EXHIBIT 99.01
MUZINICH & CO., INC.
450 Park Avenue
New York, New York 10022
February 18, 1997
Hecla Mining Company
6500 Mineral Drive
Coeur d'Alene, Idaho 83814
Ladies and Gentlemen:
Hecla Mining Company ("Hecla") has advised Muzinich &
Co., Inc. ("Muzinich") that Hecla wishes to retain Muzinich to
provide services to Hecla as placement agent in connection with
the sale (the "Offering") of not less than 3,200,000 shares and
not more than 4,500,000 shares of Hecla's common stock, par
value $.25 per share (the "Common Stock").
The purpose of this letter agreement (this "Agree-
ment") is to confirm the engagement of Muzinich by Hecla in
connection with the Offering.
Section 1. Engagement of Muzinich in connection with
Proposed Offering. Hecla hereby retains Muzinich, and Muzinich
hereby agrees to act as placement agent for Hecla, and agrees
to use its best efforts to sell, not less than 3,200,000 shares
and not more than 4,500,000 shares of the Common Stock (the
"Shares"), for the highest possible price per share, with the
price to be received by Hecla being adjusted to reflect market
conditions providing for a discount to the closing price of the
Common Stock on the date of the closing of the Offering, and to
perform all other services as is customary for a placement
agent and which are necessary to consummate the transactions
contemplated by this Agreement. The final price per share is
subject to the approval of Hecla in its sole discretion. The
Shares will be registered with the Securities and Exchange Com-
mission pursuant to the Securities Act of 1933, as amended,
pursuant to Hecla's currently effective shelf registration
statement.
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Section 2. Compensation. As compensation for
Muzinich's services in connection with the issuance of the
Shares, Hecla shall pay Muzinich the following fees upon re-
ceipt of the proceeds from such sale:
(a) a placement fee of 4.3% of the gross proceeds
received by Hecla from the issuance of the
Shares, payable upon receipt of the proceeds
from such sale, and all reasonable legal fees
and expenses incurred by Muzinich (with such
fees and expenses in excess of $20,000 being
pre-approved by Hecla); and
(b) if Hecla terminates this Agreement prior to the
closing of the Offering and, at the time of such
termination, Muzinich is not in breach in any
material respect of any of its obligations under
this Agreement, a fee of 0.50% of the funds
theretofore committed by investors pursuant to
written subscription agreements and all reason-
able out-of-pocket expenses (including reason-
able legal fees and expenses) incurred by
Muzinich in connection with the Offering (with
such fees and expenses in excess of $20,000
being pre-approved by Hecla).
Section 3. Other Agreements.
(a) Term. Muzinich's engagement hereunder may be
terminated by Muzinich at any time or, after the
date which is 20 days from the execution of this
letter, by Hecla, by prior written notice there-
of to other party; provided, however, that the
provisions of Sections 2(b), 3(c), 3(d) and 3(f)
shall survive such termination.
(b) Information. During the term of this Agreement,
Hecla agrees to furnish Muzinich with such in-
formation about Hecla as Muzinich reasonably
requests ("Company Information"). Hecla repre-
sents and warrants to Muzinich that all Company
Information will be accurate in all material
respects at the time it is furnished and will
not contain any untrue statement of a material
fact or omit to state a material fact necessary
in order to make the statements therein not mis-
leading in
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light of the circumstances under which such
statements are made, and agrees to advise
Muzinich prior to the sale of any shares of all
developments materially affecting Hecla,
or the accuracy of Company Information previ-
ously furnished to Muzinich or prospective pur-
chasers of the Shares. Hecla recognizes and
confirms that Muzinich (i) will be relying sole-
ly on such information and other information
available from generally recognized public
sources in performing the services contemplated
hereunder, (ii) will not independently verify
the accuracy or completeness of such informa-
tion, (iii) does not assume responsibility for
the accuracy or completeness thereof, and (iv)
will make appropriate disclaimers consistent
with the foregoing. In addition, any written
representations and warranties made by Hecla to
purchasers of the Shares shall be deemed to be
incorporated into this Agreement.
(c) Indemnification. Hecla agrees to indemnify
Muzinich and its affiliates and each person in
control of Muzinich and its affiliates and their
respective officers, directors, employees,
agents and representatives as provided in the
indemnity letter dated the date hereof and
attached hereto.
(d) No Shareholder Rights. Hecla acknowledges and
agrees that Muzinich has been retained only by
Hecla and that Hecla's engagement of Muzinich is
not deemed to be on behalf of and is not in-
tended to confer rights upon any shareholder,
owner or partner of Hecla or any other person
not a party hereto as against Muzinich or any of
its affiliates or the directors, officers, em-
ployees, agents and representatives of Muzinich.
Unless otherwise expressly agreed, no one other
than Hecla is authorized to rely upon Hecla's
engagement of Muzinich or any statements, advice
or opinions by Muzinich to Hecla.
(e) Miscellaneous. This Agreement may be executed
in two or more counterparts, all of which to-
gether shall be considered a single instrument.
The term "affiliate" as used herein shall have
the meaning ascribed to
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such term in the rules and regulations
promulgated under the Securities Exchange Act of
1934, as amended. Hecla confirms that it will
rely on its own counsel, accountants and other
similar expert advisors for legal, accounting,
tax and other similar expert advice. This
Agreement and the indemnity letter of even date
herewith constitute the entire agreement between
the parties with respect to the subject matter
hereof and supersede all other prior agreements
and understandings, both written and oral,
between the parties hereto with respect to the
subject matter hereof and cannot be amended or
otherwise modified except in writing executed by
the parties hereto. The provisions hereof shall
inure to the benefit of and be binding upon the
successors and permitted assignees of Hecla and
Muzinich. This letter is not intended to be and
should not be construed as a commitment with
respect to the underwriting, sale or placement
of the Shares and, except as expressly set forth
herein, creates no obligation or liability on
the part of Muzinich in connection therewith.
(f) Confidentiality. Except as required by law and
except with respect to any information that
otherwise becomes publicly available other than
as a result of a breach of this clause (f),
Muzinich agrees that it and its officers, em-
ployees, affiliates and agents will treat confi-
dentially and take reasonable precautions to
preserve and protect the confidentiality of and
otherwise refrain from disclosing to any person
other than officers, employees, affiliates and
agents of Muzinich any and all information fur-
nished to Muzinich pursuant to the terms of this
Agreement and consistent with industry practices
and will not use any of such information for any
purpose other than as set forth herein. In the
event that disclosure by Muzinich of any such
information is required by law, Muzinich shall,
if reasonably practicable, notify Hecla of such
requirement prior to disclosing any information
thereunder, and, in any event, shall notify
Hecla promptly after such disclosure. Muzinich
will not provide any information to prospective
investors other than publicly available informa-
tion.
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(g) Use of Name; Disclosure; Muzinich Advice, Role,
etc. Hecla agrees that any references to
Muzinich made in connection with the Offering
are subject to Muzinich's prior approval, which
approval shall not be unreasonably withheld or
delayed. Hecla acknowledges that all analyses,
evaluations and advice (whether written or oral,
formal or informal) given by Muzinich to Hecla
in connection with its engagement hereunder are
intended solely for the benefit and use of Hecla
(including its management, directors and attor-
neys) in considering the transaction to which
they relate and Hecla agrees that no such opin-
ion or advice shall be used for any other pur-
pose or reproduced, disseminated, quoted or
referred to at any time, in any manner or for
any purpose, without Hecla's prior written con-
sent, which shall not be unreasonably withheld
or delayed. Muzinich is authorized upon consum-
mation of the Offering contemplated hereby to
place the customary "tombstone" advertisement in
publications of its choice at Muzinich's ex-
pense. Nothing in this Agreement is intended to
obligate or commit Muzinich to provide any ser-
vices other than as set out herein.
(h) GOVERNING LAW, ETC. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CONFLICTS OF LAW PROVISIONS THERE-
OF). ANY RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARIS-
ING OUT OF THE OFFERING, AND MUZINICH'S ACTIVI-
TIES PURSUANT TO, OR THE PERFORMANCE BY MUZINICH
OF THE SERVICES CONTEMPLATED BY, THIS AGREEMENT
IS HEREBY WAIVED BY HECLA AND MUZINICH. HECLA
HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED
IN THE CITY OF NEW YORK IN CONNECTION WITH ANY
DISPUTE RELATED TO THIS AGREEMENT OR ANY OF THE
MATTERS CONTEMPLATED HEREBY. HECLA AGREES THAT
ANY LEGAL SUIT, ACTION OR PROCEEDING BROUGHT BY
MUZINICH, ANY OF ITS AFFILIATES OR ANY INDEMNI-
FIED PARTY TO ENFORCE ANY RIGHTS UNDER OR WITH
RESPECT TO THIS AGREEMENT OR THE
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OFFERING MAY BE INSTITUTED IN ANY STATE OR
FEDERAL COURT IN THE CITY OF NEW YORK, STATE OF
NEW YORK, WAIVES TO THE FULLEST EXTENT PERMITTED
BY LAW ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BY SUCH PARTIES
AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY SUCH PARTIES.
(i) Closing. The closing of the sale and purchase
of the Shares shall take place at a closing (the
"Closing") to be held at the offices of
Wachtell, Lipton, Rosen & Katz, 51 West 52nd
Street, New York, New York 10019 at 10:00 a.m.
on the third business day after investors have
entered into binding written subscription com-
mitments acceptable to Hecla to purchase at
least 3,200,000 Shares, or such later date and
time as may be mutually selected by the parties
hereto. At the Closing, Hecla will deliver the
Shares against payment of the purchase price
therefor by wire transfer to an account desig-
nated by Hecla.
Section 4. Notices. Notice given pursuant to any of
the provisions of this Agreement shall be in writing and shall
be mailed or delivered or faxed (a) to Hecla, at the address
listed on the front of this Agreement and (b) to Muzinich, at
450 Park Avenue, New York, New York 10022, (212) 888-3413,
Attention: George Muzinich.
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We are delighted to accept this engagement and look
forward to working with you on this assignment. Please confirm
that the foregoing is in accordance with your understanding by
signing and returning to us the enclosed duplicate of this let-
ter.
Very truly yours,
MUZINICH & CO., INC.
By: /s/ George R. Muzinich
Name: George R. Muzinich
Title: President
AGREED TO AND ACCEPTED
as of the date first
written above:
HECLA MINING COMPANY
By: /s/ John P. Stilwell
Name: John P. Stilwell
Title: VP - CFO