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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)*
Belcor Inc.
-------------------------------------------------------------
(Name of Issuer)
Common Stock, $.10 par value
-------------------------------------------------------------
(Title of Class of Securities)
0774430 20 8
-------------------------------------------------------------
(CUSIP Number)
Theresa C. Morris, Secretary, Coastal Capital Partners, L.P., 101 Morgan Lane,
Suite 180, Plainsboro, NJ 08536
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June 26, 1996
-------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746 (12-91)
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 2 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coastal Capital Partners, L.P. 22-3348638
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7 866,668 Shares of Common Stock
NUMBER OF Warrants to acquire 1,263,332 shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 51,030 Shares of Common Stock
Warrants to acquire 825,000 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9 866,668 Shares of Common Stock
REPORTING Warrants to acquire 1,263,332 shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 917,698 Shares of Common Stock
Warrants to acquire 2,088,332 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
44.9% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 3 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coastal Capital Partners, Inc. 22-3291782
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 917,698 Shares of Common Stock
Warrants to acquire 2,088,332 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 866,668 Shares of Common Stock
Warrants to acquire 1,263,332 shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 917,698 Shares of Common Stock
Warrants to acquire 2,088,332 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
44.9% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 4 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Philip L. Yang, Jr. ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Philippines
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 917,698 Shares of Common Stock
Warrants to acquire 2,088,332 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 866,668 Shares of Common Stock
Warrants to acquire 1,263,332 shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 917,698 Shares of Common Stock
Warrants to acquire 2,088,332 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
44.9% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 5 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael Y. Gan ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Philippines
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Warrants to acquire 150,000 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING Warrants to acquire 150,000 shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
Warrants to acquire 150,000 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.7% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 6 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Theresa C. Morris ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Warrants to acquire 150,000 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING Warrants to acquire 150,000 shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
Warrants to acquire 150,000 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.7% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 7 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Donald M. Leibsker ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 51,030 shares of Common Stock
Warrants to acquire 475,000 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9 51,030 shares of Common Stock
REPORTING Warrants to acquire 475,000 shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 51,030 shares of Common Stock
Warrants to acquire 475,000 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
8.8% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 0774430 20 8 SCHEDULE 13D PAGE 8 OF 23 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
M. Douglas Caffey ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Warrants to acquire 50,000 shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING Warrants to acquire 50,000 shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
Warrants to acquire 50,000 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.9% See Item 5
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Page 9 of 23
This Amendment No. 5 ("Amendment No. 5") to the Statement on Schedule 13D
filed by Coastal Capital Partners, L.P., a Delaware limited partnership
("Coastal LP"), Coastal Capital Partners, Inc., a Delaware corporation ("Coastal
GP"), the sole general partner of Coastal LP, Philip L. Yang, Jr. ("Yang"), the
chairman of the board and sole shareholder of Coastal GP, Michael Y. Gan
("Gan"), Theresa C. Morris ("Morris"), Donald M. Leibsker ("Leibsker") and M.
Douglas Caffey ("Caffey") (collectively, the "Filing Persons"), amends and
supplements the original Statement on Schedule 13D of the Filing Persons filed
with the Securities and Exchange Commission ("SEC") on October 27, 1994 (the
"Original Schedule 13D") relating to the purchase by Coastal LP of warrants
("Coastal Warrants") to purchase up to 3,000,000 shares of Common Stock, par
value $0.10 per share (the "Common Stock") of Belcor Inc., a California
corporation (the "Company"), as amended by Amendment No. 1 thereto, filed on
October 3, 1995 ("Amendment No. 1"), by Amendment No. 2 thereto, filed on
October 10, 1995 ("Amendment No. 2"), by Amendment No 3. thereto filed on
November 20, 1995 ("Amendment No. 3), and by Amendment No 4. thereto filed on
May 29, 1996 ("Amendment No. 4), relating to the original purchase by Coastal LP
of the Coastal Warrants, subsequent exercises and assignments of the Coastal
Warrants and certain other matters.
ITEM 1.
- -------
The information set forth in Item 1 of Amendment No. 4 is incorporated
herein by reference.
ITEM 2.
- -------
(a)-(c) Except as set forth below, the information set forth in Item 2
(a)-(c) of Amendment No. 4 is incorporated herein by reference.
The additional Filing Persons under this Amendment No. 5 are Donald M.
Leibsker and M. Douglas Caffey. The business address of Liebsker is 29 S.
LaSalle Street, Suite 415, Chicago, Illinois 60603. The residence address of
Caffey is 2605 St. Simons, Tustin, California 92680. Leibsker is a self-employed
attorney and a former Chairman of the Board of the Company. Caffey is a self-
employed real estate salesperson and a former President and a former Director of
the Company.
(d)-(f) Except as set forth below, the information set forth in Item 2
(d)-(f) of Amendment No. 4 is incorporated herein by reference.
During the last five years, neither Leibsker nor Caffey has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, was or is subject to a judgement, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Both Leibsker and Caffey are citizens of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
- ------- -------------------------------------------------
Except as set forth below, the information set forth in Item 3 of
Amendment No. 4 is incorporated herein by reference. On June 28, 1996, the
Company's Board of Directors approved the execution of one year consulting
agreements with Caffey and Leibsker under which agreements the Company is
issuing to Caffey and Leibsker five year warrants, dated as of June 26, 1996, to
purchase up to 100,000 shares (the "New Caffey Warrant") and 150,000 shares (the
"New Leibsker Warrant") of Common Stock, respectively,
<PAGE>
Page 10 of 22
at an exercise price of $.20 per share. The right to purchase one half of such
shares under the New Caffey Warrant and New Leibsker Warrant vested on June 28,
1996 and the right to pruchase the remaining half of such shares vests on June
28, 1997. In addition, Liebsker previously had acquired a total of 51,030
shares of Common Stock through a combination of stock grants in connection his
investment in a oil drilling program involving the Company and stock
acquisitions using his personal funds. Also, Leibsker was issued five year
warrants, dated as of January 20, 1995, to purchase up to 400,000 shares of
Common Stock at a price of $.18 per share (the "Old Leibsker Warrant") pursuant
to an Amended Employment Agreement, dated as of January 20, 1995, with the
Company.
As required under the Investors' Rights Agreement, described in Item 4
of this Amendment No. 5, Coastal LP has transferred $100,000 to the Company as
an additional capital contribution for which no additional securities of the
Company were issued. All funds that were used in making such capital
contribution were obtained from capital contributions made by the general
partner, Coastal GP, which received such funds by means of a capital
contribution made by Yang using his personal funds.
ITEM 4. PURPOSE OF TRANSACTION.
- ------- ----------------------
Except as set forth below, the information set forth in Item 4 of
Amendment No. 4 is incorporated herein by reference.
June 1996 Transactions
- ----------------------
On June 26, 1996, Coastal LP, the Company, Leibsker and Caffey entered
into an Amended and Restated Investors' Rights Agreement (the "Investors' Rights
Agreement"), which amended and restated the Investors' Rights Agreement, dated
as of October 3, 1995, between the Company, Coastal LP, Rio Grande Mining
Company, a Nevada corporation ("Rio Grande") of which Coastal LP is the majority
shareholder, Leibsker and Caffey. Also, on June 26, 1996, Rio Grande and the
Company entered into the related Amended and Restated Termination Agreement,
dated as of June 26, 1996 (the "Termination Agreement"), which amended and
restated the Termination Agreement, dated as of October 3, 1995, between the
same parties.
The descriptions of the Investors' Rights Agreement, the Termination
Agreement, the Settlement Warrants, Call Agreement and the Shareholders
Agreement (all as defined in Item 4 of this Amendment No. 5) and certain other
related agreements contained in this Amendment No. 5 are summaries only of
certain of the material terms contained therein. Such agreements contain
additional material terms and conditions and copies of such agreements (which
are in some cases are exhibits to the Termination Agreement) have been filed as
Exhibits to this Amendment No. 5. Such descriptions are qualified in their
entirety by reference to such exhibits.
INVESTORS' RIGHTS AGREEMENT
---------------------------
The Company's Obligations
-------------------------
Pursuant to the Investors' Rights Agreement, the Company has (i)
appointed four persons designated by Coastal LP (Andrew K. Simpson ("Simpson"),
Morris, Gan and David C. Fraser) to fill vacancies in the Company's Board of
Directors with the three then existing directors (Caffey, Leibsker, the then
Chairman of the Board, and D. Ross Hamilton ("Hamilton")), as required in the
Investors' Rights Agreement, immediately thereafter resigning their positions as
directors of the Company and Caffey also immediately thereafter resigning as the
Company's President, (ii) appointed Simpson as the Company's Chairman of the
Board and Chief Executive Officer, (iii) executed a five year irrevocable proxy
in favor of Coastal GP (acting on behalf of and in its capacity
<PAGE>
Page 11 of 23
as general partner of Coastal LP) with respect to all of the shares of Rio
Grande common stock that the Company may receive pursuant to any exercise of the
seven year warrants (the "Settlement Warrants") issued by Rio Grande in favor of
the Company to purchase up to a maximum of 17,000,000 shares of Rio Grande
common stock at an exercise price of $0.24 per share, (iv) provided certain
registration rights with respect to certain unregistered shares of the Common
Stock held or which may be held by Coastal LP, Caffey or Leibsker and (v)
cancelled its current stock option plan and certain outstanding stock options.
The Company also delivered executed copies of the Shareholders Agreement signed
by Caffey and Leibsker.
Coastal LP's Obligations
------------------------
As part of the Investors' Rights Agreement, Coastal LP (i) has made a
$100,000 capital contribution to the Company for which no additional securities
of the Company were issued, (ii) has cancelled a portion of its warrants to
purchase up to 3,000,0000 shares of Common Stock (the "Coastal Warrants") issued
by the Company on October 20, 1994 in favor of Coastal LP, which cancelled
portion represented the right to purchase up to 470,000 shares of Common Stock,
and (iii) in order to retain the services of Caffey and Leibsker as advisors to
the Company, has supported the Company's entering into one year consulting
agreements with Leibsker and Caffey, dated as of June 28, 1996 and substantially
in the form of Exhibits C and D, respectively, to the Investors' Rights
Agreement, under which agreements the New Caffey Warrant and New Leibsker
Warrant, both dated as of June 28, 1996, are being issued.
Obligations of Caffey and Leibsker
----------------------------------
Pursuant to the terms of the Investors' Rights Agreement, Caffey and
Leibsker executed a Belcor Shareholders Agreement, dated as of June 26, 1996
(the "Shareholders Agreement"), under which each granted a voting agreement in
favor of Coastal LP as to shares of Common Stock that each owns or may own in
the future, including the New Caffey Warrant and New Leibsker Warrant. Further,
Caffey and Leibsker each agreed to use reasonable efforts to secure the
execution of a similar agreement by certain companies affiliated with Hamilton
that own shares of Common Stock.
Other Agreements
----------------
As part of the Investors' Rights Agreement, Coastal LP and the Company
agreed that that any obligation of Coastal LP or Rio Grande to provide loans,
advances or other funding to the Company under a letter, dated October 20, 1994,
from Simpson, on behalf of Coastal LP, to Caffey, as president of the Company,
expired May 30, 1995, is terminated, and is null and void. Coastal LP and the
Company also agreed that (i) each may engage independently or with others in
business ventures of every nature and description, (ii) nothing in the
Investors' Rights Agreement would be deemed to prohibit Coastal LP, its
affiliates or limited or general partners from dealing or otherwise engaging in
business with any persons or entities transacting business with the Company;
provided that such transaction did not involve any arrangement which would have
the effect of circumventing any restriction set forth in the Investor's Rights
Agreement, (iii) neither party would have any right by virtue of the Investor's
Rights Agreement or the contractual relationship created thereby in or to such
other ventures or activities or to the income or proceeds derived therefrom, and
the pursuit of such ventures would not be deemed wrongful or improper. Further,
Coastal LP and the Company agreed that neither party would be obligated to
present any particular investment opportunity to the other, and that neither
party would be obligated to provide to the other any participation right, co-
sale right, "tag-along right" or any other right with respect to the sale,
conveyance, assignment or other transfer of their respective interests in Rio
Grande.
TERMINATION AGREEMENT
---------------------
General Terms
-------------
Rio Grande and the Company pursuant to the terms of the Termination
Agreement terminated a 1993 reorganization agreement under which Rio Grande
(formerly known as SilTex Resources, Inc.) had agreed to sell all its assets to
a subsidiary of the Company in exchange for shares of Common Stock, eliminated a
Rio Grande undertaking to make exchange offers of registered shares of Rio
Grande common stock and warrants for corresponding securities of the Company
held by its shareholders, and executed mutual releases as to claims each might
have against the other relating to such reorganization agreement or to certain
other property rights.
Rio Grande's Obligations
------------------------
As part of the Termination Agreement, Rio Grande (i) has repaid the
Company $47,161, the remaining balance of funds previously advanced by the
Company to Rio Grande, (ii) has issued for $25,000 the Settlement Warrants,
substantially in the form of Exhibit A to the Termination Agreement, in favor of
the Company and (iii) has assigned to the Company all of its rights in the
minerals, if any, on approximately 1,600 acres of land located near Shafter,
Texas (the "Red Hills Rights") pursuant to a Deed Without Warranty, dated June
26, 1996.
The Company's Obligations
-------------------------
<PAGE>
Page 12 of 23
As required under the Termination Agreement, the Company has executed
an Option to Purchase Agreement with Rio Grande, dated as of June 26, 1996 (the
"Call Agreement"), under which Rio Grande has the right to repurchase the Red
Hills Rights at a price of $600,000 at any time until June 26, 1999 upon advance
written notice. As contemplated in the Termination Agreement and pursuant to a
letter agreement dated June 26, 1996, the Company paid $25,000 to Caffey in
satisfaction of its obligations to him under an Amended Employment Agreement,
dated as of January 20, 1995, which agreement was terminated as of June 26,
1996. In connection with such letter agreement, Caffey released the Company from
any claims arising under or relating to such employment agreement. Also, in
consideration of Rio Grande's payment to the Company of $47,161 (the remaining
balance of funds previously advanced by the Company to Rio Grande), the Company
terminated all of Rio Grande's obligations with respect to funds advanced to Rio
Grande by the Company prior to November 1994.
Future Plans of the Filing Persons
- ----------------------------------
Leibsker and Caffey have acquired the New Leibsker Warrant and New Caffey
Warrant, respectively, for investment purposes.
Coastal LP intends to continue the currently limited activities of the
Company, and in the future will determine whether or not to engage in any
business ventures involving the Company and whether or not to any make
additional investments in the Company. There can be no assurance, however, that
Coastal LP will engage in any business ventures involving the Company and/or
will make any additional investments in the Company. Further, Coastal LP and the
Company have agreed that Coastal LP is not obligated to present any particular
investment opportunity to the Company and the Company would not have any right
by virtue of the Investors' Rights Agreement or the contractual relationship
created thereby in or to Coastal LP's other ventures or activities or to the
income or proceeds derived therefrom, and the pursuit of such ventures by
Coastal LP would not be deemed wrongful or improper.
Except as otherwise described in this Item 4 or in Item 6 of this Amendment
No. 5, neither Leibsker, Caffey, nor any of the other Filing Persons, has
any current plans or proposals which relate to or would result in: (a) the
acquisition by any of them of additional securities of the Company, or the
disposition of the securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or any of its subsidiaries; (d) any change in the
present Board of Directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's charter or bylaws
or other actions which may impede the acquisition of control of the Company by
any person; (h) causing a class of securities of the Company to be delisted from
a national securities exchange or cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act of
1934, as amended, or (j) any action similar to those enumerated above.
Notwithstanding the foregoing, each of the Filing Persons reserves the
right to take such action in the future as it deems necessary or desirable in
connection with its investment in the Company.
<PAGE>
Page 13 of 23
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
- ------- --------------------------------
(a)-(b) Based on information in the Company's Quarterly Report on Form
10-QSB for the Quarter ended April 30, 1996, there were 5,480,133 shares of
Common Stock outstanding as of June 13, 1996.
Leibsker has the right to purchase 400,000 shares of Common Stock at a
price of $.18 per share under the Old Leibsker Warrant. Leibsker also has the
right to purchase 75,000 shares of Common Stock under the New Leibsker Warrant
(with a right to purchase up to an additional 75,000 shares vesting on June 28,
1997). Leibsker also owns 51,030 shares of Common Stock. Caffey has the right to
purchase 50,000 shares of Common Stock under the New Caffey Warrant (with a
right to purchase up to an additional 50,000 shares vesting on June 28, 1997).
As described in Item 4 of this Amendment No. 5, Leibsker and Caffey have entered
into the Shareholders Agreement which gives Coastal LP the right to direct
Leibsker and Caffey in their voting of any shares of Common Stock they now own
or hereafter acquire by exercise of their respective warrants. The number of
shares of Common Stock beneficially owned by Leibsker and Caffey represents
approximately 8.8% and 0.9%, respectively, of the shares of Common Stock which
would be issued and outstanding upon exercise of the Old Leibsker Warrant, New
Leibsker Warrant and the New Caffey Warrant (collectively, the "Leibsker/Caffey
Warrants").
Morris and Gan each have the right to purchase 150,000 shares of Common
Stock under their respective warrants (collectively, the Morris/Gan Warrants").
Pursuant to a voting agreement entered into with Coastal LP, as described in
Item 4 of Amendment No. 4, Coastal LP has the right to direct Morris and Gan in
their voting of any shares they acquire by exercise of their respective
warrants. The number of shares of Common Stock beneficially owned by each of
Morris and Gan represents approximately 2.7% of the shares of Common Stock which
would be issued and outstanding upon exercise of the Morris/Gan Warrants.
After giving effect to its cancellation of rights to purchase 470,000
shares of Common Stock, as described in Item 4 of this Amendment No. 5, Coastal
LP has the right to purchase 1,263,332 shares of Common Stock under the Coastal
Warrants, which are currently exercisable at $.15 per share, and owns 866,668
shares of Common Stock which it acquired upon partial exercise of the Coastal
Warrants. Coastal LP has the sole power to vote or to direct the vote and the
sole power to dispose or to direct the disposition of the Coastal Warrants and
the Common Stock acquired upon exercise of the Coastal Warrants. Coastal LP has
shared power to vote or direct the vote of 51,030 shares of Common Stock now
owned by Leibsker, 525,000 shares of Common Stock that may be acquired by
Leibsker and Caffey upon exercise of the Leibsker/Caffey Warrants and 300,000
shares of Common Stock that may be acquired by Morris and Gan upon exercise of
the Morris/Gan Warrants.
The number of shares of Common Stock beneficially owned by Coastal LP
represents approximately 44.9% of the shares of Common Stock which would be
issued and outstanding upon exercise of the Leibsker/Caffey Warrants, the
Morris/Gan Warrants and the remaining Coastal Warrants.
Each of Coastal GP and Yang may, by virtue of their relationship to
Coastal LP, be deemed to own beneficially (as that term is defined in Rule 13d-3
of the Securities Exchange Act of 1934, as amended) and to share with Coastal LP
voting and dispositive power with respect to the Coastal Warrants, the 1,263,332
shares of Common Stock issuable upon exercise of the Coastal Warrants and the
866,668 shares of Common Stock owned by Coastal LP. Each of Coastal GP and Yang
may be deemed to share voting power with respect to 51,030 shares of Common
Stock now
<PAGE>
Page 14 of 23
owned by Leibsker, 525,000 shares of Common Stock that may be acquired by
Leibsker and Caffey upon exercise of the Leibsker/Caffey Warrants and 300,000
shares of Common Stock that may be acquired by Morris and Gan upon exercise of
the Morris/Gan Warrants. The number of shares of Common Stock beneficially owned
by each of Coastal GP and Yang represents approximately 44.9% of the shares of
Common Stock which would be issued and outstanding upon exercise of the
Leibsker/Caffey Warrants, the Morris/Gan Warrants and the remaining Coastal
Warrants.
(c) Except as described in Item 4 of this Amendment No. 5, no
transactions in the Common Stock or in other securities convertible into Common
Stock were effected in the past sixty days by any of the Filing Persons.
(d) Except for the warrant assignments described in Item 6 of Amendment
No. 4, and a contractual commitment by Coastal LP to assign to K. Glenn Cole
(the Company's former Chief Financial Officer) a portion of the Coastal Warrants
covering the right to purchase 50,000 shares of Common Stock no other person has
the right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of the Coastal Warrants.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
- ------- ---------------------------------------------------------------------
TO ANY SECURITIES OF THE ISSUER.
--------------------------------
Except as described in Item 4 or this Item 6 of this Amendment No. 5,
the information set forth in Item 6 of Amendment No. 4 is incorporated by
reference.
Except as described in this Item 6 or in Item 4 of this Amendment No.
5, there are no contracts, arrangements, understandings or relationships with
respect to any securities of the Company.
<PAGE>
Page 15 of 23
ITEM 7. EXHIBITS.
- ------- ---------
The following documents are filed as exhibits.
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A - Joint Filing Agreement Pursuant to Rule 13d-1(f).*
Exhibit B - Power of Attorney.*
Exhibit C - Warrant Purchase and Investor's Rights Agreement, dated as of October 20, 1994, between Coastal
Capital Partners, L.P., Belcor Inc. and Mark S. Isaacs.*
Exhibit D - Warrant to purchase 3,000,000 shares of common stock of Belcor Inc., dated as of October 20,
1994.*
Exhibit E - Letter Agreement, dated October 20, 1994, by Coastal Capital Partners, L.P. regarding finders
fee arrangement with David Fraser.*
Exhibit F - Letter Agreement, dated October 20, 1994, by Coastal Capital Partners, L.P. regarding possible
$100,000 secured loan to Belcor Inc.*
Exhibit G - Agreement and Plan of Reorganization, dated as of December 1, 1993, between SilTex Resources,
Incorporation and Belcor Inc.*
Exhibit H - Termination Agreement, dated as of October 3, 1995, between Rio Grande Mining Company and Belcor
Inc.*
Exhibit I - Investors' Rights Agreement, dated as of October 3, 1995, between Coastal Capital Partners,
L.P., Belcor Inc., Rio Grande Mining Company and certain other securityholders of Belcor Inc.*
Exhibit J - Letter Agreement, dated September 28, 1995, between Coastal Capital Partners, L.P., Belcor Inc.,
Rio Grande Mining Company and D. Ross Hamilton.*
Exhibit K - Joint Filing Agreement Pursuant to Rule 13d-(f).*
Exhibit L - Power of Attorney.*
Exhibit M - Power of Attorney.*
Exhibit N - Warrant Purchase Agreement, dated as of November 10, 1995, between Coastal Capital Partners,
L.P. and Michael Y. Gan.*
Exhibit O - Warrant Purchase Agreement, dated as of November 10, 1995, between Coastal Capital Partners,
L.P. and Theresa C. Morris.*
Exhibit P - Voting Agreement, dated as of November 10, 1995, between Coastal Capital Partners, L.P., Michael
Y. Gan and Theresa C. Morris.*
</TABLE>
<PAGE>
Page 16 of 23
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit Q - Joint Filing Agreement Pursuant to Rule 13d-(f).
Exhibit R - Power of Attorney.
Exhibit S - Power of Attorney.
Exhibit T - Amended and Restated Termination Agreement, dated as of June 26, 1996, between Rio Grande Mining
Company and Belcor Inc.
Exhibit U - Warrant to purchase 17,000,000 shares of common stock of Rio Grande Mining Company, dated as of
June 26, 1996.
Exhibit V - Release, dated as of June 26, 1996, of Rio Grande Mining Company in favor of Belcor Inc.
Exhibit W - Deed Without Warranty, dated June 26, 1996, of Rio Grande Mining Company in favor of Belcor Inc.
Exhibit X - Release, dated as of June 26, 1996, of Belcor Inc. in favor of Rio Grande Mining Company.
Exhibit Y - Option to Purchase Agreement, dated as of June 26, 1996, between Rio Grande Mining Company and Belcor
Inc.
Exhibit Z - Amended and Restated Investors' Rights Agreement, dated as of June 26, 1996, between Coastal
Capital Partners, L.P., Belcor Inc., Donald Liebsker and M. Douglas Caffey.
Exhibit AA - Belcor Inc. Shareholders' Agreement, dated as of June 26, 1996, between Coastal Capital Partners, L.P.,
Donald Liebsker and M. Douglas Caffey.
Exhibit AB - Irrevocable Proxy of Belcor Inc., dated as of June 26, 1996, in favor of Coastal Capital Partners, Inc.
(acting on behalf of and in its capacity as the general partner of Coastal Capital Partners, L.P.).
Exhibit AC - Letter Agreement, dated June 26, 1996, between Belcor Inc. and M. Douglas Caffey.
- ------------
</TABLE>
* Previously filed.
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996 COASTAL CAPITAL PARTNERS, L.P.
By: Coastal Capital Partners, Inc.
as General Partner
By: /s/ ANDREW K. SIMPSON
-----------------------------------
Andrew K. Simpson
Chief Executive Officer
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996 COASTAL CAPITAL PARTNERS, INC.
By: /s/ ANDREW K. SIMPSON
-----------------------------
Andrew K. Simpson
President and Chief Executive
Officer and Director
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996
By: /s/ ANDREW K. SIMPSON
-------------------------------
Andrew K. Simpson, as
Attorney-in-fact for
Philip L. Yang, Jr.
Chairman of the Board and sole
shareholder
Coastal LP Capital Partners, Inc.
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996
By: /s/ ANDREW K. SIMPSON
--------------------------------
Andrew K. Simpson, as
Attorney-in-fact for
Michael Y. Gan
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996
By: /s/ ANDREW K. SIMPSON
--------------------------------
Andrew K. Simpson, as
Attorney-in-fact for
Theresa C. Morris
<PAGE>
Page 22 of 23
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996
By: /s/ ANDREW K. SIMPSON
----------------------------
Andrew K. Simpson, as
Attorney-in-fact for
Donald M. Leibsker
<PAGE>
Page 23 of 23
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 2, 1996
By: /s/ ANDREW K. SIMPSON
-----------------------------
Andrew K. Simpson, as
Attorney-in-fact for
M. Douglas Caffey
<PAGE>
EXHIBIT 99.(Q)
JOINT FILING AGREEMENT
This Agreement is entered into by and among Coastal Capital Partners, L.P.,
a Delaware limited partnership, Coastal Capital Partners, Inc., a Delaware
corporation, Philip L. Yang, Jr., an individual, Michael Y. Gan, an individual,
Theresa C. Morris, an individual, and Donald M. Leibsker, an individual, and M.
Douglas Caffey, an individual.
Each of the persons named above hereby agrees that the Amendment No. 5 to
Schedule 13D of July 2, 1996 and to which this Agreement is attached as an
exhibit, which is to be filed with the Securities and Exchange Commission, is to
be filed on behalf of each such person.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
this 2nd day of July, 1996.
COASTAL CAPITAL PARTNERS, L.P.
/s/ Andrew K. Simpson By: Coastal Capital Partners, Inc.
- ---------------------------------------- as General Partner
Andrew K. Simpson, as attorney-
in-fact for Michael Y. Gan
By: /s/ Andrew K. Simpson
------------------------------
Andrew K. Simpson
/s/ Andrew K. Simpson Chief Executive Officer
- ----------------------------------------
Andrew K. Simpson, as attorney-
in-fact for Theresa C. Morris
COASTAL CAPITAL PARTNERS, INC.
/s/ Andrew K. Simpson
- ----------------------------------------
Andrew K. Simpson, as attorney- By: /s/ Andrew K. Simpson
fact for Philip L. Yang ------------------------------
Andrew K. Simpson
Chief Executive Officer
/s/ Andrew K. Simpson /s/ Andrew K. Simpson
- ---------------------------------------- -------------------------------
Andrew K. Simpson, as attorney- Andrew K. Simpson, as attorney-
fact for Donald M. Leibsker fact for M. Douglas Caffey
<PAGE>
EXHIBIT 99.(R)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints Andrew K. Simpson, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Amendment No. 5 to Schedule 13D, dated July 1, 1996, and to which this Power of
Attorney is attached as an exhibit, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming his signature as it may be
signed by said attorney-in-fact and agent, or his substitutes, to any and all
amendments to said Schedule 13D.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 26th
day of June, 1996.
/s/ Donald Leibsker
----------------------------------------
Donald Leibsker
<PAGE>
EXHIBIT 99.(S)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints Andrew K. Simpson, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Amendment No. 5 to Schedule 13D, dated July 1, 1996, and to which this Power of
Attorney is attached as an exhibit, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming his signature as it may be
signed by said attorney-in-fact and agent, or his substitutes, to any and all
amendments to said Schedule 13D.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 26th
day of June, 1996.
/s/ M. Douglas Caffey
----------------------------------------
M. Douglas Caffey
<PAGE>
EXHIBIT 99.(T)
AMENDED AND RESTATED TERMINATION AGREEMENT
------------------------------------------
This AMENDED AND RESTATED TERMINATION AGREEMENT (the "Termination
Agreement"), entered into as of this 26th day of June, 1996, by and between RIO
GRANDE MINING COMPANY, a Nevada corporation ("Rio Grande") and BELCOR INC., a
California Corporation ("Belcor"), amends and restates the Termination Agreement
dated as of October 3, 1995 between Rio Grande and Belcor (the "Original
Termination Agreement").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Rio Grande, formerly known as SilTex Resources, Incorporated, and
Belcor entered into an agreement dated December 1, 1993 (the "Reorganization
Agreement"), pursuant to which Rio Grande agreed to sell all its assets to a
wholly-owned subsidiary of Belcor in exchange for common stock of Belcor
("Belcor Common Stock"), subject to shareholder approval, as the result of which
Belcor would have indirectly owned the assets of Rio Grande, consisting
principally of the mining property in Texas known as the "Shafter Project," and
the pre-existing shareholders of Belcor would have held a 31.92% equity interest
in Belcor and the stockholders of Rio Grande would have obtained a 68.08% equity
interest in Belcor, and Belcor would have had to seek additional financing of
not less than $1,200,000 to complete the acquisition of the Shafter Project;
WHEREAS, Rio Grande and Belcor entered into an agreement, dated June 8,
1994, which amended the Reorganization Agreement to provide for the issuance of
additional shares of Belcor Common Stock to the stockholders of Rio Grande as
the result of Rio Grande undertaking to raise additional capital to consummate
the purchase of the Shafter Property (the "June 1994 Letter Agreement");
WHEREAS, Rio Grande and Belcor entered into various agreements in October
1994 with Coastal Capital Partners, L.P., a Delaware limited partnership
("Coastal"), under which Coastal purchased securities of Rio Grande and Belcor
(collectively, the "October 1994 Agreements"), as a result of which the pre-
existing shareholders of Belcor would have held a 15.9% equity interest in
Belcor had a business combination between Rio Grande and Belcor been
consummated;
WHEREAS, Belcor entered into an amended employment agreement with Donald
Leibsker ("Leibsker") to maintain continuing management of Belcor's operations
and to pursue negotiations relating to the Reorganization Agreement and the
October 1994 Agreements, and, pursuant to such agreements, has, as of January
20, 1995, issued warrants to purchase up to a maximum of 400,000
<PAGE>
shares of the common stock of Belcor at an exercise price of $.18 per share (the
"Leibsker Warrant");
WHEREAS, Belcor entered into an amended employment agreement with M.
Douglas Caffey ("Caffey"), dated as of January 20, 1995 (the "Caffey Employment
Agreement"), to maintain continuing management of Belcor's operations and to
pursue negotiations relating to the Reorganization Agreement and the October
1994 Agreements, such agreement having been executed in accordance with those
certain resolutions of Belcor's Board of Directors dated October 20, 1994 which
provided for Belcor's employment of Caffey and related compensation therefor of
either (i) a minimum cash payment of $25,000 subject to upward adjustment based
upon the trading price of Belcor Common Stock at a specified date or (ii) the
issuance of warrants to purchase up to a maximum of 500,000 shares of the common
stock of Belcor at an exercise price of $.18 per share;
WHEREAS, Caffey has agreed to accept, and Belcor has agreed to provide, a
cash payment of $25,000 on or before the Closing in satisfaction of all of
Belcor's obligations under the Caffey Employment Agreement pursuant to a letter
agreement between the parties (the "Caffey Letter Agreement"), such cash payment
to be made on or before the Closing;
WHEREAS, Rio Grande acquired the Shafter Project in October 1994;
WHEREAS, in a letter dated December 29, 1994, Rio Grande confirmed its
intention to Belcor to complete a business combination with Belcor on terms
"substantially equivalent" to those in the Reorganization Agreement, and further
stated that by "substantially equivalent," Rio Grande meant that it expected
there to be approximately 29,000,000 shares outstanding after the business
combination, including shares reserved for Coastal's warrants and 900,000 shares
reserved for employment agreements, and that existing Belcor shareholders would
have about 4.6 million shares of Rio Grande common stock (the "December 1994
Letter");
WHEREAS, prior to the date hereof, there have been numerous discussions,
documents, claims, correspondences, understandings and arrangements between Rio
Grande and Belcor relating to various rights of Belcor in the Shafter Project,
various proposed business combinations and other transactions between Rio Grande
and Belcor (collectively, the "Ancillary Materials");
WHEREAS, prior to November 1994, Belcor had advanced substantial funds to
Rio Grande to provide Rio Grande with working capital and funds to assist Rio
Grande in the acquisition of the Shafter Project (the "Rio Grande Debt");
-2-
<PAGE>
WHEREAS, prior to the date of the Original Termination Agreement, the
expiration of the Reorganization Agreement and certain claims of Belcor relating
to its asserted property rights in Rio Grande and the Shafter Project were
matters in dispute between the parties hereto;
WHEREAS, Rio Grande and Belcor have for various reasons decided not to
proceed with a business combination and to keep Rio Grande and Belcor as
separate entities;
WHEREAS, the parties entered into the Original Termination Agreement to,
among other things, terminate the Reorganization Agreement and Rio Grande Debt
and provide for the execution of mutual releases;
WHEREAS, Belcor, Rio Grande and Coastal, among other parties, entered into
that certain Investors' Rights Agreement, dated as of October 3, 1995 (the
"Original Investors' Rights Agreement"), and Belcor and Coastal, among other
parties, have entered in an Amended and Restated Investors' Rights Agreement
(the "Investors' Rights Agreement"), of even date herewith, amending and
restating the Original Investors' Rights Agreement; and
WHEREAS, Rio Grande and Belcor desire to amend and restate the Original
Termination Agreement as set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree that the
Original Termination Agreement is amended and restated to read in full as
follows:
AGREEMENTS
----------
1. Termination of Reorganization Agreement
---------------------------------------
Subject to the occurrence of a Closing as provided in Section 4.1, Rio
Grande and Belcor hereby terminate the Reorganization Agreement, and any and all
obligations of Rio Grande and Belcor under the Reorganization Agreement, as
amended by the July 1994 Letter Agreement and giving effect to the October 1994
Agreements, the December 1994 Letter and the Ancillary Materials, are hereby
acknowledged by both parties to be null and void.
2. Obligations
-----------
2.1 Actions of Rio Grande
---------------------
2.1.1 Rio Grande shall pay to Belcor the face amount of the Rio
Grande Debt (the "Payment Amount"), which
-3-
<PAGE>
the parties acknowledge and agree is $47,161, within two calendar days
after the Closing Date so long as Belcor has satisfied its obligations
under Section 2.2 of this Termination Agreement and under Section 2 of the
Investors' Rights Agreement.
2.1.2 Rio Grande shall deliver at the Closing a warrant,
substantially in the form of Exhibit A (the "Settlement Warrant"), executed
in favor of Belcor to purchase up to a maximum of 17,000,000 unregistered
shares of common stock of Rio Grande (the "Settlement Warrant Shares") at
an exercise price of $.24 per share, with a ten year term, in consideration
of the payment of $25,000 (the "Warrant Consideration") by Belcor to Rio
Grande and the delivery by Belcor of the Belcor Proxy, as defined and
provided for in the Investors' Rights Agreement.
2.1.3 Rio Grande shall deliver to Belcor at the Closing an executed
release (the "Rio Grande Release"), substantially in the form of Exhibit B,
dated as of the Closing Date.
2.1.4 Rio Grande shall deliver to Belcor at the Closing a Deed
Without Warranties (the "Deed"), substantially in the form of Exhibit C,
dated as of the Closing Date, pursuant to which Rio Grande shall convey
unto Belcor all of its rights, titles and interests, if any, in the
minerals and mineral rights in, on, under and covered by approximately
1,600 acres of land located near Shafter, Texas in Presidio County, Texas
(the "Red Hills Property") as more particularly described in Exhibit A-1 to
the form of Deed attached hereto and incorporated herein by this reference,
together with all easements, rights, and benefits appurtenant thereto.
2.2 Actions of Belcor
-----------------
2.2.1 Belcor shall deliver to Rio Grande at the Closing an executed
release (the "Belcor Release"), substantially in the form of Exhibit D,
dated as of the Closing Date.
2.2.2 Belcor shall deliver to Rio Grande at the Closing an executed
Option to Purchase Agreement (the "Call Agreement"), substantially in the
form of Exhibit E, dated as of the Closing Date, pursuant to which Belcor
shall grant to Rio Grande for a period of three years a right to purchase
at any time the Red Hills Property at $600,000.
2.3 Termination of Rio Grande Debt. Upon Rio Grande's payment to
------------------------------
Belcor of the Payment Amount, Belcor hereby agrees and acknowledges that any and
all obligations of Rio Grande with
-4-
<PAGE>
respect to the Rio Grande Debt are terminated. Belcor hereby agrees and
acknowledges that Rio Grande may offset the Warrant Consideration from the
Payment Amount and deliver at the Closing an amount equal to the Payment Amount
less the Warrant Consideration as provided in Section 4.2.2.
3. Other Belcor Obligations. On or before the Closing, Belcor and Caffey
------------------------
shall have entered into the Caffey Letter Agreement which shall provide, among
other things, that (i) Belcor shall, upon and subject to the occurrence of the
Closing, pay to Caffey $25,000 in satisfaction of all of its obligations under
the Caffey Employment Agreement, (ii) subject to and upon such payment, Caffey
shall release and forever discharge Belcor and its past and present parent
companies, divisions, affiliates and subsidiaries (direct and indirect),
predecessors, successors, assigns, partners, directors, officers, employees,
agents, trustees, representatives, insurers and attorneys of and from any and
all causes of action in law or in equity, suits, debts, liens, contracts,
agreements, promises, liabilities, claims, demands, damages, losses, attorneys'
fees, or costs, of any nature whatsoever, fixed or contingent, known or unknown,
suspected or unsuspected, liquidated or unliquidated, which Caffey and any
person claiming derivatively through Caffey then has or may thereafter have
against Belcor by reason of any matter, cause, or thing whatsoever arising or
relating to the Caffey Employment Agreement, except for any obligations of
Belcor to Caffey under the Investors' Rights Agreement, the Consulting and/or
Retirement Agreements referred to in Section 4(o) of the Investors' Rights
Agreement or the Caffey Consulting Agreement (as defined in the Investors'
Rights Agreement), and (iii) immediately upon such payment, the Caffey
Employment Agreement shall be deemed to have terminated.
4. CLOSING.
-------
4.1 Closing. A closing ("Closing") shall take place at the offices
-------
of Mayer, Brown & Platt in Los Angeles, California on the later of (i) June 26,
1996 and (ii) such later date to which the parties hereto shall mutually agree
(the "Closing Date").
-5-
<PAGE>
4.2 Deliveries.
----------
4.2.1 By Belcor. At the Closing, subject to the terms and conditions
---------
hereof, Belcor shall deliver to Rio Grande (i) an executed Belcor Release,
(ii) an executed Call Agreement, (iii) an executed Caffey Letter Agreement
and (iv) on behalf of Coastal, an executed Belcor Proxy (as provided and
defined in the Investors' Rights Agreement).
4.2.2 By Rio Grande. At the Closing, subject to the terms and
-------------
conditions hereof, Rio Grande shall deliver to Belcor (i) an executed Rio
Grande Release, (ii) an executed Settlement Warrant and (iii) a copy of an
executed and notarized Deed, which Rio Grande shall cause to be promptly
filed or recorded, at Rio Grande's expense, in the appropriate county or
other places in the State of Texas; and Rio Grande shall deliver to Belcor
the Payment Amount less the Warrant Consideration within two calendar days
after the Closing Date so long as Belcor has satisfied its obligations
under Section 2.2 of this Termination Agreement and under Section 2 of the
Investors' Rights Agreement.
5. REPRESENTATIONS AND WARRANTIES.
------------------------------
Each party to this Termination Agreement represents and warrants to, and
agrees with, each other party hereto, as follows:
5.1 Each party has received independent legal advice from its
attorneys with respect to the advisability of executing this Termination
Agreement.
5.2 Each party has received independent legal, tax and accounting
advice from its attorneys, tax advisers and accountants with respect to the
transactions contemplated by this Termination Agreement and has not relied on
any advice from the other party or that party's attorneys, tax advisers or
accountants with respect to such transactions.
5.3 Each party has made such investigation of the facts pertaining to
the provisions outlined above and to this Termination Agreement, and of all the
matters pertaining thereto, as it deems necessary.
5.4 Each party has not heretofore assigned, transferred, granted,
conveyed or otherwise disposed of, or purported to assign, transfer, grant,
convey or otherwise dispose of, any of the claims, demands, causes of action,
obligations, damages or liabilities asserted by it and disposed of by this
Termination Agreement, the Belcor Release or the Rio Grande Release.
-6-
<PAGE>
5.5 Each party hereby warrants that no other person has had or claims
any interest in any of the claims, demands, causes of action, obligations,
damages or liabilities asserted by it referred to herein, and that it has the
sole right and exclusive authority to execute this Termination Agreement, the
Belcor Release and the Rio Grande Release, as applicable, and to bind itself and
its assigns thereby.
5.6 Each term of this Termination Agreement, the Belcor Release and
the Rio Grande Release is contractual and not merely a recital.
6. REPRESENTATIONS AND WARRANTIES OF RIO GRANDE.
--------------------------------------------
Rio Grande represents and warrants to Belcor as follows:
6.1 Corporate Existence; Compliance with Law. Rio Grande (i) is a
----------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada; (ii) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification; (iii)
has the requisite corporate power and authority and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to lease the
property it operates under the lease, and to conduct its business as now,
heretofore and proposed to be conducted; and (iv) is in compliance with its
Articles of Incorporation and By-Laws.
6.2 Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
execution, delivery and performance by Rio Grande of this Termination Agreement,
the Rio Grande Release and the Deed: (i) are not in contravention of any
provision of Rio Grande's Articles of Incorporation or By-Laws (and will not be
in contravention of any provision of the Restated Articles); (ii) will not
violate any law or regulation applicable to Rio Grande, or any order or decree
of any court or governmental instrumentality applicable to Rio Grande; (iii)
will not conflict with or result in the breach or termination of, constitute a
default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which Rio
Grande is bound; (iv) will not result in the creation or imposition of any lien
upon any of the property of Rio Grande (other than as created by the Deed and
the Call Agreement with respect to the Red Hills Property); and (v) do not
require any consent or approval of any governmental body, agency, authority or
any other person. This Termination Agreement has been duly and validly executed
and delivered by Rio Grande, and constitutes a legal, valid and binding
obligation of Rio Grande, enforceable against Rio Grande in accordance with its
terms, subject to general principles of equity and, as to enforcement only,
bankruptcy, insolvency, moratorium or similar laws at the
-7-
<PAGE>
time in effect affecting the enforceability of the rights of creditors
generally. The Rio Grande Release and Deed, when duly and validly executed and
delivered by Rio Grande, will each constitute a legal, valid and binding
obligation of Rio Grande, enforceable against Rio Grande in accordance with its
terms, subject to general principles of equity and, as to enforcement only,
bankruptcy, insolvency, moratorium or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
6.3 Capitalization. The authorized capital stock of Rio Grande
--------------
consists of 100,000,400 shares of capital stock, of which 100,000,000 shares are
common stock, par value $0.01 per share ("Rio Grande Common Stock"), and
396.9410 shares are preferred stock, par value $0.01 per share ("Rio Grande
Preferred Stock").
6.4 Outstanding Securities. Attached as Exhibit F is, among other
----------------------
things, a summary of the issued and outstanding capital stock of Rio Grande as
of the date of this Termination Agreement, as well as all outstanding conversion
or exercise rights and the number of shares to be issued upon appropriate
conversion or exercise. Except as set forth on Exhibit F, (i) there are no
other preemptive rights, rights of first refusal or similar rights to purchase
or subscribe for any shares of capital stock or other equity interest of Rio
Grande, (ii) there are no existing contracts, options, warrants, calls or
similar commitments of any kind granted or issued by Rio Grande relating to the
issuance of such capital stock or other equity interests, and (iii) there are no
agreements restricting or otherwise affecting voting of such capital stock or
other equity interests of Rio Grande.
6.5 Liabilities and Assets. Rio Grande has no individual liability
----------------------
with a duration of more than six months or which is in an amount greater than
$250,000, other than that certain Promissory Note to Coastal, as set forth in
Exhibit F, and a certain amount payable for legal fees, and all outstanding
liabilities total no more than $1,500,000. Rio Grande's assets, as recorded on
its financial records, total no less than $2,000,000.
6.6 No Default. Rio Grande is not in default under, or in violation
----------
of, any applicable law, statute, rule or regulation or order, writ, judgment,
injunction or decree applicable to it which could be reasonably expected to
result in a material adverse change in the financial condition, business, assets
or liabilities (a "Material Adverse Change") of Rio Grande.
Section 6.7 Absence of Material Adverse Changes or Events. Since the
---------------------------------------------
date of the Original Termination Agreement,
-8-
<PAGE>
there has not been any Material Adverse Change of Rio Grande, and to Rio
Grande's knowledge no fact or condition exists as of the date hereof which is
expected to result in such a Material Adverse Change.
7. REPRESENTATIONS AND WARRANTIES OF BELCOR.
----------------------------------------
Belcor represents and warrants to Rio Grande as follows:
7.1 Corporate Existence; Compliance with Law. Belcor (i) is a
----------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of California; and (ii) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where it is material to
its business to be so qualified.
7.2 Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
execution, delivery and performance by Belcor of this Termination Agreement, the
Belcor Release, the Call Agreement and the Investor's Rights Agreement, and the
agreements contained as exhibits thereof (collectively, the "Belcor Closing
Agreements"): (i) are not in contravention of any provision of Belcor's articles
of incorporation or by-laws; (ii) will not violate any law or regulation
applicable to Belcor, or any order or decree of any court or governmental
instrumentality applicable to Belcor; (iii) will not conflict with or result in
the breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which Belcor is bound; (iv) will not result in
the creation or imposition of any lien upon any of the property of Belcor; and
(v) do not require any consent or approval of any governmental body, agency,
authority or any other person. This Termination Agreement has been duly and
validly executed and delivered by Belcor and constitutes a legal, valid and
binding obligation of Belcor, enforceable against Belcor in accordance with its
terms, subject to general principles of equity and, as to enforcement only,
bankruptcy, insolvency, moratorium or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally. The other
Belcor Closing Agreements, when duly and validly executed and delivered by
Belcor, will each constitute a legal, valid and binding obligation of Belcor,
enforceable against Belcor in accordance with its terms, subject to general
principles of equity and, as to enforcement only, bankruptcy, insolvency,
moratorium or similar laws at the time in effect affecting the enforceability of
the rights of creditors generally.
7.3 Capitalization. The authorized capital stock of Belcor consists
--------------
of 30,000,000 shares of Belcor Common Stock. As of the date hereof and before
giving effect to an agreement to issue warrants to purchase up to 50,000 shares
of Belcor Common
-9-
<PAGE>
Stock to K. Glenn Cole and any cancellation by Coastal of a portion of its
warrants to purchase Belcor Common Stock, as provided in the Investors' Rights
Agreement, there are issued and outstanding 5,515,011 shares of Belcor Common
Stock, and there are options, warrants, convertible securities or other
contractual obligations to issue an additional 3,148,332 shares. All such
issued and outstanding shares have been duly authorized and validly issued, are
fully paid and nonassessable.
7.4 No Litigation. Except as set forth on Schedule 7.4 hereto, no
------------- ------------
action, claim or proceeding is now pending or, to the knowledge of Belcor,
threatened against Belcor, at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of any federal state or local
government or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators (a) which, if determined adversely, could result in a
Material Adverse Change of Belcor or (b) which pertains to the transactions
contemplated by this Agreement. Except as set forth on Schedule 7.4 hereto, to
------------
the knowledge of Belcor, no state of facts exists which is reasonably likely to
give rise to any such action, claim or proceeding.
Section 7.5 Absence of Material Adverse Changes or Events. Since the
---------------------------------------------
date of the Original Termination Agreement, there has not been any Material
Adverse Change of Belcor, and to Belcor's knowledge no fact or condition exists
as of the date hereof which is expected to result in such a Material Adverse
Change.
8. GOOD FAITH TERMINATION; ABSENCE OF REPRESENTATION REGARDING SHAFTER
-------------------------------------------------------------------
PROJECT AND THE RED HILLS PROPERTY.
- ----------------------------------
8.1 The parties to this Termination Agreement, on behalf of
themselves, their respective assigns, directors, officers, stockholders,
partners, agents, employees, servants and all individuals and entities they
represent, hereby stipulate and agree that this termination and the settlement
of the claims, demands, causes of action, obligations, damages or liabilities
described herein have been entered into in good faith.
8.2 The parties to this Termination Agreement, on behalf of
themselves, their respective assigns, directors, officers, stockholders,
partners, agents, employees, servants and all individuals and entities they
represent, hereby acknowledge and agree that, although certain discussions have
taken place between representatives of Rio Grande and Belcor regarding certain
preliminary resource estimates and related studies (the "Preliminary Studies")
that Rio Grande had undertaken (or had engaged outside consultants to undertake)
regarding the Shafter Project and the Red Hills Property, a copy of a valuation
study of the Red Hills Property prepared by an outside consultant
-10-
<PAGE>
engaged by Rio Grande (the "Valuation Report") had been given to representatives
of Belcor, a Letter dated June 1, 1996 from Andrew Simpson was sent to Donald
Leibsker (the "Letter") and certain other statements may have been made or other
written materials may have been provided by Rio Grande Representatives regarding
the Shafter Project and the Red Hills Property to representatives of Belcor (all
such statements or materials together with the Valuation Report, the Letter and
any statements made as to the Preliminary Studies being hereinafter collectively
referred to as the "Preliminary Materials and Statements"), (i) other than as
expressly represented in Section 6 of this Termination Agreement, neither Rio
Grande nor any of its directors, officers, stockholders, employees, attorneys,
or other representatives ("Rio Grande Representatives") have made any
representation or warranty regarding (a) the truthfulness or accuracy of any of
the Preliminary Materials and Statements, (b) the value of any mineralization
which may be found at the Shafter Project or the Red Hills Property, (c) the
economic feasibility to extract such mineralization or (d) the value or worth of
the Shafter Project or the Red Hills Property, if any, and (ii) in making its
decision to enter into the Belcor Closing Agreements, Belcor has not relied upon
the truthfulness or accuracy of any of the Preliminary Materials and Statements.
9. COVENANTS.
---------
Section 9.1 Covenants of Rio Grande and Belcor. Rio Grande and Belcor
----------------------------------
shall:
9.1.1 Reasonable Efforts. Shall take all commercially reasonable and
------------------
necessary action required to fulfill their obligations under this
Termination Agreement and the transactions contemplated hereby.
9.1.2 Public Announcements. Not make any public announcement related
--------------------
to this Termination Agreement or the transactions contemplated without the
joint approval of Rio Grande and Belcor, except any public disclosure which
Rio Grande (or its affiliates) or Belcor in its good faith judgment
believes is required by law, in which case the party making the disclosure
will consult with the other party prior to making such disclosure.
9.1.3 Conduct of Business. Subsequent to the date hereof and prior to
-------------------
the Closing, each party will continue to conduct its business in
substantially the same manner as heretofore and engage only in business in
the usual and normal course consistent with past practice.
9.2 Covenants of Belcor.
--- -------------------
-11-
<PAGE>
9.2.1 Reports. From the date hereof until the Closing, Belcor
-------
will furnish to Rio Grande the following:
9.2.1.1 Within five (5) days of issuance, duplicate copies
of any general written communications with shareholders,
directors, executive committee(s), or with the financial
community, and any reports filed by Belcor with any security
exchanges or with the Securities and Exchange Commission (the
"SEC").
9.2.1.2 All information, reports, certificates and notices
furnished pursuant to this Section 9.2.1, and any additional or
supplemental information, shall be true and correct when
furnished, to Belcor's best knowledge and belief.
9.2.2 Absence of Certain Changes. From the date hereof until the
--------------------------
Closing Date, except as expressly permitted or contemplated hereby,
Belcor shall not, without Rio Grande's prior express written consent,
issue additional shares of Belcor Common Stock or, other than with
respect to such warrants that are to be issued to K. Glenn Cole, any
other shares which may be issued upon exercise or conversion of
options, warrants, convertible securities or other contractual
obligations outstanding as of the date hereof.
9.2.3 Certain Defaults; Litigation. Belcor shall give prompt
----------------------------
notice to Rio Grande of (a) any notice of default received by Belcor
subsequent to the date of this Agreement under any material instrument
or material agreement to which Belcor is a party or by which it is
bound, which default could, if not remedied, result in a Material
Adverse Change of Belcor taken as a whole, or which would render
incorrect in any material respect any representation made herein, and
(b) any claim or action at law or in equity, or before any
governmental, administrative, or regulatory body or arbitration panel
instituted against Belcor, or of disputes that may result in a suit
against Belcor involving a claim (not covered by insurance) against
Belcor for damages in excess of Twenty-Five Thousand Dollars ($25,000)
or which, if concluded adverse to Belcor, would materially affect the
business or assets of Belcor.
10. MISCELLANEOUS.
-------------
-12-
<PAGE>
10.1 This Termination Agreement, together with the other Belcor
Closing Agreements, the Rio Grande Release, the Deed and the Investors' Rights
Agreement is the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and
written agreements and discussions. This Termination Agreement may be amended
only by an agreement in writing executed by all the parties hereto.
10.2 This Termination Agreement is binding upon and shall inure to the
benefit of the parties hereto and their respective agents, employees, trustees,
insurers, representatives, affiliates and subsidiaries (direct and indirect),
officers, directors, stockholders, assigns, predecessors, successors, attorneys,
and any person claiming derivatively through the parties.
10.3 Each party hereto has cooperated in the drafting and preparation
of this Termination Agreement. Hence, in any construction to be made of this
Termination Agreement, the same shall not be construed against any party.
10.4 In the event of litigation relating to this Termination
Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees.
10.5 If any part of this Termination Agreement is found to be
prohibited, unlawful, void or for any reason unenforceable, then it shall be
deemed severable and separable from the remaining parts and it shall not
invalidate or render unenforceable the remaining parts of this Termination
Agreement.
10.6 Each party shall bear its own expenses with respect to this
Termination Agreement and the transactions contemplated hereby.
10.7 This Termination Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
the conflicts of laws principles thereof.
10.8 This Termination Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
10.9 All of the terms and conditions of the Termination Agreement, as
amended and restated hereby, shall remain in full force and effect. All
references to the Original Termination Agreement or the Termination Agreement in
any other document or instrument shall be deeded to mean the Termination
Agreement as amended and restated hereby. This Agreement shall not constitute
-13-
<PAGE>
a novation of the Original Termination Agreement, but shall constitute an
amendment and restatement thereof.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Termination
Agreement to be executed as of the date first above written.
RIO GRANDE MINING COMPANY BELCOR, INC.
By: /s/ Andrew K. Simpson By: /s/ M. Douglas Caffey
-------------------------- --------------------------
Name: Andrew K. Simpson Name: M. Douglas Caffey
Title: President Title: President
Address: 101 Morgan Lane Address: 18004 Skypark Circle
Suite 180 Irvine, CA 92714
Plainsboro, NJ 08536
By: /s/ Donald Leibsker
--------------------------
Name: Donald Leibsker
Title: Chairman of the Board
Address: 18004 Skypark Circle
Irvine, CA 92714
<PAGE>
EXHIBIT A
---------
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY ANALOGOUS STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT.
RIO GRANDE MINING COMPANY
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
(Void after 5:00 p.m. Pacific time,
on June 26, 2006)
THIS CERTIFICATE CERTIFIES THAT FOR AND IN CONSIDERATION OF TWENTY-FIVE
THOUSAND AND NO DOLLARS ($25,000.00) AND OTHER VALUABLE CONSIDERATION, receipt
of which is hereby acknowledged, BELCOR INC., a California corporation or its
registered assigns (the "Holder"), is entitled to purchase from RIO GRANDE
MINING COMPANY, a Nevada corporation (the "Company"), at any time from the date
hereof to 5:00 p.m., Pacific time, on June 26, 2006 (the "Expiration Date"),
SEVENTEEN MILLION (17,000,000) shares ("Warrant Shares") of fully paid and
nonassessable shares of common stock, par value $.01 per share, of the Company
("Common Stock") at a price of $.24 per share (the "Warrant Price"), or as
otherwise provided herein, subject to the provisions and upon the terms and
conditions hereinafter set forth.
This Warrant is subject to the following additional terms and conditions.
1. Exercisability. Until the Expiration Date, the purchase rights
--------------
represented by this Warrant are exercisable at the option of the Holder, either
as an entirety, or from time to time for any part of the Warrant Shares which
may be purchased hereunder.
2. Reservation of Warrant Shares. The Company agrees at all times to
-----------------------------
reserve a sufficient number of shares of authorized but unissued Common Stock,
when and as required for the purpose of complying with the terms of this
Warrant.
3. No Rights as Shareholder; Notices to Holder. Nothing contained in
-------------------------------------------
this Warrant shall be construed as conferring upon the Holder or its transferees
the right to vote or to receive dividends or to consent or to receive notice as
shareholders in respect of any meeting of shareholders for the election of
directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
<PAGE>
If, however, at any time prior to the expiration of this Warrant and prior
to its exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of Company, any
reclassification or recapitalization of the capital stock of Company or any
consolidation or merger of Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of
Company to, another corporation, or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, or sale of all or substantially
all of its property, assets and business as an entirety) shall be proposed;
then in any one or more of said events, the Company shall give to the Holder (i)
at least 30 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 30 days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, proposed
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, proposed disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed
to the
-2-
<PAGE>
Holder at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 11 hereof.
----------
4. Method of Exercise; Payment; Issuance of New Warrant.
----------------------------------------------------
(a) This Warrant may be exercised by the Holder, in whole or in part,
by the surrender of this Warrant together with a duly executed Purchase Form in
the form attached hereto as Exhibit A-1 at the principal office of the Company
-----------
at 101 Morgan Lane, Suite 180, Plainsboro, New Jersey 08536, or at such other
office designated by the Company in writing to the Holder, and by payment to the
Company in cash, by check, or by cancellation of Company indebtedness, of an
amount equal to the then current Warrant Price (as defined in and determined in
accordance with the provisions of Section 9 hereof) multiplied by the number of
---------
Warrant Shares being purchased (the "Total Exercise Price").
(b) As a complete alternative to an exercise of this Warrant pursuant
to subsection (a) hereof, the Holder may elect to exercise this Warrant in
--------------
whole, but not in part, without being required to pay the Aggregate Warrant
Price (a "Cashless Exercise") in accordance with the terms of this subsection
(the "Net Issuance Right"). Upon electing a Cashless Exercise, the Holder shall
be entitled to receive that number of Warrant Shares equal to the quotient
obtained as the result of dividing (1) the product of (A) the excess of (i) the
Fair Market Value of a Warrant Share on such date over (ii) the then current
Warrant Price (as determined in accordance with the provisions of Section 9
---------
hereof) multiplied by (B) the number of Warrant Shares then issuable under this
Warrant on such date (the "Purchasable Shares") by (2) the Fair Market Value of
a Warrant Share on such date. An election to make a Cashless Exercise shall be
made by surrender of this Warrant together with a duly executed Net Issuance
Form in the form attached hereto as Exhibit B-1 in the manner specified in
-----------
subsection (a) hereof. For the purpose of any computation under this
- --------------
subsection, the Fair Market Value of a Warrant Share shall be deemed to be the
price determined pursuant to the first applicable of the methods set forth in
subsection (b)(1), (b)(2) or (b)(3) hereof.
- ----------------- ------ ------
(1) If shares of Common Stock are traded on a national securities
exchange, in the over-the-counter market, or on a foreign national exchange, the
Fair Market Value of a Warrant Share shall be deemed to be an amount equal to
the quotient determined by dividing (i) the sum of (x) an amount equal to the
average of the daily closing market prices (i.e., the average of the closing bid
and asked prices) for thirty (30) consecutive Trading Days prior to such
determination multiplied by the then outstanding number of shares and (y) an
amount equal to the then current Warrant Price (as determined in accordance with
the provisions of Section 9 hereof) multiplied by the
---------
-3-
<PAGE>
Purchasable Shares by (ii) the sum of (a) the then outstanding number of shares
and (b) the number of Purchasable Shares.
(2) If the Company is subject to a "Material Transaction" (as
defined below in this subsection), the Fair Market Value of a Warrant Share
shall be deemed to be an amount equal to the quotient determined by dividing (i)
the sum of (x) an amount equal to the then current Warrant Price (as determined
in accordance with the provisions of Section 9 hereof) multiplied by the
---------
Purchasable Shares and (y) the total price or consideration to be paid in the
Material Transaction by (ii) the sum of (a) the number of shares of Common Stock
subject to the Material Transaction (or in the case of a sale of all or
substantially all of the Company's assets, all of the outstanding number of
shares, on an as converted basis, other than the Purchasable Shares) and (b) the
number of Purchasable Shares. For purposes of this section, a "Material
Transaction" shall include an initial public offering of Common Stock, a tender
offer for shares of Common Stock or a merger.
(3) If the Fair Market Value per share of Common Stock cannot be
ascertained by any of the methods set forth in subsections b(1) or b(2)
---------------- ----
immediately above, the Fair Market Value per share of outstanding Common Stock
shall be the value determined by the Company's board of directors in its sole
discretion.
(c) In the event of a sale of all or substantially all of the assets
of the Company, and so long as at such time this Warrant has not been previously
exercised in whole or in part, the Holder may elect as a complete alternative to
an exercise of this Warrant pursuant to subsection (a) or subsection (b) hereof
-------------- --------------
to tender to the Company for cancellation this Warrant in exchange for the right
to receive that number of Warrant Shares equal to the greater of (i) 6,250,000
or (ii) the product of (x) 500,000 and (y) the quotient of the Net Proceeds of
the Asset Sale divided by $1,000,000 (an "Asset Sale Warrant Exchange") in
accordance with the terms of this subsection (the "Asset Sale Warrant Exchange
Right"). An election to make an Asset Sale Warrant Exchange shall be made by
surrender of this Warrant together with a duly executed Asset Sale Warrant
Exchange Form in the form attached hereto as Exhibit C-1 in the manner
-----------
specified in subsection (a) hereof. For purposes of this subsection, the "Net
--------------
Proceeds of the Asset Sale" shall mean the gross proceeds from a sale of all or
substantially all of the assets of the Company (not including any liabilities of
the Company as may be assumed as part of such a sale), less the sum of all costs
incurred by the Company in connection with such sale, including, but not limited
to, legal or other professional expenses and title insurance, Phase I or other
environmental reports, surveys, filing, recording, notary, stamp taxes or
-4-
<PAGE>
documentary transfer fees. The amount of Net Proceeds of the Asset Sale shall
be determined solely by the Company's Board of Directors in exercise of its
reasonable judgment.
(d) In the event of any exercise of this Warrant, certificates for the
shares of the number of full Warrant Shares so purchased shall be in the name
of, and delivered to, the Holder, or as the Holder may direct (subject to
restrictions upon transfer contained herein). Such delivery shall be made
within ten (10) days after exercise of this Warrant and at the Company's expense
and, unless this Warrant has been fully exercised or has expired, a new Warrant
representing the number of shares of Common Stock, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
Holder within ten (10) days after exercise of this Warrant.
5. Payment of Taxes. The Company will pay all documentary stamp taxes,
----------------
if any, attributable to the initial issuance of Warrant Shares upon the exercise
of this Warrant; provided, however, that the Company shall not be required to
-----------------
pay any tax or taxes which may be payable in respect of any transfer involved in
the issuance or delivery of any Warrant or certificates for Warrant Shares in a
name other than that of the registered Holder of this Warrant in respect of
which such Warrant Shares are issued.
6. Mutilated or Missing Warrant. In case the certificate evidencing this
----------------------------
Warrant shall be mutilated, lost, stolen or destroyed, the Company may in its
discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant certificate, or in lieu of and in
substitution for this Warrant certificate lost, stolen or destroyed, a new
Warrant certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of this Warrant and indemnity, if requested, also
satisfactory to the Company. The Holder shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
7. Exchange of Warrant Certificates for Other Warrants. This Warrant
---------------------------------------------------
certificate, when surrendered properly endorsed at the principal offices of the
Company set forth in Section 4 hereof, or at such other office designated by the
---------
Company in writing to the Holder, may be exchanged for another certificate or
certificates of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares.
8. Transferability. This Warrant is not transferable, in whole or in
---------------
part, without the express written consent of the
-5-
<PAGE>
Company; and any such consented to transfer shall be evidenced on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant
properly endorsed by the Holder in person or by duly authorized attorney,
together with a written assignment of this Warrant substantially in the form of
Exhibit D-1 hereto duly executed by the Holder or its duly authorized attorney.
- -----------
The Company may treat the holder of record of this Warrant as the absolute owner
hereof for all purposes and shall not be affected by any notice to the contrary.
9. Warrant Price. The price per share at which Warrant Shares shall be
-------------
purchasable upon exercise of this Warrant (the "Warrant Price") shall be $.24
subject to adjustment pursuant to Section 10 hereof.
----------
10. Adjustment in Warrant Price. In the event of changes in the
---------------------------
outstanding Common Stock of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like, the number and class of
shares available under this Warrant in the aggregate and the Warrant Price,
shall be correspondingly adjusted to give the holder of this Warrant, in
exercises for the same aggregate Warrant Price, the total number, class, and
kind of shares as the holder would have owned had this Warrant been exercised
prior to the event and had the holder continued to hold such shares until after
the event requiring adjustment.
(a) Notice of Adjustment. Whenever the number of Warrant Shares
--------------------
purchasable upon the exercise of this Warrant or Warrant Price of such Warrant
Shares is adjusted, as herein provided, the Company shall promptly mail by first
class mail, postage prepaid, to the Holder notice of such adjustment or
adjustments and shall deliver to the Holder a certificate of a firm of
independent public accountants selected by the Board of Directors of the Company
(who may be the regular accountants employed by the Company) setting forth the
number of Warrant Shares purchasable upon the exercise of this Warrant and the
Call Price and Warrant Price of such Warrant Shares after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made. Such
certificate shall be conclusive evidence of the correctness of such adjustment.
(b) No Adjustment for Dividends. Except as provided in Section 10
--------------------------- ----------
hereof, no adjustment in respect of any dividend shall be made during the term
of a Warrant or upon the exercise of a Warrant.
-6-
<PAGE>
(c) Preservation of Purchase Rights Upon Reclassification,
------------------------------------------------------
Consolidation, etc. In case of any consolidation of the Company with or merger
- -------------------
of the Company into another corporation, such successor corporation shall
execute with the Holder a Warrant providing that such Holder shall have the
right thereafter upon payment of the Warrant Price in effect immediately prior
to such action to purchase upon exercise of this Warrant the kind and amount of
shares and/or other consideration which he would have owned or have been
entitled to receive after the happening of such consolidation, merger, sale or
conveyance had such Warrant been exercised immediately prior to such action.
The Company shall mail by first class mail, postage prepaid, to each Holder,
notice of the execution of any such agreement. Such Warrant shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 10 hereof. The provisions of this
----------
subsection 10(c) shall similarly apply to successive consolidations, mergers,
- ----------------
sales or conveyances.
11. Notices. Any notice pursuant to this Warrant by the Company to the
-------
Holder, or by the Holder to the Company, shall be in writing and shall be mailed
first class, postage prepaid, or delivered (a) to the Company at 101 Morgan
Lane, Suite 180, Plainsboro, New Jersey 08536, Attention: Theresa C. Morris, or
(b) to the Holder at 18004 Skypark Circle, Irvine, California 92714, or
delivered to any new holder of record at its respective address on the books of
the Company. Each party hereto may from time to time change the address to
which notices to it are to be delivered or mailed hereunder by notice in writing
to the other party.
12. Successors. All the covenants and provisions of this Warrant by or
----------
for the benefit of the Company or the Holder shall bind and inure to the benefit
of their respective successors and assigns hereunder.
13. Merger or Consolidation of the Company. The Company will not merge or
--------------------------------------
consolidate with or into any other corporation unless the corporation resulting
from such merger or consolidation (if not the Company) shall expressly assume by
supplemental agreement satisfactory in form to the holder of record of this
Warrant and executed and delivered to such holder, the due and punctual
performance and observance of each and every covenant and condition of this
Warrant to be performed and observed by the Company.
14. Applicable Law. This Warrant shall be governed by and construed in
--------------
accordance with the laws of the State of Nevada, without giving effect to
principles of conflict of laws.
-7-
<PAGE>
15. Benefits of this Warrant. Nothing in this Warrant shall be construed
------------------------
to give to any person or corporation other than the Company and the Holder any
legal or equitable right, remedy or claim under this Warrant; but this Warrant
shall be for the sole and exclusive benefit of the Company and the Holder of
this Warrant.
16. Counterparts. This Warrant may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
17. Captions. The captions of the Sections and subsections of this
--------
Warrant have been inserted for convenience only and shall have no substantive
effect.
-8-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and its corporate seal to be impressed hereon and attested by its Secretary or
an Assistant Secretary, as of this 26th day of June, 1996.
RIO GRANDE MINING COMPANY
By: ___________________________
Andrew K. Simpson
President, Chief Executive Officer
<PAGE>
EXHIBIT A-1
RIO GRANDE MINING COMPANY
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for, and to purchase thereunder, ________
shares of the stock provided for therein and requests that certificates for such
shares be issued in the name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security No. or Taxpayer Identification
No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and, if said number of shares shall not be all the shares purchasable
thereunder, that a new Warrant Certificate for the balance remaining of the
shares purchasable under the within Warrant Certificate be registered in the
name of the undersigned Warrantholder or his Assignee as below indicated and
delivered to the address stated below.
DATED: _____________________, 199_
Name of Warrantholder or Assignee:_______________________________
(Please Print)
Address:_________________________________________________________
_________________________________________________________
Signature:_______________________________________________________
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatever, unless this Warrant has been
assigned.
<PAGE>
EXHIBIT B-1
RIO GRANDE MINING COMPANY
NET ISSUANCE FORM
The undersigned hereby irrevocably elects to exercise the Net Issuance
Right represented by the within Warrant for, and to purchase thereunder, shares
of the stock provided for therein and requests that certificates for such shares
be issued in the name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security No. or Taxpayer Identification
No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and authorizes the Company to calculate the number of shares issuable following
such exercise, as determined in accordance with Section 4(b) of the within
Warrant.
DATED: _____________________, 199_
Name of Warrantholder or Assignee:_______________________________
(Please Print)
Address:_________________________________________________________
_________________________________________________________
Signature:_______________________________________________________
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatever, unless this Warrant has been
assigned.
<PAGE>
EXHIBIT C-1
RIO GRANDE MINING COMPANY
ASSET SALE WARRANT EXCHANGE FORM
The undersigned hereby irrevocably elects to exercise the Asset Sale
Warrant Exchange Right represented by the within Warrant for, and to purchase
thereunder, shares of the stock provided for therein and requests that
certificates for such shares be issued in the name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security No. or Taxpayer Identification
No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and authorizes the Company to calculate the number of shares issuable following
such exchange, as determined in accordance with Section 4(c) of the within
Warrant.
DATED: _____________________, 199_
Name of Warrantholder or Assignee:_______________________________
(Please Print)
Address:_________________________________________________________
_________________________________________________________
Signature:_______________________________________________________
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatever, unless this Warrant has been
assigned.
<PAGE>
EXHIBIT D-1
ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
- --------------------------------------------------------------------------------
(Name and Address of Assignee Must Be Printed or Typewritten)
- --------------------------------------------------------------------------------
the within Warrant, hereby irrevocably constituting and appointing
________________________________________________________ Attorney to transfer
said Warrant on the books of the Company, with full power of substitution in the
premises.
DATED: _______________, 199_
-------------------------------
Signature of Registered Holder
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this
Warrant Certificate in every particular,
without alteration or enlargement or any
change whatever, unless this Warrant has
been assigned.
<PAGE>
EXHIBIT B
FORM OF RIO GRANDE RELEASE
This Release, dated as of June 26, 1996, of Rio Grande Mining Company, a
Nevada corporation ("Rio Grande") is made in favor of Belcor Inc., a California
corporation ("Belcor").
WHEREAS, Rio Grande and Belcor have entered into that certain Amended and
Restated Termination Agreement (the "Termination Agreement"), dated as of June
26, 1996, pursuant to which each party terminated any and all obligations of
either party under that certain agreement dated as of December 1, 1993 (the
"Reorganization Agreement"), the agreement, dated July 8, 1994 (the "July 1994
Letter Agreement"), a letter, dated December 29, 1994, from the Rio Grande
President to the Belcor President (the "December 1994 Letter"), and numerous
discussions, documents, correspondences, understandings, agreements and
arrangements between Rio Grande and Belcor relating to various proposed business
combinations and other transactions between Rio Grande and Belcor (collectively,
the "Ancillary Materials");
WHEREAS, the conditions precedent to the performance of Rio Grande and
Belcor under the Termination Agreement have been satisfied, and each party
thereto has otherwise performed its respective obligations thereunder;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein or the context
-------------
otherwise requires, terms used in this Release have the meanings provided in the
Termination Agreement.
2. RELEASE
-------
2.1 Except with respect to obligations created by or arising out of
the Termination Agreement, the Belcor Release, the Call Agreement and the
Investor's Rights Agreement, and the agreements contained as exhibits thereof,
Rio Grande, including its past and present parent companies, divisions,
affiliates and subsidiaries (direct and indirect), predecessors, successors,
assigns, stockholders, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys, and any person claiming derivatively
through any of the above (collectively, the "Rio Grande Releasors"), shall
release and forever discharge Belcor and its past and present parent companies,
divisions, affiliates and subsidiaries (direct and indirect), predecessors,
successors, assigns, partners, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys of and
<PAGE>
from any and all causes of action in law or in equity, suits, debts, liens,
contracts, agreements, promises, liabilities, claims, demands, damages, losses,
attorneys' fees, or costs, of any nature whatsoever, fixed or contingent, known
or unknown, suspected or unsuspected, liquidated or unliquidated, which Rio
Grande now has or may hereafter have against Belcor by reason of any matter,
cause, or thing whatsoever arising or occurring on or before the date hereof,
relating to the Reorganization Agreement, the July 1994 Letter Agreement, the
December 1994 Letter or the Ancillary Materials or any acts or omissions of
Belcor taken or not taken in connection with the Reorganization Agreement, the
July 1994 Letter Agreement, the December 1994 Letter or the Ancillary Materials,
including without limitation on the generality of the foregoing, any and all
claims, demands and causes of action that are, were, could have been or could
hereafter be asserted; except that nothing herein shall constitute a release by
any Rio Grande Releasor of any claim against Mark S. Isaacs.
2.2 Rio Grande expressly waives all rights and benefits which it now
has or may in the future have conferred upon it by virtue of the provisions of
Section 1542 of the California Civil Code or any other statute or law of similar
effect with respect to the adequacy of the settlement made pursuant to the
Termination Agreement and the releases granted hereunder and agrees that this
Release shall be fully effective notwithstanding those provisions. Section 1542
provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
RIO GRANDE HAS SOUGHT THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO REVIEW
THIS WAIVER WITH COUNSEL. RIO GRANDE UNDERSTANDS AND ACKNOWLEDGES THE
SIGNIFICANCE AND CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE PROVISIONS OF
SECTION 1542 AND HEREBY ASSUMES FULL RESPONSIBILITY FOR ANY DAMAGE, LOSS, OR
LIABILITY WHICH IT MAY HEREAFTER INCUR BY REASON OF SUCH WAIVER.
3. ACKNOWLEDGEMENT OF COMPROMISE.
-----------------------------
This Release is the result of a compromise and shall never at any time for
any purpose be considered as an admission of liability or responsibility on the
part of the parties herein released.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, Rio Grande has caused this Release to be executed as of
the date first above written.
RIO GRANDE MINING COMPANY
By: _________________________
Name: Andrew K. Simpson
Title: President
Address: 101 Morgan Lane
Suite 180
Plainsboro, NJ 08536
<PAGE>
EXHIBIT C
FORM OF DEED
DEED WITHOUT WARRANTY
THE STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF PRESIDIO (S)
THAT RIO GRANDE MINING COMPANY, a Nevada corporation ("Grantor"), FOR AND
IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00) in hand paid by
BELCOR INC., a California corporation ("Grantee") whose address is 18004 Skypark
Circle, Irvine, CA 92714, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, has GRANTED, SOLD and
CONVEYED and by these presents does GRANT, SELL and CONVEY unto Grantee all
rights, titles and interest, if any, of the Grantor in the minerals and mineral
rights in, on, under and covered by all of following described lands situated in
Presidio County, Texas (said rights, titles, and interest being hereinafter
referred to collectively as the "Property") and more particularly described as
follows:
ALL of SURV. 2, ABST. 2813, CERT. 49/7109, J. B. LACOSTE, H&TC Ry. Co.
BLOCK No. 7, consisting of 640 acres of land, more or less.
ALL of SURV. 33, ABST. 1728, CERT. 388, M. TARIN, within H&TC Ry. Co. BLOCK
No. 7, consisting of 320 acres of land, more or less.
ALL of SURV. 34, ABST. 1729, CERT. 388, M. TARIN, within H&TC Ry. Co. BLOCK
No. 7, consisting of 320 acres of land, more or less.
ALL of SURV. 186, ABST. 2508 or 84, CERT. 1096, M. CUBIER, within H&TC Ry.
Co. BLOCK No. 7, consisting of 160 acres of land, more or less.
ALL of SURV. 187, ABST. 85, CERT. 1096 or 47/7110, M. CUBIER, within H&TC
Ry. Co. BLOCK No. 7, consisting of 160 acres of land, more or less.
TO HAVE AND TO HOLD the Property, together with the rights and
appurtenances thereto in any wise belonging unto Grantee, its successors and
assigns forever, subject to the matters herein stated.
<PAGE>
This conveyance is made subject to Grantor's right to repurchase the
Property pursuant to that certain Option to Purchase Agreement, dated as of June
26, 1996, between Grantor and Grantee.
NOTWITHSTANDING ANYTHING HEREIN CONTAINED TO THE CONTRARY, THIS CONVEYANCE
IS MADE WITHOUT EXPRESSED OR IMPLIED WARRANTY OF TITLE OR OTHER WARRANTY
(WHETHER STATUTORY, EXPRESS, IMPLIED OR WHICH OTHERWISE ARISE BY COMMON LAW) AND
IS MADE "AS IS, WHERE IS AND WITH ALL FAULTS;" PROVIDED, HOWEVER, THAT GRANTOR
DOES HEREBY REPRESENT THAT IT HAS NOT SOLD, ASSIGNED OR CONVEYED ANY OF THE
PROPERTY PRIOR TO THE DATE HEREOF.
EXECUTED this the __________ day of June, 1996.
RIO GRANDE MINING COMPANY
By: __________________________
Name: Andrew K. Simpson
Title: President
<PAGE>
STATE OF CALIFORNIA)
)
COUNTY OF SONOMA )
On ______________, 1996, before me, ______________________, a Notary Public in
and for said State, personally appeared Andrew K. Simpson, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the within instrument such person, or the entity upon behalf of
which such person acted, executed such instrument.
WITNESS my hand and official seal.
________________________________
(Signature)
My Commission Expires:___________
[Affix Notarial Seal]
AFTER RECORDATION, RETURN TO:
Mr. Timothy Ellwood
Mayer, Brown & Platt
700 Louisiana, Suite 4400
Houston, TX 77002
<PAGE>
EXHIBIT D
FORM OF BELCOR RELEASE
This Release, dated as of June 26, 1996, of Belcor Inc., a California
corporation ("Belcor") is made in favor of Rio Grande Mining Company, a Nevada
corporation ("Rio Grande").
WHEREAS, Rio Grande and Belcor have entered into that certain Amended and
Restated Termination Agreement (the "Termination Agreement"), dated as of June
26, 1996, pursuant to which each party terminated any and all obligations of
either party under that certain agreement dated as of December 1, 1993 (the
"Reorganization Agreement"), the agreement, dated July 8, 1994 (the "July 1994
Letter Agreement"), a letter, dated December 29, 1994, from the Rio Grande
President to the Belcor President (the December 1994 Letter") and numerous
discussions, documents, correspondences, understandings, agreements and
arrangements between Rio Grande and Belcor relating to various proposed business
combinations and other transactions between Rio Grande and Belcor (collectively,
the "Ancillary Materials");
WHEREAS, Belcor, Coastal Capital Partners, L.P., Donald Leibsker and M.
Douglas Caffey have entered into that Amended and Restated Investors' Rights
Agreement (the "Investors' Rights Agreement"), dated as of June 26, 1996;
WHEREAS, the conditions precedent to the performance of Rio Grande and
Belcor under the Termination Agreement have been satisfied, and each party
thereto has otherwise performed its respective obligations thereunder;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein or the context
-------------
otherwise requires, terms used in this Release have the meanings provided in the
Termination Agreement.
2. RELEASE.
-------
2.1 Except with respect to obligations created by or arising out of
the Termination Agreement and the Investors' Rights Agreement, and the exhibits
thereto, Belcor, including its past and present parent companies, divisions,
affiliates and subsidiaries (direct and indirect), predecessors, successors,
assigns, stockholders, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys, and any person claiming derivatively
through any of the above (collectively, the "Belcor Releasors"), shall release
and forever discharge Rio
<PAGE>
Grande and its past and present parent companies, divisions, affiliates and
subsidiaries (direct and indirect), predecessors, successors, assigns, partners,
directors, officers, employees, agents, trustees, representatives, insurers and
attorneys of and from any and all causes of action in law or in equity, suits,
debts, liens, contracts, agreements, promises, liabilities, claims, demands,
damages, losses, attorneys' fees, or costs, of any nature whatsoever, fixed or
contingent, known or unknown, suspected or unsuspected, liquidated or
unliquidated, which Belcor now has or may hereafter have against Rio Grande by
reason of any matter, cause, or thing whatsoever arising or occurring on or
before the date hereof, relating to the Reorganization Agreement, the July 1994
Letter Agreement, the December 1994 Letter, the Ancillary Materials or the Rio
Grande Debt (as defined in the Termination Agreement), or any acts or omissions
of Rio Grande taken or not taken in connection with the Reorganization
Agreement, the July 1994 Letter Agreement, the December 1994 Letter, the
Ancillary Materials or the Rio Grande Debt, or any other transactions,
understandings or arrangements under which the Belcor Releasors may claim a
property right in Rio Grande or the assets of Rio Grande, including without
limitation on the generality of the foregoing, any and all claims, demands and
causes of action that are, were, could have been or could hereafter be asserted;
except that nothing herein shall constitute a release by any Belcor Releasor of
any claim against Mark S. Isaacs.
2.2 Belcor expressly waives all rights and benefits which it now has
or may in the future have conferred upon it by virtue of the provisions of
Section 1542 of the California Civil Code or any other statute or law of similar
effect with respect to the adequacy of the settlement made pursuant to the
Termination Agreement and the releases granted hereunder and agrees that this
Release shall be fully effective notwithstanding those provisions. Section 1542
provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
BELCOR HAS SOUGHT THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO REVIEW
THIS WAIVER WITH COUNSEL. BELCOR UNDERSTANDS AND ACKNOWLEDGES THE SIGNIFICANCE
AND CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE PROVISIONS OF SECTION 1542 AND
HEREBY ASSUMES FULL RESPONSIBILITY FOR ANY DAMAGE, LOSS, OR LIABILITY WHICH IT
MAY HEREAFTER INCUR BY REASON OF SUCH WAIVER.
<PAGE>
3. ACKNOWLEDGEMENT OF COMPROMISE.
-----------------------------
This Release is the result of a compromise and shall never at any time for
any purpose be considered as an admission of liability or responsibility on the
part of the parties herein released.
IN WITNESS WHEREOF, Belcor has caused this Release to be executed as of the
date first above written.
BELCOR, INC.
By: _________________________
Name: M. Douglas Caffey
Title: President
Address: 18004 Skypark Circle
Irvine, CA 92714
By: _________________________
Name: Donald Leibsker
Title: Chairman of the Board
Address: 18004 Skypark Circle
Irvine, CA 92714
<PAGE>
Exhibit E
---------
OPTION TO PURCHASE AGREEMENT
THIS OPTION TO PURCHASE AGREEMENT (this "Agreement") is made as of June 26,
---------
1996 by and between Rio Grande Mining Company, a Nevada corporation ("Rio
---
Grande"), and Belcor Inc., a California corporation ("Belcor").
------
RECITALS
WHEREAS, Rio Grande and Belcor have entered into an Amended and Restated
Termination Agreement (the "Termination Agreement"), dated of even date
---------------------
herewith; and
WHEREAS, this Agreement is an exhibit to, and the execution and delivery of
this Agreement is a condition to, the closing of the Termination Agreement under
which Rio Grande has agreed to convey, without representation or warranty but
subject to this Agreement, unto Belcor all of its right, title and interest to
the mineral rights of approximately 1,600 acres of land located near Shafter,
Texas in Presidio County, Texas (the "Red Hills Property") as more particularly
------------------
described in the Deed (as defined in the Termination Agreement).
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Option to Purchase.
------------------
1.1 Option. Belcor hereby grants Rio Grande an exclusive and
------
irrevocable option (the "Option") to purchase all of Belcor's right, title and
------
interest to the Red Hills Property at a fixed purchase price of $600,000 (the
"Purchase Price") upon the terms and conditions of this Agreement. The term of
- ---------------
the Option shall commence on the date of execution of this Agreement and shall
terminate at 11:59 p.m. (Pacific Time) on June 26, 1999. In order to exercise
the Option, Rio Grande shall give to Belcor not less than 3 days advance written
notice thereof to Belcor prior to the expiration of the term of the Rio Grande
Option. Rio Grande is under no obligation to exercise the Rio Grande Option and
shall not be liable for any penalty for not exercising the Rio Grande Option.
1.2 Transfer of Assets. If Rio Grande exercises the Option, Belcor
------------------
shall sell, convey, transfer, assign, and deliver to Rio Grande, effective as of
the Closing Date, and Rio Grande will acquire from Belcor, effective as of the
Closing Date, all of Belcor's right, title and interest to the Red Hills
Property.
-4-
<PAGE>
2. Other Sale of the Red Hills Property.
------------------------------------
2.1 Notice of Sale. In the event that during the term of the Option
--------------
Belcor receives a Bona Fide Offer proposing a Sale of the Red Hills Property
which Belcor is willing to accept, Belcor shall promptly (and in any event
within two business days) give written notice (the "Offer Notice") to Rio
------------
Grande. The Offer Notice shall set forth all relevant terms and conditions in
connection with the Bona Fide Offer, including, without limitation, the party or
parties making such offer (the "Buyer"), the purchase price, method of payment
-----
thereof, proposed date of closing, in the case of an Offer in which the
consideration offered consists in whole or in part of consideration other than
cash, such information relating to such other consideration as is reasonably
necessary for Rio Grande to be informed of all material facts relating to such
consideration and a copy of the purchase agreement or other document
constituting the Bona Fide Offer.
2.2 Condition to Sale. During the term of the Option, neither Belcor
-----------------
nor any party acting on Belcor's behalf will enter into any agreement or
commitment providing for the Sale of the Red Hills Property or accept a Bona
Fide Offer relating to a proposed Sale of the Red Hills Property, until and
unless ten (10) business days have passed following the receipt by Rio Grande of
the Offer Notice and during such period Rio Grande has not elected to exercise
the Option as provided in Section 1.1.
3. Definitions.
-----------
3.1 "Sale". As used herein, the words "sell", "sale", "transfer" or
------
similar words of conveyance shall mean any sale, transfer, assignment, gift, or
other conveyance of all or any part of the Red Hills Property, or any interest
therein, whether voluntary, involuntary, by operation of law or otherwise.
3.2 "Bona Fide Offer" means a written offer from a Buyer or Buyers
---------------
offering to consummate a transaction which would result in a Sale of the Red
Hills Property; provided that such written offer (and related documents provided
with such offer) shall set forth in reasonable detail the price and other
principal terms upon which the proposed Sale of the Red Hills Property is
proposed to be consummated and such offer will be subject to no conditions other
than execution of the definitive documentation of the terms of such written
offer.
4. Representations and Warranties.
------------------------------
4.1 Belcor represents and warrants to Rio Grande that it has duly
authorized the execution, delivery and performance of this Agreement and that
this Agreement constitutes a legal, valid
-5-
<PAGE>
and binding obligation of Belcor, enforceable against Belcor in accordance with
its terms, subject to general principles of equity and, as to enforcement only,
bankruptcy, insolvency, moratorium or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
4.2 Rio Grande represents and warrants to Belcor that it has duly
authorized the execution, delivery and performance of this Agreement and that
this Agreement constitutes a legal, valid and binding obligation of Rio Grande,
enforceable against Rio Grande in accordance with its terms, subject to general
principles of equity and, as to enforcement only, bankruptcy, insolvency,
moratorium or similar laws at the time in effect affecting the enforceability of
the rights of creditors generally.
5. Belcor Covenants. Belcor covenants that during the term of this
----------------
Agreement and until any Sale of the Red Hills Property as provided in Section 2,
if any, Belcor shall pay prior to delinquency all real estate taxes and
assessments applicable to the Red Hills Property (except as may be contested in
good faith in accordance with any applicable procedure for the contesting of
same), and shall not, without the prior written consent of Rio Grande, which
consent shall not be unreasonably withheld:
5.1 Other Indebtedness. Create, incur, assume, or become or remain
------------------
liable in any manner in respect of, or allow to exist, any indebtedness secured
by any lien or charge against the Red Hills Property.
5.2 Acquisition Liens. Own or acquire or agree to acquire any
-----------------
property of any character related to the Red Hills Property subject to or upon
any mortgage, conditional sale agreement or other title retention agreement that
would create a lien against any portion of the Red Hills Property except liens
in respect of the Red Hills Property imposed by law, which were incurred in the
ordinary course of business (including property tax liens and other similar
liens) and which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such lien and which are bonded over in a manner
reasonably satisfactory to Rio Grande
5.3 Assignment and Encumbrance. Assign or encumber any of its rights
--------------------------
under this Agreement or convey, encumber or dispose (or consent or agree to the
conveyance, encumbrance or disposal) of any interest whatsoever, legal or
beneficial, in the Red Hills Property.
-6-
<PAGE>
6. Closings, Closing Dates and Method of Payment. The date (the "Closing
--------------------------------------------- -------
Date") of the closing (the "Closing") of a transfer of the Red Hills Property
- ---- -------
shall be, upon an exercise of the Option, the 20th business day after the date
on which Rio Grande exercises the Option pursuant to Section 1.1 or such other
date as may be mutually agreed upon by Rio Grande and Belcor. The Closing shall
occur at the offices of Mayer, Brown & Platt in Los Angeles, California or such
other location as may be mutually agreed upon by Rio Grande and Belcor. On the
Closing Date, Belcor shall deliver such instruments and documents as Rio Grande
shall reasonably deem necessary or convenient, including a notarized and
executed deed without warranty (substantially equivalent in form and substance
to the deed without warranty set forth in Exhibit C to the Termination Agreement
with appropriate changes to reflect Belcor as the grantor and Rio Grande as the
grantee) in order to convey, transfer and assign to Rio Grande all of Belcor's
right, title and interest in and to the Red Hills Property and Rio Grande shall
simultaneously pay to Belcor the Purchase Price. Payment of the Purchase Price
may be made at the option of Rio Grande either (i) in readily available funds
(by cashier's check or wire transfer) or (ii) by transfer of securities with a
readily ascertainable market value which have an aggregate market value at the
time of transfer at least equal to such purchase price. If the Closing occurs
prior to the receipt of the tax bill for the calendar year or other applicable
tax period in which the Closing occurs, Belcor and Rio Grande shall prorate
taxes for such calendar year or other applicable tax period based upon the most
recent ascertainable assessed values and tax rates using the tax bill for the
previous calendar year or other applicable tax period. In the event that final
bills are not available or cannot be issued prior to the Closing for any item
being prorated under this Section 4, then Belcor and Rio Grande agree to
allocate such items on a fair and equitable basis as soon as such bills are
available, final adjustment to be made as soon as reasonably possible after the
Closing. Payments by Belcor or Rio Grande, as the case may be, in connection
with the final adjustment shall be due within 30 days of written notice.
7. Notices. Any notice required or permitted under this Agreement shall
-------
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified, upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified, with respect to Coastal at 101 Morgan Lane, Suite 180, Plainsboro, NJ
08536, Attention: Theresa C. Morris, and with respect to Belcor, at 18004
Skypark Circle, Suite 105, Irvine, California 92714, or at such other address as
such party may designate by five days' advance written notice to the other
party.
-7-
<PAGE>
8. Further Assurances. In addition to the acts and deeds recited herein
------------------
and contemplated to be performed, executed and /or delivered by either party,
each party agrees to perform, execute and deliver, but without any obligation to
incur any additional liability or expense, any further deliveries and assurances
as may be reasonably necessary to consummate the transactions contemplated
hereby.
9. Successors and Assigns. This Agreement and all of the provisions
----------------------
hereof will be binding upon and inure to the benefit of the parties hereto and,
as applicable, their respective successors, assigns, heirs, executors and
administrators.
10. Counterparts. This Agreement may be executed in one or more
------------
counterparts, any one of which need not contain the signature of more than one
party, but all such counterparts taken together will constitute one and the same
Agreement.
11. Governing Law. The internal law, and not the law of conflicts, of the
-------------
State of Texas will govern all questions concerning the construction, validity
and interpretation of this Agreement.
12. Amendments and Waivers. Any term of this Agreement may be amended and
----------------------
the observance of any such term may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the parties hereto.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Option to Purchase
Agreement to be executed and delivered as of the date first above written.
RIO GRANDE MINING COMPANY BELCOR, INC.
By: _________________________ By: __________________________
Name: Andrew K. Simpson Name: M. Douglas Caffey
Title: President Title: President
By: __________________________
Name: Donald Leibsker
Title: Chairman of the Board
<PAGE>
EXHIBIT F
OUTSTANDING SECURITIES
Capitalization
- --------------
As of June 26, 1996, Rio Grande had the following securities issued and
outstanding:
1. 16,827,844 shares of Rio Grande Common Stock held by 33 holders.
2. 396.9410 shares of Rio Grande Preferred Stock held by 32 holders.
3. Warrant, dated October 20, 1994, to purchase 35.18 shares of Rio
Grande Common Stock (1,491,414 shares after giving effect to Rio Grande's 1995
recapitalization) at $7,675 per share ($.181 per share after giving effect to
such 1995 recapitalization), held by Coastal.
4. A Promissory Note, dated June 6, 1996, with a current balance of
$900,946 but with an authorized borrowing limit of $1,250,000, held by Coastal
and under which Note Coastal has certain rights to convert such Note into shares
of Rio Grande Common Stock.
Voting or Proxy Agreements
- --------------------------
(1) Stock Restriction Agreement, dated as of May 15, 1995, between Theresa C.
Morris, and Coastal Capital Partners, L.P., a Delaware limited partnership
("Coastal").
(2) Stock Restriction Agreement, dated as of April 18, 1995, between Michael Y.
Gan and Coastal.
(3) Stock Restriction Agreement, dated as of September 22, 1995, between Peter
E. Galli and Coastal.
(4) Stock Restriction Agreement, dated as of April 18, 1995, between Michael Y.
Gan and Coastal.
(5) Proxies as to a total of 4,960,085 shares or Rio Grande Common Stock held by
Mark Isaacs, David Fraser, Edward Patterson, Cynthia M. Hock, Devin D. Hock,
Alexandra MacDonald, Trenwith Capital, Suzanne Bradfield, Noelle McGivern, David
Bunt, Sheri Rushforth, Patrick Brake and Susanne Collins.
<PAGE>
SCHEDULE 7.4
BELCOR LITIGATION
NONE.
-----
<PAGE>
EXHIBIT 99.(U)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY ANALOGOUS STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT.
RIO GRANDE MINING COMPANY
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
(Void after 5:00 p.m. Pacific time,
on June 26, 2006)
THIS CERTIFICATE CERTIFIES THAT FOR AND IN CONSIDERATION OF TWENTY-FIVE
THOUSAND AND NO DOLLARS ($25,000.00) AND OTHER VALUABLE CONSIDERATION, receipt
of which is hereby acknowledged, BELCOR INC., a California corporation or its
registered assigns (the "Holder"), is entitled to purchase from RIO GRANDE
MINING COMPANY, a Nevada corporation (the "Company"), at any time from the date
hereof to 5:00 p.m., Pacific time, on June 26, 2006 (the "Expiration Date"),
SEVENTEEN MILLION (17,000,000) shares ("Warrant Shares") of fully paid and
nonassessable shares of common stock, par value $.01 per share, of the Company
("Common Stock") at a price of $.24 per share (the "Warrant Price"), or as
otherwise provided herein, subject to the provisions and upon the terms and
conditions hereinafter set forth.
This Warrant is subject to the following additional terms and conditions.
1. Exercisability. Until the Expiration Date, the purchase rights
--------------
represented by this Warrant are exercisable at the option of the Holder, either
as an entirety, or from time to time for any part of the Warrant Shares which
may be purchased hereunder.
2. Reservation of Warrant Shares. The Company agrees at all times to
-----------------------------
reserve a sufficient number of shares of authorized but unissued Common Stock,
when and as required for the purpose of complying with the terms of this
Warrant.
3. No Rights as Shareholder; Notices to Holder. Nothing contained in
-------------------------------------------
this Warrant shall be construed as conferring upon the Holder or its transferees
the right to vote or to receive dividends or to consent or to receive notice as
shareholders in respect of any meeting of shareholders for the election of
directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
If, however, at any time prior to the expiration of this
<PAGE>
Warrant and prior to its exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of Company, any
reclassification or recapitalization of the capital stock of Company or any
consolidation or merger of Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of
Company to, another corporation, or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, or sale of all or substantially
all of its property, assets and business as an entirety) shall be proposed;
then in any one or more of said events, the Company shall give to the Holder (i)
at least 30 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 30 days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, proposed
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, proposed disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed
to the Holder at the last address of Holder appearing on the books of the
Company and delivered in accordance with Section 11 hereof.
----------
-2-
<PAGE>
4. Method of Exercise; Payment; Issuance of New Warrant.
----------------------------------------------------
(a) This Warrant may be exercised by the Holder, in whole or in part,
by the surrender of this Warrant together with a duly executed Purchase Form in
the form attached hereto as Exhibit A-1 at the principal office of the Company
-----------
at 101 Morgan Lane, Suite 180, Plainsboro, New Jersey 08536, or at such other
office designated by the Company in writing to the Holder, and by payment to the
Company in cash, by check, or by cancellation of Company indebtedness, of an
amount equal to the then current Warrant Price (as defined in and determined in
accordance with the provisions of Section 9 hereof) multiplied by the number of
---------
Warrant Shares being purchased (the "Total Exercise Price").
(b) As a complete alternative to an exercise of this Warrant pursuant
to subsection (a) hereof, the Holder may elect to exercise this Warrant in
--------------
whole, but not in part, without being required to pay the Aggregate Warrant
Price (a "Cashless Exercise") in accordance with the terms of this subsection
(the "Net Issuance Right"). Upon electing a Cashless Exercise, the Holder shall
be entitled to receive that number of Warrant Shares equal to the quotient
obtained as the result of dividing (1) the product of (A) the excess of (i) the
Fair Market Value of a Warrant Share on such date over (ii) the then current
Warrant Price (as determined in accordance with the provisions of Section 9
---------
hereof) multiplied by (B) the number of Warrant Shares then issuable under this
Warrant on such date (the "Purchasable Shares") by (2) the Fair Market Value of
a Warrant Share on such date. An election to make a Cashless Exercise shall be
made by surrender of this Warrant together with a duly executed Net Issuance
Form in the form attached hereto as Exhibit B-1 in the manner specified in
-----------
subsection (a) hereof. For the purpose of any computation under this
- --------------
subsection, the Fair Market Value of a Warrant Share shall be deemed to be the
price determined pursuant to the first applicable of the methods set forth in
subsection (b)(1), (b)(2) or (b)(3) hereof.
- ---------- ------ ------ ------
(1) If shares of Common Stock are traded on a national securities
exchange, in the over-the-counter market, or on a foreign national exchange, the
Fair Market Value of a Warrant Share shall be deemed to be an amount equal to
the quotient determined by dividing (i) the sum of (x) an amount equal to the
average of the daily closing market prices (i.e., the average of the closing bid
and asked prices) for thirty (30) consecutive Trading Days prior to such
determination multiplied by the then outstanding number of shares and (y) an
amount equal to the then current Warrant Price (as determined in accordance with
the provisions of Section 9 hereof) multiplied by the Purchasable Shares by
---------
(ii) the sum of (a) the then outstanding number of shares and (b) the number of
Purchasable Shares.
(2) If the Company is subject to a "Material
-3-
<PAGE>
Transaction" (as defined below in this subsection), the Fair Market Value of a
Warrant Share shall be deemed to be an amount equal to the quotient determined
by dividing (i) the sum of (x) an amount equal to the then current Warrant Price
(as determined in accordance with the provisions of Section 9 hereof) multiplied
---------
by the Purchasable Shares and (y) the total price or consideration to be paid in
the Material Transaction by (ii) the sum of (a) the number of shares of Common
Stock subject to the Material Transaction (or in the case of a sale of all or
substantially all of the Company's assets, all of the outstanding number of
shares, on an as converted basis, other than the Purchasable Shares) and (b) the
number of Purchasable Shares. For purposes of this section, a "Material
Transaction" shall include an initial public offering of Common Stock, a tender
offer for shares of Common Stock or a merger.
(3) If the Fair Market Value per share of Common Stock cannot be
ascertained by any of the methods set forth in subsections b(1) or b(2)
---------------- ----
immediately above, the Fair Market Value per share of outstanding Common Stock
shall be the value determined by the Company's board of directors in its sole
discretion.
(c) In the event of a sale of all or substantially all of the assets
of the Company, and so long as at such time this Warrant has not been previously
exercised in whole or in part, the Holder may elect as a complete alternative to
an exercise of this Warrant pursuant to subsection (a) or subsection (b) hereof
-------------- --------------
to tender to the Company for cancellation this Warrant in exchange for the right
to receive that number of Warrant Shares equal to the greater of (i) 6,250,000
or (ii) the product of (x) 500,000 and (y) the quotient of the Net Proceeds of
the Asset Sale divided by $1,000,000 (an "Asset Sale Warrant Exchange") in
accordance with the terms of this subsection (the "Asset Sale Warrant Exchange
Right"). An election to make an Asset Sale Warrant Exchange shall be made by
surrender of this Warrant together with a duly executed Asset Sale Warrant
Exchange Form in the form attached hereto as Exhibit C-1 in the manner specified
-----------
in subsection (a) hereof. For purposes of this subsection, the "Net Proceeds of
--------------
the Asset Sale" shall mean the gross proceeds from a sale of all or
substantially all of the assets of the Company (not including any liabilities of
the Company as may be assumed as part of such a sale), less the sum of all costs
incurred by the Company in connection with such sale, including, but not limited
to, legal or other professional expenses and title insurance, Phase I or other
environmental reports, surveys, filing, recording, notary, stamp taxes or
documentary transfer fees. The amount of Net Proceeds of the Asset Sale shall
be determined solely by the Company's Board of Directors in exercise of its
reasonable judgment.
(d) In the event of any exercise of this Warrant,
-4-
<PAGE>
certificates for the shares of the number of full Warrant Shares so purchased
shall be in the name of, and delivered to, the Holder, or as the Holder may
direct (subject to restrictions upon transfer contained herein). Such delivery
shall be made within ten (10) days after exercise of this Warrant and at the
Company's expense and, unless this Warrant has been fully exercised or has
expired, a new Warrant representing the number of shares of Common Stock, if
any, with respect to which this Warrant shall not then have been exercised shall
also be issued to the Holder within ten (10) days after exercise of this
Warrant.
5. Payment of Taxes. The Company will pay all documentary stamp taxes,
----------------
if any, attributable to the initial issuance of Warrant Shares upon the exercise
of this Warrant; provided, however, that the Company shall not be required to
--------- --------
pay any tax or taxes which may be payable in respect of any transfer involved in
the issuance or delivery of any Warrant or certificates for Warrant Shares in a
name other than that of the registered Holder of this Warrant in respect of
which such Warrant Shares are issued.
6. Mutilated or Missing Warrant. In case the certificate evidencing this
----------------------------
Warrant shall be mutilated, lost, stolen or destroyed, the Company may in its
discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant certificate, or in lieu of and in
substitution for this Warrant certificate lost, stolen or destroyed, a new
Warrant certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of this Warrant and indemnity, if requested, also
satisfactory to the Company. The Holder shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
7. Exchange of Warrant Certificates for Other Warrants. This Warrant
---------------------------------------------------
certificate, when surrendered properly endorsed at the principal offices of the
Company set forth in Section 4 hereof, or at such other office designated by the
---------
Company in writing to the Holder, may be exchanged for another certificate or
certificates of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrant Shares.
8. Transferability. This Warrant is not transferable, in whole or in
---------------
part, without the express written consent of the Company; and any such consented
to transfer shall be evidenced on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant properly endorsed by the Holder in
person or by duly authorized attorney, together with a written assignment of
this Warrant substantially in the form of Exhibit D-1 hereto duly executed by
-----------
the Holder or its duly authorized
-5-
<PAGE>
attorney. The Company may treat the holder of record of this Warrant as the
absolute owner hereof for all purposes and shall not be affected by any notice
to the contrary.
9. Warrant Price. The price per share at which Warrant Shares shall be
-------------
purchasable upon exercise of this Warrant (the "Warrant Price") shall be $.24
subject to adjustment pursuant to Section 10 hereof.
----------
10. Adjustment in Warrant Price. In the event of changes in the
---------------------------
outstanding Common Stock of the Company by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like, the number and class of
shares available under this Warrant in the aggregate and the Warrant Price,
shall be correspondingly adjusted to give the holder of this Warrant, in
exercises for the same aggregate Warrant Price, the total number, class, and
kind of shares as the holder would have owned had this Warrant been exercised
prior to the event and had the holder continued to hold such shares until after
the event requiring adjustment.
(a) Notice of Adjustment. Whenever the number of Warrant Shares
--------------------
purchasable upon the exercise of this Warrant or Warrant Price of such Warrant
Shares is adjusted, as herein provided, the Company shall promptly mail by first
class mail, postage prepaid, to the Holder notice of such adjustment or
adjustments and shall deliver to the Holder a certificate of a firm of
independent public accountants selected by the Board of Directors of the Company
(who may be the regular accountants employed by the Company) setting forth the
number of Warrant Shares purchasable upon the exercise of this Warrant and the
Call Price and Warrant Price of such Warrant Shares after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made. Such
certificate shall be conclusive evidence of the correctness of such adjustment.
(b) No Adjustment for Dividends. Except as provided in Section 10
--------------------------- ----------
hereof, no adjustment in respect of any dividend shall be made during the term
of a Warrant or upon the exercise of a Warrant.
(c) Preservation of Purchase Rights Upon Reclassification,
------------------------------------------------------
Consolidation, etc. In case of any consolidation of the Company with or merger
- -------------------
of the Company into another corporation, such successor corporation shall
execute with the Holder a Warrant providing that such Holder shall have the
right thereafter upon payment of the Warrant Price in effect immediately prior
to such action to purchase upon exercise of this Warrant the kind and amount of
shares and/or other consideration which he would have owned or have been
entitled to
-6-
<PAGE>
receive after the happening of such consolidation, merger, sale or conveyance
had such Warrant been exercised immediately prior to such action. The Company
shall mail by first class mail, postage prepaid, to each Holder, notice of the
execution of any such agreement. Such Warrant shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in Section 10 hereof. The provisions of this subsection 10(c)
---------- ----------------
shall similarly apply to successive consolidations, mergers, sales or
conveyances.
11. Notices. Any notice pursuant to this Warrant by the Company to the
-------
Holder, or by the Holder to the Company, shall be in writing and shall be mailed
first class, postage prepaid, or delivered (a) to the Company at 101 Morgan
Lane, Suite 180, Plainsboro, New Jersey 08536, Attention: Theresa C. Morris, or
(b) to the Holder at 18004 Skypark Circle, Irvine, California 92714, or
delivered to any new holder of record at its respective address on the books of
the Company. Each party hereto may from time to time change the address to
which notices to it are to be delivered or mailed hereunder by notice in writing
to the other party.
12. Successors. All the covenants and provisions of this Warrant by or
----------
for the benefit of the Company or the Holder shall bind and inure to the benefit
of their respective successors and assigns hereunder.
13. Merger or Consolidation of the Company. The Company will not merge or
--------------------------------------
consolidate with or into any other corporation unless the corporation resulting
from such merger or consolidation (if not the Company) shall expressly assume by
supplemental agreement satisfactory in form to the holder of record of this
Warrant and executed and delivered to such holder, the due and punctual
performance and observance of each and every covenant and condition of this
Warrant to be performed and observed by the Company.
14. Applicable Law. This Warrant shall be governed by and construed in
--------------
accordance with the laws of the State of Nevada, without giving effect to
principles of conflict of laws.
15. Benefits of this Warrant. Nothing in this Warrant shall be construed
------------------------
to give to any person or corporation other than the Company and the Holder any
legal or equitable right, remedy or claim under this Warrant; but this Warrant
shall be for the sole and exclusive benefit of the Company and the Holder of
this Warrant.
16. Counterparts. This Warrant may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such
-7-
<PAGE>
counterparts shall together constitute but one and the same instrument.
17. Captions. The captions of the Sections and subsections of this
--------
Warrant have been inserted for convenience only and shall have no substantive
effect.
-8-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and its corporate seal to be impressed hereon and attested by its Secretary or
an Assistant Secretary, as of this 26th day of June, 1996.
RIO GRANDE MINING COMPANY
By: /s/ Andrew K. Simpson
---------------------
Andrew K. Simpson
President, Chief Executive Officer
-9-
<PAGE>
EXHIBIT A-1
RIO GRANDE MINING COMPANY
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for, and to purchase thereunder,
________shares of the stock provided for therein and requests that certificates
for such shares be issued in the name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security No. or Taxpayer Identification
No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and, if said number of shares shall not be all the shares purchasable
thereunder, that a new Warrant Certificate for the balance remaining of the
shares purchasable under the within Warrant Certificate be registered in the
name of the undersigned Warrantholder or his Assignee as below indicated and
delivered to the address stated below.
DATED: __________________, 199__
Name of Warrantholder or Assignee:----------------------------------------------
(Please Print)
Address:------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature:----------------------------------------------------------------------
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatever, unless this Warrant has been
assigned.
<PAGE>
EXHIBIT B-1
RIO GRANDE MINING COMPANY
NET ISSUANCE FORM
The undersigned hereby irrevocably elects to exercise the Net Issuance
Right represented by the within Warrant for, and to purchase thereunder, shares
of the stock provided for therein and requests that certificates for such shares
be issued in the name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security No. or Taxpayer Identification
No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and authorizes the Company to calculate the number of shares issuable following
such exercise, as determined in accordance with Section 4(b) of the within
Warrant.
DATED: ________________, 199__
Name of Warrantholder or Assignee:----------------------------------------------
(Please Print)
Address:------------------------------------------------------------------------
------------------------------------------------------------------------
Signature:----------------------------------------------------------------------
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatever, unless this Warrant has been
assigned.
<PAGE>
EXHIBIT C-1
RIO GRANDE MINING COMPANY
ASSET SALE WARRANT EXCHANGE FORM
The undersigned hereby irrevocably elects to exercise the Asset Sale
Warrant Exchange Right represented by the within Warrant for, and to purchase
thereunder, shares of the stock provided for therein and requests that
certificates for such shares be issued in the name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Social Security No. or Taxpayer Identification
No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and authorizes the Company to calculate the number of shares issuable following
such exchange, as determined in accordance with Section 4(c) of the within
Warrant.
DATED: __________________, 199__
Name of Warrantholder or Assignee:----------------------------------------------
(Please Print)
Address:------------------------------------------------------------------------
------------------------------------------------------------------------
Signature:----------------------------------------------------------------------
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatever, unless this Warrant has been
assigned.
<PAGE>
EXHIBIT D-1
ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- --------------------------------------------------------------------------------
(Name and Address of Assignee Must Be Printed or Typewritten)
- --------------------------------------------------------------------------------
the within Warrant, hereby irrevocably constituting and appointing
- ----------------------------------------------------------------------- Attorney
to transfer said Warrant on the books of the Company, with full power of
substitution in the premises.
DATED: _________________, 199__
----------------------------------
Signature of Registered Holder
Signature Guaranteed: NOTE: The above signature must correspond with the
name as written upon the face of this
Warrant Certificate in every particular,
without alteration or enlargement or any
change whatever, unless this Warrant has
been assigned.
<PAGE>
EXHIBIT 99.(V)
RIO GRANDE RELEASE
This Release, dated as of June 26, 1996, of Rio Grande Mining Company, a
Nevada corporation ("Rio Grande") is made in favor of Belcor Inc., a California
corporation ("Belcor").
WHEREAS, Rio Grande and Belcor have entered into that certain Amended and
Restated Termination Agreement (the "Termination Agreement"), dated as of June
26, 1996, pursuant to which each party terminated any and all obligations of
either party under that certain agreement dated as of December 1, 1993 (the
"Reorganization Agreement"), the agreement, dated July 8, 1994 (the "July 1994
Letter Agreement"), a letter, dated December 29, 1994, from the Rio Grande
President to the Belcor President (the "December 1994 Letter"), and numerous
discussions, documents, correspondences, understandings, agreements and
arrangements between Rio Grande and Belcor relating to various proposed business
combinations and other transactions between Rio Grande and Belcor (collectively,
the "Ancillary Materials");
WHEREAS, the conditions precedent to the performance of Rio Grande and
Belcor under the Termination Agreement have been satisfied, and each party
thereto has otherwise performed its respective obligations thereunder;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein or the context
-------------
otherwise requires, terms used in this Release have the meanings provided in the
Termination Agreement.
2. RELEASE
-------
2.1 Except with respect to obligations created by or arising out of
the Termination Agreement, the Belcor Release, the Call Agreement and the
Investor's Rights Agreement, and the agreements contained as exhibits thereof,
Rio Grande, including its past and present parent companies, divisions,
affiliates and subsidiaries (direct and indirect), predecessors, successors,
assigns, stockholders, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys, and any person claiming derivatively
through any of the above (collectively, the "Rio Grande Releasors"), shall
release and forever discharge Belcor and its past and present parent companies,
divisions, affiliates and subsidiaries (direct and indirect), predecessors,
successors, assigns, partners, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys of and from any and all causes of action
in law or in equity, suits, debts, liens, contracts, agreements, promises,
liabilities, claims, demands, damages, losses, attorneys' fees, or costs, of
<PAGE>
any nature whatsoever, fixed or contingent, known or unknown, suspected or
unsuspected, liquidated or unliquidated, which Rio Grande now has or may
hereafter have against Belcor by reason of any matter, cause, or thing
whatsoever arising or occurring on or before the date hereof, relating to the
Reorganization Agreement, the July 1994 Letter Agreement, the December 1994
Letter or the Ancillary Materials or any acts or omissions of Belcor taken or
not taken in connection with the Reorganization Agreement, the July 1994 Letter
Agreement, the December 1994 Letter or the Ancillary Materials, including
without limitation on the generality of the foregoing, any and all claims,
demands and causes of action that are, were, could have been or could hereafter
be asserted; except that nothing herein shall constitute a release by any Rio
Grande Releasor of any claim against Mark S. Isaacs.
2.2 Rio Grande expressly waives all rights and benefits which it now
has or may in the future have conferred upon it by virtue of the provisions of
Section 1542 of the California Civil Code or any other statute or law of similar
effect with respect to the adequacy of the settlement made pursuant to the
Termination Agreement and the releases granted hereunder and agrees that this
Release shall be fully effective notwithstanding those provisions. Section 1542
provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
RIO GRANDE HAS SOUGHT THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO REVIEW
THIS WAIVER WITH COUNSEL. RIO GRANDE UNDERSTANDS AND ACKNOWLEDGES THE
SIGNIFICANCE AND CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE PROVISIONS OF
SECTION 1542 AND HEREBY ASSUMES FULL RESPONSIBILITY FOR ANY DAMAGE, LOSS, OR
LIABILITY WHICH IT MAY HEREAFTER INCUR BY REASON OF SUCH WAIVER.
3. ACKNOWLEDGEMENT OF COMPROMISE.
-----------------------------
This Release is the result of a compromise and shall never at any time for
any purpose be considered as an admission of liability or responsibility on the
part of the parties herein released.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, Rio Grande has caused this Release to be executed as of
the date first above written.
RIO GRANDE MINING COMPANY
By: /s/ Andrew K. Simpson
-------------------------
Name: Andrew K. Simpson
Title: President
Address: 101 Morgan Lane
Suite 180
Plainsboro, NJ 08536
<PAGE>
EXHIBIT 99.(W)
DEED WITHOUT WARRANTY
THE STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF PRESIDIO (S)
THAT RIO GRANDE MINING COMPANY, a Nevada corporation ("Grantor"), FOR AND
IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00) in hand paid by
BELCOR INC., a California corporation ("Grantee") whose address is 18004 Skypark
Circle, Irvine, CA 92714, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, has GRANTED, SOLD and
CONVEYED and by these presents does GRANT, SELL and CONVEY unto Grantee all
rights, titles and interest, if any, of the Grantor in the minerals and mineral
rights in, on, under and covered by all of following described lands situated in
Presidio County, Texas (said rights, titles, and interest being hereinafter
referred to collectively as the "Property") and more particularly described as
follows:
ALL of SURV. 2, ABST. 2813, CERT. 49/7109, J. B. LACOSTE, H&TC Ry. Co.
BLOCK No. 7, consisting of 640 acres of land, more or less.
ALL of SURV. 33, ABST. 1728, CERT. 388, M. TARIN, within H&TC Ry. Co. BLOCK
No. 7, consisting of 320 acres of land, more or less.
ALL of SURV. 34, ABST. 1729, CERT. 388, M. TARIN, within H&TC Ry. Co. BLOCK
No. 7, consisting of 320 acres of land, more or less.
ALL of SURV. 186, ABST. 2508 or 84, CERT. 1096, M. CUBIER, within H&TC Ry.
Co. BLOCK No. 7, consisting of 160 acres of land, more or less.
ALL of SURV. 187, ABST. 85, CERT. 1096 or 47/7110, M. CUBIER, within H&TC
Ry. Co. BLOCK No. 7, consisting of 160 acres of land, more or less.
TO HAVE AND TO HOLD the Property, together with the rights and
appurtenances thereto in any wise belonging unto Grantee, its successors and
assigns forever, subject to the matters herein stated.
<PAGE>
This conveyance is made subject to Grantor's right to repurchase the
Property pursuant to that certain Option to Purchase Agreement, dated as of June
26, 1996, between Grantor and Grantee.
NOTWITHSTANDING ANYTHING HEREIN CONTAINED TO THE CONTRARY, THIS CONVEYANCE
IS MADE WITHOUT EXPRESSED OR IMPLIED WARRANTY OF TITLE OR OTHER WARRANTY
(WHETHER STATUTORY, EXPRESS, IMPLIED OR WHICH OTHERWISE ARISE BY COMMON LAW) AND
IS MADE "AS IS, WHERE IS AND WITH ALL FAULTS;" PROVIDED, HOWEVER, THAT GRANTOR
DOES HEREBY REPRESENT THAT IT HAS NOT SOLD, ASSIGNED OR CONVEYED ANY OF THE
PROPERTY PRIOR TO THE DATE HEREOF.
EXECUTED this the 26th day of June, 1996.
RIO GRANDE MINING COMPANY
By: /s/ Andrew K. Simpson
----------------------------
Name: Andrew K. Simpson
Title: President
<PAGE>
STATE OF CALIFORNIA)
)
COUNTY OF SONOMA )
On 6-26, 1996, before me, Darche C. Knudson, a Notary Public in and for said
State, personally appeared Andrew K. Simpson, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
within instrument such person, or the entity upon behalf of which such person
acted, executed such instrument.
WITNESS my hand and official seal.
/s/ Darche C. Knudson
----------------------
(Signature)
My Commission Expires: 8-18-97
[Affix Notarial Seal]
AFTER RECORDATION, RETURN TO:
Mr. Timothy Ellwood
Mayer, Brown & Platt
700 Louisiana, Suite 4400
Houston, TX 77002
<PAGE>
EXHIBIT 99.(X)
BELCOR RELEASE
This Release, dated as of June 26, 1996, of Belcor Inc., a California
corporation ("Belcor") is made in favor of Rio Grande Mining Company, a Nevada
corporation ("Rio Grande").
WHEREAS, Rio Grande and Belcor have entered into that certain Amended and
Restated Termination Agreement (the "Termination Agreement"), dated as of June
26, 1996, pursuant to which each party terminated any and all obligations of
either party under that certain agreement dated as of December 1, 1993 (the
"Reorganization Agreement"), the agreement, dated July 8, 1994 (the "July 1994
Letter Agreement"), a letter, dated December 29, 1994, from the Rio Grande
President to the Belcor President (the December 1994 Letter") and numerous
discussions, documents, correspondences, understandings, agreements and
arrangements between Rio Grande and Belcor relating to various proposed business
combinations and other transactions between Rio Grande and Belcor (collectively,
the "Ancillary Materials");
WHEREAS, Belcor, Coastal Capital Partners, L.P., Donald Leibsker and M.
Douglas Caffey have entered into that Amended and Restated Investors' Rights
Agreement (the "Investors' Rights Agreement"), dated as of June 26, 1996;
WHEREAS, the conditions precedent to the performance of Rio Grande and
Belcor under the Termination Agreement have been satisfied, and each party
thereto has otherwise performed its respective obligations thereunder;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein or the context
-------------
otherwise requires, terms used in this Release have the meanings provided in the
Termination Agreement.
2. RELEASE.
-------
2.1 Except with respect to obligations created by or arising out of
the Termination Agreement and the Investors' Rights Agreement, and the exhibits
thereto, Belcor, including its past and present parent companies, divisions,
affiliates and subsidiaries (direct and indirect), predecessors, successors,
assigns, stockholders, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys, and any person claiming derivatively
through any of the above (collectively, the "Belcor Releasors"), shall release
and forever discharge Rio Grande and its past and present parent companies,
divisions, affiliates and subsidiaries (direct and indirect), predecessors,
successors, assigns, partners, directors, officers, employees,
<PAGE>
agents, trustees, representatives, insurers and attorneys of and from any and
all causes of action in law or in equity, suits, debts, liens, contracts,
agreements, promises, liabilities, claims, demands, damages, losses, attorneys'
fees, or costs, of any nature whatsoever, fixed or contingent, known or unknown,
suspected or unsuspected, liquidated or unliquidated, which Belcor now has or
may hereafter have against Rio Grande by reason of any matter, cause, or thing
whatsoever arising or occurring on or before the date hereof, relating to the
Reorganization Agreement, the July 1994 Letter Agreement, the December 1994
Letter, the Ancillary Materials or the Rio Grande Debt (as defined in the
Termination Agreement), or any acts or omissions of Rio Grande taken or not
taken in connection with the Reorganization Agreement, the July 1994 Letter
Agreement, the December 1994 Letter, the Ancillary Materials or the Rio Grande
Debt, or any other transactions, understandings or arrangements under which the
Belcor Releasors may claim a property right in Rio Grande or the assets of Rio
Grande, including without limitation on the generality of the foregoing, any and
all claims, demands and causes of action that are, were, could have been or
could hereafter be asserted; except that nothing herein shall constitute a
release by any Belcor Releasor of any claim against Mark S. Isaacs.
2.2 Belcor expressly waives all rights and benefits which it now has
or may in the future have conferred upon it by virtue of the provisions of
Section 1542 of the California Civil Code or any other statute or law of similar
effect with respect to the adequacy of the settlement made pursuant to the
Termination Agreement and the releases granted hereunder and agrees that this
Release shall be fully effective notwithstanding those provisions. Section 1542
provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
BELCOR HAS SOUGHT THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO REVIEW
THIS WAIVER WITH COUNSEL. BELCOR UNDERSTANDS AND ACKNOWLEDGES THE SIGNIFICANCE
AND CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE PROVISIONS OF SECTION 1542 AND
HEREBY ASSUMES FULL RESPONSIBILITY FOR ANY DAMAGE, LOSS, OR LIABILITY WHICH IT
MAY HEREAFTER INCUR BY REASON OF SUCH WAIVER.
<PAGE>
3. ACKNOWLEDGEMENT OF COMPROMISE.
-----------------------------
This Release is the result of a compromise and shall never at any time for
any purpose be considered as an admission of liability or responsibility on the
part of the parties herein released.
IN WITNESS WHEREOF, Belcor has caused this Release to be executed as of the
date first above written.
BELCOR, INC.
By: /s/ M. Douglas Caffey
--------------------------
Name: M. Douglas Caffey
Title: President
Address: 18004 Skypark Circle
Irvine, CA 92714
By: /s/ Donald Leibsker
--------------------------
Name: Donald Leibsker
Title: Chairman of the Board
Address: 18004 Skypark Circle
Irvine, CA 92714
<PAGE>
EXHIBIT 99.(Y)
OPTION TO PURCHASE AGREEMENT
THIS OPTION TO PURCHASE AGREEMENT (this "Agreement") is made as of June 26,
---------
1996 by and between Rio Grande Mining Company, a Nevada corporation ("Rio
---
Grande"), and Belcor Inc., a California corporation ("Belcor").
- ------ ------
RECITALS
WHEREAS, Rio Grande and Belcor have entered into an Amended and Restated
Termination Agreement (the "Termination Agreement"), dated of even date
---------------------
herewith; and
WHEREAS, this Agreement is an exhibit to, and the execution and delivery of
this Agreement is a condition to, the closing of the Termination Agreement under
which Rio Grande has agreed to convey, without representation or warranty but
subject to this Agreement, unto Belcor all of its right, title and interest to
the mineral rights of approximately 1,600 acres of land located near Shafter,
Texas in Presidio County, Texas (the "Red Hills Property") as more particularly
------------------
described in the Deed (as defined in the Termination Agreement).
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Option to Purchase.
------------------
1.1 Option. Belcor hereby grants Rio Grande an exclusive and irrevocable
------
option (the "Option") to purchase all of Belcor's right, title and interest to
------
the Red Hills Property at a fixed purchase price of $600,000 (the "Purchase
--------
Price") upon the terms and conditions of this Agreement. The term of the Option
- -----
shall commence on the date of execution of this Agreement and shall terminate at
11:59 p.m. (Pacific Time) on June 26, 1999. In order to exercise the Option,
Rio Grande shall give to Belcor not less than 3 days advance written notice
thereof to Belcor prior to the expiration of the term of the Rio Grande Option.
Rio Grande is under no obligation to exercise the Rio Grande Option and shall
not be liable for any penalty for not exercising the Rio Grande Option.
1.2 Transfer of Assets. If Rio Grande exercises the Option, Belcor shall
------------------
sell, convey, transfer, assign, and deliver to Rio Grande, effective as of the
Closing Date, and Rio Grande will acquire from Belcor, effective as of the
Closing Date, all of Belcor's right, title and interest to the Red Hills
Property.
2. Other Sale of the Red Hills Property.
------------------------------------
<PAGE>
2.1 Notice of Sale. In the event that during the term of the Option
--------------
Belcor receives a Bona Fide Offer proposing a Sale of the Red Hills Property
which Belcor is willing to accept, Belcor shall promptly (and in any event
within two business days) give written notice (the "Offer Notice") to Rio
------------
Grande. The Offer Notice shall set forth all relevant terms and conditions in
connection with the Bona Fide Offer, including, without limitation, the party or
parties making such offer (the "Buyer"), the purchase price, method of payment
-----
thereof, proposed date of closing, in the case of an Offer in which the
consideration offered consists in whole or in part of consideration other than
cash, such information relating to such other consideration as is reasonably
necessary for Rio Grande to be informed of all material facts relating to such
consideration and a copy of the purchase agreement or other document
constituting the Bona Fide Offer.
2.2 Condition to Sale. During the term of the Option, neither Belcor nor
-----------------
any party acting on Belcor's behalf will enter into any agreement or commitment
providing for the Sale of the Red Hills Property or accept a Bona Fide Offer
relating to a proposed Sale of the Red Hills Property, until and unless ten (10)
business days have passed following the receipt by Rio Grande of the Offer
Notice and during such period Rio Grande has not elected to exercise the Option
as provided in Section 1.1.
3. Definitions.
-----------
3.1 "Sale". As used herein, the words "sell", "sale", "transfer" or
------
similar words of conveyance shall mean any sale, transfer, assignment, gift, or
other conveyance of all or any part of the Red Hills Property, or any interest
therein, whether voluntary, involuntary, by operation of law or otherwise.
3.2 "Bona Fide Offer" means a written offer from a Buyer or Buyers
---------------
offering to consummate a transaction which would result in a Sale of the Red
Hills Property; provided that such written offer (and related documents provided
with such offer) shall set forth in reasonable detail the price and other
principal terms upon which the proposed Sale of the Red Hills Property is
proposed to be consummated and such offer will be subject to no conditions other
than execution of the definitive documentation of the terms of such written
offer.
4. Representations and Warranties.
------------------------------
4.1 Belcor represents and warrants to Rio Grande that it has duly
authorized the execution, delivery and performance of this Agreement and that
this Agreement constitutes a legal, valid and binding obligation of Belcor,
enforceable against Belcor in accordance with its terms, subject to general
principles of equity and, as to enforcement only, bankruptcy, insolvency,
moratorium or similar laws at the time in effect affecting the enforceability of
the rights of creditors generally.
<PAGE>
4.2 Rio Grande represents and warrants to Belcor that it has duly
authorized the execution, delivery and performance of this Agreement and that
this Agreement constitutes a legal, valid and binding obligation of Rio Grande,
enforceable against Rio Grande in accordance with its terms, subject to general
principles of equity and, as to enforcement only, bankruptcy, insolvency,
moratorium or similar laws at the time in effect affecting the enforceability of
the rights of creditors generally.
5. Belcor Covenants. Belcor covenants that during the term of this
----------------
Agreement and until any Sale of the Red Hills Property as provided in Section 2,
if any, Belcor shall pay prior to delinquency all real estate taxes and
assessments applicable to the Red Hills Property (except as may be contested in
good faith in accordance with any applicable procedure for the contesting of
same), and shall not, without the prior written consent of Rio Grande, which
consent shall not be unreasonably withheld:
5.1 Other Indebtedness. Create, incur, assume, or become or remain liable
------------------
in any manner in respect of, or allow to exist, any indebtedness secured by any
lien or charge against the Red Hills Property.
5.2 Acquisition Liens. Own or acquire or agree to acquire any property of
-----------------
any character related to the Red Hills Property subject to or upon any mortgage,
conditional sale agreement or other title retention agreement that would create
a lien against any portion of the Red Hills Property except liens in respect of
the Red Hills Property imposed by law, which were incurred in the ordinary
course of business (including property tax liens and other similar liens) and
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
or asset subject to such lien and which are bonded over in a manner reasonably
satisfactory to Rio Grande
5.3 Assignment and Encumbrance. Assign or encumber any of its rights
--------------------------
under this Agreement or convey, encumber or dispose (or consent or agree to the
conveyance, encumbrance or disposal) of any interest whatsoever, legal or
beneficial, in the Red Hills Property.
6. Closings, Closing Dates and Method of Payment. The date (the "Closing
--------------------------------------------- -------
Date") of the closing (the "Closing") of a transfer of the Red Hills Property
- ---- -------
shall be, upon an exercise of the Option, the 20th business day after the date
on which Rio Grande exercises the Option pursuant to Section 1.1 or such other
date as may be mutually agreed upon by Rio Grande and Belcor. The Closing shall
occur at the offices of Mayer, Brown & Platt in Los Angeles, California or such
other location as may be mutually agreed upon by Rio Grande and Belcor. On the
Closing Date, Belcor shall deliver such instruments and documents as Rio Grande
<PAGE>
shall reasonably deem necessary or convenient, including a notarized and
executed deed without warranty (substantially equivalent in form and substance
to the deed without warranty set forth in Exhibit C to the Termination Agreement
with appropriate changes to reflect Belcor as the grantor and Rio Grande as the
grantee) in order to convey, transfer and assign to Rio Grande all of Belcor's
right, title and interest in and to the Red Hills Property and Rio Grande shall
simultaneously pay to Belcor the Purchase Price. Payment of the Purchase Price
may be made at the option of Rio Grande either (i) in readily available funds
(by cashier's check or wire transfer) or (ii) by transfer of securities with a
readily ascertainable market value which have an aggregate market value at the
time of transfer at least equal to such purchase price. If the Closing occurs
prior to the receipt of the tax bill for the calendar year or other applicable
tax period in which the Closing occurs, Belcor and Rio Grande shall prorate
taxes for such calendar year or other applicable tax period based upon the most
recent ascertainable assessed values and tax rates using the tax bill for the
previous calendar year or other applicable tax period. In the event that final
bills are not available or cannot be issued prior to the Closing for any item
being prorated under this Section 4, then Belcor and Rio Grande agree to
allocate such items on a fair and equitable basis as soon as such bills are
available, final adjustment to be made as soon as reasonably possible after the
Closing. Payments by Belcor or Rio Grande, as the case may be, in connection
with the final adjustment shall be due within 30 days of written notice.
7. Notices. Any notice required or permitted under this Agreement shall
-------
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified, upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified, with respect to Coastal at 101 Morgan Lane, Suite 180, Plainsboro, NJ
08536, Attention: Theresa C. Morris, and with respect to Belcor, at 18004
Skypark Circle, Suite 105, Irvine, California 92714, or at such other address as
such party may designate by five days' advance written notice to the other
party.
8. Further Assurances. In addition to the acts and deeds recited herein
------------------
and contemplated to be performed, executed and /or delivered by either party,
each party agrees to perform, execute and deliver, but without any obligation to
incur any additional liability or expense, any further deliveries and assurances
as may be reasonably necessary to consummate the transactions contemplated
hereby.
9. Successors and Assigns. This Agreement and all of the provisions
----------------------
hereof will be binding upon and inure to the benefit of the parties hereto and,
as applicable, their respective successors, assigns, heirs, executors and
administrators.
<PAGE>
10. Counterparts. This Agreement may be executed in one or more
------------
counterparts, any one of which need not contain the signature of more than one
party, but all such counterparts taken together will constitute one and the same
Agreement.
11. Governing Law. The internal law, and not the law of conflicts, of the
-------------
State of Texas will govern all questions concerning the construction, validity
and interpretation of this Agreement.
12. Amendments and Waivers. Any term of this Agreement may be amended and
----------------------
the observance of any such term may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Option to Purchase
Agreement to be executed and delivered as of the date first above written.
RIO GRANDE MINING COMPANY BELCOR, INC.
By: /s/ Andrew K. Simpson By: /s/ M. Douglas Caffey
------------------------ ------------------------
Name: Andrew K. Simpson Name: M. Douglas Caffey
Title: President Title: President
By: /s/ Donald Leibsker
-------------------------
Name: Donald Leibsker
Title: Chairman of the Board
<PAGE>
EXHIBIT 99.[Z]
AMENDED AND RESTATED
--------------------
INVESTORS' RIGHTS AGREEMENT
---------------------------
This AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this "Agreement")
---------
made and entered into as of the 26th day of June, 1996 by and between Belcor
Inc., a California corporation (the "Company"), Coastal Capital Partners, L.P.,
-------
a Delaware limited partnership ("Coastal"), Donald Leibsker ("Leibsker"), in his
------- --------
capacity as a director of the Company and as a holder of warrants of the Company
issued pursuant to his employment agreement and as may be issued pursuant to a
future consulting agreement, and M. Douglas Caffey ("Caffey"), in his capacity
------
as a director of the Company and a holder of warrants as may be issued pursuant
to a future consulting agreement, amends and restates the Investors' Rights
Agreement dated as of October 3, 1995 between the Company, Coastal, Leibsker, M.
Douglas Caffey ("Caffey") and Rio Grande Mining Company, a Nevada corporation
------
("Rio Grande") (the "Original Investors' Rights Agreement").
- ------------ ------------------------------------
WHEREAS, Coastal has experience in the evaluation, acquisition and
financing of businesses and related negotiation and supervision;
WHEREAS, Coastal is a shareholder of the Company, holding approximately
866,668 shares of the Company's common stock, par value $.10 per share ("Common
------
Stock") and, before giving effect to the partial cancellation of the Warrant
- -----
provided for herein, the rights to purchase up to an additional 1,733,332 shares
pursuant to the Warrant (as hereinafter defined);
WHEREAS, the Company has entered into an Amended and Restated Termination
Agreement (the "Termination Agreement") with Rio Grande;
WHEREAS, the Company shall receive pursuant to the Termination Agreement a
warrant to purchase shares of common stock of Rio Grande;
WHEREAS, the Company pursuant to its amended employment agreement with
Leibsker, dated as of January 20, 1995 (the "Leibsker Employment Agreement"),
-----------------------------
has issued warrants to purchase up to a maximum of 400,000 shares of Common
Stock at an exercise price of $.18 per share (the "Leibsker Warrant"), any such
----------------
shares of Common Stock issued, either directly or upon exercise of such
warrants, hereinafter referred to as, collectively, the "Employment Shares";
-----------------
WHEREAS, the Company entered into an amended employment agreement with
Caffey, dated as of January 20, 1995 (the "Caffey Employment Agreement"), such
---------------------------
agreement having been executed in accordance with those certain resolutions of
the Company's Board of Directors dated October 20, 1994 which provided for the
Company's employment of Caffey and related compensation therefor of either (i) a
minimum cash payment of $25,000 subject to upward
<PAGE>
adjustment based upon the trading price of Common Stock at a specified date or
(ii) the issuance of warrants to purchase up to a maximum of 500,000 shares of
Common Stock at an exercise price of $.18 per share;
WHEREAS, Caffey has agreed to accept, and the Company has agreed to
provide, a cash payment of $25,000 on or before the closing of the Termination
Agreement (the "Closing") in satisfaction of all of the Company's obligations
-------
under the Caffey Employment Agreement pursuant to a letter agreement between the
parties (the "Caffey Letter Agreement"), such cash payment to be made on or
-----------------------
before the Closing;
WHEREAS, the Caffey Employment Agreement shall be deemed to have terminated
upon such payment of $25,000, and whereas Coastal desires to retain certain
advisory services of Caffey, Coastal has agreed to cause the Coastal Directors,
promptly following the Closing, to authorize the Company to enter into a
consulting agreement with Caffey (the "Caffey Consulting Agreement") under which
---------------------------
Caffey will provide advisory services to the Company's management regarding the
Company's operations for a period of one year following the execution of such
agreement, and as compensation for Caffey's entering into such agreement, the
Company shall issue to Caffey additional warrants to purchase up to 100,000
shares of the Company Common Stock, with the right to purchase 50,000 shares
vesting upon the execution of the Caffey Consulting Agreement and the right to
purchase the remaining 50,000 shares vesting on the first anniversary of such
execution, at an exercise price of $.20 per share (the "New Caffey Warrants"),
-------------------
any such shares of Common Stock issued, either directly or upon exercise of such
warrant, hereinafter referred to as, collectively, the "New Caffey Warrant
------------------
Shares");
- ------
WHEREAS, the Company and Leibsker have agreed that the Leibsker Employment
Agreement shall be deemed to have terminated upon the Closing, and whereas
Coastal desires to retain certain advisory services of Leibsker, Coastal has
agreed to cause the Coastal Directors, promptly following the Closing, to
authorize the Company to enter into a consulting agreement with Leibsker (the
"Leibsker Consulting Agreement") under which Leibsker will provide advisory
- ------------------------------
services to the Company's management regarding the Company's operations for a
period of one year following the execution of such agreement, and as
compensation for Leibsker's entering into such agreement, the Company shall
issue to Leibsker an additional warrant to purchase up to 150,000 shares of the
Company Common Stock, with the right to purchase 75,000 shares vesting upon the
execution of the Leibsker Consulting Agreement and the right to purchase the
remaining 75,000 shares vesting on the first anniversary of such execution, at
an exercise price of $.20 per share (the "New Leibsker Warrants"), any such
---------------------
shares of Common Stock issued, either directly or upon exercise of such
-2-
<PAGE>
warrant, hereinafter referred to as, collectively, the "New Leibsker Warrant
--------------------
Shares");
- -------
WHEREAS, Coastal is willing to propose a slate of directors for the
Company, recommend a new Chief Executive Officer for the Company, make an
additional capital contribution to the Company, and may consider pursuing
additional financing for the Company for transactions undertaken by the Company
and may consider engaging in other activities intended to increase shareholder
value of the Company; provided, however, Coastal does not have nor shall have
any obligation to direct business opportunities discovered by Coastal to the
Company nor to only pursue business opportunities through the Company;
WHEREAS, the Company's Board of Directors desires the involvement of
Coastal in the business of the Company and has agreed to support a slate of
directors to be recommended by Coastal, to appoint four persons designated by
Coastal to fill the vacancies in the Company Board of Directors and to appoint a
Chief Executive Officer proposed by Coastal;
WHEREAS, Leibsker has agreed to execute and deliver the Belcor
Shareholders' Agreement in favor of Coastal; and
WHEREAS, the Company, Coastal and Leibsker desire to amend and restate the
Original Investors' Rights Agreement as set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants
set forth herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree that the
Original Investors' Rights Agreement is hereby amended and restated in its
entirety to read in full as follows:
I. CERTAIN DEFINITIONS
-------------------
1. Certain Definitions. For purposes of this Agreement, the following
-------------------
terms shall have the following respective meanings:
The term "Charges" shall mean all federal, state, county, city,
-------
municipal, local, foreign or other governmental taxes at the time due and
payable, levies, assessments charges, liens, claims or encumbrances upon or
relating to (i) the Company's employees, payroll, income or gross receipts, (ii)
the Company's ownership or use of any of its assets, or (iii) any other aspect
of the Company's business.
The term "Combined Investment" shall mean the total of all funds of
-------------------
Coastal invested in any manner in the Company, as determined at each such time
as the amount of Coastal's Combined Investment is evaluated. For the purposes
of this definition,
-3-
<PAGE>
(i) shares of Common Stock shall be valued at the purchase price or the
conversion rate of such shares, as the case may be; (ii) the Warrant shall be
valued at the purchase price therefor; and (iii) any note issued by the Company
in favor of Coastal shall be valued at the then outstanding principal plus
accrued and unpaid interest.
The terms "Form S-2" and "Form S-3" means such respective form under
-------- --------
the Securities Act of 1933, as amended (the "1933 Act"), as in effect on the
--------
date hereof, or any successor registration form to Form S-2 and Form S-3,
respectively, under the 1933 Act subsequently adopted by the Securities and
Exchange Commission ("SEC"), or any equivalent form that may be used by a "Small
--- -----
Business Issuer" as defined in Regulation S-B.
- ---------------
The term "Holder" means any person owning or having the right to
------
acquire Registrable Securities or any assignee thereof in accordance with
Section 16 hereof.
- ----------
The term "Lien" shall mean any mortgage or deed of trust, pledge,
----
hypothecation, assignment, deposit arrangement, lien, Charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any lease or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).
The term "Material Adverse Effect" shall mean any material adverse
-----------------------
effect on the business, assets, operations, prospects or financial or other
condition of the Company.
The terms "register," "registered," and "registration" refer to a
-------- ---------- ------------
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"1933 Act"), and the declaration or ordering of effectiveness of such
--------
registration statement or document.
The term "Registrable Securities" means (i) the Warrant Shares, (ii)
----------------------
the Employment Shares, (iii) the New Leibsker Warrant Shares, (iv) the New
Caffey Warrant Shares and (v) any Common Stock issued as a dividend on or other
distribution with respect to, in exchange for or in replacement of the Warrant
Shares, the Employment Shares, the New Leibsker Warrant Shares or the New Caffey
Warrant Shares.
The number of shares of "Registrable Securities then outstanding"
---------------------------------------
shall be determined by the number of then existing Registrable Securities.
-4-
<PAGE>
The term "Rio Grande" means Rio Grande Mining Company, a Nevada
----------
corporation.
The term "Settlement Warrant" means that certain warrant in favor of
------------------
the Company to purchase up to a maximum of 17,000,000 unregistered shares of
common stock of Rio Grande at an exercise price of $.24 per share, to be issued
by Rio Grande pursuant to the Termination Agreement.
The term "Settlement Warrant Shares" shall mean any shares of common
-------------------------
stock of Rio Grande issued pursuant to the Settlement Warrant.
The term "Stock" shall mean all shares, options, warrants, interests,
-----
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity whether voting or nonvoting, including, without
limitation, common stock, preferred stock or any other "equity security" (as
---------------
such term is defined in Rule 3a11-l of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the "1934 Act")).
--------
The term "Termination Agreement" means that certain Amended and
---------------------
Restated Termination Agreement, dated as of even date herewith, between the
Company and Rio Grande.
The term "Warrant" means the Warrant, dated as of October 20, 1994,
-------
issued to Coastal by the Company.
The term "Warrant Shares" shall mean any shares of Common Stock issued
--------------
pursuant to the Warrant.
The term "Warrant Purchase Agreement" means the Warrant Purchase and
--------------------------
Investor's Rights Agreement, dated as of October 20, 1994, between Coastal, the
Company and Mark S. Isaacs.
II. Obligations of the Parties
--------------------------
2. Obligations of the Company
--------------------------
(a) Termination of Loan Commitment. The Company and Coastal hereby
------------------------------
agree that any obligation of Coastal or Rio Grande to provide loans,
advances or other funding to the Company under that certain letter, dated
October 20, 1994, from Andrew K. Simpson, Chief Executive Officer of
Coastal Capital Partners, Inc., the general partner of Coastal, to M.
Douglas Caffey, President and Chief Executive Officer of the Company,
expired May 30, 1995, is terminated, and is null and void.
-5-
<PAGE>
(b) Appointment of the Company's Chairman of the Board and Chief
------------------------------------------------------------
Executive Officer, Appointment of Persons to fill Vacancies in the Board,
-------------------------------------------------------------------------
and Resignation of Directors. Promptly following, and subject to the
----------------------------
occurrence of, the Closing, the Company (and its then existing board of
directors) hereby agree:
(i) to appoint Andrew K. Simpson ("Simpson"), Theresa C.
Morris, Michael Y. Gan and David C. Fraser, or such other persons as
may be designated in writing by Coastal, its successors, affiliates or
assigns prior to the Closing (collectively, the "Coastal Directors"),
-----------------
to fill vacancies in the Company's Board of Directors, and each such
Coastal Director has informed Coastal that he or she shall accept such
an appointment;
(ii) to appoint Simpson as Chairman of the Board and Chief
Executive Officer of the Company; and
(iii) immediately following the appointment of Simpson as
Chairman of the Board and Chief Executive Officer of the Company and
the appointment of the four Coastal Directors to fill vacancies in the
Company's Board of Director, each of the then existing directors,
other than the Coastal Directors, shall resign his office as a
director of the Company.
The obligations of this Section 2(b) shall survive the Closing and
------------
shall be binding on each Director of the Company who executes this Agreement.
(c) Shareholders' Agreements. The Company shall deliver, by the
------------------------
Closing, executed copies of the Belcor Shareholders' Agreement, in the form
attached as Exhibit A, signed by Leibsker and Caffey.
(d) Voting Agreement and Irrevocable Proxy. The Company hereby
--------------------------------------
agrees to vote any Settlement Warrant Shares that are acquired by the
Company and any shares or other securities as may be issued subsequent to
the date of this Agreement but before June 26, 2001 (or the date, if any,
of an earlier termination or revocation of the Belcor Proxy) on, or in
exchange for, any of the Settlement Warrant Shares by reason of any stock
dividend, stock split, reclassification, asset sale or any other
transaction or event involving Rio Grande or then holder of the Settlement
Warrant Shares (along with the Settlement Warrant Shares, collectively, the
"Proxy Shares") in accordance with the recommendation of Coastal Capital
------------
Partners, Inc., a Delaware corporation ("Coastal GP"), acting on behalf of
----------
and in its capacity as the general partner of Coastal, or any party as may
be assigned by Coastal GP the rights provided in this
-6-
<PAGE>
Section 2(d) to Coastal GP on behalf of Coastal from the date hereof until
------------
the earlier of (i) June 26, 2001 or (ii) such earlier expiration date or
revocation, if any, of the Belcor Proxy, as provided therein, with respect
to all matters as to which the Company or any donee, transferee or assignee
of the Proxy Shares is entitled to vote. In order to insure the voting of
the Proxy Shares in accordance with this Section 2(d), the Company agrees
------------
to and shall deliver to Coastal Capital Partners, Inc., a Delaware
corporation ("Coastal GP"), acting on behalf of and in its capacity as the
----------
general partner of Coastal, an irrevocable proxy (the "Belcor Proxy") with
------------
respect to all of the Proxy Shares in the form attached as Exhibit B, such
proxy to be delivered in the manner provided in the Termination Agreement.
(e) Cancellation of Option Plan and outstanding Options. The Company
---------------------------------------------------
shall cancel all of its current option plan(s) and, to the extent it is
contractually empowered to, cancel all outstanding options to purchase
shares of Common Stock, other than the Leibsker Warrant.
3. Obligations and Agreements of Coastal
-------------------------------------
(a) Additional Capital Contribution. Coastal shall, upon and subject
-------------------------------
to the Closing, pay to the Company a total of $100,000 by wire transfer or
cashier's check as an additional capital contribution to the Company within
two calendar days after Belcor has satisfied its obligations under Section
2 of this Agreement.
(b) Coastal Consent. Coastal hereby consents pursuant to Section 8
---------------
of the Warrant Purchase Agreement to the transactions contemplated by the
Termination Agreement and this Agreement and hereby consents pursuant to
Section 20 of the Warrant Purchase Agreement to the registration rights
granted pursuant to Article IV of this Agreement.
----------
(c) Partial Warrant Cancellation. Coastal shall, upon and subject to
----------------------------
the Closing, cancel a portion of its Warrant covering the right to purchase
470,000 shares of Common Stock.
(d) Consulting Agreements, New Caffey Warrants and New Liebsker
-----------------------------------------------------------
Warrants. Coastal hereby agrees to cause the Coastal Directors, promptly
--------
following the Closing, to authorize the Company to enter into the Leibsker
Consulting Agreement with Leibsker, substantially in the form of Exhibit C,
and enter into the Caffey Consulting Agreement with Caffey, substantially
in the form of Exhibit D, under which agreements Leibsker and Caffey shall
provide advisory services to the Company's management regarding the
Company's operations for a period of one year following the execution
-7-
<PAGE>
of such agreements, and as compensation therefor, the Company shall agree
(i) to issue to Leibsker the New Leibsker Warrants and to issue to Caffey
the New Caffey Warrants and (ii) during the term of such agreements, to
provide cash reimbursements to Leibsker or Caffey, as the case may be, for
their respective reasonable out-of-pocket business expenses relating to
such advisory services.
III. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS
------------------------------------------------
4. The Company
-----------
To induce Coastal to enter into this Agreement, the Company makes the
following representations, warranties and acknowledgements to Coastal, each and
all of which shall be true and correct as of the date of execution and delivery
of this Agreement, and shall survive the execution and delivery of this
Agreement:
(a) Corporate Existence; Compliance with Law. The Company (i) is a
----------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of California; (ii) to the knowledge of the Company, is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where it is material to its business to be so qualified; (iii) has
the requisite corporate power and authority and the legal right to conduct its
business as now, heretofore and proposed to be conducted; (iv) to the knowledge
of the Company, has all material licenses, permits, consents or approvals from
or by, and, to the knowledge of the Company, has made all material filings with,
and has given all material notices to, all governmental authorities having
jurisdiction to the extent required for such ownership, operation and conduct;
(v) is in compliance with its Articles of Incorporation and by-laws; and (vi) to
the knowledge of the Company, is in compliance in all material respects with all
applicable provisions of law.
(b) Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
execution, delivery and performance by the Company of this Agreement, the Belcor
Proxy and all other instruments and documents to be delivered by the Company
hereunder and thereunder (i) are within the Company's corporate power, as the
case may be; (ii) have been duly authorized by all necessary or proper corporate
action; (iii) are not in contravention of any provision of the Company's
Articles of Incorporation or by-laws; (iv) will not violate any law or
regulation, or any order or decree of any court or governmental instrumentality;
(v) will not conflict with or result in the breach or termination of, constitute
a default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which the
Company is a party or by which the Company or any property of the
-8-
<PAGE>
Company is bound; (vi) will not result in the creation or imposition of any Lien
upon any of the property of the Company; and (vii) do not require any consent or
approval of any governmental body, agency, authority or any other person. This
Agreement shall have been duly authorized, executed and delivered on behalf of
the Company, and shall then constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms
subject to general principles of equity and, as to enforcement only, to
bankruptcy, insolvency, moratorium or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
(c) Outstanding Stock; Options; Warrants, etc. The capital stock of
-----------------------------------------
the Company consists of 30,000,000 authorized shares of common stock, par value
$.10, of which, 5,515,011 shares of Belcor Common Stock are outstanding as of
the date hereof. Other than the Warrant, the outstanding options to purchase a
total of 115,000 shares of common stock granted under one or both of the
Company's stock option plans (which options the Company shall use its best
effort to have cancelled and which option plans shall be cancelled by the
Company on, before or as soon as possible after Closing), the Leibsker Warrant,
Coastal's agreements as to the issuance of the New Leibsker Warrants and the New
Caffey Warrants, the Company's agreement to issue to K. Glenn Cole warrants to
purchase up to 50,000 shares of Common Stock, the Company does not have any
outstanding rights, options, warrants or agreements pursuant to which it may be
required to issue or sell any Stock or other equity security.
(d) No Litigation. Except as set forth on Schedule 4(d) hereto, no
------------- -------------
action, claim or proceeding is now pending or, to the knowledge of the Company,
threatened against the Company, at law, in equity or otherwise, before any
court, board, commission, agency or instrumentality of any federal state or
local government or of any agency or subdivision thereof, or before any
arbitrator or panel of arbitrators (a) which, if determined adversely, could
have a Material Adverse Effect or (b) which pertains to the transactions
contemplated by this Agreement. Except as set forth on Schedule 4(d) hereto, to
-------------
the knowledge of the Company, no state of facts exists which is reasonably
likely to give rise to any such action, claim or proceeding.
(e) Subsidiaries. There currently exist no Subsidiaries of the
------------
Company.
(f) SEC Filings and Financials. (1) All documents filed by the
--------------------------
Company with the SEC since October 31, 1994, including its Forms 10-K for the
years ended October 31, 1994 and October 31, 1995, its Forms 10-Q for each of
the Quarters ended January 31, 1995, April 30, 1995, July 31, 1995, January 31,
1996
-9-
<PAGE>
and April 30, 1996 (collectively, "SEC Documents") when they were filed, as
-------------
amended, with the SEC, conformed in all material respects to the requirements of
the 1934 Act and the rules and regulations of the SEC thereunder, and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(2) The financial statements, together with the related notes,
set forth in the SEC Documents fairly present, on the basis stated in the SEC
Documents, the financial position and the results of operations and changes in
financial position of the Company at the respective dates or for the respective
periods therein specified. Such statements and related notes have been prepared
in accordance with GAAP applied on a consistent basis except as may be set forth
in the SEC Documents.
(3) The Company had no obligations, contingent liabilities or
liabilities for Charges, long-term leases or unusual forward or long-term
commitments which are not reflected in the balance sheet of the Company
contained in the Form 10-Q for the Quarter ended January 31, 1996 which would
have a Material Adverse Effect.
(4) Since January 31, 1996, there has been no material adverse
change in the business, assets, operations, operating properties, prospects or
financial or other condition of the Company. No dividends or other
distributions have been declared, paid or made upon any shares of capital Stock
of the Company, nor have any shares of capital Stock of the Company been
redeemed, retired, purchased or otherwise acquired for value by the Company
since November 1, 1994.
(g) No Default. The Company is not in default, nor to the Company's
----------
knowledge is any third party in default, under or with respect to any contract,
agreement, lease or other instrument to which the Company is a party, except for
any default which (either individually or collectively with other defaults
arising out of the same event or events) would not have a Material Adverse
Effect.
(h) Burdensome Restrictions. No contract, lease, agreement or other
-----------------------
instrument to which the Company is a party or by which the Company is bound and
no provision of applicable law or governmental regulation has a Material Adverse
Effect, or insofar as the Company can reasonably foresee is reasonably likely to
have a Material Adverse Effect.
(i) Labor Matters. The Company has no employees. The Company has no
-------------
obligations to any former employees under COBRA.
-10-
<PAGE>
(j) Other Ventures. The Company is not engaged in any joint venture
--------------
or partnership with any other Person.
(k) Investment Company Act. To the knowledge of the Company, it is
----------------------
not an "investment company" or an "affiliated person" of, or "promoter" or
------------------ ----------------- --------
"principal underwriter" for, an "investment company," as such terms are defined
--------------------- ------------------
in the Investment Company Act of 1940, as amended. The consummation of the
transactions contemplated by this Agreement and the Termination Agreement will
not violate any provision of such Act or any rule, regulation or order issued by
the SEC thereunder.
(1) Taxes. All federal, state, local and foreign tax returns,
reports and statements required to be filed by the Company have been filed with
the appropriate governmental agencies, and all such returns, reports and
statements are true and correct in all material respects, and all Charges and
other impositions shown thereon to be due and payable have been paid prior to
the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof, or any such fine, penalty, interest, late charge
or loss has been paid. All additional taxes (including any related interest,
fine, penalty, late charge or loss thereon) asserted against the Company by any
taxing authority, if any, have been paid by the Company. The Company has paid
when due and payable all requisite Charges upon the books of the Company. Proper
and accurate amounts have been withheld by the Company from its employees for
all periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state and local law
and such withholdings have been timely paid to the respective governmental
agencies. There are no taxable years for which the Company's tax returns are
currently being audited by the Internal Revenue Service (the "IRS") or any other
---
applicable governmental authority. The Company has not executed or filed with
the IRS or any other governmental authority any Agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. The Company has not filed a consent pursuant to IRC
Section 341(f) or agreed to have IRC Section 341(f)(2) apply to any disposition
of subsection (f) assets (as such term is defined in IRC Section 341(f)(4)).
None of the property owned by the Company is property which the Company is
required to treat as being owned by any other person pursuant to the provisions
of IRC Section 168(f)(8) or is "tax-exempt use property" within the meaning of
IRC Section 168(j)(3). The Company has not agreed or has been requested to make
any adjustment under IRC Section 481(a) by reason of a change in accounting
method or otherwise. The Company has no obligation under any tax sharing
agreement and no potential liability for taxes of another member of a
consolidated group pursuant to Treas. Reg. (S)1.1502-6.
-11-
<PAGE>
(m) ERISA. Except for the Company's 1989 Stock Option Plan, the
-----
Company does not maintain or contribute to any employee benefit plan.
(n) Environmental Compliance. To the knowledge of the Company, no
------------------------
release, emission, or discharge into the environment of hazardous substances, as
defined under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. Sections 9601 et seq., or hazardous waste as
-- ---
defined under the Solid Waste Disposal Act, 42 U.S.C. Sections 6901 et seq., or
-- ---
air pollutants as defined under the Clean Air Act, 42 U.S.C. Section 7401 et
--
seq., or toxic pollutants as defined under the Clean Water Act, 33 U.S.C.
- ---
Section 1251 et seq., or the Toxic Substances Control Act, 15 U.S.C. Section
-- ---
2601 et seq., has occurred or is presently occurring on any real property owned
-- ---
or leased by the Company in excess of federally permitted releases or reportable
quantities or other concentrations, standards, or limitations under the
foregoing laws or any other federal, state or local laws or regulations.
(o) Employment and Labor Agreements. Except for the Employment
-------------------------------
Agreements with Leibsker and Caffey, the Leibsker Consulting Agreement and
Caffey Consulting Agreement, the other Consulting and/or Retirement Agreements
with Caffey and a Services Agreement with K. Glenn Cole, all as attached hereto
as Exhibit E, there are no employment or consulting agreements covering
management of the Company, and there are no collective bargaining agreements or
other labor agreements covering any employees of the Company. Except as set
forth in Exhibit E, no employee, officer or director of the Company or member of
his immediate family is indebted to the Company, nor is the Company indebted (or
committed to make loans or extend or guaranty credit) to any of them. Except as
set forth in Exhibit E, no employee, officer or director of the Company or
member of his immediate family is a party to any agreement or understanding with
the Company that would be required to be disclosed pursuant to Rule 404 under
Regulation S-K of the 1933 Act.
(p) Patents, Trademarks, Copyrights and Licenses. The Company does
--------------------------------------------
not own, nor is it a licensee under licenses of, any material licenses, patents,
patent applications, copyrights, service marks, trademarks, trademark
applications and trade names; and the Company is not required to own, or be a
licensee under any licenses of, any material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications and
trade names, in order to continue to conduct the Company's business as
heretofore conducted by it, now conducted by it and proposed to be conducted by
it. The Company conducts its business without infringement or claim of
infringement of any license, patent, copyright, service mark, trademark, trade
name, trade secret or other intellectual property right of others. There is no
infringement or claim of infringement by others of
-12-
<PAGE>
any license, patent, copyright, service mark, trademark, trade name, trade
secret or other intellectual property right of the Company.
(q) Full Disclosure. No information contained in this Agreement or
---------------
any written statement furnished by or on behalf of the Company pursuant to the
terms of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which made.
(r) No Material Adverse Effect. No Material Adverse Effect has
--------------------------
occurred since October 31, 1994 and is continuing.
5. Coastal Acknowledgment and Representation. Coastal acknowledges,
-----------------------------------------
represents and warrants to the Company that execution, delivery and performance
by Coastal of this Agreement (a) is within Coastal's power; (b) has been duly
authorized by all necessary or proper action; and (c) is not in contravention of
any provision of Coastal's underlying partnership agreement. Coastal is an
"accredited investor" as that term is defined under the regulations of the 1933
Act.
IV. REGISTRATION
------------
(6) Request for Registration. The registration rights provided for in
------------------------
this Section 6 shall supersede the registration rights provided for in the
---------
Warrant Purchase Agreement and supersede the registration rights provided for in
the Company's employment agreements with Caffey and Leibsker, and shall apply to
all shares of Registrable Securities.
(a) If the Company shall receive, at any time or times, after April
30, 1996 a written request from a Holder or Holders of at least fifty percent of
the Registrable Securities then outstanding and entitled to registration rights
under this Section 6 that the Company file a registration statement under the
---------
1933 Act covering the registration of a majority of Registrable Securities then
outstanding, then the Company shall, within five (5) days of the receipt
thereof, give written notice of such request to all Holders and shall, subject
to the limitations of Section 6(b), use its best efforts to effect as soon as
------------
practicable, and in any event within 120 days of the receipt of such request,
the registration under the 1933 Act of all Registrable Securities which the
Holders request to be registered within 30 days of the mailing of such notice by
the Company in accordance with this Section 6.
---------
(b) If the Holder or Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
------------------
covered by their request by means of an underwriting, they shall so advise the
Company as a
-13-
<PAGE>
part of their request made pursuant to this Section 6 and the Company shall
---------
include such information in the written notice referred to in Section 6(a). In
------------
such event, the right of any Holder to include his Registrable Securities in
such registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their Registrable Securities through such underwriting
shall (together with the Company as provided in Section 8(f) hereof) enter into
------------
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders and reasonably satisfactory to the Company. Notwithstanding any other
provision of this Section 6, if such underwriter advises the Initiating Holders
---------
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder.
(c) If the Holders initiate a registration pursuant to this Section 6
---------
and the underwriters therefor determine that it would not be detrimental to
include securities of the Company other than the Registrable Securities (the
"Securities") in such registration, the Company shall, with the prior written
- -----------
consent of 50 percent of the Holders participating in the registration, give
written notice as soon as practicable to all its holders of Securities of its
intention to effect a registration of its Securities. Each holder of Securities
which is entitled to notice shall have the option to include its Securities in
such registration, subject to reduction based upon the number of Securities
which the Company proposes to register on its own behalf; provided, that any
--------
such holder and the Company may include all or a portion of its Securities in
such a registration only to the extent that the inclusion of its Securities will
not reduce the amount of the Registrable Securities of the Holders which is
included. Any reduction in the amount of Securities which may be included in a
registration pursuant to the foregoing will be done on a pro rata basis; a
holder's pro rata share is the ratio of the amount of Securities a holder
proposes to include in a registration divided by the total amount of Securities
outstanding, exclusive of the Registrable Securities.
(d) The Company is obligated to effect only three such registrations
pursuant to this Section 6; provided, however, that for purposes of calculating
--------- -------- -------
the number of registrations under
-14-
<PAGE>
this Section 6(d), only registrations that have been declared effective shall be
------------
counted; provided, further, that no registration pursuant to Section 7, whether
-------- ------- ---------
or not such registration includes Registrable Securities, shall be counted for
purposes of this Section 6(d).
------------
(e) Notwithstanding the foregoing, (i) the Company shall not be
obligated to effect a registration pursuant to this Section 6 during the period
---------
starting with the date 60 days prior to the Company's good faith estimated date
of filing of, and ending on the date 90 days following the effective date of, a
registration statement pertaining to an underwritten public offering of
Securities for the account of the Company, provided, that the Company is at all
--------
times during such period diligently pursuing such registration and (ii) if the
Company shall furnish to Holders requesting a registration statement pursuant to
this Section 6 a certificate signed by the President of the Company stating
---------
that, in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its shareholders for such
registration statement to be filed and that it is therefore essential to defer
the filing of such registration statement, the Company shall have the right to
defer such filing for a period of not more than 180 days after receipt of the
request of the Initiating Holders; provided, however, that the Company may not
-------- --------
utilize its right to defer the filing of a registration statement more than once
in any twelve-month period.
7. Company Registration. If (but without any obligation to do so) the
--------------------
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders other than the Holders) any of its Securities
under the 1933 Act in connection with the public offering of such Securities
solely for cash (other than a registration relating solely to the sale of
Securities to participants in a Company stock plan or a registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of any Holder given
within 30 days after mailing of such notice by the Company, the Company shall,
subject to the provisions of Section 6, use its best efforts to cause to be
---------
registered under the 1933 Act all the Registrable Securities that each such
Holder has requested to be registered.
8. Obligations of the Company. Whenever required under this Agreement to
--------------------------
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
-15-
<PAGE>
(a) Prepare a registration statement with respect to such Registrable
Securities and deliver such registration statement to counsel designated by the
Holders for review.
(b) With the consent of counsel to the Holders, file with the SEC a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective, and, upon
the request of the Holders of at least 25 percent of the Registrable Securities
registered thereunder, keep such registration statement effective for up to four
months.
(c) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
1933 Act with respect to the disposition of all Securities covered by such
registration statement.
(d) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
1933 Act, and such other documents as the Holders may reasonably request in
order to facilitate the disposition of Registrable Securities owned by them.
(e) Use its best efforts to register and qualify the Securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holders
subject to reasonable approval by the Board of Directors of the Company,
provided, that the Company shall not be required in connection therewith or as a
- --------
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(g) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the 1933 Act,
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
-16-
<PAGE>
(h) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such Registrable Securities
are being sold through underwriters, or, if such Registrable Securities are not
being sold through underwriters, on the date that the registration statement
with respect to such Registrable Securities becomes effective, (i) an opinion,
dated such date, of the independent counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
(i) List the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities are
listed or, if practicable and if the Company otherwise meets the criteria for
inclusion on the automated quotation system of the National Association of
Securities Dealers, Inc., qualify the Registrable Securities being registered
for inclusion on the automated quotation system of the National Association of
Securities Dealers, Inc. if the Company does not have a class of equity
securities listed on a national securities exchange.
(j) Use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, but not later than 18 months after the effective date of
the registration statement, an earnings statement covering the period of at
least 12 months beginning with the first full month after the effective date of
such registration statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the 1933 Act.
9. Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to this Agreement that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such Registrable Securities as shall be required to effect the
registration of their Registrable Securities.
10. Expenses of Demand Registration. All expenses other than underwriting
-------------------------------
discounts and commissions relating to Registrable Securities incurred in
connection with the
-17-
<PAGE>
registrations, filings or qualifications pursuant to Section 6, including
---------
(without limitation) all federal and state registration, filing and
qualification fees, all NASD filing fees and expenses, all listing fees and
expenses for any national securities exchange on which the Company's equity
securities are then listed, printing and accounting fees, fees and disbursements
of one counsel for the Company and the reasonable fees and disbursements of
counsel for the selling Holders, shall be borne by the Company for three
registrations on any form.
11. Expenses of Company Registration. The Company shall bear and pay all
--------------------------------
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
-------
7 for each Holder including (without limitation) federal and state registration,
- -
filing and qualification fees, all listing fees and expenses for any national
securities exchange on which the Company's equity securities are then listed,
all legal, printing and accounting fees relating or apportionable thereto
(including the reasonable legal fees of a single counsel selected by the
participating Holders holding a majority of the Registrable Securities being
registered) but excluding underwriting discounts and commissions relating to
Registrable Securities.
12. Underwriting Requirements. In connection with any offering involving
-------------------------
an underwriting of shares being issued by the Company, the Company shall not be
required under Section 7 to include any of the Holders' Registrable Securities
---------
in such underwriting unless the Holders accept the terms of the underwriting as
agreed upon between the Company and the underwriters selected by it and then
only in such quantity as will not, in the opinion of the underwriters,
jeopardize the success of the offering by the Company. If the total amount of
Securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of Securities to be sold other than
by the Company that the underwriters reasonably believe compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such Securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the offering
(the Securities so included, exclusive of Registrable Securities, to be
apportioned pro rata among the selling shareholders according to the total
amount of Securities entitled to be included therein owned by each selling
shareholder or in such other proportions as shall mutually be agreed to by such
selling shareholders); provided, that the holders of Securities other than
--------
Registrable Securities may participate in such a registration by the Company
only with the prior written consent of 50 percent of the Holders of Registrable
Securities participating in the registration, and provided, further, that such
-------- -------
other holders may include their Securities in such registration only to the
extent such inclusion
-18-
<PAGE>
will not reduce the number of Registrable Securities included. Further, in no
event shall (i) the amount of Registrable Securities of the selling Holders
included in the offering be reduced below 50 percent of the total amount of
Securities included in such offering; or (ii) notwithstanding (i) above, any
shares being sold by a shareholder exercising a demand registration right
similar to that granted in Section 6 be excluded from such offering.
---------
13. Indemnification and Contribution. In the event any Registrable
--------------------------------
Securities are included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the officers and directors of each Holder, any
underwriter (as defined in the 1933 Act) for such Holder and each person, if
any, who controls such Holder or underwriter within the meaning of the 1933 Act
or the 1934 Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state law or common law insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (each, a "Violation"):
---------
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the 1933 Act, the 1934 Act or any state securities law. The
Company will reimburse each such Holder, officer or director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity contained in this
-------- -------
Section 13(a) shall not apply to amounts paid in settlement of any such loss,
- -------------
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld) nor
shall the Company be liable to any Holder, underwriter or controlling person for
any such loss, claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person (a
"Holder Violation"); provided, that the Company shall indemnify all other
- ----------------- --------
parties entitled to indemnification hereunder for any Holder Violation and shall
be entitled to seek indemnification thereof
-19-
<PAGE>
from such Holder, underwriter or controlling person responsible for such Holder
Violation. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Holder, underwriter or
controlling person and shall survive the transfer of such securities by such
Holder. In addition to its other obligations under this Section 13(a), the
-------------
Company agrees that, as an interim measure during the pendency of any such loss,
claim, damage, liability or action arising out of or based upon any Violation,
it will reimburse such Holder or such underwriter or controlling person on a
monthly basis for all reasonable legal or other expenses incurred in connection
with investigating or defending any such loss, claim, damage, liability or
action, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company's obligations to reimburse such
Holder or such underwriter or controlling person for such expenses and the
possibility that such payments might later by held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, such Holder or such
underwriter or controlling person shall promptly return it to the Company
together with interest at the rate of ten percent (10%) per annum. Any such
interim reimbursement payments which are not made to such Holder or such
underwriter or controlling person within 30 days of a request for reimbursement
shall bear interest at the rate of ten percent (10%) per annum from the date of
such request. This indemnity agreement shall be in addition to any liability
which the Company may otherwise have.
(b) To the extent permitted by law, each selling Holder will
severally and not jointly indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of the 1933 Act,
each agent and any underwriter for the Company and any other Holder selling
securities, including Registrable Securities, in such registration statement or
any of its directors or officers or any person who controls such Holder or
underwriter against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, controlling person,
agent, underwriter or controlling person, or other such Holder or director,
officer or controlling person thereof may become subject, under the 1933 Act,
the 1934 Act or other federal or state law or common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, agent, underwriter or controlling person, or
-20-
<PAGE>
other Holder or director, officer or controlling person thereof in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
-------- -------
Section 13(b) shall not apply to amounts paid in settlement of any such loss,
- -------------
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld, and
provided, further, that the maximum liability of any selling Holder under this
- -------- -------
Section 13(b) in regard to any registration statement shall in no event exceed
- -------------
the amount of the proceeds received by such selling Holder from the sale of
securities under such registration statement.
(c) Promptly after receipt by an indemnified party under this Section
-------
13 of notice of the commencement of any action (including any governmental
- --
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 13, deliver to the
----------
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
-------- -------
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 13, but the omission so to deliver written
----------
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 13.
----------
(d) If the indemnification provided for in this Section 13 from the
----------
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be
-21-
<PAGE>
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceedings.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 13(d) were determined by pro rata
-------------
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the contribution provisions of this Section 13(d), in no event
-------------
shall the amount contributed by any selling Holder be greater than the dollar
amount of the net proceeds received by such holder upon the sale of the
Securities giving rise to such contributed obligation. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 13 shall
----------
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement and otherwise.
14. Reports Under 1934 Act. With a view to making available to the
----------------------
Holders the benefits of Rule 144 promulgated under the 1933 Act and any other
rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-2 or Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) comply with the reporting requirements of the 1934 Act (whether
or not it shall be required to do so pursuant to the provisions of the 1934
Act);
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written
-22-
<PAGE>
statement by the Company that it has complied with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-2 or Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such Securities without registration or pursuant to such form.
15. Form S-2 and Form S-3 Registrations. In addition to the registration
-----------------------------------
rights provided in Section 6 hereof, in case the Company shall receive a written
---------
request from the Holders of at least 25 percent of the Registrable Securities
that the Company effect a registration on Form S-2 or Form S-3 (or any successor
form to Form S-2 or Form S-3, respectively, regardless of its designation) and
any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly given written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration, qualification
or compliance as may be so requested and as would permit or facilitate the sale
and distribution for all or such portion of such Holder's or Holders'
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
days after receipt of such written notice from the Company; provided, however,
-------- -------
that the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 15: (1) if Form S-2 or S-3
----------
(or any successor form to Form S-2 or Form S-3 regardless of its designation) is
not available for such offering by the Holders; or (2) if the Company shall
furnish to the Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such Form S-2 or Form S-3 Registration to be effected at such time, in which
event the Company shall have the right to defer the filing of the Form S-2 or
Form S-3 Registration for a period of not more than 60 days after the receipt of
the request of the Holder or Holders under this Section 15; provided, however,
---------- -------- -------
that the Company shall not utilize this right more than once in any twelve-month
period.
(c) Subject to the foregoing, the Company shall file a Form S-2 or
Form S-3 (or any successor form to Form S-2 or Form
-23-
<PAGE>
S-3 regardless of its designation) covering the Registrable Securities and other
securities requested to be registered as soon as practicable after receipt of
the request or requests of the Holders. All expenses other than underwriting
discounts and commissions relating to Registrable Securities incurred in
connection with a registration, filings or qualifications requested pursuant to
this Section 15, including (without limitation) all registration, filing,
----------
qualification fees, printing and accounting fees and the reasonable fees and
disbursements of counsel for the selling Holder or Holders and counsel for the
Company, shall be borne by the Company, and all other expenses of such
registration shall be borne pro rata by the Holders participating in the Form S-
2 or Form S-3 Registration based on the number of shares sold by such Holders at
such offering. Registrations effected pursuant to this Section 15 shall not be
----------
counted as demands for registration or registrations effected pursuant to
Sections 6 and 7, respectively.
- ----------------
16. Assignment of Registration Rights. All rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to Sections 6, 7 and 15 may be assigned
--------------------
by a Holder to a transferee or assignee of such Registrable Securities;
provided, that the Company is, within a reasonable time after such transfer,
- --------
furnished with written notice of the name and address of such transferee or
assignee and the Registrable Securities with respect to which such registration
rights are being assigned, and provided, further, that such assignment shall be
-------- -------
effective only if, immediately following such transfer, the further disposition
of such Registrable Securities by the transferee or assignee is restricted under
the 1933 Act unless otherwise exempted therefrom. All rights to cause the
Company to register Registrable Securities shall continue for the benefit of the
Holders or their transferees or assignees until the consummation of their sale
of such Registrable Securities in a bona fide firm commitment underwritten pubic
offering.
17. Limitations on Subsequent Registration Rights. From and after the
---------------------------------------------
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of at least 50 percent of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any Securities
of the Company unless such agreement includes: (a) to the extent the agreement
would allow such holder or prospective holder to include such Securities in any
registration filed under Section 6 hereof, a provision that such holder or
---------
prospective holder may include such Securities in any such registration only to
the extent that the inclusion of its securities will not reduce the amount of
the Registrable Securities of the Holders which is included; or (b) no provision
which would allow such holder or prospective holder to make a demand
registration which could result in such registration statement being declared
effective
-24-
<PAGE>
within 120 days of the effective date after any registration effected pursuant
to Section 6.
---------
V. COVENANTS; ABSENCE OF CERTAIN CHANGES; ACCESS.
---------------------------------------------
18. Covenants of Belcor. From the date hereof until the Closing, Belcor
-------------------
will furnish to Coastal the following:
(a) As soon as available, and in any event within ninety (90) days
after the close of each fiscal year, Belcor shall furnish a report of audit
including a consolidated balance sheet, statement of profit or loss,
statement of stockholders' equity, and a statement of cash flow as at the
close of and for the fiscal year then ended, all in reasonable detail and
stating in comparative form the figures as at the close of and for the
previous fiscal year, with the opinion of an independent certified public
accounting firm qualified and enrolled to practice before the SEC.
(b) As soon as available but in no event later than forty five (45)
days after the end of each fiscal quarter a balance sheet of Belcor (and
its subsidiaries) as of the end of the preceding quarter, a statement of
income, statement of stockholders' equity, and a statement of the cash flow
of Belcor (and its subsidiaries, if any) for such quarter and for the
period from the beginning of the fiscal year to the end of such quarter,
all in reasonable detail. Each such financial report shall be presented on
a consolidated and consolidating basis. Each report shall state in
comparative form (i) the figures as at and for the same period of the
previous fiscal year, (ii) the results for the same quarter during the
previous fiscal year, and (iii) compare the actual result as at and for the
period then ending with the operating budget previously provided by Belcor
and with the amount set forth in any revision(s) of such operating budget.
(c) Within forty five (45) days after the end of each fiscal quarter
and ninety (90) days after the end of Belcor's fiscal year, a certificate
of compliance, in a form satisfactory to Coastal, shall be submitted by the
Chief Executive Officer of Belcor, stating that Belcor has performed and
observed each and every covenant contained in this Investors' Rights
Agreement and the related Termination Agreement to be performed by it and
that no event has occurred and no condition then exists that constitutes an
event of non-compliance hereunder or would constitute such an event of non-
compliance upon the lapse of time or upon the giving of notice and the
lapse of time specified herein; or, if any such event has occurred or any
such condition exists, specifying the nature thereof.
-25-
<PAGE>
(d) Within five (5) days of issuance, duplicate copies of any general
written communications with shareholders, directors, executive
committee(s), or with the financial community, and any reports filed by
Belcor with any security exchanges or with the SEC.
(e) All information, reports, certificates and notices furnished
pursuant to this Section 18, and any additional or supplemental
----------
information, shall be true and correct when furnished, to Belcor's best
knowledge and belief.
19. Absence of Certain Changes. From the date hereof until the Closing
--------------------------
Date (as defined in the Termination Agreement), except as expressly permitted or
contemplated hereby, Belcor shall not, without Coastal's prior express written
consent:
(a) Incur any additional indebtedness for money borrowed, or
guarantee any indebtedness or obligation of any other party;
(b) Set aside or pay any dividend or distribution of assets to, or
repurchase any of its stock from, any of its shareholders;
(c) Enter into, amend or terminate any material employment agreement
or increase the compensation payable or to become payable by Belcor to any
of its officers, employees or agents above the amount payable as of the
date hereof, or adopt or amend any employee benefit plan or arrangement;
(d) Acquire or dispose of any material properties or assets used in
its business;
(e) Waive any statute of limitations so as to extend the time for the
assessment of any tax or other liability of Belcor;
(f) Create or suffer to be imposed any lien, mortgage, security
interest or other charge on or against its properties or assets, except for
liens for current taxes, materialmen's liens and other similar statutory
liens, and purchase money security interests incurred in the ordinary
course of business;
(g) Enter into, amend or terminate any lease of real or personal
property;
(h) Enter into any contract or commitment except in the ordinary
course of business consistent with past practice or make any capital
expenditures;
-26-
<PAGE>
(i) Merge or consolidate or agree to merge or consolidate with or
into any other entity except as provided in this Agreement;
(j) Amend its Articles of Incorporation or By-Laws;
(k) Incur any other material liability or obligation (absolute,
accrued or otherwise), except in the ordinary course of business and
consistent with past practice and except those incurred in connection with
the transactions contemplated by this Agreement; or
(l) Authorize, propose or commit to any of the actions prohibited by
this Section 19 or enter into or modify any agreement, commitment or
----------
arrangement to do any of the actions prohibited by this Section 19.
----------
(m) Forgive, release or settle any claim or amount receivable to
Belcor for less than a payment in full in cash of the amount of the claim
or amount receivable.
20. Covenants of Leibsker and Caffey. Leibsker and Caffey shall, on or
--------------------------------
prior to the Closing, execute copies of the Belcor Shareholders' Agreement, in
the form attached as Exhibit A. In addition, from the date hereof until 30 days
following the Closing, Leibsker and Caffey shall each use reasonable efforts to
secure, or assist in an attempt to secure, the execution of the Belcor
Shareholders' Agreement (or supplements thereto) by Ross Hamilton, on behalf of
R&C and Hamilton Resources, Inc.
21. Access. During normal business hours and upon reasonable prior notice,
------
afford to Coastal and their counsel and accountants, and to such other persons
as may be selected by Coastal and approved by Belcor, access to all its
properties, permit Coastal and such other persons to inspect and make copies of
all stock records, minute books, books of account, contracts, commitments and
other records, and furnish to Coastal such certified or other copies of such
documents or such information with respect to its businesses and affairs as
Coastal may from time to time reasonably request and that Belcor may reasonably
provide without violation of applicable law or regulation. In addition, Coastal
may send representatives to attend, or may participate telephonically at, all of
Belcor's board of directors meetings and committee meetings of the board.
Coastal shall receive no less than two (2) days prior notice of the time and
place of all directors' meetings. Any information received by Coastal at such
meetings will be held in strict confidence and Coastal shall take no action
based upon information obtained at said meetings which would have the effect of
subjecting Belcor to liability.
-27-
<PAGE>
22. Other Business of Coastal or the Company. Both Coastal and the
----------------------------------------
Company may engage independently or with others in business ventures of every
nature and description, including, without limitation, the rendering of advice
or services of any kind to other investors and the making or management of other
investments. Nothing in this Agreement shall be deemed to prohibit Coastal, any
limited or general partner of Coastal, or any officer, director, employee,
shareholder of Coastal or any limited or general partner of Coastal from dealing
or otherwise engaging in business with any persons or entities transacting
business with the Company; provided that such transaction does not involve any
--------
arrangement which would have the effect of circumventing any restriction set
forth in this Agreement. Neither Coastal nor the Company shall have any right by
virtue of this Agreement or the contractual relationship created hereby in or to
such other ventures or activities or to the income or proceeds derived
therefrom, and the pursuit of such ventures shall not be deemed wrongful or
improper. Neither Coastal nor the Company shall be obligated to present any
particular investment opportunity to the other. In addition, without limitation
as to any of the foregoing, neither Coastal nor the Company shall be obligated
to provide to the other any participation right, "co-sale right," "tag-along
right" or any other right with respect to the sale, conveyance, assignment or
other transfer of their respective interests in Rio Grande.
VI. MISCELLANEOUS.
-------------
23. Governing Law. This Agreement shall be construed in accordance with
-------------
and governed by the internal laws of the State of California, without regard to
the principles thereof regarding conflicts of law. The Company consents to
personal jurisdiction, waives any objection as to jurisdiction or venue, and
agrees not to assert any defense based on lack of jurisdiction or venue in the
County of Los Angeles, State of California. Service of process on the Company in
any action arising out of or related to this Agreement shall be effective if
mailed to such party in accordance with the procedures and requirements set
forth in Section 28 hereof.
----------
24. Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
- -------- -------
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner
-28-
<PAGE>
and holder of such shares for all purposes, including the payment of dividends
or any redemption price.
25. Separability. If one or more of the provisions of this Agreement
------------
should, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
26. Amendment and Waiver. This Agreement may be amended and the
--------------------
observance of any term of this Agreement may be waived, only with the written
consent of both of the Companies and the Holders of at least 50 percent of the
Registrable Securities then outstanding.
27. Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of either of the Companies under this Agreement shall
impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent, or approval
of any kind or character on any Holder's part of any breach, default or
noncompliance under the Agreement or any waiver on such Holder's part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, by law, or otherwise afforded to Holders,
shall be cumulative and not alternative.
28. Notices. Unless otherwise provided, any notice required or permitted
-------
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified, upon deposit with the
United States Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified, with respect to Coastal at 101 Morgan
Lane, Suite 180, Plainsboro, NJ 08536, Attention: Theresa C. Morris, and with
respect to all other parties at the address indicated for such party on the
signature page(s) hereof, or upon delivery to a reputable express courier for
delivery to the party to be notified at the address indicated for such party in
this Section 28 or on the signature page(s) hereof, or at such other address as
----------
such party may designate by ten days' advance written notice to the other party.
29. Attorneys' Fees. If legal action is brought to enforce or interpret
---------------
this Agreement, the prevailing party shall be
-29-
<PAGE>
entitled to recover its reasonable attorneys' fees and legal costs in connection
therewith.
30. Section Headings. The headings contained in this agreement are for
----------------
reference purposes only and shall not in any way affect the meaning or
interpretation of this agreement.
31. Gender. Whenever used herein the singular number shall include the
------
plural, the plural shall include the singular, and the use of any gender shall
include all genders.
32. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
33. Amendment and Restatement. All of the terms and conditions of the
-------------------------
Investors' Rights Agreement, as amended and restated hereby, shall remain in
full force and effect. All references to the Original Investors' Rights
Agreement or the Investors' Rights Agreement in any other document or instrument
shall be deeded to mean the Investors' Rights Agreement as amended and restated
hereby. This Agreement shall not constitute a novation of the Original
Investors' Rights Agreement, but shall constitute an amendment and restatement
thereof.
-30-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Investors' Rights
Agreement as of the date first above written.
BELCOR INC.
By: /s/ M. Douglas Caffey
----------------------------------------
M. Douglas Caffey
President and Chief Executive
Officer
By: /s/ Donald M. Liebsker
----------------------------------------
Donald M. Leibsker
Chairman of the Board
18004 Skypark Circle, Suite 105
Irvine, California 92714
COASTAL CAPITAL PARTNERS, L.P.
By: Coastal Capital Partners, Inc.,
as General Partner
By: /s/ Andrew K. Simpson
---------------------------------------
Andrew K. Simpson
Chief Executive Officer
We individually, as directors of Belcor, Inc., agree to be bound by Section
2(b) of this Agreement, and we, Messrs. Leibsker and Caffey, as directors of
Belcor, Inc. and as holders of warrants of the Company issued pursuant to our
employment agreements and to be issued pursuant to our consulting agreements,
agree to be bound by Section 20 of this Agreement.
/s/ M. Douglas Caffey
---------------------------------------
M. Douglas Caffey
/s/ Donald M. Lebisker
---------------------------------------
Donald M. Leibsker
/s/ D. Ross Hamilton
---------------------------------------
D. Ross Hamilton
-31-
<PAGE>
EXHIBIT A
BELCOR INC. SHAREHOLDERS' AGREEMENT
THIS BELCOR INC. SHAREHOLDERS' AGREEMENT (this "Agreement") is made as of
---------
June 26, 1996 by and among Coastal Capital Partners, L.P., a Delaware limited
partnership ("Coastal"), Belcor Inc., a California corporation (the "Company"),
------- -------
and the Persons listed on the signature pages hereto (collectively, the
"Shareholders").
------------
WHEREAS, Coastal and each Shareholder are or will be, directly or
indirectly, holders of shares of common stock of the Company ("Common Stock")
------------
and/or warrants or other instruments convertible into shares of Common Stock
("Convertible Instruments"; the Common Stock, shares of Common Stock issuable
-----------------------
upon exercise of any Convertible Instrument (including, but not, limited to the
New Caffey Warrants, the Leibsker Warrant and the New Leibsker Warrants (all as
defined in the Investors' Rights Agreement or Termination Agreement) and any
shares of Common Stock received subsequent to the execution of this Agreement by
each Shareholder as a dividend or otherwise on their Common Stock or Convertible
Instruments, together, "Shares")
------
WHEREAS, Coastal and the Shareholders desire to secure the election of the
nominees of Coastal to the Board of Directors of the Company; and
WHEREAS, Coastal has entered into an Amended and Restated Investors' Rights
Agreement ("Investors' Rights Agreement"), dated as of June 26, 1996, with the
---------------------------
Company, Donald Leibsker and M. Douglas Caffey under which Coastal will make a
substantial capital contribution to the Company; and a condition of closing the
Investors' Rights Agreement is the execution and delivery by the Shareholders
and the Company of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. VOTING AGREEMENT REGARDING SHARES.
---------------------------------
1.1 Agreement to Vote. Each Shareholder agrees on behalf of himself
-----------------
or herself and any of the following persons to whom the Shareholder may transfer
Shares (or his Convertible Instruments): (a) a member of his or her immediate
family; (b) a trust established by the Shareholder for the benefit of the
Shareholder or his or her immediate family by gift or inheritance; or (c) a
person that directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, the Shareholder
(individually, an "Affiliated Transferee") to hold all of the Shares (and
Convertible Instruments) now held or subsequently acquired
<PAGE>
registered in his or her name subject to, and to vote the Shares in accordance
with, the provisions of this Agreement.
1.2 Board of Directors. Each Shareholder shall vote his or her
------------------
Shares (or shall consent pursuant to an action by written consent of the
Company's shareholders) so as to elect nominees designated by Coastal, its
successors, affiliates or assigns to all of the positions on the Company's then
existing Board of Directors; and, in the event that any designated director
shall not complete his term of office as a director and a successor director is
to be elected, each Shareholder shall vote his or her Shares to elect as such
successor director a nominee designated by Coastal, its successors, affiliates
or assigns.
1.3. Removal. On all matters relating to the removal of directors of
-------
the Company, each Shareholder shall vote his or her Shares (or shall consent
pursuant to an action by written consent of the Company's shareholders) to
ensure that no director of the Company may be removed from the Board, with or
without cause, except upon the prior written authorization or request of
Coastal.
1.4 Conflicting Charter or By-Law Provisions. Each Shareholder shall
----------------------------------------
vote his or her Shares (or shall consent pursuant to an action by written
consent of the Company's shareholders), and shall take all other action
necessary, to ensure that the Articles of Incorporation and By-Laws of the
Company facilitate and do not at any time conflict with the provisions of this
Agreement.
1.5 Approval of Transactions. Each Shareholder shall vote his or her
------------------------
Shares (or shall consent pursuant to an action by written consent of the
Company's shareholders) on any issue put to the vote of the Company's
shareholders in the manner which the Board of Directors of the Company
recommends.
1.6 Rights Assignable. Coastal may assign its rights and benefits
-----------------
under this Agreement to any person that acquires shares of Common Stock from
Coastal.
2. CONDITION PRECEDENT; TERMINATION.
--------------------------------
2.1 Condition Precedent to Obligations. The obligation of each party
----------------------------------
to this Agreement to perform its obligations under this Agreement shall be
subject to the consummation and performance of the transactions contemplated by
that certain Amended and Restated Termination Agreement, dated as of June 26,
1996, between the Company and Belcor (the "Termination Agreement").
---------------------
-33-
<PAGE>
2.2 Termination of Rights regarding the Company. The rights of
-------------------------------------------
Coastal and the Shareholders under this Agreement shall terminate upon the
earliest to occur of (i) with respect any individual Shareholder, the date on
which such Shareholder or any Affiliated Transferee no longer owns any Shares,
(ii) the occurrence of the merger or consolidation of the Company into, or the
sale of all or substantially all of the Company's assets to, another
corporation, unless the shareholders of the Company shall own at least 51% of
the capital stock of such other corporation immediately after such merger,
consolidation or sale, or (iii) the date two years from the closing of the
Termination Agreement.
3. LEGEND.
------
3.1 Legend. Each certificate representing Shares owned by any
------
Shareholder or transferred to any Affiliated Transferee shall be endorsed with
the following legend:
"THE VOTING OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS AND CONDITIONS OF A SHAREHOLDERS' AGREEMENT BY AND AMONG
CERTAIN HOLDERS OF COMMON STOCK OF THE CORPORATION. BY ACCEPTING ANY
INTEREST IN SUCH SECURITIES THE PERSON ACCEPTING SUCH INTEREST SHALL BE
DEEMED TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH
SHAREHOLDERS' AGREEMENT. COPIES OF SUCH SHAREHOLDERS' AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE CORPORATION."
3.2 Legend Removal. The legend referred to in Section 3.1 shall be
--------------
removed (i) from every certificate upon termination of this Agreement in
accordance with the provisions of Section 2 above or (ii) from any certificate
representing Shares owned by any Shareholder or transferred to any Affiliated
Transferee that are transferred to a person other than a signatory to this
Agreement.
3.3 Cooperation with Filings. Each Shareholder shall cooperate fully
------------------------
with Coastal and the Company with regard to any filings required under the
Securities and Exchange Act of 1934, as amended, or any other federal or state
securities law, rule or regulation, relative to such Shareholder's participation
in this Agreement, which cooperation shall include, without limitation, the
prompt response to written requests for information. Each Shareholder hereby
agrees to indemnify and hold harmless Coastal and the Company and their
respective officers, directors, employees, shareholders and agents from and
against any and all losses, damages, costs and expenses (including attorney's
fees and other costs) and liabilities due or arising out of information such
Shareholder shall provide to Coastal and the Company pursuant to this Section
3.3 but only if such information included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
-34-
<PAGE>
therein, in the light of the circumstances under which they were made, not
misleading.
4. MISCELLANEOUS.
-------------
4.1 Representations. Each of the parties hereto represents that this
---------------
Agreement has been duly authorized, executed and delivered by such party and
constitutes a legal, valid and binding obligation of such party, enforceable
against it in accordance with the terms of this Agreement.
4.2 Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof, that money damages shall be
inadequate for such breach, and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or in
equity.
4.3 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any such term may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the parties hereto.
4.4 Notices. All notices and other communications provided for
-------
herein shall be in writing and shall be delivered by hand, telecopied or sent by
overnight, certified or registered mail, return receipt requested, postage
prepaid, addressed in the manner set forth on the signature pages of this
Agreement (or to such other address for a party as shall be specified in a
notice given in accordance with this Section 4.4). All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery or telecopied, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
4.5 Benefit; Successors and Assigns. Except as otherwise provided
-------------------------------
herein, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement either express or implied is intended to confer on any
person other than the parties hereto and their respective successors and
permitted assigns, any rights, remedies or obligations under or by reason of
this Agreement.
4.6 Miscellaneous. This Agreement sets forth the entire agreement
-------------
and understanding among the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement, regardless of any investigation made by any party
-35-
<PAGE>
hereto or on such party's behalf. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one instrument.
4.7 Severability. If any provisions of this Agreement shall be
------------
deemed invalid or unenforceable pursuant to a final determination of any court
of competent jurisdiction, or as a result of future legislative action, such
determination or action shall be construed so as not to affect the validity,
enforceability or effect the other provisions of this Agreement this Agreement,
and this Agreement shall be construed as if the invalid or unenforceable
provision were not contained herein, and the rights and obligations of the
parties shall be construed and enforced accordingly.
4.8 Amendments and Waivers. Neither this Agreement nor any term
----------------------
hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by Shareholders holding a majority of the Shares.
4.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which together shall constitute one instrument, and each of
which may be executed by less than all of the parties to this Agreement.
4.10 Governing Law. The agreement shall be governed by an construed
-------------
in accordance with the laws of the state of California without regard to the
choice of law provisions thereof.
4.11 Joint Filing Agreement and Power of Attorney. In connection
--------------------------------------------
with the execution of this agreement and required filings of Schedule 13D with
the Securities and Exchange Commission, each Shareholder shall execute a Joint
Filing Agreement and Power of Attorney, substantially in the form attached
hereto as Exhibit A-1
[signature page follows]
-36-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Shareholders'
Agreement to be executed and delivered as of the date first above written.
COASTAL CAPITAL PARTNERS, L.P.
By: Coastal Capital Partners,
Inc., as General Partner
By:_____________________________
Andrew K. Simpson
Chief Executive Officer
Address: 101 Morgan Lane
Suite 180
Plainsboro, NJ 08536
SHAREHOLDERS
By:____________________________
Donald Leibsker
Address: 2856 Greenleaf
Chicago, ILL 60645
By:____________________________
M. Douglas Caffey
Address: 2605 St. Simons
Tustin, CA 92680
<PAGE>
EXHIBIT A-1
-----------
JOINT FILING AGREEMENT
This Agreement is entered into by and among Coastal Capital Partners, L.P.,
a Delaware limited partnership, Coastal Capital Partners, Inc., a Delaware
corporation, Philip L. Yang, Jr., an individual, Michael Y. Gan, an individual,
Theresa C. Morris, an individual, Donald Leibsker, an individual, and M. Douglas
Caffey, an individual.
Each of the persons named above hereby agrees that the Amendment No. 5 to
Schedule 13D of _______________, 1996 and to which this Agreement is attached as
an exhibit, which is to be filed with the Securities and Exchange Commission, is
to be filed on behalf of each such person.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
this 26th day of June, 1996.
COASTAL CAPITAL PARTNERS, L.P.
- ----------------------------------- By: Coastal Capital Partners, Inc.
Andrew K. Simpson, as attorney- as General Partner
in-fact for Michael Y. Gan
By:
---------------------------------
Andrew K. Simpson
- ----------------------------------- Chief Executive Officer
Andrew K. Simpson, as attorney-
in-fact for Theresa C. Morris
COASTAL CAPITAL PARTNERS, INC.
- -----------------------------------
Andrew K. Simpson, as attorney- By:
fact for Philip L. Yang ------------------------------------
Andrew K. Simpson
Chief Executive Officer
- -----------------------------------
Andrew K. Simpson, as attorney-
fact for Donald Leibsker
- -----------------------------------
Andrew K. Simpson, as attorney-
fact for M. Douglas Caffey
<PAGE>
EXHIBIT A-1.1
-------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints Andrew K. Simpson, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Amendment No. 5 to Schedule 13D, dated ________________, 1996, and to which this
Power of Attorney is attached as an exhibit, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming his
signature as it may be signed by said attorney-in-fact and agent, or his
substitutes, to any and all amendments to said Schedule 13D.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 26th
day of June, 1996.
----------------------------------------
[Signing Shareholder]
<PAGE>
EXHIBIT B
IRREVOCABLE PROXY
Belcor Inc. ("Belcor"), as owner of the Settlement Warrant (as defined in
------
that certain Amended and Restated Termination Agreement, dated as of June 26,
1996, between Belcor and Rio Grande Mining Company) under which it may purchase
up to 17,000,000 shares ("Warrant Shares") of common stock of Rio Grande Mining
--------------
Company ("Rio Grande"), hereby revokes all previous proxies and appoints Coastal
----------
Capital Partners, Inc. ("Coastal GP"), acting on behalf of and in its capacity
----------
as the general partner of Coastal Capital Partners, L.P. ("Coastal LP"), as its
----------
proxyholder to attend and vote any and all Warrant Shares that are acquired by
Belcor at any and all meetings of the shareholders of Rio Grande (or such other
issuer of the Warrant Shares, if any), and any adjournments thereof, held on or
after the date such Warrant Shares are acquired, and to execute any and all
written consents of shareholders of Rio Grande (or such other issuer of the
Warrant Shares, if any) executed on or after the date such Warrant Shares are
purchased, with the same effect as if an authorized agent of Belcor had
personally attended the meeting or had personally voted the Warrant Shares or
had personally signed the written consent. Belcor also hereby appoints Coastal
GP, acting in its capacity as the general partner of Coastal LP, with full power
of substitution of other persons to act in its name, place or stead. Belcor
hereby agrees that the votes of Coastal GP may be cast by its President, Andrew
K. Simpson, and further agrees that upon written notice to Belcor the Board of
Directors of Coastal GP has the power and authority to designate another person
to cast the votes of Belcor on behalf of Coastal GP, acting in its capacity as
the general partner of Coastal LP, and that such other person can be an officer
of Coastal GP or a designated representative of Coastal GP. Belcor authorizes
and directs the proxyholder to file this proxy appointment with the Secretary of
Rio Grande (or such other issuer of the Warrant Shares, if any) and authorizes
the proxyholder to substitute another person as proxyholder and to file the
substitution instrument with the Secretary of Rio Grande (or such other issuer
of the Warrant Shares, if any).
Belcor hereby agrees that in the event that subsequent to the date of this
irrevocable proxy but before its expiration any shares or other securities are
issued on, or in exchange for, any of the Warrant Shares by reason of any stock
dividend, stock split, reclassification, asset sale or any other transaction or
event involving Rio Grande or the holder of the Warrant Shares, such shares or
securities shall be deemed to be Warrant Shares for purposes of this irrevocable
proxy.
This irrevocable proxy shall survive and not be affected by the subsequent
dissolution, bankruptcy or insolvency of Belcor. This irrevocable proxy shall
remain in full force and effect and be enforceable against any donee, transferee
or assignee of the Warrant Shares.
This irrevocable proxy is coupled with an interest and is irrevocable
pursuant to Nevada General Corporation Law Section 78.355(4) as long as the
Combined Investment (as defined in that certain Amended and Restated Investors'
Rights Agreement, dated as of June 26, 1996, between Belcor, Coastal, Donald
Leibsker and M. Douglas Caffey) of Coastal exceeds $200,000.00; provided that,
and in any event, this irrevocable proxy shall expire on June 26, 2001.
BELCOR INC.
___________________________ _______________________________
By: M. Douglas Caffey By: Donald Leibsker
President Chairman of the Board
-40-
<PAGE>
EXHIBIT C
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made as of the __th day of
_____, 1996, by and between Belcor Inc., a California corporation ("Belcor") and
Donald Leibsker, an individual resident of the State of Illinois ("Leibsker").
WHEREAS, Leibsker possesses valuable business expertise and knowledge of
Belcor's operations; and
WHEREAS, Belcor desires to engage Leibsker to provide certain advisory
services to Belcor's management regarding its operations.
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Consulting Services. Leibsker hereby offers his services as
-------------------
consultant of, and independent contractor to, Belcor, and Belcor hereby accepts
such offer.
2. Leibsker' Duties; Scope. Subject to the direction and control of
-----------------------
Belcor's Board of Directors, Leibsker hereby agrees to serve Belcor faithfully
and honestly and to use his best efforts and ability in the capacity of
consultant to provide consulting services for the benefit of Belcor with respect
to management and strategic planning relating to the operations of Belcor and to
perform such other duties as are reasonably assigned to him by Belcor's Chief
Executive Officer.
3. Term. This Agreement shall become effective on the date first above
----
written and shall terminate on the first anniversary of such date, or upon such
earlier date as may be specified by Belcor in an advance written notice to
Leibsker (the "Term").
----
4. Compensation. In consideration for the execution of this Agreement by
------------
Leibsker and services to be rendered by Leibsker to Belcor, Belcor hereby agrees
upon execution of this Agreement to issue to Leibsker warrants to purchase up to
150,000 shares of Belcor Common Stock, with the right to purchase 75,000 shares
vesting upon the occurrence of the execution of this Agreement and the right to
purchase the remaining 75,000 shares vesting on the first anniversary of such
execution, at an exercise price of $.20 per share (the "New Leibsker Warrant").
An early termination of this Agreement as provided in Section 3 above, if any,
shall have no effect on Leibsker's right to receive the New Leibsker Warrant as
provided herein. During the Term, Leibsker shall be entitled to reimbursement
by Belcor for
-41-
<PAGE>
all reasonable business expenses Leibsker incurs in the performance of his
duties and responsibilities hereunder; provided, that any such amount in excess
--------
of Five Hundred Dollars ($500.00) in the aggregate in any month shall be
approved by Belcor before being incurred by Leibsker.
5. Independent Contractor. In the performance of the work, duties and
----------------------
obligations by Leibsker under this Consulting Agreement, it is mutually
understood and agreed that Leibsker is at all times acting and performing as an
independent contractor, and Belcor shall have no responsibility for withholding
federal or state income taxes for Leibsker. Further, performing services
pursuant to this Consulting Agreement, Leibsker shall have no claim under this
Consulting Agreement or otherwise against Belcor for vacation pay, sick leave,
retirement benefits, Social Security, workers' compensation, disability or
unemployment insurance benefits or employee benefits of any kind unless
specifically awarded in this Consulting Agreement.
6. Non-Exclusivity; Part-Time. Leibsker shall make himself available to
--------------------------
Belcor pursuant to this Agreement at such times as may be reasonably requested
from time to time by Belcor, but in no event shall Leibsker's time so spent be
required to exceed a monthly average of five (5) hours. However, Leibsker may
devote as much additional time, ability and attention to the performance of his
duties and responsibilities hereunder as he shall deem necessary but, in such
event, no additional compensation is payable by Belcor. All consulting services
to be rendered by Leibsker hereunder shall be performed upon reasonable notice
and for reasonable periods of time during normal working hours.
7. No Conflicts. Leibsker represents and warrants that his performance
------------
of this Consulting Agreement does not conflict with any written or oral
agreement into which he has entered.
8. Confidential Information. The term "Confidential Information" shall
------------------------
mean all information Belcor desires, for business reasons, to hold in
confidence. By way of illustration but not limitation, Confidential Information
includes (a) information regarding business plans, budgets and unpublished
financial statements, licenses, prices and costs of Belcor; and (b) information
regarding the skills and compensation of employees of or other consultants to
Belcor. Leibsker agrees to hold all such Confidential Information in strictest
confidence and not to disclose or use any Confidential Information, except (i)
as such use or disclosure may be required in connection with work for Belcor,
provided that an officer of Belcor expressly authorizes such disclosure or use,
(ii) as such information has come to be in the public domain or (iii) as
Leibsker may be legally required to disclose pursuant to applicable laws,
regulations, court or administrative orders. Leibsker further
-42-
<PAGE>
agrees to assign to Belcor any rights he has or may acquire in such Confidential
Information and agrees that all Confidential Information shall be the sole
property of Belcor and its assigns. The covenants and restrictions set forth in
this Section 8 shall survive the expiration or termination of this Agreement.
Leibsker acknowledges and agrees that the foregoing restrictions are reasonable
and necessary to protect the legitimate interests of Belcor and that any
violation of such restriction may result in irreparable injury to Belcor, that
the remedy at law for any breach of the foregoing restrictions will be
inadequate, and that, in the event of any such breach, Belcor, in addition to
any other relief available to it, shall be entitled to temporary injunctive
relief before trial from any court of competent jurisdiction as a matter of
course and to permanent injunctive relief without the necessity of proving
actual damages.
9. Assignment. The provisions of this Agreement shall inure to the
----------
benefit of the parties hereto, their heirs, legal representatives, successors
and permitted assigns. Leibsker shall have no right to assign any of his rights
nor delegate any of his duties created by this Agreement, and any assignment or
attempted assignment shall be null and void. Belcor may assign its rights,
together with its obligations, hereunder in connection with any sale, transfer
or other disposition of all or a substantial portion of the assets of Belcor.
10. Notices. All notices, requests, demands and other communications
-------
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, or by confirmed facsimile transmission,
or on two business days following consignment, freight prepaid, to a commercial
overnight air courier service, or five days after being mailed, first class
postage prepaid, return receipt requested.
If to Leibsker, addressed as follows:
Donald Leibsker
29 S. LaSalle Street
Suite 415
Chicago, Illinois 60603
Facsimile: (312) 332-0204
-43-
<PAGE>
If to Belcor, addressed as follows:
Belcor Inc.
101 Morgan Lane, Suite 180
Plainsboro, New Jersey 08536
Attention: Theresa Morris
Facsimile: (609) 936-9088
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
11. Counterparts. This Agreement may be executed in counterparts, which
------------
together shall constitute one agreement.
12. Governing Law. This Agreement shall be governed by and construed
-------------
according to the laws of the State of California as applicable to agreements
executed in and to be wholly performed within such State.
13. Entire Agreement. This Consulting Agreement constitutes the sole
----------------
agreement of the parties hereto relating to the subject matter hereof and
supersedes all prior agreements with respect to the subject matter hereof.
Leibsker agrees that all prior compensation agreements and compensation and
bonus arrangements between Leibsker and Belcor shall be deemed terminated as of
the date hereof. This Agreement shall not be amended, altered or modified other
than by written agreement between the parties hereto.
14. Severability. If any paragraph, term or provision of this Agreement
------------
shall be held or determined to be unenforceable, the balance of this Agreement
shall nevertheless continue in full force and effect, unaffected by such holding
or determination.
15. Governing Law. This Agreement shall be governed by the internal laws
-------------
of the State of California.
16. Headings. The section headings contained in this Agreement are for
--------
convenience and reference purposes only and shall not affect in any way the
meaning and interpretation of this Agreement.
-44-
<PAGE>
In Witness Whereof, Belcor and Leibsker have executed this Agreement as of
the day and year first above written.
Belcor Inc.
________________________
Andrew K. Simpson
Chief Executive Officer
________________________
Donald Leibsker
-45-
<PAGE>
EXHIBIT D
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made as of the __th day of
_____, 1996, by and between Belcor Inc., a California corporation ("Belcor") and
M. Douglas Caffey, an individual resident of the State of California ("Caffey").
WHEREAS, Caffey possesses valuable business expertise and knowledge of
Belcor's operations; and
WHEREAS, Belcor desires to engage Caffey to provide certain advisory
services to Belcor's management regarding its operations.
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Consulting Services. Caffey hereby offers his services as consultant
-------------------
of, and independent contractor to, Belcor, and Belcor hereby accepts such offer.
2. Caffey' Duties; Scope. Subject to the direction and control of
---------------------
Belcor's Board of Directors, Caffey hereby agrees to serve Belcor faithfully and
honestly and to use his best efforts and ability in the capacity of consultant
to provide consulting services for the benefit of Belcor with respect to
management and strategic planning relating to the operations of Belcor and to
perform such other duties as are reasonably assigned to him by Belcor's Chief
Executive Officer.
3. Term. This Agreement shall become effective on the date first above
----
written and shall terminate on the first anniversary of such date, or upon such
earlier date as may be specified by Belcor in an advance written notice to
Caffey (the "Term").
----
4. Compensation. In consideration for the execution of this Agreement
------------
by Caffey and services to be rendered by Caffey to Belcor, Belcor hereby agrees
upon execution of this Agreement to issue to Caffey warrants to purchase up to
100,000 shares of Belcor Common Stock, with the right to purchase 50,000 shares
vesting upon the occurrence of the execution of this Agreement and the right to
purchase the remaining 50,000 shares vesting on the first anniversary of such
execution, at an exercise price of $.20 per share (the "New Caffey Warrant"). An
early termination of this Agreement as provided in Section 3 above, if any,
shall have no effect on Caffey's right to receive the New Caffey Warrant as
provided herein. During the Term, Caffey shall be entitled to reimbursement by
Belcor for all reasonable business
-46-
<PAGE>
expenses Caffey incurs in the performance of his duties and responsibilities
hereunder; provided, that any such amount in excess of Five Hundred Dollars
--------
($500.00) in the aggregate in any month shall be approved by Belcor before being
incurred by Caffey.
5. Independent Contractor. In the performance of the work, duties and
----------------------
obligations by Caffey under this Consulting Agreement, it is mutually understood
and agreed that Caffey is at all times acting and performing as an independent
contractor, and Belcor shall have no responsibility for withholding federal or
state income taxes for Caffey. Further, performing services pursuant to this
Consulting Agreement, Caffey shall have no claim under this Consulting Agreement
or otherwise against Belcor for vacation pay, sick leave, retirement benefits,
Social Security, workers' compensation, disability or unemployment insurance
benefits or employee benefits of any kind unless specifically awarded in this
Consulting Agreement.
6. Non-Exclusivity; Part-Time. Caffey shall make himself available to
--------------------------
Belcor pursuant to this Agreement at such times as may be reasonably requested
from time to time by Belcor, but in no event shall Caffey's time so spent be
required to exceed a monthly average of five (5) hours. However, Caffey may
devote as much additional time, ability and attention to the performance of his
duties and responsibilities hereunder as he shall deem necessary but, in such
event, no additional compensation is payable by Belcor. All consulting services
to be rendered by Caffey hereunder shall be performed upon reasonable notice and
for reasonable periods of time during normal working hours.
7. No Conflicts. Caffey represents and warrants that his performance of
------------
this Consulting Agreement does not conflict with any written or oral agreement
into which he has entered.
8. Confidential Information. The term "Confidential Information" shall
------------------------
mean all information Belcor desires, for business reasons, to hold in
confidence. By way of illustration but not limitation, Confidential Information
includes (a) information regarding business plans, budgets and unpublished
financial statements, licenses, prices and costs of Belcor; and (b) information
regarding the skills and compensation of employees of or other consultants to
Belcor. Caffey agrees to hold all such Confidential Information in strictest
confidence and not to disclose or use any Confidential Information, except (i)
as such use or disclosure may be required in connection with work for Belcor,
provided that an officer of Belcor expressly authorizes such disclosure or use,
(ii) as such information has come to be in the public domain or (iii) as Caffey
may be legally required to disclose pursuant to applicable laws, regulations,
court or administrative orders. Caffey further agrees to assign to Belcor any
rights he has or may acquire in such Confidential Information and agrees that
all Confidential
-47-
<PAGE>
Information shall be the sole property of Belcor and its assigns. The covenants
and restrictions set forth in this Section 8 shall survive the expiration or
termination of this Agreement. Caffey acknowledges and agrees that the foregoing
restrictions are reasonable and necessary to protect the legitimate interests of
Belcor and that any violation of such restriction may result in irreparable
injury to Belcor, that the remedy at law for any breach of the foregoing
restrictions will be inadequate, and that, in the event of any such breach,
Belcor, in addition to any other relief available to it, shall be entitled to
temporary injunctive relief before trial from any court of competent
jurisdiction as a matter of course and to permanent injunctive relief without
the necessity of proving actual damages.
9. Assignment. The provisions of this Agreement shall inure to the
----------
benefit of the parties hereto, their heirs, legal representatives, successors
and permitted assigns. Caffey shall have no right to assign any of his rights
nor delegate any of his duties created by this Agreement, and any assignment or
attempted assignment shall be null and void. Belcor may assign its rights,
together with its obligations, hereunder in connection with any sale, transfer
or other disposition of all or a substantial portion of the assets of Belcor.
10. Notices. All notices, requests, demands and other communications
-------
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, or by confirmed facsimile transmission,
or on two business days following consignment, freight prepaid, to a commercial
overnight air courier service, or five days after being mailed, first class
postage prepaid, return receipt requested.
If to Caffey, addressed as follows:
M. Douglas Caffey
2605 St. Simons
Tustin, California 92680
Facsimile: (714) 832-6377
If to Belcor, addressed as follows:
Belcor Inc.
101 Morgan Lane, Suite 180
Plainsboro, New Jersey 08536
Attention: Theresa Morris
Facsimile: (609) 936-9088
-48-
<PAGE>
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
11. Counterparts. This Agreement may be executed in counterparts, which
------------
together shall constitute one agreement.
12. Governing Law. This Agreement shall be governed by and construed
-------------
according to the laws of the State of California as applicable to agreements
executed in and to be wholly performed within such State.
13. Entire Agreement. This Consulting Agreement constitutes the sole
----------------
agreement of the parties hereto relating to the subject matter hereof and
supersedes all prior agreements with respect to the subject matter hereof.
Caffey agrees that all prior compensation agreements and compensation and bonus
arrangements between Caffey and Belcor shall be deemed terminated as of the date
hereof. This Agreement shall not be amended, altered or modified other than by
written agreement between the parties hereto.
14. Severability. If any paragraph, term or provision of this Agreement
------------
shall be held or determined to be unenforceable, the balance of this Agreement
shall nevertheless continue in full force and effect, unaffected by such holding
or determination.
15. Governing Law. This Agreement shall be governed by the internal laws
-------------
of the State of California.
16. Headings. The section headings contained in this Agreement are for
--------
convenience and reference purposes only and shall not affect in any way the
meaning and interpretation of this Agreement.
-49-
<PAGE>
In Witness Whereof, Belcor and Caffey have executed this Agreement as of
the day and year first above written.
Belcor Inc.
________________________
Andrew K. Simpson
Chief Executive Officer
________________________
M. Douglas Caffey
-50-
<PAGE>
EXHIBIT E
EMPLOYMENT, CONSULTING AND SEVERANCE AGREEMENTS
-51-
<PAGE>
SCHEDULE 4(d)
BELCOR LITIGATION
NONE.
-----
-52-
<PAGE>
EXHIBIT 99.(AA)
BELCOR INC. SHAREHOLDERS' AGREEMENT
THIS BELCOR INC. SHAREHOLDERS' AGREEMENT (this "Agreement") is made as of
---------
June 26, 1996 by and among Coastal Capital Partners, L.P., a Delaware limited
partnership ("Coastal"), Belcor Inc., a California corporation (the "Company"),
------- -------
and the Persons listed on the signature pages hereto (collectively, the
"Shareholders").
------------
WHEREAS, Coastal and each Shareholder are or will be, directly or
indirectly, holders of shares of common stock of the Company ("Common Stock")
------------
and/or warrants or other instruments convertible into shares of Common Stock
("Convertible Instruments"; the Common Stock, shares of Common Stock issuable
-----------------------
upon exercise of any Convertible Instrument (including, but not, limited to the
New Caffey Warrants, the Leibsker Warrant and the New Leibsker Warrants (all as
defined in the Investors' Rights Agreement or Termination Agreement) and any
shares of Common Stock received subsequent to the execution of this Agreement by
each Shareholder as a dividend or otherwise on their Common Stock or Convertible
Instruments, together, "Shares")
------
WHEREAS, Coastal and the Shareholders desire to secure the election of the
nominees of Coastal to the Board of Directors of the Company; and
WHEREAS, Coastal has entered into an Amended and Restated Investors' Rights
Agreement ("Investors' Rights Agreement"), dated as of June 26, 1996, with the
---------------------------
Company, Donald Leibsker and M. Douglas Caffey under which Coastal will make a
substantial capital contribution to the Company; and a condition of closing the
Investors' Rights Agreement is the execution and delivery by the Shareholders
and the Company of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. VOTING AGREEMENT REGARDING SHARES.
---------------------------------
1.1 Agreement to Vote. Each Shareholder agrees on behalf of himself or
-----------------
herself and any of the following persons to whom the Shareholder may transfer
Shares (or his Convertible Instruments): (a) a member of his or her immediate
family; (b) a trust established by the Shareholder for the benefit of the
Shareholder or his or her immediate family by gift or inheritance; or (c) a
person that directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, the Shareholder
(individually, an "Affiliated Transferee") to hold all of the Shares (and
Convertible Instruments) now held or subsequently acquired registered in his or
her name subject to, and to vote the Shares in accordance with, the provisions
of this Agreement.
<PAGE>
1.2 Board of Directors. Each Shareholder shall vote his or her Shares
------------------
(or shall consent pursuant to an action by written consent of the Company's
shareholders) so as to elect nominees designated by Coastal, its successors,
affiliates or assigns to all of the positions on the Company's then existing
Board of Directors; and, in the event that any designated director shall not
complete his term of office as a director and a successor director is to be
elected, each Shareholder shall vote his or her Shares to elect as such
successor director a nominee designated by Coastal, its successors, affiliates
or assigns .
1.3 Removal. On all matters relating to the removal of directors of
-------
the Company, each Shareholder shall vote his or her Shares (or shall consent
pursuant to an action by written consent of the Company's shareholders) to
ensure that no director of the Company may be removed from the Board, with or
without cause, except upon the prior written authorization or request of
Coastal.
1.4 Conflicting Charter or By-Law Provisions. Each Shareholder shall
----------------------------------------
vote his or her Shares (or shall consent pursuant to an action by written
consent of the Company's shareholders), and shall take all other action
necessary, to ensure that the Articles of Incorporation and By-Laws of the
Company facilitate and do not at any time conflict with the provisions of this
Agreement.
1.5 Approval of Transactions. Each Shareholder shall vote his or her
------------------------
Shares (or shall consent pursuant to an action by written consent of the
Company's shareholders) on any issue put to the vote of the Company's
shareholders in the manner which the Board of Directors of the Company
recommends.
1.6 Rights Assignable. Coastal may assign its rights and benefits
-----------------
under this Agreement to any person that acquires shares of Common Stock from
Coastal.
2. CONDITION PRECEDENT; TERMINATION.
--------------------------------
2.1 Condition Precedent to Obligations. The obligation of each party
----------------------------------
to this Agreement to perform its obligations under this Agreement shall be
subject to the consummation and performance of the transactions contemplated by
that certain Amended and Restated Termination Agreement, dated as of June 26,
1996, between the Company and Belcor (the "Termination Agreement").
---------------------
2.2 Termination of Rights regarding the Company. The rights of Coastal
-------------------------------------------
and the Shareholders under this Agreement shall terminate upon the earliest to
occur of (i) with respect any individual Shareholder, the date on which such
Shareholder or any
-2-
<PAGE>
Affiliated Transferee no longer owns any Shares, (ii) the occurrence of the
merger or consolidation of the Company into, or the sale of all or substantially
all of the Company's assets to, another corporation, unless the shareholders of
the Company shall own at least 51% of the capital stock of such other
corporation immediately after such merger, consolidation or sale, or (iii) the
date two years from the closing of the Termination Agreement.
3. LEGEND.
------
3.1 Legend. Each certificate representing Shares owned by any
------
Shareholder or transferred to any Affiliated Transferee shall be endorsed with
the following legend:
"THE VOTING OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS AND CONDITIONS OF A SHAREHOLDERS' AGREEMENT BY AND AMONG
CERTAIN HOLDERS OF COMMON STOCK OF THE CORPORATION. BY ACCEPTING ANY
INTEREST IN SUCH SECURITIES THE PERSON ACCEPTING SUCH INTEREST SHALL BE
DEEMED TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH
SHAREHOLDERS' AGREEMENT. COPIES OF SUCH SHAREHOLDERS' AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE CORPORATION."
3.2 Legend Removal. The legend referred to in Section 3.1 shall be
--------------
removed (i) from every certificate upon termination of this Agreement in
accordance with the provisions of Section 2 above or (ii) from any certificate
representing Shares owned by any Shareholder or transferred to any Affiliated
Transferee that are transferred to a person other than a signatory to this
Agreement.
3.3 Cooperation with Filings. Each Shareholder shall cooperate fully
------------------------
with Coastal and the Company with regard to any filings required under the
Securities and Exchange Act of 1934, as amended, or any other federal or state
securities law, rule or regulation, relative to such Shareholder's participation
in this Agreement, which cooperation shall include, without limitation, the
prompt response to written requests for information. Each Shareholder hereby
agrees to indemnify and hold harmless Coastal and the Company and their
respective officers, directors, employees, shareholders and agents from and
against any and all losses, damages, costs and expenses (including attorney's
fees and other costs) and liabilities due or arising out of information such
Shareholder shall provide to Coastal and the Company pursuant to this Section
3.3 but only if such information included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
-3-
<PAGE>
4. MISCELLANEOUS.
-------------
4.1 Representations. Each of the parties hereto represents that this
---------------
Agreement has been duly authorized, executed and delivered by such party and
constitutes a legal, valid and binding obligation of such party, enforceable
against it in accordance with the terms of this Agreement.
4.2 Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof, that money damages shall be
inadequate for such breach, and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or in
equity.
4.3 Amendments and Waivers. Any term of this Agreement may be amended
----------------------
and the observance of any such term may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the parties hereto.
4.4 Notices. All notices and other communications provided for herein
-------
shall be in writing and shall be delivered by hand, telecopied or sent by
overnight, certified or registered mail, return receipt requested, postage
prepaid, addressed in the manner set forth on the signature pages of this
Agreement (or to such other address for a party as shall be specified in a
notice given in accordance with this Section 4.4). All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery or telecopied, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
4.5 Benefit; Successors and Assigns. Except as otherwise provided
-------------------------------
herein, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement either express or implied is intended to confer on any
person other than the parties hereto and their respective successors and
permitted assigns, any rights, remedies or obligations under or by reason of
this Agreement.
4.6 Miscellaneous. This Agreement sets forth the entire agreement and
-------------
understanding among the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. All representations and
warranties contained herein shall survive the execution and delivery of this
Agreement, regardless of any investigation made by any party hereto or on such
party's behalf. The headings in this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof. This Agreement
may be
-4-
<PAGE>
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one instrument.
4.7 Severability. If any provisions of this Agreement shall be deemed
------------
invalid or unenforceable pursuant to a final determination of any court of
competent jurisdiction, or as a result of future legislative action, such
determination or action shall be construed so as not to affect the validity,
enforceability or effect the other provisions of this Agreement this Agreement,
and this Agreement shall be construed as if the invalid or unenforceable
provision were not contained herein, and the rights and obligations of the
parties shall be construed and enforced accordingly.
4.8 Amendments and Waivers. Neither this Agreement nor any term hereof
----------------------
may be amended, waived, discharged or terminated other than by a written
instrument signed by Shareholders holding a majority of the Shares.
4.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which together shall constitute one instrument, and each of
which may be executed by less than all of the parties to this Agreement.
4.10 Governing Law. The agreement shall be governed by an construed in
-------------
accordance with the laws of the state of California without regard to the choice
of law provisions thereof.
4.11 Joint Filing Agreement and Power of Attorney. In connection with
--------------------------------------------
the execution of this agreement and required filings of Schedule 13D with the
Securities and Exchange Commission, each Shareholder shall execute a Joint
Filing Agreement and Power of Attorney, substantially in the form attached
hereto as Exhibit A-1
[signature page follows]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Shareholders'
Agreement to be executed and delivered as of the date first above written.
COASTAL CAPITAL PARTNERS, L.P.
By: Coastal Capital Partners,
Inc., as General Partner
By: ____________________________
Andrew K. Simpson
Chief Executive Officer
Address: 101 Morgan Lane
Suite 180
Plainsboro, NJ 08536
SHAREHOLDERS
By: /s/ Donald Leibsker
-----------------------------
Donald Leibsker
Address: 2856 Greenleaf
Chicago, ILL 60645
By: /s/ M. Douglas Caffey
-----------------------------
M. Douglas Caffey
Address: 2605 St. Simons
Tustin, CA 92680
-6-
<PAGE>
EXHIBIT A-1
-----------
JOINT FILING AGREEMENT
This Agreement is entered into by and among Coastal Capital Partners, L.P.,
a Delaware limited partnership, Coastal Capital Partners, Inc., a Delaware
corporation, Philip L. Yang, Jr., an individual, Michael Y. Gan, an individual,
Theresa C. Morris, an individual, Donald Leibsker, an individual, and M. Douglas
Caffey, an individual.
Each of the persons named above hereby agrees that the Amendment No. 5 to
Schedule 13D of _______________, 1996 and to which this Agreement is attached as
an exhibit, which is to be filed with the Securities and Exchange Commission, is
to be filed on behalf of each such person.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
this 26th day of June, 1996.
COASTAL CAPITAL PARTNERS, L.P.
- ------------------------------ By: Coastal Capital Partners, Inc.
Andrew K. Simpson, as attorney- as General Partner
in-fact for Michael Y. Gan
By:________________________________
Andrew K. Simpson
- ------------------------------ Chief Executive Officer
Andrew K. Simpson, as attorney-
in-fact for Theresa C. Morris
COASTAL CAPITAL PARTNERS, INC.
- ------------------------------
Andrew K. Simpson, as attorney- By:____________________________
fact for Philip L. Yang Andrew K. Simpson
Chief Executive Officer
- ------------------------------
Andrew K. Simpson, as attorney-
fact for Donald Leibsker
- ------------------------------
Andrew K. Simpson, as attorney-
fact for M. Douglas Caffey
<PAGE>
EXHIBIT A-1.1
-------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints Andrew K. Simpson, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Amendment No. 5 to Schedule 13D, dated ________________, 1996, and to which this
Power of Attorney is attached as an exhibit, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming his
signature as it may be signed by said attorney-in-fact and agent, or his
substitutes, to any and all amendments to said Schedule 13D.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 26th
day of June, 1996.
-------------------------------
[Signing Shareholder]
<PAGE>
EXHIBIT 99.(AB)
IRREVOCABLE PROXY
Belcor Inc. ("Belcor"), as owner of the Settlement Warrant (as defined in
------
that certain Amended and Restated Termination Agreement, dated as of June 26,
1996, between Belcor and Rio Grande Mining Company) under which it may purchase
up to 17,000,000 shares ("Warrant Shares") of common stock of Rio Grande Mining
--------------
Company ("Rio Grande"), hereby revokes all previous proxies and appoints Coastal
----------
Capital Partners, Inc. ("Coastal GP"), acting on behalf of and in its capacity
----------
as the general partner of Coastal Capital Partners, L.P. ("Coastal LP"), as its
----------
proxyholder to attend and vote any and all Warrant Shares that are acquired by
Belcor at any and all meetings of the shareholders of Rio Grande (or such other
issuer of the Warrant Shares, if any), and any adjournments thereof, held on or
after the date such Warrant Shares are acquired, and to execute any and all
written consents of shareholders of Rio Grande (or such other issuer of the
Warrant Shares, if any) executed on or after the date such Warrant Shares are
purchased, with the same effect as if an authorized agent of Belcor had
personally attended the meeting or had personally voted the Warrant Shares or
had personally signed the written consent. Belcor also hereby appoints Coastal
GP, acting in its capacity as the general partner of Coastal LP, with full power
of substitution of other persons to act in its name, place or stead. Belcor
hereby agrees that the votes of Coastal GP may be cast by its President, Andrew
K. Simpson, and further agrees that upon written notice to Belcor the Board of
Directors of Coastal GP has the power and authority to designate another person
to cast the votes of Belcor on behalf of Coastal GP, acting in its capacity as
the general partner of Coastal LP, and that such other person can be an officer
of Coastal GP or a designated representative of Coastal GP. Belcor authorizes
and directs the proxyholder to file this proxy appointment with the Secretary of
Rio Grande (or such other issuer of the Warrant Shares, if any) and authorizes
the proxyholder to substitute another person as proxyholder and to file the
substitution instrument with the Secretary of Rio Grande (or such other issuer
of the Warrant Shares, if any).
Belcor hereby agrees that in the event that subsequent to the date of this
irrevocable proxy but before its expiration any shares or other securities are
issued on, or in exchange for, any of the Warrant Shares by reason of any stock
dividend, stock split, reclassification, asset sale or any other transaction or
event involving Rio Grande or the holder of the Warrant Shares, such shares or
securities shall be deemed to be Warrant Shares for purposes of this irrevocable
proxy.
This irrevocable proxy shall survive and not be affected by the subsequent
dissolution, bankruptcy or insolvency of Belcor. This irrevocable proxy shall
remain in full force and effect and be enforceable against any donee, transferee
or assignee of the Warrant Shares.
This irrevocable proxy is coupled with an interest and is irrevocable
pursuant to Nevada General Corporation Law Section 78.355(4) as long as the
Combined Investment (as defined in that certain Amended and Restated Investors'
Rights Agreement, dated as of June 26, 1996, between Belcor, Coastal, Donald
Leibsker and M. Douglas Caffey) of Coastal exceeds $200,000.00; provided that,
and in any event, this irrevocable proxy shall expire on June 26, 2001.
BELCOR INC.
/s/ M. Douglas Caffey /s/ Donald Leibsker
- -------------------------- ---------------------------
By: M. Douglas Caffey By: Donald Leibsker
President Chairman of the Board
<PAGE>
EXHIBIT 99.(AC)
M. DOUGLAS CAFFEY
2605 St. Simons
Tustin, California 92680
June 26, 1996
Mr. Donald Leibsker
Chairmen of the Board
Belcor Inc.
18004 Skypark Circle
Irvine, California 92714
Dear Mr. Leibsker:
This letter (the "Letter Agreement") is to confirm our agreement regarding
that certain Amended Employment Agreement, dated as of January 20, 1995 (the
"Employment Agreement"), between Belcor Inc. ("Belcor") and myself, which
agreement was executed in accordance with those certain resolutions of Belcor's
Board of Directors dated October 20, 1994 which provided for Belcor's employment
of myself for a stated compensation of either (i) a minimum cash payment of
$25,000 subject to upward adjustment based upon the trading price of Belcor
common stock at a specified date or (ii) the issuance of warrants to purchase up
to a maximum of 500,000 shares of the common stock of Belcor at an exercise
price of $.18 per share (the "Warrants"). This agreement also is executed in
contemplation of the execution of that Amended and Restated Termination
Agreement, dated as of June 26, 1996, between Belcor and the Rio Grande Mining
Company (the "Termination Agreement") and that certain Amended and Restated
Investors' Rights Agreement, dated as of June 26, 1996, between Belcor, Coastal
Capital Partners, L.P., Donald Leibsker and myself (the "Investors' Rights
Agreement").
We have agreed as follows:
1. Belcor hereby agrees that it shall, upon and subject to the occurrence
of the closing of the Termination Agreement, pay to me $25,000 (the
"Compensation Amount") by check or wire transfer in satisfaction of all of its
obligations under the Employment Agreement.
2. In consideration of and subject to payment of the Compensation Amount,
I do hereby, except with respect to those obligations of Belcor relating to
myself created by or arising out of the Investors' Rights Agreement, the
Consulting and/or
<PAGE>
Mr. Donald Leibsker
Belcor Inc.
June 26, 1996
Page 2
Retirement Agreements referred to in Section 4(o) of the Investors' Rights
Agreement or the Caffey Consulting Agreement (as defined therein), release and
forever discharge Belcor and its past and present parent companies, divisions,
affiliates and subsidiaries (direct and indirect), predecessors, successors,
assigns, partners, directors, officers, employees, agents, trustees,
representatives, insurers and attorneys of and from any and all causes of action
in law or in equity, suits, debts, liens, contracts, agreements, promises,
liabilities, claims, demands, damages, losses, attorneys' fees, or costs, of any
nature whatsoever, fixed or contingent, known or unknown, suspected or
unsuspected, liquidated or unliquidated, which I and any person claiming
derivatively through myself now have or may hereafter have against Belcor by
reason of any matter, cause, or thing whatsoever arising or relating to the
Employment Agreement, including without limitation on the generality of the
foregoing, any and all claims, demands and causes of action that are, were,
could have been or could hereafter be asserted.
3. I expressly waive all rights and benefits which I now have or may in
the future have conferred upon me by virtue of the provisions of Section 1542 of
the California Civil Code or any other statute or law of similar effect with
respect to the adequacy of the $25,000 payment being made by Belcor in
satisfaction of all of its obligations under the Employment Agreement and the
releases granted by myself in this Letter Agreement and I agree that the
releases set forth in this Letter Agreement shall be fully effective
notwithstanding those provisions. Section 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED THE
SETTLEMENT WITH THE DEBTOR."
I HAVE SOUGHT THE ADVICE OF COUNSEL OR HAVE HAD THE OPPORTUNITY TO REVIEW THIS
WAIVER WITH COUNSEL. I UNDERSTAND AND ACKNOWLEDGE THE SIGNIFICANCE AND
CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE PROVISIONS OF SECTION 1542 AND HEREBY
ASSUME FULL RESPONSIBILITY FOR ANY DAMAGE, LOSS, OR LIABILITY WHICH I MAY
HEREAFTER INCUR BY REASON OF SUCH WAIVER.
4. Belcor and I hereby acknowledge and agree that immediately upon and
subject to payment of the Compensation Amount, the Employment Agreement shall be
deemed to have been terminated and Belcor shall have no further obligations to
me
<PAGE>
under the Employment Agreement, including any obligation to execute and issue
the Warrants to me, and no such Warrants shall be deemed to have ever been
issued; and I further acknowledge and agree that even if the Warrants were
deemed to have been issued to me, I hereby disclaim and renounce any and all of
my interests to, and any and all of my rights under, the Warrants.
Sincerely,
/s/ M. Douglas Caffey
--------------------------
M. Douglas Caffey
AGREED TO AND ACCEPTED AS OF JUNE 26, 1996
BELCOR INC.
By: /s/ Donald Leibsker
-------------------------
Donald Leibsker,
Chairmen of the Board
