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EXHIBIT 10.12
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND, UNLESS REGISTERED, MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE SHARES OF COMMON
STOCK OF SUNSHINE MINING AND REFINING COMPANY
This certifies that Neuberger & Berman, LLC, as nominee (the
"Holder"), for value received, is entitled to purchase from Sunshine Mining and
Refining Company, a Delaware corporation (the "Company"), seven hundred
ninety-five thousand (795,000) fully paid and nonassessable shares of the
Company's Common Stock, par value $.01 per share (the "Stock"), at the Stock
Purchase Price (as defined herein) at any time or from time to time on or after
the Commencement Date (as defined below) but not later than 5:00 p.m. (New York
time) on the Expiration Date (as defined below), upon surrender to the Company
at its principal office at 5956 Sherry Lane, Suite #1621, Dallas, Texas 75202
(or at such other location as the Company may advise Holder in writing) of this
Warrant with the Form of Subscription attached hereto duly filled in and signed
and upon payment by cash, certified or bank check or wire transfer of the
aggregate Stock Purchase Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. The
Stock Purchase Price and, in certain instances, the number of shares
purchasable hereunder are subject to adjustment as provided in Section 3 of
this Warrant. "Commencement Date" means the date on which none of the Senior
Convertible Promissory Notes (the "Notes") issued pursuant to the Purchase
Agreement referred to below remain outstanding. "Expiration Date" means the
earlier of (i) November 24, 2002, or (ii) the occurrence of an event which
causes termination of this Warrant under clause (d) of Section 3.6; provided,
however, if for the 90 days prior to November 24, 2002 the Registration
Statement (as defined in the Registration Rights Agreement referred to below)
was not continuously effective (other than black-outs not exceeding 10 days in
the aggregate and other than the last three business days prior to November 24,
2002), then the November 24, 2002 date shall be extended until such
Registration Statement has been continuously effective for 90 days (other than
such black-outs). This Warrant is issued pursuant to the Purchase Agreement,
dated as of November 24, 1997, among the Company, the Holder and certain other
persons (the "Purchase Agreement").
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for
Shares. Subject to compliance with the conditions set forth herein, this
Warrant is exercisable at the option of Holder at any time or from time to time
on or after the Commencement Date but not later than the Expiration Date for
all or a portion of the shares of Stock which may be purchased
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hereunder. The Company agrees that the shares of Stock purchased under this
Warrant shall be and are deemed to be issued to Holder as the record owner of
such shares as of the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares. Subject to the
provisions of Section 2, certificates for the shares of Stock so purchased,
together with any other securities or property to which Holder is entitled upon
such exercise, shall be delivered to Holder by the Company's transfer agent at
the Company's expense within a reasonable time (but in no event more than ten
days) after the rights represented by this Warrant have been exercised. Each
stock certificate so delivered shall be in such denominations of Stock as may
be requested by Holder and shall be registered in the name of Holder or such
other name as shall be designated by Holder, subject to the limitations
contained in Section 6. If, upon exercise of this Warrant, fewer than all of
the shares of Stock evidenced by this Warrant are purchased prior to the
Expiration Date, one or more new warrants substantially in the form of, and on
the terms in, this Warrant will be issued for the remaining number of shares of
Stock not purchased upon exercise of this Warrant.
2. Shares to be Fully Paid: Reservation of Shares. The
Company covenants and agrees that all shares of Stock which may be issued upon
the exercise of the rights represented by this Warrant (the "Warrant Shares")
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder and free
of all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Stock for such exercise.
Notwithstanding anything to the contrary in this Warrant, in the event that the
shares of Stock to be issued upon exercise of this Warrant, in whole or in
part, would, upon issuance, exceed the Maximum Number (as defined in the
Notes), the Company shall, in lieu of issuing such shares, pay to the Holder an
amount equal to the difference between the Stock Purchase Price and the Closing
Bid Price (as defined in the Notes) on the date of exercise for each share that
would otherwise be issuable upon such exercise.
3. Adjustment of Stock Purchase Price; Number of Shares.
The Stock Purchase Price shall be equal to 110% of the Conversion Price last
in effect under the Notes. If, as a result of an adjustment pursuant to
Section 6.1(a) of the Notes or otherwise, there are different Conversion Prices
in effect for different portions of the Notes, then the Stock Purchase Price
shall be 110% of the lowest Conversion Price pursuant to the Notes.
Upon any adjustments of the Stock Purchase Price based on any
adjustment to the Conversion Price of the Notes pursuant to Section 6.2 of the
Notes only, the holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustments, the
number of shares obtained by multiplying the Stock Purchase Price without
giving effect to such adjustment by the number of shares purchasable pursuant
hereto immediately prior to such adjustments, and dividing the product thereof
by the Stock Purchase Price resulting from such adjustments.
In case of any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger in which the
Company is the surviving corporation) or the sale of all or substantially all
of the assets of the Company to another
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corporation, this Warrant thereafter shall be exercisable into the kind and
amount of shares of stock or other securities or property to which a Holder of
the number of shares of the Company's Common Stock issuable upon exercise of
this Warrant would have been entitled upon such consolidation, merger or sale;
and, in such case, appropriate adjustment (as determined in good faith by the
Board of Directors of the Company) shall be made in the application of the
provisions in this Section 3, to the end that the provisions set forth in this
Section 3 (including provisions with respect to changes in and adjustments of
the number of shares of Common Stock into which this Warrant is exercisable)
shall thereafter be applicable, as nearly as reasonably may be, in relation to
any shares of stock or other securities or property thereafter deliverable upon
the exercise of this Warrant.
3.1 Notice of Adjustment. On or immediately
after the Commencement Date, the Company shall give written notice thereof and
of the Stock Purchase Price then in effect, by first class mail, postage
prepaid, addressed to the registered holder of this Warrant at the address of
such holder as shown on the books of the Company. The notice shall be signed
by the Company's chief financial officer and shall state the Commencement Date
and the Stock Purchase Price resulting from any adjustment of the Stock
Purchase Price and, if applicable, the increase or decrease in the number of
shares purchasable at such price upon the exercise of this Warrant, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.
3.2 Other Notices. If at any time:
(a) the Company shall propose to declare any cash
dividend upon its Stock;
(b) the Company shall propose to declare or make
any dividend or other distribution to the holders of its Stock, whether in
cash, property or other securities;
(c) the Company shall propose to effect any
reorganization or reclassification of the capital stock of the Company or any
consolidation or merger of the Company with or into another corporation or any
sale, lease or conveyance of all or substantially all of the assets of the
Company; or
(d) the Company shall propose to effect a
voluntary or involuntary dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, addressed to the holder of this Warrant at
the address of such holder as shown on the books of the Company, (i) at least
30 days' prior written notice of the date on which the books of the Company
shall close or a record shall be taken for such dividend or distribution or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding- up, at least 30 days' written notice of the date when
the same shall take place. Upon the occurrence of an event described in clause
(c), the holder of this Warrant shall be entitled thereafter to receive upon
exercise of this Warrant the kind and amount of shares of stock or other
securities or assets which the holder would have been entitled to receive after
the occurrence of such event had
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this Warrant been exercised immediately prior to such event; and in any such
case, appropriate provision shall be made with respect to the rights and
interests of the holder to the end that the provisions of this Warrant
(including, without limitation, provisions with respect to changes in and
adjustments of the Stock Purchase Price and the number of shares purchasable
upon the exercise of this Warrant) shall thereafter be applicable, as nearly as
may be, in relation to any shares of stock, or other securities or assets,
thereafter deliverable upon the exercise of this Warrant. The Company will not
effect any of the transactions described in clause (c) above unless, prior to
the consummation thereof, each person (other than the Company) that may be
required to deliver any cash, stock, securities or other assets upon the
exercise of this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the holder of this Warrant, (x)
the obligations of the Company under this Warrant (and if the Company shall
survive the consummation of any such transaction, such assumption shall be in
addition to, and shall not release the Company from, any continuing obligations
of the Company under this Warrant) and (y) the obligation to deliver to such
holder such cash, stock, securities or other assets as such holder may be
entitled to receive in accordance with the provisions of this Section 3. Upon
the occurrence of an event described in clause (d), this Warrant shall
terminate. The provisions of this Section 3.2 shall similarly apply to
successive transactions.
4. Issue Tax. The issuance of certificates for shares
of Stock upon the exercise of this Warrant shall be made without charge to the
holder of this Warrant for any issue tax in respect thereof; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then holder of the Warrant being
exercised.
5. No Voting Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of meetings of stockholders for the election of directors of the
Company or any other matters or any rights whatsoever as a stockholder of the
Company. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Stock, and no mere enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a stockholder of the Company
whether such liability is asserted by the Company or by its creditors.
6. Restrictions on Transferability of Securities;
Compliance With Securities Act.
6.1 Restrictions on Transferability.
Notwithstanding anything in this Warrant to the contrary, neither any of the
Warrants nor any of the shares of Stock issuable upon exercise of any of the
Warrants shall be transferable, except upon compliance by the Holder with any
applicable provisions of the Securities Act and any applicable state securities
or blue sky laws.
6.2 Restrictive Legend. Each certificate
representing the Securities or any other securities issued in respect of the
Securities upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (except with respect to the Warrant
Shares only until such Shares are registered pursuant to the Registration
Rights Agreement executed and delivered pursuant to the Purchase Agreement) be
stamped or
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otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY
INTEREST THEREIN MAY BE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR SUCH
LAWS AND RULES AND REGULATIONS THEREUNDER.
6.3 Effect of Transfer. Subject to the
provisions of Section 6.1 hereof and this section 6.3, the Holder may transfer
all or any portion of this Warrant by surrendering this Warrant to the Company
together with a completed assignment in the form attached hereto as Exhibit B.
Upon such surrender, the Company shall deliver a new Warrant or Warrants to the
person or persons entitled thereto and, if applicable, shall deliver to the
Holder a new Warrant evidencing the right of the Holder to purchase the balance
of the Warrant Shares subject to purchase hereunder. The term "Holder" as used
herein shall include any transferee to whom this Warrant has been transferred
in accordance with this Section 6.3. The Holder may assign this Warrant to any
other Holder of the Warrants or to any affiliate (as defined under the
Securities Exchange Act of 1934) of the Holder, but shall not assign this
Warrant to any other person without the consent of the Company, which consent
shall not be unreasonably withheld and which consent shall be deemed given if
not denied within three (3) business days of receipt of a notice requesting
consent. Notwithstanding the foregoing, this Warrant may not be assigned or
transferred, in whole or in part, if as a result of such assignment or
transfer, there would be more than an aggregate of 10 Holders of this Warrant
(or portions hereof) and the other Warrants (or portions thereof) issued
pursuant to the Purchase Agreement. Any transfer or assignment in
contravention of this Section shall be null and void.
7. Registration Procedures. The Warrant Shares
constitute "Registrable Securities" as defined in Section 1 of the Registration
Rights Agreement and shall be entitled to registration rights in accordance
with such Agreement.
8. Modification and Waiver. This Warrant and any
provision hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of the same
is sought.
9. Notices. Any notice, request or other document
required or permitted to be given or delivered to the Holder hereof or the
Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid, to the Holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor in the
first paragraph of this Warrant. Any notice given by personal delivery shall
be deemed given upon receipt, and any notice given by certified or registered
mail shall be deemed given five days after registration or certification
thereof, as the case may be.
10. Descriptive Headings and Governing Law. The
descriptive headings of the several sections and paragraphs of this Warrant are
inserted for convenience only and
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do not constitute a part of this Warrant. This Warrant shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of New York, without giving effect to rules governing
conflicts of law.
11. Lost Warrants or Stock Certificates. The Company
represents and warrants to, and agrees with, the Holder that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of any Warrant or stock certificate and, in the case
of any such loss, theft or destruction, upon receipt of an indemnity, or in the
case of any such mutilation, upon surrender and cancellation of such Warrant or
stock certificate, the Company at its expense will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
12. Fractional Shares. No fractional shares shall be
issued upon exercise of this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by an officer, thereunto duly authorized this 24th day of November,
1997.
SUNSHINE MINING AND REFINING COMPANY
By: /s/ WILLIAM W. DAVIS
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Name: William W. Davis
Title: Executive Vice President
and Chief Financial Officer
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: ___________________________
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _____________________ (_______) shares of
Common Stock, par value $.01 per share (the "Stock"), of Sunshine Mining and
Refining Company (the "Company") and herewith makes payment of _________________
_____________________________ Dollars ($__________) therefor and requests that
the certificates for such shares be issued in the name of, and delivered to,
____________________________________________________________________, whose
address is ____________________________________________________________________.
The undersigned represents, unless the exercise of this
Warrant has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), that the undersigned is acquiring such Stock for his own
account for investment and not with a view to or for sale in connection with
any distribution thereof (except for any resale pursuant to a Registration
Statement under the Securities Act).
DATED:
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(Signature must conform in all
respects to name of holder as specified
on the face of the Warrant)
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(Address)
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EXHIBIT B
FORM OF ASSIGNMENT
(To be executed by the registered Holder if such Holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, ____________________________ hereby sells,
assigns, and transfers unto ___________________________ a Warrant to Purchase
____________ shares of Common Stock, par value $.01 per share, of Sunshine
Mining and Refining Company (the "Company"), together with all right, title,
and interest therein, and does hereby irrevocably constitute and appoint
___________ attorney to transfer such Warrant on the books of the Company, with
full power of substitution.
DATED:
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Signature:
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NOTICE
This signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.