchange as of such
redemption date the aggregate number of Notes due for redemption on such date
and in respect of which Exchange Rights have not been exercised by Noteholders
("Unexercised Notes") into Shares at the Exchange Price applicable at such
redemption date if all necessary consents (if any) have been obtained and the
Trustee is satisfied or is advised by a reputable independent merchant bank
appointed by it that the net proceeds of an immediate sale of the Shares arising
from such exchange (disregarding any liability other than a liability of the
Trustee) to taxation or the payment of any capital, stamp, issue or registration
duties consequent thereon) would be likely to exceed by 5 percent or more the
amount of redemption moneys and interest which would otherwise be payable in
respect of interest accrued since the Interest Payment Date immediately
preceding such redemption date or if such date falls before the first Interest
Payment Date, since the Closing Date in respect of such Unexercised Notes.
Subject to applicable law, the Trustee shall arrange for the sale on behalf
of the holders of the Unexercised Notes of the Shares issued on such exchange as
soon as practicable, and (subject to any necessary consents being obtained and
to the deduction by the Trustee of any amount which it determines to be payable
in respect of its liability to taxation or the payment of any capital, stamp,
issue or registration duties (if any) and any costs incurred by the Trustee in
connection with that allotment and sale thereof) the net proceeds of sale
together with accrued interest payable under Condition 8(B)(iv) in respect of
such Unexercised Notes (if any) shall be held by the Trustee and distributed by
the Principal Paying Agent rateably to the holders of such Unexercised Notes
against due presentation in accordance with Condition 7. The amount of such net
proceeds of sale shall be treated for all purposes as the full amount due by the
Company in respect of such Unexercised Notes.
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(E) Mandatory Exchange
(i) Each Noteholder acknowledges and agrees that the Company may, at its
own cost (save those expenses or taxes referred to in Condition 8(E)(iii)),
at any time on or after March 21, 1997, elect to exercise the Exchange Right
on behalf of each and every Noteholder in respect of Notes in whole or in
part outstanding at the date of such election (the "Mandatory Exchange
Date"), provided that the Current Market Price of the Shares for each of the
30 consecutive Stock Exchange Business Days, the last of which falls on a
day not more than 30 calendar days prior to the date on which notice is
given to Noteholders of the mandatory exchange under this Condition 8(E), is
equal to or greater than 150 percent of the Exchange Price at the time such
notice is given.
(ii) Not less than 30 and not more than 60 calendar days prior to such
Mandatory Exchange Date, the Company shall cause written notice of the
Mandatory Exchange Date to be given to the Trustee, the Paying Agents, the
Exchange Agents and the holders of the Notes (in accordance with Condition
17 (such notice to include a statement of the consequences of failure on the
part of the Noteholders to perform the obligations specified in this
Condition 8(E)). Following such notice, each of the Noteholders will be
required on or before the Mandatory Exchange Date to deliver or procure
delivery of its Notes together with a duly completed Exchange Notice to the
specified office of any Exchange Agent, during its usual business hours for
such purposes and perform together with the Company and SSC, the obligations
applicable to it on exchange specified in this Condition 8.
(iii) If any Noteholder with respect to whose Notes mandatory exchange
(pursuant to this Condition 8) is to take place shall fail to perform its
obligations specified in this Condition 8 or shall have a registered address
in any territory where, in the absence of any registration statement or
other special formalities or legal requirements, the issue, allotment,
transfer or delivery of the Shares arising on mandatory exchange in the
reasonable opinion of the Trustee, is or could be unlawful or impracticable,
subject to applicable law, the Trustee shall make arrangements for the sale
of such Shares to a third party at the best consideration reasonably
obtainable by the Trustee and arrange for the Principal Paying Agent to pay
to such Noteholder the consideration received by the Trustee in respect of
such Shares (after any deduction required to reimburse any reasonable and
proper expenses incurred in arranging any such sale or any taxes payable in
connection therewith arising solely as a result of the Noteholder's failure
to perform its obligations under this Condition 8(E)).
(F) Consolidation, Amalgamation or Merger
Without limiting the provisions of Condition 3(C) hereof, in the case of any
consolidation, amalgamation or merger of SSC (other than the Merger) with any
other corporation (other than a consolidation, amalgamation or merger in which
SSC is the continuing corporation), or in the case of any sale or transfer of
all, or substantially all, of the assets of SSC, SSC will forthwith notify the
Noteholders of such event in accordance with Condition 17 and (so far as legally
possible) cause the corporation resulting from such consolidation, amalgamation
or merger or the corporation which shall have acquired such assets, as the case
may be, to execute a trust deed supplemental to the Trust Deed to ensure that
the holder of each Note then outstanding will have the right (during the period
in which such Note shall be exchangeable) to exchange such Note into the class
and amount of shares and other securities and property receivable upon such
consolidation, amalgamation, merger, sale or transfer by a holder of the number
of Shares which would have become liable to be issued upon exchange of such Note
immediately prior to such consolidation, amalgamation, merger, sale or transfer.
Such supplemental trust deed will provide for adjustments which will be as
nearly equivalent as may be practicable to the adjustments provided for in the
foregoing provisions of this Condition. The above provisions of this Condition
8(F) will apply in the same way to any subsequent consolidations, amalgamations,
mergers, sales or transfers.
9. REDEMPTION AND PURCHASE
(A) Unless previously redeemed, exchanged or purchased and cancelled as
provided herein, the Company will redeem the Notes at their principal amount on
March 21, 2000.
(B) If as a result of any change in, or amendment to, the laws or
regulations of the U.S. or any political sub-division of, or any authority in,
or of, the U.S. having power to tax, or any change in the application or
official interpretation of such laws or regulations, which change or amendment
becomes effective after March 21, 1996, the Company has or will become obliged
to pay additional amounts as provided or referred to in Condition 10 (and such
amendment or change has been evidenced by the delivery by the Company to the
Trustee (who shall, in the absence of manifest error, accept such certificate
and opinion as sufficient evidence thereof) of (i) a certificate signed by two
officers of the Company on behalf of the Company stating that such amendment or
change has occurred (irrespective of
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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 into any
Person by SSC or the sale, lease, conveyance, transfer or other disposal by SSC
of its property or assets as an entirety or substantially as an entirety to a
Person and as a result of such transaction the Shares are no longer listed on
the NYSE or an Alternative Stock Exchange.
(D) Subject to applicable law, the Company, SSC or any of their Subsidiaries
or Affiliates (as defined in the Trust Deed) may at any time purchase Notes
together, in the case of Bearer Notes, with unmatured Coupons in any manner and
at any price in the open market or by private treaty. If purchases are made by
tender, tenders must be available to all Noteholders alike. Notes purchased by
the Company, SSC or any of their Subsidiaries will forthwith be surrendered for
cancellation and shall no longer be deemed Outstanding.
(E) All Notes which are redeemed by the Company will forthwith be cancelled
(together with all relative unmatured Coupons attached to or surrendered with
the Bearer Notes) and may not be reissued or resold.
10. TAXATION
All payments in respect of the Notes by the Company or, as the case may be,
SSC shall be made without withholding or deduction for, or on account of, any
present or future taxes, duties, assessments or governmental charges of whatever
nature ("Taxes") imposed or levied by or on behalf of the U.S. or any political
sub-division of, or any authority in, or of, the U.S. having power to tax,
unless the withholding or deduction of the Taxes is required by law. In that
event, the Company or, as the case may be, SSC will pay such additional amounts
as may be necessary in order that the net amounts received by the Noteholders
and Couponholders after the withholding or deduction shall equal the respective
amounts which would have been receivable in respect of the Notes or, as the case
may be, Coupons in the absence of the withholding or deduction; except that no
additional amounts shall be payable in relation to any payment in respect of any
Note or Coupon:
(A) to, or to a third party on behalf of, a holder who is liable for the
Taxes in respect of the Note or Coupon by reason of his having some connection
with the U.S. other than the mere holding of the Note or Coupon; and
(B) presented for payment more than 30 calendar days after the Relevant Date
except to the extent that a holder would have been entitled to additional
amounts on presenting the same for payment on the last day of such period of 30
calendar days; or
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(C) to, or to a third party on behalf of, a holder who would not be liable
or subject to the withholding or deduction by making a declaration of
non-residence or other similar claim for exemption to the relevant tax
authority.
As used herein, "Relevant Date" means the date on which the payment first
becomes due but, if the full amount of the money payable has not been received
in New York by the Principal Paying Agent or the Trustee on or before the due
date, it means the date on which, the full amount of the money having been so
received, notice to that effect shall have been duly given to the Noteholders by
the Company in accordance with Condition 17.
Any reference in these Terms and Conditions to any amounts in respect of the
Notes shall be deemed also to refer to any additional amounts which may be
payable under this Condition or under any undertakings given in addition to, or
in substitution for, this Condition pursuant to the Trust Deed.
11. ADDITIONAL COVENANTS
(A) Undertakings by SSC
Whilst any Exchange Right remains exercisable, SSC will, save with the
approval of an Extraordinary Resolution (as defined in the Trust Deed) or with
the approval of the Trustee where, in its opinion, it is not materially
prejudicial to the interests of the Noteholders to give such approval:
(i) at all times keep available for issuance free from any pre-emptive
rights out of its 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) will not create or permit to subsist any Lien relating to or over
the shares of the Company, held or beneficially owned by SSC;
(iii) to the extent SSC and its counsel determine it is required because
an exemption from registration is not available, file with the Securities
and Exchange Commission on or before June 30, 1996, and keep effective a
Registration Statement on such form as SSC determines to be appropriate in
respect of the registration of the Shares to be issued pursuant to the
Exchange Rights to U.S. persons and any subsequent resale of such Shares to
U.S. persons;
(iv) (a) to maintain a listing for all the issued Shares on the NYSE, it
being understood that if SSC is unable to obtain or maintain such listing of
Shares, to obtain and maintain a listing for all the Shares issued on the
exercise of the Exchange Rights on any other stock exchanges or 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;
(b) procure that the Company maintains a listing of the Notes on
the Luxembourg Stock Exchange; and
(v) not in any way modify the rights attaching to the Shares with
respect to voting, dividends or liquidation nor issue any class of equity
share capital carrying any rights which are more favorable than such rights.
(B) Undertakings by the Company
Whilst any Exchange Right remains exercisable, the Company will, save with
the approval of an Extraordinary Resolution or with the approval of the Trustee
where, in its opinion, it is not materially prejudicial to the interests of the
Noteholders to give such approval:
(i) not incur any Indebtedness other than the Notes;
(ii) not create or permit to subsist any Lien or other encumbrance or
security interest over or otherwise dispose, sell or transfer its interest
in the Sunshine Mine; and
(iii) maintain a listing for the Notes on the Luxembourg Stock Exchange.
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(C) For the purposes of this condition, "Sunshine Mine" means that certain
real property location in Shoshone County, Idaho, known as the "Sunshine Mine",
consisting of the ownership rights of the Company in the real property, together
with the ownership rights of the Company in equipment, plant, machinery and
other property located thereon and all patented and unpatented mining claims and
interests therein owned by the Company.
12. PRESCRIPTION
Bearer Notes and Coupons will become void unless presented for payment
within periods of 10 years (in the case of principal) and five years (in the
case of interest) from the Relevant Date in respect of the Notes or, as the case
may be, the Coupons, subject to the provisions of Condition 7.
Claims for the payment of principal and interest and other sums payable in
respect to Registered Notes shall be prescribed unless made within 10 years (in
the case of principal) and 5 years (in the case of interest) from the Relevant
Date.
13. EVENTS OF DEFAULT
The Trustee at its discretion may, and if so requested in writing by the
holders of at least one-quarter in principal amount of the Notes then
outstanding or if so directed by an Extraordinary Resolution of the Noteholders
shall, give notice to the Company that the Notes are, and they shall accordingly
thereby forthwith become, immediately due and repayable at their principal
amount together with accrued interest (as provided in the Trust Deed) if any of
the following events (each an "Event of Default") shall have occurred (unless
(i) such events (including, without limitation, the Merger) are expressly
permitted or contemplated by the Trust Deed or (ii) such Event of Default has
been remedied to the satisfaction of the Trustee):
(A) if default is made for a period of 5 Business Days or more in the
payment of any principal or interest due in respect of the Notes or any of them;
or
(B) if the Company or SSC fails to perform or observe any of its other
obligations, covenants, conditions or provisions under the Notes or the Trust
Deed and (except where the Trustee shall have certified to the Company in
writing that it considers such failure to be incapable of remedy in which case
no such notice or continuation as is hereinafter mentioned will be required)
such failure continues for the period of 30 calendar days (or such longer period
as the Trustee may in its absolute discretion permit) next following the service
by the Trustee on the Company or SSC, as the case may be, of notice requiring
the same to be remedied; or
(C) if (i) any other Indebtedness of the Company, SSC or any Principal
Subsidiary (as defined below) becomes due and repayable prior to its stated
maturity by reason of an event of default (howsoever described) or (ii) any such
Indebtedness is not paid when due or, as the case may be, within any applicable
grace period (as originally provided) or (iii) the Company, SSC or any Principal
Subsidiary fails to pay when due (or, as the case may be, within any originally
applicable grace period) any amount payable by it under any present or future
guarantee for, or indemnity in respect of, any Indebtedness of any Person or
(iv) any security given by the Company, SSC or any Principal Subsidiary for any
Indebtedness of any Person or any guarantee or indemnity of Indebtedness of any
Person or any guarantee or indemnity of Indebtedness of any Person becomes
enforceable by reason of default in relation thereto and steps are taken to
enforce such security save in any such case where there is a bona fide dispute
as to whether the relevant Indebtedness or any such guarantee or indemnity as
aforesaid shall be due and payable, provided that in each such case the
Indebtedness exceeds in the aggregate US$1,000,000 and in each such case such
event continues unremedied for a period of 30 calendar days (or such longer
period as the Trustee may in its sole discretion consent to in writing upon
receipt of written notice from the Company or SSC); or
(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
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or a substantial part of the assets of any of them and in any of the foregoing
cases it or he shall not be paid out or discharged within 90 calendar days (or
such longer period as the Trustee may in its absolute discretion consent to in
writing upon receipt of written notice from the Company or SSC); or
(F) if the Company, SSC or any Principal Subsidiary institutes proceedings
to be adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking organization under the laws of the U.S. Federal Bankruptcy Code or any
similar applicable U.S. Federal or State law, or shall consent to the filing of
any such petition, or shall consent to the appointment of a receiver or
liquidator or trustee or assignee (or other similar official) in bankruptcy or
insolvency of it or its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they come due; or
(G) if a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking the 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 been entered, and such
decree or order shall have continued undischarged and unstayed for a period of
90 calendar days; or
(H) if a warranty, representation or other statement made by or on behalf of
the Company or SSC contained in the Trust Deed, the Notes or any certificate or
other agreement furnished in compliance with such documents is false in any
material respect when made; or
(I) if SSC or its successor as permitted by Condition 3(C) ceases to own all
of the issued and outstanding shares of the Company or shall at any time pledge,
transfer, exchange or otherwise dispose of such shares; or
(J) if there is any final judgment or judgments for the payment of money
exceeding in the aggregate US$1,000,000 outstanding against the Company, SSC or
any Principal Subsidiary which has been outstanding for more than sixty (60)
calendar days from the date of its entry and shall not have otherwise been
discharged in full or stayed by appeal, bond or otherwise.
For the purposes of these Terms and Conditions:
(a) "Group" means SSC and all its Subsidiaries.
(b) "Indebtedness" of any person, means any present or future obligations,
which shall include all obligations (i) which in accordance with the
generally accepted accounting principles in the U.S., shall be
classified upon the balance sheet of such person as liabilities, (ii)
for borrowed money, (iii) which have been incurred in connection with
the acquisition of any property (including without limitation, all
obligations evidenced by any indenture, bond, note, commercial paper or
other similar security, but excluding, in any case, obligations arising
from the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection, (iv) obligations secured by any
Lien existing on property owned, even though such person has not assumed
or become liable for the payment of such obligations, (v) obligations
created or arising under conditional sale or other title retention
agreement with respect to property acquired by such person,
notwithstanding the fact that the rights and remedies of the seller,
lender or lessor under such agreement in the event of default are
limited to repossession or sale of such property, (vi) for capitalised
leases, (vii) for all guarantees, whether or not reflected in the
balance sheet of such person, and (viii) all reimbursement and other
payment obligations (whether contingent mature or otherwise) of such
person in respect of acceptance or documentary credit. Notwithstanding
the foregoing, Indebtedness shall not include (i) Indebtedness
incidental to the operation of the business of the Person in the
ordinary course and in the aggregate not material to the business and
operations of the Person and (ii) Indebtedness represented by purchase,
rental or lease obligations which would cause the direct or contingent
liabilities of the Person and its Subsidiaries, on a consolidated basis,
in respect of all such obligations, not to exceed US$1,000,000 in any
period of 12 months.
(c) "Merger" means the proposed merger of SSC with and into Sunshine Merger
Company, a Delaware corporation and wholly-owned subsidiary of SSC, with
Sunshine Merger Company being the surviving corporation;
(d) a "Principal Subsidiary" at any time means a Subsidiary of the Company
or SSC:
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(A) whose gross assets represent 15 percent or more of the consolidated
gross assets of the Group as calculated by reference to the then latest
audited financial statements of the Group; or
(B) to which is transferred all or substantially all of the business,
undertaking and assets of a Subsidiary of the Company or SSC which
immediately prior to such transfer is a Principal Subsidiary, whereupon
the transferor Subsidiary shall immediately cease to be a Principal
Subsidiary and the transferee Subsidiary shall cease to be a Principal
Subsidiary under the provisions of this sub-paragraph(B) (but without
prejudice to the provisions of sub-paragraph(A) above), upon
publication of its next audited financial statements;
all as more fully defined in the Trust Deed.
A report by the Auditors that in their opinion a Subsidiary of the Company
or SSC is or is not or was or was not at any particular time or throughout
any specified period a Principal Subsidiary shall, in the absence of
manifest error, be conclusive and binding on all parties; and
(e) "Subsidiary" means any corporation of which at least a majority of the
shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is directly or indirectly
owned or controlled by any one of or any combinations of the Company,
SSC or one or more of the Principal Subsidiaries.
(f) "Lien" means any mortgage, pledge, security interest, lien, charge or
other encumbrance, but shall not include any of the foregoing types of
encumbrances that are incidental to the conduct of the business of the
Company, SSC or any of its Subsidiaries or the ownership of property and
assets of any of them, including (i) pledges or deposits made to secure
obligations of the Company, SSC or any of its Subsidiaries under the
workmen's compensation laws or similar legislation; (ii) liens imposed
by law, such as materialmen's, mechanics', carriers', workmen's,
vendors', repairments', governmental (Federal, state or municipal) liens
arising out of contracts for the purchase or lease of products of the
Company, SSC or a Subsidiary, and deposits or pledges to obtain the
release of any of the foregoing liens; (iii) liens created by or
resulting from any litigation or legal proceedings currently being
contested in good faith by appropriate proceedings; (iv) leases made or
existing on property entered into in the ordinary course of business of
the Company, SSC or one of its Subsidiaries; (v) landlords' liens under
leases of property to which the Company, SSC or one of its Subsidiaries
is a party; (vi) zoning restrictions, easements, licenses or
restrictions on the use of property or minor irregularities in the title
thereto; (vii) deposits in connection with bids, tenders, contracts
(other than the repayment of money) to which the Company, SSC or one of
its Subsidiaries is a party; (viii) deposits to secure public or
statutory obligations of the Company, SSC or one of its Subsidiaries;
(ix) deposits in connection with obtaining or maintaining self-insurance
or to obtain the benefits of any law regulation or arrangement
pertaining to unemployment insurance, old age pensions, social security
or similar matters; (x) deposits or cash or obligations of the United
States of America to secure surety, appeal or customs bonds to which the
Company, SSC or any of its Subsidiaries is a party; and (xi) liens for
tax or assessments or government charges or levies not yet due or
delinquent or which can thereafter be paid without penalty, or which are
being contested in good faith by appropriate proceedings.
(g) "Consolidated Net Worth" means at any time, the total consolidated
stockholders' equity determined on a consolidated basis in accordance
with the U.S. generally accepted accounting principles, plus there shall
be added thereto when determined with respect to SSC and its
Subsidiaries (or any successor entity thereof): (i) the principal amount
of the Notes then outstanding, (ii) if not otherwise included, the book
value of any mandatorily redeemable preferred stock, except for the
aggregate liquidation preference of any portion thereof which has a
stated maturity date or a mandatory redemption requirement due on or
prior to the final maturity date of the Notes, (iii) if not otherwise
included, the book value of any shares of preferred stock then
outstanding mandatorily redeemable for shares of Common Stock, and (iv)
the principal amount of any other convertible subordinated Indebtedness
then outstanding, or the principal amount of any portion of any such
convertible subordinated Indebtedness, except for the principal amount
which has a stated maturity date or mandatory redemption requirement due
on or prior to the final maturity date of the Notes.
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14. ENFORCEMENT
The Trustee may at any time, at its discretion and with prior written notice
to the Company and SSC, take such proceedings against the Company or SSC as it
may think fit to enforce the provisions of the Trust Deed, the Notes and the
Coupons or the Guarantee but it shall not be bound to take any proceedings or
any other action in relation to the Trust Deed, the Notes or the Coupons or the
Guarantee unless (a) it shall have been so directed by an Extraordinary
Resolution of the Noteholders or so requested in writing by the holders of at
least one-quarter in principal amount of the Notes then outstanding, and (b) it
shall have been indemnified to its satisfaction. No Noteholder or Couponholder
shall be entitled to proceed directly against the Company unless the Trustee,
having become bound so to proceed, fails so to do within a reasonable period and
such failure shall be continuing.
15. SUBSTITUTION
The Trustee may, without the consent of the Noteholders or Couponholders,
agree with the Company to the substitution in place of the Company (or of any
previous substitute under this Condition) as the principal debtor under the
Notes, the Coupons and the Trust Deed of any Subsidiary or holding company
(being a corporation holding (directly or indirectly) at least a majority of
shares of stock having by the terms ordinary voting power to elect a majority of
the board of directors of the Company (or such previous substitute)
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency)) of the Company or any Subsidiary of such holding
company, subject to (a) the Notes continuing to be unconditionally and
irrevocably guaranteed by SSC and exchangeable into Shares of SSC, (b) the
Trustee being satisfied that the interests of the Noteholders will not be
materially prejudiced by the substitution, and (c) certain other conditions set
out in the Trust Deed being complied with.
16. REPLACEMENT OF NOTES AND COUPONS
Should any Note or Coupon be lost, stolen, mutilated, defaced or destroyed,
it may be replaced at the specified office of the Paying Agent in London, in the
case of Bearer Notes or Coupons, or the Registrar, in the case of Registered
Notes, upon payment by the claimant of the expenses incurred in connection with
the replacement and on such terms as to evidence indemnity and security as the
Company may reasonably require. Mutilated or defaced Notes or Coupons must be
surrendered before replacements will be issued.
17. NOTICES
(A) Notices to holders of Registered Notes will be mailed to them at the
respective addresses in the Register and deemed to have been given on the fourth
Business Day after the date of mailing, provided that, if at any time by reason
of suspension or curtailment (or except suspension or curtailment) of postal
services within the U.S. or elsewhere the Company is unable effectively to give
notice to holders of Registered Notes through the post, notices to holders of
Registered Notes will be valid if given in the same manner as other notices as
set forth below.
(B) Notices to all the Noteholders will be valid if published in a leading
English language daily newspaper published in London or such other English
language daily newspaper with general circulation in Europe as the Trustee may
approve (which is expected to be the Financial Times) and, so long as the Notes
are listed on the Luxembourg Stock Exchange and the rules of that Exchange
require, in a leading newspaper having general circulation in Luxembourg (which
is expected to be the Luxemburger Wort). Any notice shall be deemed to have been
given on the date of publication or, if so published more than once, on the date
of the first publication. If publication as provided above is not practicable,
notice will be given in such other manner, and shall be deemed to have been
given on such date, as the Trustee may approve.
(C) Couponholders will be deemed for all purposes to have notice of the
contents of any notice given to the Noteholders in accordance with this
Condition.
18. MEETINGS OF NOTEHOLDERS, MODIFICATION, WAIVER AND AUTHORISATION
(A) The Trust Deed contains provisions for convening meetings of the
Noteholders to consider any matter affecting their interests, including the
modification by Extraordinary Resolution of these Terms and Conditions or the
provisions of the Trust Deed. The quorum at any meeting for passing an
Extraordinary Resolution will be one or more persons present holding or
representing a clear majority in principal amount of the Notes for the time
being outstanding, or at any adjourned such meeting one or more persons present
whatever the principal amount of the Notes held or represented by him or them,
except that at any meeting, the business of which includes the modification of
certain of the provisions of these Terms and Conditions and certain of the
provisions of the Trust Deed, the necessary
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quorum and vote required for passing an Extraordinary Resolution will be one or
more persons present holding or representing not less than two-thirds, or at any
adjourned such meeting not less than one-third, of the principal amount of the
Notes then Outstanding. An Extraordinary Resolution passed at any meeting of the
Noteholders will be binding on all Noteholders, whether or not they are present
at the meeting, and on all Couponholders.
(B) The Trustee may agree, without the consent of the Noteholders or
Couponholders, to any modification (subject to certain exceptions) of, or to the
waiver or authorisation of any breach or proposed breach of, any of these
Conditions or any of the provisions of the Trust Deed which is not, in the
opinion of the Trustee, materially prejudicial to the interests of the
Noteholders or to any modification which is of a formal, minor or technical
nature or to correct a manifest error.
(C) In connection with the exercise by it of any of its trusts, powers,
authorities or discretions (including, without limitation, any modification,
waiver, authorisation or substitution), the Trustee shall have regard to the
interests of the Noteholders as a class and, in particular but without
limitation, shall not have regard to the consequences of the exercise of its
trusts, powers, authorities or discretions for individual Noteholders and
Couponholders resulting from their being for any purpose domiciled or resident
in, or otherwise connected with, or subject to the jurisdiction of, any
particular territory and the Trustee shall not be entitled to require, nor shall
any Noteholder or Couponholder be entitled to claim, from the Company, the
Trustee or any other person any indemnification or payment in respect of any tax
consequences of any such exercise upon individual Noteholders or Couponholders
except to the extent already provided for in Condition 10 and/or any undertaking
given in addition to, or in substitution for, Condition 10 pursuant to the Trust
Deed.
(D) Any modification, waiver or authorisation shall be binding on the
Noteholders and the Couponholders and, unless the Trustee agrees otherwise, any
modification shall be notified by the Company to the Noteholders as soon as
practicable thereafter in accordance with Condition 17.
19. INDEMNIFICATION OF THE TRUSTEE
The Trust Deed contains provisions for the indemnification of the Trustee
and for its relief from responsibility, including provisions relieving it from
taking action unless indemnified to its satisfaction.
20. GOVERNING LAW
The Trust Deed, the Agency Agreement, the Notes and the Coupons are governed
by, and will be construed in accordance with, English law. In relation to any
legal action or proceedings arising out of or in connection with the Trust Deed,
the Agency Agreement, the Notes, the Coupons or the Guarantee, the Company and
SSC have irrevocably submitted to the jurisdiction of the Courts of England and
in relation thereto have appointed The Law Debenture Trust Corporation plc, now
at Princes House, 95 Gresham Street, London EC2 V7LY as its agent for service of
process in England.
PRINCIPAL PAYING, EXCHANGE AND TRANSFER AGENT
Midland Bank plc
Mariner House
Pepys Street
London EC3 N4DA
PAYING, EXCHANGE AND TRANSFER AGENT
Banque Generale du Luxembourg, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
REGISTRAR
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
U.S.A.
17
<PAGE> 1
NOTICE OF A MEETING OF THE HOLDERS OF THE OUTSTANDING
U.S. $30,000,000
8% SENIOR EXCHANGEABLE NOTES DUE 2000
OF THE COMPANY
SUNSHINE PRECIOUS METALS, INC
("COMPANY")
SUNSHINE MINING AND REFINING COMPANY
("SSC")
(THE "NOTEHOLDERS" AND THE "NOTES" RESPECTIVELY)
NOTICE IS HEREBY GIVEN that a Meeting of the Noteholders convened by the Company
will be held at 712 Fifth Ave., 35th Floor, New York, New York, on Monday,
March 27, 2000 at 10.00 a.m. (New York time) for the purpose of considering and,
if thought fit, passing a Resolution relating to the provisions set forth below
which will be proposed as an Extraordinary Resolution in accordance with the
provisions of a Trust Deed dated March 21, 1996 (as amended) made between, inter
alios the Company, SSC, and HSBC Bank USA (formerly Marine Midland Bank) (the
"Trustee"), as trustee for the Noteholders and constituting and securing the
Notes.
EXTRAORDINARY RESOLUTION
THAT at the Meeting of the holders (the "Noteholders") of the outstanding U.S.
$30,000,000 8% Senior Exchangeable Notes due 2000 (the "Notes") of Sunshine
Precious Metals, Inc, ("Company"), guaranteed by Sunshine Mining and Refining
Company ("SSC") constituted by the Trust Deed dated March 21, 1996 (as amended)
(the "Trust Deed") made between Company, SSC and HSBC Bank USA (formerly Marine
Midland Bank) (the "Trustee"), as trustee for the holders of the Notes, the
Noteholders will be requested to sanction and approve a recapitalization of the
Company, which recapitalization will result in the amendments to the Terms and
Conditions of the Notes as provided for herein and in the Supplemental Trust
Deed and the issuance of eight million shares of common stock of the Company to
be distributed to the Noteholders and such other matters relating to the
recapitalization as are set forth below:
(1) sanction and approve a postponement to the final maturity date of the Notes
to May 1,2001, or such earlier date to be subsequently agreed upon by the
holders of a majority of the principal amount of the Notes Outstanding (as
defined in the Trust Deed);
(2) sanction and approve an amendment to the Notes to provide that interest
payments on the Notes, will be paid in common stock of SSC, with the value
of the stock to be issued being equal to 90% of the average of the high and
low trading prices for the five trading days immediately prior to the
interest payment date, unless SSC's common stock in 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, in which case the interest shall be paid in cash;
(3) sanction and approve an amendment to the exchange terms applicable to the
Notes to provide that (i) the Notes will not be exchangeable into SSC's
common stock for a period of 120 days following the recapitalization of
the Company, (ii) thereafter, upon the approval or consent of the holders
of a majority of the principal amount of the Notes Outstanding, the Notes
will be exchangeable into common stock of SSC at a conversion price equal
to U.S. $1.50 per share subject to further adjustments as set forth in the
Notes, and (iii) limitations on the ability of the Noteholders to exchange
Notes into common stock will be imposed to prevent any Noteholder from
exchanging Notes for more than 9.9% of the issued and outstanding shares of
SSC common stock or otherwise exchange the Notes for shares of SSC common
stock in a manner that could deem such Noteholder to beneficially own more
than 9.9% of the issued and outstanding shares of SSC common stock;
(4) sanction and approve an amendment to provide that Extraordinary Resolutions
may be passed at a meeting of Noteholders duly convened and held in
accordance with the provisions of the Trust Deed or pursuant to written
consents executed by Noteholders holding a majority of the principal amount
of the Notes Outstanding;
(5) sanction and approve an amendment to give the Company, after obtaining
appropriate stockholder approval and provided the common stock of SSC
remains listed on the New York Stock Exchange, Inc. and SSC's market
capitalization exceeds U.S. $50,000,000, the option to postpone the
maturity of the Notes to May 1, 2002 by delivering to the Noteholders on
April 1, 2001, common stock of SSC equal to twenty-five percent (25%) of
the principal amount of the Notes Outstanding, assuming the common stock is
valued at 90% of the average of the daily high and low for the ten trading
days prior to April 1,2001;
(6) sanction and approve an amendment to allow the Notes to be accelerated upon
certain events with the consent or approval of the Noteholders of a
majority of the principal amount of the Notes outstanding, and as specified
in the Supplemental Trust Deed;
(7) sanctions and approve an amendment requiring SSC to ensure that the SSC
common stock issued will be unlegended and freely tradeable and to call as
shareholders meeting to authorize the issuance of the additional shares
and other actions contemplated herein;
(8) sanction and approve such additional amendments and resolutions that are
not inconsistent with the foregoing, that further supplement the intent of
the foregoing, or that may be deemed necessary or appropriate at the
meeting;
(9) sanction every abrogation, modification, compromise arrangement in respect
of the rights of the Noteholders appertaining to the Notes against the
Company and SSC, whether or not such rights arise under the Trust Deed,
involved in or resulting from the implementation of the Extraordinary
Resolution; and
(10) authorize, direct and request the Trustee to concur in and do all such
things as may be necessary or expedient to carry out and give effect to the
Extraordinary Resolution, including, without limitation, executing a
supplemental trust deed in the form of the draft to be produced to the
Meeting and signed by she Chairman for the purpose of identification with
such amendments (if any) thereto as the Company and the Trustee may agree.
Copies of the said Trust Deed (including the Terms and Conditions of the Notes)
and of certain other relevant documents including the draft supplemental trust
deed will be available as soon as practicable for inspection and/or collection
by Noteholders at the specified offices of the Paying, Exchange, and Transfer
Agents and the Registrar set out below, but in any event prior so the Meeting of
the Noteholders.
The Trustee expresses no opinion on the merits of the proposals set out in the
Extraordinary Resolution.
VOTING AND QUORUM
1. A Noteholder wishing to attend and vote at the Meeting in person must
produce at the Meeting a valid voting certificate or valid voting
certificates issued by a Paying, Exchange, or Transfer Agent relative to
the Note(s), in respect of which he wishes to vote.
A Noteholder not wishing to attend and vote at the Meeting in person may
either deliver his voting certificate(s) to the person whom he wishes to
attend on his behalf or give a voting instruction either on a voting
instruction form (obtainable from the specified offices of the Paying,
Exchange, or Transfer Agent set out below) or, where his Note(s) is/are
held by The Depository Trust Company ("DTC"), Clearstream or Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System ("Euroclear"), in accordance with the procedures of the
DTC, Clearstream or Euroclear, as applicable, instructing a Paying,
Exchange, or Transfer Agent to appoint a proxy to attend and vote at the
Meeting in accordance with his instructions.
A Noteholder who wishes to obtain a voting certificate or give voting
instructions must first arrange for his Note(s) to beheld to the order or
under the control of a Paying, Exchange, or Transfer Agent by DTC,
Clearstream or Euroclear, as applicable or any other person released at the
conclusion of the Meeting (or, if applicable, any adjourned such Meeting)
or upon surrender of the voting certificate(s) or, not less than 48 hours
before the time for which the Meeting (or, if applicable, any adjourned
such Meeting) is convened, the voting instruction receipt(s) issued in
respect thereof. Any Bearer Notes may be deposited with (or to the order of
any Paying, Exchange, or 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 Register 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 she time fixed for the
Meeting.
2. The quorum required at the Meeting is one or more persons being present
holding voting certificates or being proxies and holding or representing in
the aggregate not less than two-thirds is principal amount of the Notes for
the time being outstanding.
3. To be passed, the Extraordinary Resolution requires a majority in favour
consisting of not less than two-thirds of the principal amount of the Notes
Outstanding. If passed, the Extraordinary Resolution will be binding upon
all the Noteholders, whether or not present at such Meeting and whether or
not voting.
<TABLE>
<S> <C> <C>
BANQUE GENERALE DU LUXEMBOURG, SA. HSBC BANK PLC HSBC BANK USA
50 Avenue J. F. Kennedy Contact: Mark Allen Contact: Frank Godino
L-2951 Luxembourg Mariner House 140 Broadway
Pepys Street New York, NY 10005
London EC3N 4DA Tel: 212-658-6433
Tel: 44 171 260 5434 Fax: 212-658-6425
Fax: 44 171 260 0428/3269
Dated: March 3, 2000
</TABLE>
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EXHIBIT (vi)
2.8 Incorporation by Reference of Trust Indenture Act; Trust Indenture Act
Controls. Sections 310 through 318 of the Trust Indenture Act of 1939 (as
amended, 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. 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
provision of the Trust Indenture Act that is incorporated by reference herein,
such provision of the Trust Indenture Act shall control.
The Issuer and the Trustee may without the consent of, or notice to,
any of the Noteholders, but only with the prior written consent of the Company
and SSC in each case, 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 permitted by the Trust
Indenture Act or similar Federal statute.
