EXHIBIT 10.1
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STOCK PURCHASE AGREEMENT
by and among
STILLWATER MINING COMPANY,
NORIMET LIMITED,
AND
MMC NORILSK NICKEL
dated as of
November 20, 2002
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................2
ARTICLE II SALE AND PURCHASE OF COMMON STOCK.................................0
2.1 Sale and Purchase................................................0
2.2 Consideration....................................................0
2.3 Use of Proceeds..................................................0
ARTICLE III CLOSING..........................................................0
3.1 Closing..........................................................0
3.2 Conditions to the Parties' Obligations to Close..................1
3.3 Conditions to the Closing Obligation of Buyer....................2
3.4 Conditions to the Closing Obligation of the Company..............2
3.5 Delivery and Evaluation of Palladium.............................3
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND NORILSK NICKEL........4
4.1 Organization and Good Standing...................................4
4.2 Organizational Documents.........................................4
4.3 Authority and Authorization......................................4
4.4 No Conflicts; No Consents or Approvals...........................5
4.5 Investment Representations and Covenants.........................5
4.6 Brokers or Finders...............................................5
4.7 Sufficient Funds; Palladium......................................5
4.8 Absence of Litigation............................................6
4.9 Financial Statements; No Liabilities.............................6
4.10 Compliance with Laws.............................................6
4.11 Information for SEC Filings......................................6
4.12 Share Ownership..................................................6
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................6
5.1 Organization, Good Standing and Qualification....................7
5.2 Organizational Documents.........................................7
5.3 Capitalization...................................................7
5.4 Rights Agreement.................................................8
5.5 Authority and Authorization......................................8
5.6 No Conflicts; No Consents or Government Approvals................8
5.7 Compliance with Laws.............................................9
5.8 SEC Filings, Financial Statements................................9
5.9 Absence of Certain Changes or Events.............................9
5.10 Absence of Litigation............................................0
5.11 Royalties........................................................0
5.12 Brokers or Finders...............................................0
5.13 No Liabilities...................................................0
5.14 Guaranties.......................................................0
5.15 Material Contracts...............................................0
5.16 Payment of Dividends, Stock Redemption Rights....................1
5.17 Title to Property................................................1
5.18 Taxes............................................................1
5.19 Labor and Employment Matters.....................................3
5.20 Employee Benefit Matters.........................................3
5.21 Insurance........................................................5
5.22 Registration Rights..............................................6
5.23 Environmental Matters............................................6
5.24 Intellectual Property............................................6
5.25 NYSE Compliance..................................................7
ARTICLE VI COVENANTS OF THE COMPANY..........................................7
6.1 Interim Conduct of the Company...................................7
6.2 Notice of Claims; Breaches.......................................9
6.3 Access to Business...............................................9
6.4 Insurance........................................................9
6.5 Acquisition Proposals............................................9
6.6 Payment of Debt..................................................1
6.7 Bank Waiver......................................................1
ARTICLE VII COVENANTS OF BUYER AND NORILSK NICKEL............................1
7.1 Covenants of Buyer and Norilsk Nickel............................1
7.2 Investment.......................................................2
ARTICLE VIII COVENANTS OF THE PARTIES........................................2
8.1 Reasonable Efforts...............................................2
8.2 Certain Filings and Regulatory Approvals.........................3
8.3 Public Announcements.............................................3
8.4 Insurance........................................................4
8.5 Company Stockholder Approval.....................................4
8.6 Operations following the Closing.................................5
8.7 Schedules........................................................5
8.8 Organizational Documents.........................................5
8.9 Board of Directors...............................................6
8.10 PGM Agreement....................................................6
ARTICLE IX THE OFFER.........................................................6
9.1 The Offer........................................................6
9.2 SEC Documents....................................................7
9.3 Purchase of Shares pursuant to the Offer.........................8
9.4 Withholding Taxes................................................8
ARTICLE X TERMINATION........................................................8
10.1 Termination......................................................8
10.2 Effect of Termination............................................0
10.3 Termination Fees.................................................0
ARTICLE XI INDEMNIFICATION...................................................0
11.1 Indemnification by the Company...................................0
11.2 Indemnification by Buyer and Norilsk Nickel......................1
11.3 Procedures for Third-Party Claims................................1
11.4 Limits For Recovery for Indemnified Costs........................1
11.5 Environmental Claims.............................................2
11.6 Transfer Taxes...................................................3
ARTICLE XII MISCELLANEOUS....................................................4
12.1 Survival of Representations and Warranties.......................4
12.2 Governing Law; Consent to Jurisdiction...........................4
12.3 Amendment........................................................4
12.4 Extension and Waiver.............................................4
12.5 Severability.....................................................5
12.6 Adjustment to Purchase Price.....................................5
12.7 Counterparts.....................................................5
12.8 Notices..........................................................5
12.9 Expenses and Payments............................................6
12.10 Specific Performance.............................................7
12.11 Entire Agreement.................................................7
12.12 Assignment.......................................................7
12.13 Company Actions..................................................7
12.14 Headings.........................................................7
12.15 Gender and Number................................................7
12.16 Reference to Days................................................7
12.17 Construction.....................................................7
EXHIBITS
Exhibit A Registration Rights Agreement
Exhibit B Amended and Restated Certificate of Incorporation
Exhibit C Amended and Restated By-Laws
Exhibit D Form of Opinion of Company's Outside Counsel
Exhibit E Form of Opinion of Buyer's Outside Counsel
Exhibit F Stockholders Agreement
SCHEDULES
Schedule 1 Natural Persons To Whom "Knowledge" Applies
Schedule 4.4(b) Consents
Schedule 4.11 Information for SEC Filings
Schedule 5.3(a) Capitalization
Schedule 5.6 Consents and Government Approvals
Schedule 5.7 Necessary Governmental Approvals
Schedule 5.8 SEC Filings; Financial Statements
Schedule 5.9 Changes or Events
Schedule 5.10 Absence of Litigation
Schedule 5.11 Royalties
Schedule 5.13 Other Liabilities
Schedule 5.14 Guaranties
Schedule 5.15 Material Contracts
Schedule 5.17 Title to Property; Patented and Unpatented
Mining Claims and Millsite Claims
Schedule 5.18 Taxes
Schedule 5.19 Certain Labor and Employment Matters
Schedule 5.20(a) Employee Plans
Schedule 5.20(e) Employee Plans
Schedule 5.20(f) Employee Plan Notices of Termination
Schedule 5.20(h) Employee Benefit Matters
Schedule 5.20(k) Excess Parachute Payments
Schedule 5.20(n) Severance Payments or Stock Option Obligations
Triggered by Transaction
Schedule 5.20(n) Employee Benefit Matters
Schedule 5.20(o) Employee Benefit Matters
Schedule 5.21 Insurance and Bonds
Schedule 5.23 Environmental Disclosures
Schedule 5.25 NYSE Compliance
Schedule 6.1 Interim Conduct of the Company
ANNEX
Annex A Offer Conditions
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (together with all Exhibits and
Schedules attached hereto, this "Agreement") is agreed and entered into as of
November 20, 2002, by and among Norimet Limited, a company organized under the
laws of England and Wales ("Buyer"), MMC Norilsk Nickel, an open joint stock
company organized under the laws of the Russian Federation ("Norilsk Nickel"),
and Stillwater Mining Company, a corporation organized under the laws of
Delaware (the "Company") (each a "Party" and collectively, the "Parties").
RECITALS
A. WHEREAS, Buyer is a wholly-owned indirect subsidiary of Norilsk
Nickel which, among other things, sells Palladium (as hereinafter defined)
produced in Russia by Norilsk Nickel.
B. WHEREAS, the Company produces and sells Palladium originated in
the United States.
C. WHEREAS, Buyer desires to purchase, and the Company desires to
sell for a price of $100,000,540 in cash and such number of ounces of
Palladium as determined pursuant to Section 3.5 hereof, 45,463,222
newly-issued shares of the Company's common stock, par value $0.01 per share
(the "Common Stock"), which shares shall constitute 51% of the Common Stock
issued and outstanding immediately following such issuance.
D. WHEREAS, a material inducement for the willingness of Norilsk
Nickel and Buyer to enter into this Agreement is that Norilsk Nickel and Buyer
reasonably expect that the Company will enter into an agreement with Buyer to
purchase and resell Buyer's Palladium as contemplated by Section 8.10 of the
Agreement, and the Company has represented to the Buyer and Norilsk Nickel
that it desires to enter into such an agreement because of the profits to be
realized thereunder will be beneficial to the Company and its stockholders.
E. WHEREAS, on or before the date hereof, the respective boards of
directors of Buyer, Norilsk Nickel and the Company have authorized and
approved the Transaction Documents (as hereinafter defined) and the
transactions contemplated thereby.
F. WHEREAS, the transactions contemplated by the Transaction
Documents are subject to the approval of the Company's stockholders.
NOW, THEREFORE, in consideration of the foregoing recitals and the
representations, warranties, covenants and agreements set forth herein, Buyer,
Norilsk Nickel and the Company, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
Unless specifically indicated otherwise in this Agreement, the
following defined terms shall have the meanings ascribed hereto in this
Article I:
"Accounts" shall have the meaning assigned to such term in Section
3.5(a).
"Acquisition Proposal" shall mean any bona fide proposal by any
Person other than Buyer or its Affiliates, whether or not in writing, to
acquire beneficial ownership (as described in Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the assets of, or 50% or more of the equity
securities of, the Company pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, sale of assets, tender
or exchange offer or similar transaction, including any single or multi-step
transaction or series of related transactions that results in such beneficial
ownership by such Person.
"Affiliate" shall mean, with respect to any Party, any Person that
controls, is controlled by, or is under common control with such Party. For
the purposes of this definition, "control," as used with respect to a Person
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of such Person, whether through
the ownership of voting securities, by contract, agency or otherwise.
Notwithstanding the foregoing, for the purposes of the Transaction Documents
and the PGM Agreement, the Company, on the one hand, and each Person in the
Norilsk Nickel Group, on the other hand, shall be deemed not to be Affiliates
of one another.
"Agreement" shall have the meaning assigned to such term in the
preamble hereto.
"Amended and Restated By-Laws" shall mean the amended and restated
by-laws substantially in the form attached hereto as Exhibit C.
"Amended and Restated Certificate of Incorporation" shall mean the
amended and restated certificate of incorporation substantially in the form
attached hereto as Exhibit B.
"Buyer" shall have the meaning assigned to such term in the preamble
hereto.
"Buyer Allotment Account" shall have the meaning assigned to such
term in Section 3.5(a).
"Buyer Directors" shall have the meanings assigned to such term in
Section 7.1(d).
"Buyer Financial Statements" shall mean the audited financial
statements of Buyer as and for the years ended December 31, 2001 and December
31, 2000 and when available, December 31, 2002 filed with the Companies House
of England, together with audit reports thereon, including consolidated profit
and loss accounts, consolidated balance sheets, consolidated statements of
cash flows, and accompanying notes, and its quarterly unaudited financial
statements for the quarters ended March 31, 2002, June 30, 2002, and September
30, 2002 and March 31, 2003, June 30, 2003 and September 30, 2003, each when
available.
"Buyer Indemnitees" shall have the meaning assigned to such term in
Section 11.5.
"Buyer Transfer Taxes" shall have the meaning assigned to such term
in Section 11.6.
"Casualty or Condemnation Loss" shall mean a Loss, whether or not
insured, as a result of any fire, flood, accident, explosion, strike, labor
disturbance, riot, act of God or other calamity or casualty, unless such Loss
shall have been substantially cured, repaired or restored by the Company prior
to the Closing Date.
"Change of Company Recommendation" shall have the meaning assigned to
such term in Section 6.5(d).
"Claim" shall mean any claim, demand, suit, action, investigation,
proceeding, governmental action or cause of action of any kind or character
(in each case, whether civil, criminal, investigative or administrative),
known or unknown, under any theory, including those based on theories of
contract, tort, equity, statutory liability, strict liability, employer
liability, premises liability, products liability or breach of warranty.
"Closing" shall have the meaning assigned to such term in Section 3.1.
"Closing Date" shall have the meaning assigned to such term in
Section 3.1.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Common Stock" shall have the meaning set forth in the recitals
hereto.
"Company" shall have the meaning assigned to such term in the
preamble hereto.
"Company Financial Statements" shall have the meaning assigned to
such term in Section 5.8.
"Company Group" shall have the meaning assigned to such term in
Section 5.18(d).
"Company Pool Account" shall have the meaning assigned to such term
in Section 3.5(a).
"Company Stockholder Approval" shall have the meaning set forth in
Section 3.2(d).
"Company Transfer Taxes" shall have the meaning assigned to such term
in Section 11.6(b).
"Confidentiality Agreements" shall mean the two letter agreements
between the Company and Norilsk Nickel, dated August 27, 2002.
"Consent" shall mean any consent or action required under a Material
Contract, Employment Agreement, Employee Plan, Organizational Document or
other material agreement or document which is necessary to avoid a default,
termination, material penalty, material violation of Law or grounds for
material amendment or renegotiation under such an agreement or document.
"Contracts" shall mean contracts, leases, licenses, indentures,
agreements, sale and purchase orders, commitments and all other legally
binding arrangements, whether oral or written, express or implied.
"Costs" shall have meaning assigned to such term in Section 11.1(a).
"DGCL" shall mean the General Corporation Law of the State of Delaware.
"Employee Plans" shall mean all employee welfare benefit plans (as
defined in Section 3(1) of ERISA), employee pension benefit plans (as defined
in Section 3(2) of ERISA) and all bonus, stock option, stock purchase,
benefit, profit sharing, savings, vacation, retirement, disability, insurance,
incentive, deferred compensation and other similar fringe or employee benefit
plans, programs or arrangements (i) for the benefit of or relating to any
employee of the Company, which the Company contributes to or maintains, (ii)
in which any employee of the Company participates in connection with such
employment, or (iii) under which any employee has accrued or is or may become
entitled to a benefit that is payable by the Company or for which the Company
has an obligation to make a contribution and (x) are sponsored by the Company
or (y) are not sponsored by the Company but as to which the Company is a
participating employer.
"Employment Agreements" shall mean the agreements listed as
employment agreements in Schedule 5.20(a).
"Environmental Law" shall mean any Law (including common law
requirements), now or hereafter enacted, relating to protection of natural
resources or the environment or the cleanup, or restoration of the
environment, or to safety or health, including, but not limited to, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act, the Federal Comprehensive Environmental
Response, Compensation and Liability Act, the Federal Toxic Substances Control
Act, the Federal Occupational Safety and Health Act, and various corresponding
state statutes.
"ERISA" shall mean the Employment Retirement Income Security Act of
1974, as amended.
"EU Regulation" shall mean any European Union, European Free Trade
Area and national antitrust regulation applicable in the European Economic
Area.
"Exchange Act" shall mean the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
"Exon-Florio Act" shall mean Section 721 of the Defense Production
Act of 1950, as amended, and the rules and regulations promulgated thereunder.
"Facilities" shall mean all of the buildings, structures, headframes,
hoist houses, paste plants, concentrator plants, offices, shops, warehouses,
furnaces, smelters, scrubbing systems, and refineries used in connection with
the Company's mining and processing operations.
"GAAP" shall mean generally accepted accounting principles as applied
in the United States.
"Governmental Approval" shall mean any permit, license, franchise,
approval, consent, waiver, certification, qualification or other authorization
issued, granted, given or otherwise made available, or the expiration or
termination of any applicable waiting period by or under the authority of any
Governmental Authority or pursuant to any Law, including, but not limited to,
any such approvals under the HSR Act, any EU Regulation and the Exon-Florio
Act.
"Governmental Authority" shall mean any United States or foreign
national, federal, state, provincial, local or other government or any
departmental or other political subdivision thereof, or any entity, body or
authority exercising executive, legislative, judicial, regulatory,
administrative or other governmental functions, including, but not limited to,
any court, department, commission, board, bureau, agency, instrumentality or
administrative body.
"Hazardous Substances" shall mean each and every element, compound,
chemical mixture, contaminant, pollutant, material, waste, other substance or
constituent thereof which is defined, determined, characterized or identified
by any Governmental Authority as or having the potential to be hazardous or
toxic under Environmental Laws or the release or threatened release of which
is regulated under Environmental Laws. Without limiting the foregoing, the
term includes: "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation & Liability Act of 1980; "extremely
hazardous substances" as defined in the Emergency Planning and Community
Right-to-Know Act of 1986; "hazardous waste" as defined in the Resource
Conservation and Recovery Act; "hazardous materials" as defined in the
Hazardous Materials Transportation Act; "chemical substance or mixture" as
defined in the Toxic Substances Control Act; crude oil, petroleum products or
any fraction thereof; radioactive materials including source, byproduct or
special nuclear materials; asbestos or asbestos-containing materials;
chlorinated fluorocarbons; and radon.
"HSR Act" shall mean the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
"Income Taxes" shall have the meaning set forth in Section 5.18(a).
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
capital lease obligations of such Person, (d) all obligations of such Person
as an account party in respect of letters of credit and bankers' acceptances,
and (e) all guaranties by such Person of Indebtedness of others referred to in
clauses (a) through (d) above.
"Indemnified Employees" shall have the meaning assigned to such term
in Section 8.4(a)
"Indemnitee" shall have the meaning assigned to such term in Section
11.3.
"Indemnitor" shall have the meaning assigned to such term in Section
11.3.
"Ingot Ounces" shall have the meaning set forth in Section 3.5(b).
"Ingot Value" shall mean the Ingot Ounces multiplied by the London PM
Fix price of Palladium per ounce in ingot form on November 19, 2002.
"Intellectual Property Rights" shall mean all patents and patent
applications; trademarks, service marks, and copyrights, whether registered or
unregistered and any applications for registration of trademarks, service
marks, and copyrights; innovations, improvements, technologies, and
developments, whether patentable or unpatentable; all trade secrets; know-how;
computer software programs and applications; and databases and tangible or
intangible proprietary information or materials.
"J-M Reef" shall mean the mineralized zone containing platinum group
metals located in Stillwater and Sweet Grass Counties, Montana.
"Knowledge," with respect to either Party, shall mean the actual
knowledge of such Party and the directors, officers and employees of such
Party set forth on Schedule 1.
"Law" shall mean any United States or foreign federal, state or local
law, statute, ordinance, decree, requirement, order, judgment, rule or
regulation.
"Lien" shall mean any mortgage, lien, security interest, pledge,
assignment, hypothecation, title retention, preferential right, counterclaim,
attachment, levy or other charge or encumbrance of any kind thereupon or in
respect thereof.
"Loss" shall mean any loss, cost, liability or expense, settlement,
damage of any kind, judgment, obligation, charge, fee, fine, penalty,
interest, court cost and/or administrative and reasonable attorneys' fees,
expert fees, consulting fees, and disbursements (at all levels, including
appellate), but excluding a Party's indirect corporate and administrative
overhead costs.
"Material Adverse Effect" with respect to any Person shall mean any
change, event or effect occurring after the date hereof that, individually or
in the aggregate with all other such changes, events and effects, is
materially adverse to the business, assets or results of operations of such
Person, taken as a whole, including, with respect to the Company, loss of the
Company's listing on the New York Stock Exchange (unless such loss of listing
is caused by Buyer or Norilsk Nickel); provided, however, that a Material
Adverse Effect shall not include any change (i) in Law or generally accepted
accounting principles or interpretations thereof, (ii) in general economic or
business conditions or in the mining industry generally, or (iii) due to the
public announcement of the Transaction Documents or the consummation of the
transactions contemplated thereby.
"Material Contract" shall mean any Contract (a) involving the payment
or receipt of amounts in excess of $200,000, (b) which cannot be terminated
with 90 days' prior notice without a penalty in excess of $200,000, (c)
imposing material obligations on the Company with respect to its finances,
governance, operations or assets (including any Contracts creating material
Liens not constituting Permitted Encumbrances), (d) materially restricting the
activities of the Company, or (e) any waiver of any material rights under any
Contract described in clauses (a) through (d).
"Mining Rights" shall mean all interests in the surface of any lands,
the minerals in (or that may be extracted from) any lands, all royalty
agreements, water rights, patented and unpatented mining and millsite claims,
fee interests, mineral leases, mining licenses, profits-a-prendre, joint
ventures and other leases, rights-of-way, inurements, licenses and other
rights and interests used by or necessary to the Company to construct, develop
and operate mines, including, all rights to and interest in claims covering
substantially all of the identified platinum-group-metals mineralized zone of
the J-M Reef.
"Norilsk Nickel" shall have the meaning assigned to such term in the
preamble hereto.
"Norilsk Nickel Financial Statements" shall mean the auditor-reviewed
year-end financial statements of Norilsk Nickel as of and for the years ended
December 31, 2001 and December 31, 2000, together with review reports on such
statements by Norilsk Nickel's independent accountants, including consolidated
profit and loss accounts, consolidated balance sheets, consolidated statements
of cash flows, and accompanying notes.
"Norilsk Nickel Group" shall mean Buyer, Norilsk Nickel and all of
their respective Affiliates.
"Offer" shall have the meaning assigned to such term in Section 9.1(a).
"Offer Documents" shall have the meaning assigned to such term in
Section 9.2(a).
"Offer Price" shall have the meaning assigned to such term in Section
9.1(a).
"Offer to Purchase" shall have the meaning assigned to such term in
Section 9.1(b).
"Organizational Documents" with respect to any Party shall mean the
certificate of incorporation, the by-laws, or other organizational documents
of such Party, each as amended.
"Own" shall have the meaning set forth in the Stockholders Agreement.
"PACE Union Contracts" shall mean the contract between the Company
and the Paper, Allied Industrial, Chemical and Energy Workers International
Union and its Local 8-001 ("PACE") (effective July 1, 1999 until June 30,
2004) and the contract between the Company and PACE, East Boulder Unit
(effective July 1, 2002 until July 1, 2005).
"Palladium" shall mean refined palladium in ingot and/or sponge form
with a purity of 99.95% or more.
"Party" and "Parties" shall have the meanings assigned to such terms
in the preamble hereto.
"Paying Agent" shall have the meaning assigned to such term in
Section 9.3(a).
"PBGC" shall have the meaning assigned to such term in Section
5.20(f).
"Permitted Encumbrances" shall mean (a) Liens for current Taxes not
yet due; (b) workers' or unemployment compensation Liens arising in the
ordinary course of business; (c) mechanics', materialmen's, suppliers',
vendors' garnishment or similar Liens arising in the ordinary course of
business for amounts not yet due not exceeding $200,000 with respect to any
property; (d) utility easements not materially impairing the use or value of
the burdened property (but not any violation thereof or encroachment thereon).
"Person" shall mean any natural person, corporation, business trust,
association, company, partnership, joint venture or other entity or
Governmental Authority.
"PGM Agreement" shall have the meaning assigned to such term in
Section 8.10.
"Preferred Stock" shall have the meaning assigned to such term in
Section 5.3(a).
"Public Director" shall have the meaning assigned to such term in the
Stockholders Agreement.
"Purchase Price" shall have the meaning assigned to such term in
Section 2.2.
"Registration Rights Agreement" shall mean the agreement
substantially in the form attached hereto as Exhibit A, to be executed by the
Parties at the Closing.
"Restraints" shall have the meaning set forth in Section 3.2(a).
"Returns" shall have the meaning assigned to such term in Section
5.18(a).
"Royalties" shall have the meaning assigned to such term in Section
5.11.
"Rights Agreement" shall mean the Rights Agreement by and between the
Company and American Securities Transfer, Inc. dated October 26, 1995.
"Schedule 14D-9" shall have the meaning assigned to such term in
Section 9.2(a).
"Schedule TO" shall have the meaning assigned to such term in Section
9.2(a).
"Schedules" shall have the meaning set forth in Section 8.7.
"SEC" shall have the meaning assigned to such term in Section 5.8.
"SEC Documents" shall have the meaning assigned to such term in
Section 5.8.
"Securities Act" shall mean the United States Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
"Share Price" shall have the meaning assigned to such term in
Section 2.2.
"Shares" shall have the meaning assigned to such term in Section 2.1.
"Sponge Ounces" shall have the meaning set forth in Section 3.5(b).
"Sponge Value" shall mean the Sponge Ounces multiplied by $274.25.
"Stockholders Agreement" shall mean the agreement substantially in
the form attached hereto as Exhibit F, to be executed by the Parties at the
Closing.
"Superior Acquisition Proposal" shall mean an unsolicited Acquisition
Proposal that the Board of Directors of the Company determines in its good
faith judgment, after consulting with the Company's outside financial and
legal advisors, and taking into account all terms and conditions of such
proposal, the required Governmental Approvals and the likelihood of its
completion (i) is reasonably capable of being completed and (ii) as a whole,
taking into account all factors deemed appropriate by the Company's Board of
Directors, presents a more favorable opportunity than the Transaction
Documents and the transactions contemplated thereby.
"Superior Acquisition Proposal Notice" shall have the meaning
assigned to such term in Section 6.5(c).
"Taxes" shall mean all taxes, assessments, charges, duties, fees,
levies or other governmental charges including all federal, state, local,
foreign and other income, franchise, profits, capital gains, capital stock,
transfer, sales, use, occupation, property, excise, severance, windfall
profits, stamp, license, payroll, withholding and other taxes, assessments,
charges, duties, fees, levies or other governmental charges of any kind
whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of a Return), all estimated taxes, and all deficiency
assessments, additions to tax, penalties and interest with respect thereto,
and shall include any liability for such amounts as a result either of being a
member of a combined, consolidated, unitary, affiliated or similar group or of
a contractual obligation to indemnify any Person.
"Termination Fee" shall have the meaning assigned to such term in
Section 10.3(a).
"Title Documents" shall mean documents which are reasonably
satisfactory to the Company and customary to the industry which shall evidence
transfer of ownership of the Palladium portion of the Purchase Price.
"Transaction Documents" shall mean this Agreement, the Registration
Rights Agreement, and the Stockholders Agreement.
"Transfer Taxes" shall have the meaning set forth in Section 11.6(a).
"Warehouse" shall mean Johnson Matthey Inc., or such other warehouse
mutually agreed upon by Buyer and the Company, which shall be internationally
recognized in the platinum group metals industry.
ARTICLE II
SALE AND PURCHASE OF COMMON STOCK
2.1 Sale and Purchase. At the Closing, upon the terms and subject to
the conditions herein c/ontained, and in reliance on the representations and
warranties of Buyer, Norilsk Nickel and the Company contained herein, Buyer
agrees, and Norilsk Nickel agrees to cause Buyer, to purchase from the
Company, and the Company agrees to issue and sell to Buyer, 45,463,222 shares
of authorized Common Stock (the "Shares"), which shall constitute not less
than 51% of the issued and outstanding Common Stock of the Company immediately
following such issuance.
2.2 Consideration. The consideration to be paid for the Shares shall
be equal to $2.1996 in cash and such number of ounces of Palladium per Share
determined pursuant to Section 3.5 (the "Share Price"), or an aggregate of
$100,000,540, and such number of ounces of Palladium determined pursuant to
Section 3.5 for all of the Shares; provided, that if Buyer is prohibited under
applicable Law from transferring such number of ounces of Palladium to the
Company, the consideration shall consist of zero ounces of Palladium and $7.50
per share in cash, or an aggregate of $340,974,165 in cash for all of the
Shares (collectively, the "Purchase Price").
2.3 Use of Proceeds. The Company shall use the proceeds of such sale
and purchase as shall be determined by its Board of Directors. Such uses shall
include repayment of a portion of outstanding bank debt, palladium product and
marketing development, utilization for performance and contractual bonds,
capital expenditures and ongoing working capital.
ARTICLE III
CLOSING
3.1 Closing. Upon the terms and subject to the conditions of this
Agreement, the closing of the sale to and purchase by Buyer of the Shares (the
"Closing") shall take place at the offices of Baker Botts L.L.P., 30
Rockefeller Plaza, New York, New York 10112-4498, at 10:30 A.M. New York time,
on a date to be agreed upon by the Parties, which shall be no later than five
(5) business days following the satisfaction or waiver (to the extent
permitted by Law) of all the conditions set forth in Sections 3.2 through 3.4
(the "Closing Date"), unless otherwise agreed to by the Parties. At the
Closing:
(a) the Company shall deliver to Buyer one or more certificates
representing the Shares, which such Shares shall, in accordance with the DGCL,
bear a legend stating that such Shares are subject to the provisions of the
Stockholders Agreement and such other legends as may be required under the
Securities Act or other applicable Law;
(b) Buyer shall, and Norilsk Nickel shall cause Buyer to,
deliver to the Company the Purchase Price, the cash portion of which shall be
delivered in immediately available funds in the amount of U.S. $100,000,540,
in accordance with the wire transfer instructions delivered by the Company to
Buyer at least three (3) business days prior to the Closing Date;
(c) Buyer shall cause the Warehouse to transfer such number of
ounces of Palladium determined pursuant to Section 3.5 from the Buyer
Allotment Account to the Company Pool Account and Buyer shall deliver to the
Company the Title Documents for such Palladium; provided, that if Buyer is
prohibited under applicable Law from transferring such Palladium to the
Company, in lieu of such transfer and in addition to the payment set forth in
Section 3.1(b), Buyer shall deliver to the Company immediately available funds
in the amount of $240,973,625 in accordance with the wire transfer
instructions set forth in Section 3.1(b);
(d) the Company and Buyer shall execute and deliver the
Registration Rights Agreement;
(e) the Company, Buyer and Norilsk Nickel shall execute and
deliver the Stockholders Agreement; and
(f) the Buyer Directors (as defined in Section 7.1(d)) shall be
elected to the Company's Board of Directors.
3.2 Conditions to the Parties' Obligations to Close. The respective
obligations of the Parties to consummate the transactions contemplated by the
Transaction Documents shall be subject to the satisfaction or waiver (to the
extent permitted by applicable Law) on or prior to the Closing Date of the
following conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other judgment, decision or order issued by any Governmental
Authority, or any other Law (collectively, the "Restraints") shall be in
effect preventing the consummation of the transactions contemplated by the
Transaction Documents;
(b) No action, suit or proceeding shall have been instituted, or
shall be pending or, to any Party's Knowledge, threatened, by a Government
Authority seeking to restrain in any material respect or to prohibit the
consummation of the transactions contemplated by the Transaction Documents;
(c) The Governmental Approvals required of Buyer, Norilsk
Nickel, and the Company listed on Schedules 4.4(b) and 5.6(b) shall have been
made or obtained;
(d) The stockholders of the Company shall have approved the
Transaction Documents and the transactions contemplated thereby as required
under the DGCL (the "Company Stockholder Approval"); and
(e) Prior to the mailing of the definitive proxy statement in
connection with the Company Stockholder Approval, the Company shall have
received Consents or amendments satisfactory to Buyer, and the Company
pursuant to the $250,000,000 Credit Agreement, dated as of February 23, 2001,
among the Company, N M Rothschild & Sons Limited, Westdeutsche Landesbank
Girozentrale, New York Branch, Toronto Dominion (Texas), Inc., and TD
Securities (USA) Inc., as amended from time to time (the "Credit Agreement"),
in connection with the Transaction Documents and the transactions contemplated
thereby, including that the negative covenants in the Credit Agreement will
not prohibit the Parties from entering into and performing the PGM Agreement.
3.3 Conditions to the Closing Obligation of Buyer. The obligation of
Buyer to consummate the transactions contemplated by this Agreement shall also
be subject to the satisfaction or waiver, to the extent permitted by
applicable Law, on or prior to the Closing Date of the following conditions:
(a) the Company shall not have breached or failed to perform or
comply with any material obligation, agreement or covenant required by this
Agreement to be performed or complied with by it;
(b) the representations and warranties of the Company set forth
in this Agreement shall be true and correct in all respects as of the Closing
Date as if made at and as of the Closing Date (except for those
representations and warranties that address matters only as of a particular
date or only with respect to a specific period of time which need only be true
and accurate as of such date or with respect to such period) and without
giving any effect to any amendment or supplement of, or addition to, the
Schedules following the date hereof by the Company pursuant to Section 8.7,
except as would not have a Material Adverse Effect;
(c) Buyer shall have received a certificate, dated as of the
Closing Date, signed by a duly authorized an officer of the Company to the
effect that, to the best of such officer's Knowledge, the conditions set forth
in Sections 3.3(a) and 3.3(b) have been satisfied; and
(d) the Company shall have received and made available to Buyer
a true and correct copy of the opinion of its outside counsel, Skadden, Arps,
Slate, Meagher & Flom LLP, in substantially the form attached hereto as
Exhibit D.
3.4 Conditions to the Closing Obligation of the Company. The
obligation of the Company to consummate the transactions contemplated by this
Agreement shall also be subject to the satisfaction or waiver, to the extent
permitted by applicable Law, on or prior to the Closing Date of the following
conditions:
(a) Neither Buyer nor Norilsk Nickel shall have breached or
failed to perform or comply with any material obligation, agreement or
covenant required by this Agreement to be performed or complied with by it;
(b) the representations and warranties of Buyer and Norilsk
Nickel set forth in this Agreement shall be true and correct in all respects
as of the Closing Date as if made at and as of the Closing Date (except for
those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period) and
without giving any effect to any amendment or supplement of, or addition to,
the Schedules following the date hereof by the Buyer pursuant to Section 8.7,
except as would not have a Material Adverse Effect;
(c) Buyer shall have received and made available to the Company
a true and correct copy of the opinion of its outside counsel, Baker Botts
L.L.P., in substantially the form attached hereto as Exhibit E;
(d) the Company shall have received certificates, dated as of
the Closing Date, signed by a duly authorized officer of each of Buyer and
Norilsk Nickel to the effect that, to the best of such officer's Knowledge,
the conditions set forth in Sections 3.4(a) and 3.4(b) have been satisfied;
and
(e) Buyer shall have delivered to the Buyer Allotment Account
(as defined in Section 3.5(a)) such number of ounces of Palladium determined
pursuant to Section 3.5.
3.5 Delivery and Evaluation of Palladium.
(a) Within thirty (30) days of the date hereof, Buyer shall
establish with the Warehouse in London, England or New York, New York (the
location being at Buyer's sole option) an allotment account (the "Buyer
Allotment Account") and the Company shall establish with the Warehouse at such
location a pool account (the "Company Pool Account" and, together with the
Buyer Allotment Account, the "Accounts"), which Accounts are for the delivery
of Palladium pursuant to this Agreement. The Parties shall make appropriate
arrangements with the Warehouse, so that the Warehouse shall accept and hold
Palladium on behalf of Buyer pursuant to the terms of this Agreement and
determine the purity and weight of the Palladium on behalf of both Parties.
Within such thirty (30) day period, the Parties shall enter into an agreement
with the Warehouse, which agreement shall evidence the provisions of this
Section 3.5.
(b) Within forty (40) days of the date hereof, Buyer shall
notify the Company as to the number of ounces of Palladium which shall be in
sponge form (the "Sponge Ounces") and the number of ounces of Palladium which
shall be in ingot form (the "Ingot Ounces"), provided that the Sponge Value
plus the Ingot Value shall equal $240,973,625. Within five (5) days of the
Company's receipt of such notice, the Company shall confirm in writing its
acceptance of such apportionment between sponge and ingot form, which
acceptance shall not be unreasonably withheld or delayed. In the event no such
written acceptance shall be received by Buyer within such five (5) day period,
it shall be assumed that the portions proposed by Buyer have been accepted.
(c) Within seventy-five (75) days of the date hereof, Buyer
shall, and Norilsk Nickel shall cause Buyer to, deliver the Palladium portion
of the Purchase Price to the Buyer Allotment Account, along with a certificate
of weight and purity for such Palladium. As promptly as practicable after
receipt of the Palladium portion of the purchase price, the Warehouse shall
confirm the purity and weight of such Palladium set forth in Buyer's
certificate. The Warehouse shall immediately provide Buyer and the Company
with written notice if such Palladium does not have purity of 99.95% or more
or weighs less than set forth on the certificate. Buyer shall as soon as
possible, but no later than five (5) days following receipt of such notice,
replace the Palladium or provide additional Palladium, as may be necessary to
correct such deficiency. Without the prior written consent of the Company,
Norilsk Nickel and Buyer shall not transfer or cause to be transferred the
Palladium portion of the Purchase Price from the Buyer Allotment Account until
the earlier of (i) the Closing Date or (ii) forty-five (45) days following the
termination of this Agreement pursuant to Section 10.1 hereof, other than any
termination pursuant to Section 10.1(d)(i) or (ii).
(d) If Buyer is prevented or prohibited under applicable Law
from delivering the Palladium to the Buyer Allotment Account pursuant to
Section 3.5(c), within seventy-five (75) days of the date hereof, Buyer shall,
and Norilsk Nickel shall cause Buyer to, secure a letter of credit, the terms
of which shall be reasonably satisfactory to the Company, from a reputable
bank reasonably satisfactory to the Company. Buyer shall, and Norilsk Nickel
shall cause Buyer to, cause such letter of credit to remain effective until
the earliest to occur of (i) the delivery of Palladium to the Buyer Allotment
Account pursuant to Section 3.5(c), (ii) the Closing Date or (iii) forty five
(45) days following the termination of this Agreement pursuant to Section 10.1
hereof, other than any termination pursuant to Sections 10.1(d)(i) or (ii).
(e) Buyer shall bear all costs and risks associated with the
requirements of this Section 3.5, including, but not limited to, the delivery
to the Warehouse and the evaluation and storage of the Palladium in the Buyer
Allotment Account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND NORILSK NICKEL
Buyer and Norilsk Nickel hereby jointly and severally represent and
warrant to the Company as follows:
4.1 Organization and Good Standing. Buyer is a company duly
organized, validly existing and in good standing under the Laws of England and
Wales and is a wholly-owned, indirect subsidiary of Norilsk Nickel. Norilsk
Nickel is an open joint stock company duly organized, validly existing and in
good standing under the Laws of the Russian Federation, and Buyer is its
wholly-owned, indirect subsidiary.
4.2 Organizational Documents. The Organizational Documents of Buyer
and Norilsk Nickel are in full force and effect, and true and correct copies
of English translations thereof have been made available to the Company.
4.3 Authority and Authorization. Buyer and Norilsk Nickel each have
all requisite corporate power to enter into each of the Transaction Documents
to be entered into by each of them, and to carry out their respective
obligations thereunder. The execution, delivery and performance of each of the
Transaction Documents by Buyer and (where Norilsk Nickel is a party) Norilsk
Nickel have been duly authorized by all necessary corporate action. Each of
the Transaction Documents, when duly executed and delivered to the Company,
will constitute a valid, binding and enforceable obligation of Buyer and
(where Norilsk Nickel is a party) Norilsk Nickel, as applicable to each of
them, enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other Laws and judicial decisions of general application
relating to or affecting the enforcement of creditors' rights generally or by
general equitable principles.
4.4 No Conflicts; No Consents or Approvals.
(a) The execution, delivery and performance of the Transaction
Documents by Buyer and (where Norilsk Nickel is a party) Norilsk Nickel, will
not (i) conflict with, violate or result in a breach or default of any
provision of its respective Organizational Documents, or (ii) conflict with or
violate any Law applicable to Buyer or Norilsk Nickel (as the case may be), or
by which any of their respective properties or assets are bound.
(b) Except as listed in Schedule 4.4(b), no Governmental
Approval, declaration, Consent or filing with any Governmental Authority or
any other Person is required to be obtained or made by Buyer or Norilsk Nickel
in connection with the execution, delivery and performance by each of them of
any of the Transaction Documents to which it is a party or the transactions
contemplated thereby.
(c) There is no Claim pending or, to Buyer's or Norilsk Nickel's
Knowledge, threatened against Buyer or Norilsk Nickel or any of their
respective properties in or by any Governmental Authority, to restrain, enjoin
or prohibit consummation of the transactions contemplated by any Transaction
Document, and there is no judgment, decree, injunction, ruling or order of any
Governmental Authority outstanding against Buyer or Norilsk Nickel having any
such effect.
4.5 Investment Representations and Covenants.
(a) Buyer is acquiring the Shares for its own account for
investment and not with a view to the distribution thereof.
(b) Buyer has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
prospective investment, as provided in Rule 506(b)(2)(ii) under the Securities
Act, and for purposes of the exemption to registration of the Shares afforded
by Rule 506 under the Securities Act.
4.6 Brokers or Finders. Neither Buyer nor Norilsk Nickel has
incurred any liabilities, contingent or otherwise, for brokers' or finders'
fees relating to the transactions contemplated by the Transaction Documents,
for which the Company has or shall have any responsibility whatsoever.
4.7 Sufficient Funds; Palladium.
(a) Buyer has available to it sufficient funds to pay the cash
portion of the Purchase Price, to make and consummate the Offer (as defined in
Section 9.1(a)) and to pay any and all of its fees and expenses related to the
transactions contemplated by the Transaction Documents.
(b) Buyer has available to it sufficient Palladium to pay the
Palladium portion of the Purchase Price to the Company pursuant to Section 2.2
hereof and to meet the obligations contained in Section 3.5 hereof.
Immediately upon the delivery of such Palladium at the Closing, the Company
will acquire good and valid title to all such Palladium, free and clear of all
Liens, other than Liens that might have been created by the Company.
4.8 Absence of Litigation. There is no Claim pending or, to the
Knowledge of the Buyer or Norilsk Nickel, threatened against Buyer or Norilsk
Nickel which would have a Material Adverse Effect on the business or
operations of Buyer or its ability to consummate the transactions contemplated
by the Transaction Documents.
4.9 Financial Statements; No Liabilities.
(a) Buyer's Financial Statements have been prepared from, are in
accordance with and accurately reflect, the books and records of Buyer, and
have been prepared in accordance with United Kingdom Accounting Standards and
applicable Law applied on a consistent basis during the periods involved
(except as may be stated in the notes thereto), and fairly present the
consolidated financial position and the consolidated results of operations and
cash flows (and changes in financial position, if any) of Buyer as of the
times and for the periods referred to therein (subject, in the case of
unaudited statements, to normally recurring year-end audit adjustments which
are not material either individually or in the aggregate). True, correct and
complete copies of Buyer's Financial Statements have been provided to the
Company.
(b) Norilsk Nickel's Financial Statements have been prepared
from, are in accordance with, and accurately reflect, the books and records of
Norilsk Nickel and its subsidiaries, comply in all material respects and have
been prepared in accordance with International Accounting Standards (I.A.S.)
applied on a consistent basis during the periods involved (except as may be
stated in the notes thereto), and fairly present the consolidated financial
position and the consolidated results of operations and cash flows (and
changes in financial position, if any) of Norilsk Nickel and its subsidiaries
as of the times and for the periods referred to therein. True, correct and
complete copies of Norilsk Nickel's Financial Statements have been provided to
the Company.
4.10 Compliance with Laws. The business and operations of Buyer and
Norilsk Nickel and the duties of their respective officers and directors have
been and are being conducted and discharged, respectively, in material
compliance with all applicable Laws.
4.11 Information for SEC Filings. Schedule 4.11 sets forth the names
and addresses of all Persons or groups of Persons who will be required to
provide information in connection with any necessary SEC filings to be made on
Schedule 13D and Schedule TO, including, if such Person is a corporation, each
executive officer and director of such corporation, each Person controlling
such corporation, and each executive officer and director of any corporation
or other Person ultimately in control of such corporation.
4.12 Share Ownership. Neither Buyer nor Norilsk Nickel Owns any
shares of Common Stock or other securities of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer as follows:
5.1 Organization, Good Standing and Qualification.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of its properties
owned, operated or leased or the nature of its activities makes such
qualification necessary.
(b) The Company does not own directly or indirectly any
subsidiary except MetCom, Inc., a Montana corporation formed on December 6,
2001, which subsidiary does not have and has never had any assets, employees,
properties, or liabilities (whether actual, contingent, accrued or unaccrued).
The Company does not own any equity interest in any other corporation,
partnership, joint venture or other business association or entity.
5.2 Organizational Documents. The Company has made available to
Buyer complete and correct copies of its Organizational Documents, each as
amended to date. The Organizational Documents of the Company are in full force
and effect and have not been amended or repealed. The Company is not in
violation, breach or default of any of the provisions of its Organizational
Documents.
5.3 Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 1,000,000 shares of preferred stock,
par value $0.01 per share (the "Preferred Stock"), of which 135,000 shares
have been designated Series A Preferred Stock in connection with rights issued
pursuant to the Rights Agreement. As of September 30, 2002, (x) 43,335,416
Common Stock shares were issued and outstanding and no Preferred Stock was
issued and outstanding, and (y) 2,652,559 shares of Common Stock were reserved
for issuance upon the exercise of outstanding options to purchase Common Stock
shares. Immediately following the issuance of the Shares on the Closing Date,
the Shares shall represent not less than 51% of the issued and outstanding
Common Stock of the Company. Except as set forth in this Section 5.3 and
Schedule 5.3(a), there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock or Preferred Stock, contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock or Preferred Stock, or securities or rights convertible
or exchangeable into shares of Common Stock or Preferred Stock. The issuance
and sale of the Shares hereunder will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price
under such securities.
(b) There are no outstanding contractual obligations (contingent
or otherwise) of the Company to retire, repurchase, redeem or otherwise
acquire any of the Common Stock or Preferred Stock of the Company or to
provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any other entity.
5.4 Rights Agreement. The Company has taken all required action
to render the Rights Agreement inapplicable to the execution, delivery and
performance of the Transaction Documents and the transactions contemplated
thereby.
5.5 Authority and Authorization.
(a) The Company has all requisite corporate power to own,
operate and lease its properties and to conduct its business as it is now
being conducted. The Company has all requisite corporate power to enter into
each of the Transaction Documents and to carry out its obligations thereunder.
The execution, delivery and performance of each of the Transaction Documents
by the Company have been duly authorized by all necessary corporate action,
subject to the Company Stockholder Approval. Each of the Transaction
Documents, when duly executed and delivered to Buyer, will constitute a valid,
binding and enforceable obligation of the Company, enforceable against it in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or other laws
and judicial decisions of general application relating to or affecting the
enforcement of creditors' rights generally or by general equitable principles
and with respect to indemnification provisions contained therein, by
applicable securities laws or principles of public policy.
(b) The issuance of the Shares has been duly authorized by all
requisite corporate action of the Company, subject to Company Stockholder
Approval, and, upon issuance to Buyer, the Shares will (i) be validly issued,
fully paid and nonassessable, (ii) be free and clear of pre-emptive rights,
(iii) subject to Buyers' representations in Section 4.5, be issued in
compliance with the Securities Act and any applicable state securities laws
and the rules and regulations promulgated thereunder, and (iv) be free and
clear of all Liens, other than Liens that might have been created by Buyer.
Immediately upon consummation of the purchase by Buyer of the Shares pursuant
to this Agreement, Buyer will have good and valid title to the Shares.
5.6 No Conflicts; No Consents or Government Approvals.
(a) The execution, delivery and performance of each of the
Transaction Documents by the Company will not (i) conflict with, violate or
result in a breach or default of any provision of the Organizational Documents
of the Company; (ii) conflict with or violate any Law applicable to the
Company or by which any of its properties or assets are bound; (iii) conflict
with, result in any breach of or default under (with or without notice or
lapse of time or both), or permit a termination or modification of, any
material note, bond, indenture, mortgage, agreement, contract or other
instrument to which the Company is a party or by which the Company or any of
its properties or assets are bound; (iv) require any Consent which is not
listed on Schedule 5.6 as having been obtained, with respect to (ii) through
(iv), in each case except as would not have a Material Adverse Effect; or (v)
conflict with, violate or result in a breach or default of any contract listed
on Schedule 5.6.
(b) Except as listed in Schedule 5.6, and such filings or
approvals as may be required by the Securities Act and state blue sky laws, no
Governmental Approval of any Governmental Authority is required to be obtained
or made by the Company in connection with the execution, delivery and
performance by the Company of the Transaction Documents and the transactions
contemplated thereby.
(c) There is no Claim pending, or to the Company's Knowledge,
threatened against the Company or any of its properties in or by any
Governmental Authority to restrain, enjoin or prohibit consummation of the
transactions contemplated by the Transaction Documents, and there is no
judgment, decree, injunction, ruling or order of any Governmental Authority
outstanding against the Company or any of its properties having any such
effect.
5.7 Compliance with Laws. The business and operations of the Company
are in material compliance with all applicable Law. Schedule 5.7 lists all
material Governmental Approvals necessary in connection with the operation of
the Company's business. The Company is in possession of and operating in
material compliance with all such Governmental Approvals necessary to conduct
the business of the Company. The Company has acquired all Mining Rights, and
has obtained such other surface and other rights as are necessary for access
rights, water rights, plant sites, tailings disposal, waste dumps, ore dumps,
abandoned heaps or ancillary facilities which are required in connection with
its business, except as would not have a Material Adverse Effect. To the
Company's Knowledge, no event has occurred which allows, or after notice or
lapse of time or both would allow, revocation or termination of any such
Governmental Approval or which results or would result in any other material
impairment of the rights of the holder thereof such that the Company would not
be able to operate substantially as it has in the ordinary course of its
business prior to the date hereof.
5.8 SEC Filings, Financial Statements. Except as set forth in
Schedule 5.8, since January 1, 2002, the Company has filed all documents
required to be filed by it with the United States Securities and Exchange
Commission (the "SEC") pursuant to the reporting requirements of the Exchange
Act (the "SEC Documents"). Except as otherwise set forth in the SEC Documents
as of the date of filing thereof, each SEC Document complied in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Document
and none of the SEC Documents, as of the date filed, contained any untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. Except as otherwise set forth in the SEC Documents as of their
respective dates, the Financial Statements of the Company and its former
subsidiaries included in the SEC Documents (the "Company Financial
Statements") complied in all material respects with GAAP and published rules
and regulations of the SEC with respect thereto, and the Company Financial
Statements have been prepared in accordance with GAAP, consistently applied,
during the periods involved and fairly present in all material respects the
financial position of the Company and its former subsidiaries as of the dates
thereof and the results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments).
5.9 Absence of Certain Changes or Events. Except as set forth in
Schedule 5.9 or in the SEC Documents, since September 30, 2002 there has not
been (a) any change having a Material Adverse Effect; (b) any damage,
destruction or loss, whether covered by insurance or not, having a Material
Adverse Effect; (c) any sale, lease, disposition of assets, which was not or
is not in the ordinary course of business; (d) creation of any Lien upon the
Company's assets other than a Permitted Encumbrance; (e) any amendment, waiver
or termination of any material provision of any Material Contract of the
Company; (f) any change by the Company in accounting principles or methods,
except insofar as may be required by a change in GAAP or in Tax elections,
principles or methods except as required by Law; (g) any declarations, payment
or setting aside for payment by the Company of any dividends; (h) any increase
in the compensation payable or to become payable by the Company to its
directors, officers or employees, or, any increase in any bonus, pension,
compensation or other benefit plan made for or with or covering any directors,
officers or employees (other than, in each case, costs outside of the control
of the Company or increases in the ordinary course of the Company's business
consistent with past practice); (i) any redemption or repurchase of capital
stock of the Company; (j) any increase in indebtedness (other than as a result
of fluctuations in trade payables in the ordinary course of business); or (k)
any agreement or commitment to do any of the foregoing.
5.10 Absence of Litigation. Except as set forth in Schedule 5.10 or
the SEC Documents, there is no Claim pending or, to the Knowledge of the
Company, threatened against the Company or its officers or directors in their
capacities as such, that, either individually or in the aggregate in a series
of related Claims, may result in liability to the Company in excess of
$200,000.
5.11 Royalties. Schedule 5.11 lists all Contracts pursuant to which
the Company is obligated to pay royalties, overriding royalties, compensatory
royalties and other payments from or in respect of production or as a result
of its mining operations ("Royalties"), the duration of the Royalties, and the
percentage amount of such Royalties.
5.12 Brokers or Finders. No broker, investment banker, financial
advisor or other Person, other than J.P. Morgan Securities Inc. and Salomon
Smith Barney, Inc., the fees and expenses of which will be paid by the
Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
the Transaction Documents, based upon arrangements made by or on behalf of the
Company.
5.13 No Liabilities. Except as (i) set forth in the SEC Documents or
described on Schedules 5.9, 5.10 or 5.13 or (ii) as incurred in the ordinary
course of business since September 30, 2002, the Company has incurred no
liabilities in excess of $200,000, either individually or in the aggregate in
a series of related liabilities required under GAAP to be set forth on the
Company's balance sheet, whether absolute, accrued, contingent or otherwise
and whether due or to become due, and whether known or unknown.
5.14 Guaranties. Except as provided on Schedule 5.14, the Company has
not made any guaranties, except for negotiable instruments endorsed for
collection or deposit in the ordinary course of the Company's business.
5.15 Material Contracts. Schedule 5.15 lists all Material Contracts.
The Company is not in breach or default under any Material Contract and the
Company has not waived any material right under any Material Contract. Except
as set forth on Schedule 5.15, to the Company's Knowledge, no counterparty to
a Material Contract is in breach or default thereunder, nor does any
counterparty to a Material Contract intend not to renew or not to continue to
perform such Material Contract.
5.16 Payment of Dividends, Stock Redemption Rights. Except as
provided in the Transaction Documents, there are no outstanding contractual
obligations (contingent or otherwise) of the Company that would prohibit or
restrict the Company's ability to declare or pay dividends or to repurchase or
redeem the Company's capital stock.
5.17 Title to Property. The Company has good and marketable title to
(i) such real and personal property reflected in the Financial Statements
(except for property sold or otherwise disposed of in the ordinary course of
business), (ii) all of its patented mining claims, which patented mining
claims are listed under such category on Schedule 5.17, (iii) all of its
unpatented mining claims, which unpatented mining claims are listed under such
category on Schedule 5.17, (iv) all of its millsite claims, which millsite
claims are listed under such category on Schedule 5.17, and (v) all of the
Facilities and the real property upon which the Facilities are located, all of
the foregoing free and clear of any Liens, except for (x) Liens reflected on
the Financial Statements, and (y) Permitted Encumbrances. All leases and
licenses pursuant to which the Company leases or licenses real or personal
property, including leases of mining and millsite claims, are in good
standing, valid and effective in accordance with their respective terms, and
there is not, under any of such leases or licenses, any existing material
default or event of default (or event which with notice or lapse of time, or
both would constitute a material default, or would constitute a basis of force
majeure or other claim of excusable delay or non-performance) of the Company
and, to the Company's Knowledge, no other Person is in default thereunder.
5.18 Taxes.
(a) Except as set forth in Schedule 5.18(a), (x) the Company and
each of its former subsidiaries (with respect to periods during which they
were subsidiaries of the Company) has timely filed or caused to be timely
filed with the appropriate Governmental Authorities (i) all returns,
statements, declarations, forms and reports ("Returns") with respect to Taxes
that are based upon or measured by income ("Income Taxes") and (ii) all
material Returns with respect to Taxes other than Income Taxes, in each case
that are required to be filed by, or with respect to, the Company and such
subsidiaries on or prior to the Closing Date, and (y) the Returns as filed
were true, correct and complete in all material respects. The federal income
tax Returns of the Company and its former subsidiaries have been examined by
the Internal Revenue Service (or the applicable statutes of limitations for
the assessment of federal income Taxes for such periods have expired) for all
periods through and including December 31, 1998.
(b) All Income Taxes and material Taxes other than Income Taxes
of the Company and its former subsidiaries (with respect to periods during
which they were subsidiaries of the Company) that have become due and payable
have been timely and properly paid or deposited (except for Taxes that are
being contested in good faith in appropriate proceedings, which contests are
disclosed on Schedule 5.18(b)) or fully provided for as a liability in
accordance with GAAP.
(c) Except as set forth in Schedule 5.18(c), (i) no deficiencies
for any Taxes of the Company or any of its former subsidiaries (with respect
to periods during which they were subsidiaries of the Company) have been
asserted or assessed by any Governmental Authority in a written notice
delivered to the Company or the former subsidiaries when they were
subsidiaries of the Company, (ii) no Governmental Authority is presently
conducting a Tax audit, investigation or proceeding with respect to the
Company or, to the Company's Knowledge, any of its former subsidiaries (with
respect to periods during which they were subsidiaries of the Company), or has
requested in a writing delivered to the Company an extension or waiver of an
applicable statute of limitations, (iii) with respect to Taxes or any Return,
no power of attorney has been executed by the Company, and (iv) no dispute or
claim concerning the Tax liability of the Company or any of its former
subsidiaries has been claimed or raised by any Governmental Authority in a
writing delivered to the Company.
(d) Neither the Company nor any of its former subsidiaries (with
respect to periods preceding the periods during which they were subsidiaries
of the Company) has been a member of any affiliated group within the meaning
of Section 1504(a) of the Code, or any similar affiliated or consolidated
group for tax purposes under state, local or foreign law (other than a group
the common parent of which is or was the Company (the "Company Group")), or
has any liability for Taxes of any Person (other than the Company) under
Treasury Regulation Section 1.1502-6 or any similar provision of state, local
or foreign law as a transferee or successor, by contract or otherwise.
Consolidated federal income returns of the Company Group were filed for
taxable years ended December 31, 1993 through December 31, 2001.
(e) All material Taxes which the Company or any of its former
subsidiaries (with respect to periods during which they were subsidiaries of
the Company) is or was required by law to withhold or collect have been
properly withheld or collected, and have been timely paid over to the proper
authorities to the extent due and payable.
(f) There are no Tax sharing, allocation, indemnification or
similar agreements or arrangements in effect as between the Company, any of
its former subsidiaries, or any predecessor or Affiliate of any of them and
any other party under which the Company could be liable for any Taxes of any
party other than the Company.
(g) There are no Liens for Taxes upon any property or assets of
the Company, except for Liens for Taxes not yet due or for which adequate
reserves have been established in accordance with GAAP.
(h) No unresolved written claim has been made and delivered to
the Company by any taxing authority in a jurisdiction where the Company or any
of its former subsidiaries (with respect to periods during which they were
subsidiaries of the Company) does not or did not pay Taxes or file Returns
that the Company or any of its former subsidiaries is, was or may be subject
to Taxes assessed by such jurisdiction.
(i) The consolidated net operating loss carryforward of the
Company as of December 31, 2001 (i) for federal income tax purposes was at
least $160,000,000; (ii) for federal income tax alternative minimum tax
purposes was at least $0; (iii) for Montana state income tax purposes was at
least $150,000,000; and (iv) for Colorado state income tax purposes was at
least $1,500,000. No such net operating loss carryforward is currently subject
to limitation under Section 382 of the Code or a comparable provision of state
or local law.
(j) The acquisition of Shares pursuant to this Agreement is not
part of a plan of the Company, taking into account any other transaction
occurring before or after such acquisition, in which the Company will in
exchange for its shares, acquire property or money from transferors that will
be in control of the Company, within the meaning of Section 368(c) of the
Code, immediately after the exchange or series of exchanges. The Company has
no plan or intention of treating the acquisition of Shares pursuant to this
Agreement on any Return as part of a transaction qualifying under Section 351
or 368(a) of the Code or a comparable provision of state or local law.
5.19 Labor and Employment Matters. Except as set forth in the SEC
Documents or on Schedule 5.19, there are no (i) collective bargaining
agreements or other labor agreements relating to the Company or covering any
employee to which the Company is a party or by which it is bound, other than
the PACE Union Contracts; (ii) unfair labor practice complaints against the
Company pending (or to the Knowledge of the Company threatened) before the
National Labor Relations Board or any state or local agency with respect to
the operation of the Company; (iii) pending or, to the Company's Knowledge,
threatened material labor strikes or other material labor troubles affecting
the Company; or (iv) material labor grievances pending against the Company.
All individual Employment Agreements of the Company are listed on Schedule
5.19.
5.20 Employee Benefit Matters.
(a) Schedule 5.20(a) lists all Employee Plans of the Company.
Except for the Employment Agreements and as described on Schedule 5.20(a), no
written or oral management or employment contract or contract for personal
services exists between the Company and any officer, consultant, director,
employee, independent contractor or other Person.
(b) The Company has delivered to Buyer true and correct copies
of the following:
(i) Each Employee Plan document and all amendments thereto
as of the date hereof and all current summary plan descriptions required
by ERISA regarding the Employee Plans and summaries of all Employee Plans
not reflected in a plan document;
(ii) Each trust agreement, annuity contract (or any other
funding instrument), investment management agreement and custodial
agreement pertaining to any of the Employee Plans, including all
amendments to such documents as of the date hereof; and
(iii) For any Employee Plan intended to be qualified under
Section 401(a) of the Code, a copy of the most recent annual report (Form
5500 Series) filed with the IRS, including any actuarial report filed
therewith, and a copy of the most recent determination letter.
(c) All Employee Plans and their related trusts have been and
are maintained in material compliance with applicable requirements of ERISA,
the Code, and all other federal and state statutes and regulations relating to
employee benefit plans. The Company does not have any commitment or obligation
to establish or adopt any new or additional Employee Plans or to increase the
benefits under any existing Employee Plan.
(d) Neither the Company, any of its former subsidiaries, nor any
fiduciary of any Employee Plan has (i) engaged in a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the Code)
with respect to an Employee Plan which could subject the Company or any
fiduciary of any Employee Plan to the tax on or any other penalty or sanction
with respect to, prohibited transactions imposed by Section 502 of ERISA or
Section 4975 of the Code or (ii) acted or failed to act in any manner that
violates Section 404 of ERISA and results in liability to the Company.
(e) Except as set forth on Schedule 5.20(e), neither the Company
nor any former subsidiary has maintained during the six-year period
immediately preceding the date hereof an Employee Plan which is subject to
Section 412 of the Code or Title IV of ERISA.
(f) Except as a result of the transactions contemplated by this
Agreement, the Company does not know or have any reasonable grounds to know of
any event threatened or about to occur which would constitute a "reportable
event" (as that term is defined in Section 4043(b) of ERISA) with respect to
any Employee Plan, but excluding any event for which reporting has been waived
by regulation, and, except as described on Schedule 5.20(f), no notice of
termination has been filed by the plan administrator of any Employee Plan
pursuant to Section 4041 of ERISA, or has been issued by the Pension Benefit
Guaranty Corporation ("PBGC") pursuant to Section 4042 of ERISA, to the extent
applicable, with respect to any Employee Plan.
(g) Each Employee Plan intended to be "qualified" within the
meaning of Section 401(a) of the Code has been determined to be so qualified
by the appropriate District Director of the IRS. No such Employee Plan has
lost its qualified status and, to the Knowledge of the Company, there are no
facts which would adversely affect the qualified status of any Employee Plan.
(h) Except to the extent that the failure to file would have a
Material Adverse Effect with respect to the Employee Plan, all required
governmental filings have been made with respect to the Employee Plans, and to
the Knowledge of the Company, there are no pending or threatened legal
actions, investigations, proceedings or other matters concerning the Employee
Plans before the IRS, the Department of Labor, or the PBGC, to the extent
applicable, other than determination letter applications filed with the IRS in
the normal course of operating the Employee Plans, and to the Knowledge of the
Company, there is no basis for any such legal action, investigation or
proceeding. Neither the Company nor any of its subsidiaries is in material
default in performing any of its contractual obligations with respect to any
Employee Plan.
(i) The Company does not maintain any "multiemployer plan"
within the meaning of Section 3(37) of ERISA.
(j) The amounts expected to be paid or accrued by the Company
for 2002 with respect to (i) all employee welfare benefit plans (as defined in
Section 3(1) of ERISA), (ii) all employee pension benefit plans (as defined in
Section 3(2) of ERISA) and (iii) all profit sharing, incentive and deferred
compensation and other similar employee benefit plans are reflected in the SEC
Documents.
(k) Except as otherwise described on Schedule 5.20(k), the
Company has no obligation to make any payments that would be "excess parachute
payments" under Section 280G of the Code. The Company has complied with the
requirements of Section 4980B of the Code and Sections 601-608 of ERISA
regarding continuation of health care coverage notices and provision of
appropriate health care coverage under the Employee Plans.
(l) The Company and its former subsidiaries have maintained
workers' compensation coverage as required by the applicable state law through
purchase of insurance as described on Schedule 5.21 and not by self-insurance
or otherwise.
(m) Except as set forth in Schedule 5.21, no Employee Plan
provides benefits, including death, medical or health benefits (whether or not
insured), after an employee's retirement of employment, other than (i)
continuation coverage required pursuant to Section 4980B of the Code and Part
6 of Title I of ERISA, and the regulations thereunder, and any other
applicable Law, (ii) death benefits or retirement benefits under any employee
pension benefit plan (as defined in Section 3(2) of ERISA), (iii) deferred
compensation benefits, reflected as liabilities on the books of the Company or
a subsidiary or (iv) benefits the full cost of which is borne by the current
or former employee (or his beneficiary).
(n) Except as set forth in Schedule 5.20(n), the consummation of
the transactions contemplated by this Agreement will not (i) entitle any
current or former employee of the Company and its former subsidiaries to
severance pay, employment compensation or any other payment, benefit or award,
contingent or otherwise, or (ii) with respect to stock options, accelerate the
time of payment or vesting, or increase the amount of any benefit, award
(including stock options, restricted stock and similar awards) or compensation
due any such employee.
(o) To the Knowledge of the Company, there are no pending,
threatened or anticipated claims against any of the Employee Plans, by any
employee or beneficiary covered under any such Employee Plan, or otherwise
involving any such Employee Plan (other than routine claims for benefits).
5.21 Insurance.
(a) The Company has in place policies of insurance and bonds in
amounts and scope of coverage as set forth in Schedule 5.21(a).
(b) Except as set forth in Schedule 5.12(b) each such policy and
bond is in full force and effect and all premiums and payments are currently
paid or accrued. The Company has no notice that any policy of insurance or
bond will be cancelled or will not be renewed, nor does the Company have any
notice that cancellation or non-renewal is threatened, nor any notice that any
material modification of the terms of any policy of insurance or bond will be
or is threatened to be required as a condition of renewal.
(c) The Company is not in default with respect to any material
obligations under any insurance policy or bond, except as would not have a
Material Adverse Effect.
5.22 Registration Rights. Except as described the SEC Documents and
except as to such shares of capital stock as are presently registered, and as
provided in the Registration Rights Agreement, the Company has not agreed to
register under the Securities Act any of its authorized or outstanding shares
of capital stock.
5.23 Environmental Matters.
Except as described in Schedule 5.23 and except for matters which
would not have a Material Adverse Effect, (i) the operations and business of
the Company and its former subsidiaries, and occupation by the Company and its
former subsidiaries, and their agents and representatives, of any former and
currently owned and leased properties, at all times have complied and are in
compliance with all applicable Environmental Laws; (ii) the Company is not
subject to any pending or, to the Company's Knowledge, threatened notice,
claim, proceeding, investigation, inquiry or other liability, whether
administrative, judicial or private party in nature, under any Environmental
Laws; (iii) the Company is not subject to any agreement, or consent order or
decree, whether administrative, judicial or private party in nature, that
imposes or will impose any obligations on the Company under any Environmental
Law; (iv) none of the owned or leased properties of the Company is subject to
any private party or governmental Lien under Environmental Laws; (v) no
release or threatened release of Hazardous Substances has occurred or is
occurring at, in, under, to or from the owned or leased properties of the
Company or any former subsidiary and, to the Knowledge of the Company, no such
release or threatened release has occurred or is occurring at, in, under, to
or from any other owned or leased property or facility where Hazardous
Substances generated or handled by the Company or any of its former
subsidiaries have been or are being disposed, except for such releases which
are in compliance with Environmental Laws; (vi) to the Company's Knowledge,
there is no underground storage tank or underground injection well on any such
owned or leased properties; (vii) the Company has obtained all permits,
licenses and other authorizations required to conduct its business and
operations, and to occupy the owned and leased properties or any third-party
property, in compliance with Environmental Laws; (viii) to the Company's
Knowledge, there is no existing or potential condition on property currently
or formerly owned or leased by the Company or any former subsidiary that
reasonably would be anticipated to result in a Material Adverse Effect; and
(ix) to the Company's Knowledge, there is no environmentally hazardous
condition existing on the property or properties of third parties, the source
of which is activities currently or previously conducted by the Company or any
former subsidiary on properties currently or previously owned or leased by the
Company or any former subsidiary.
5.24 Intellectual Property. The Company does not have any registered
copyrights and trademarks, patents, and applications for any of the foregoing,
or any material license agreements through which the Company holds
Intellectual Property Rights. The Company owns or has the right to use or
otherwise employ the Intellectual Property Rights to operate or otherwise
carry out the Company's business as presently conducted. To the Company's
Knowledge, no complaints, either formal or informal, have been made alleging
that the Company now is infringing or otherwise violating or that the Company
or any subsidiary has infringed or otherwise violated any Intellectual
Property Rights of a third party. To the Company's Knowledge, the operation or
execution of the Company's business is not now infringing or otherwise
violating any Intellectual Property Rights of another.
5.25 NYSE Compliance. Except as set forth in Schedule 5.25, the
Company is in compliance with the requirements of the New York Stock Exchange
in effect as of the date hereof for continued listing of the Common Stock
thereon and has no Knowledge that the New York Stock Exchange is contemplating
terminating such listing nor, to the Company's Knowledge, is there any basis
therefor. The Company makes no such representation or warranty with regard to
the termination of such listing or non-compliance with such listing
requirements as may be caused by the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1 Interim Conduct of the Company. Except as (i) expressly
contemplated by this Agreement, (ii) set forth in Schedule 6.1, (iii) required
by Law, (iv) set forth in the Company's 2002 and 2003 Budget Plans, copies of
which were made available to Buyer prior to the date hereof, or (v) Buyer may
approve by prior written consent (which consent shall not be unreasonably
withheld), from and after the date of this Agreement until the Closing Date,
the Company will conduct its operations in accordance with its ordinary course
of business, consistent with past practice, and will not:
(a) amend its certificate of incorporation or bylaws or file any
certificate of designation or similar instrument with respect to any shares of
its authorized but unissued capital stock;
(b) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(c) declare or pay any dividend or distribution with respect to
its capital stock, issue or authorize the issuance of any shares of its
capital stock (other than in connection with the exercise of currently
outstanding stock options or any other securities exercisable or exchangeable
for or convertible into shares of its Common Stock or Preferred Stock);
(d) merge or consolidate with any entity, except pursuant to
Section 6.5;
(e) liquidate, dissolve or effect any recapitalization or
reorganization in any form;
(f) enter into any new Contract with any Affiliate;
(g) enter into any Contract, or modify, amend, terminate or
waive any material rights under any Contract, either of which would have a
Material Adverse Effect;
(h) incur, assume or guarantee any third party Indebtedness
(other than the factoring of receivables or endorsement of negotiable
interests for collection in the ordinary course of business);
(i) sell, transfer, pledge or otherwise dispose of any material
asset, except for sales of inventory and the sale, transfer or other
disposition of uneconomic or obsolete equipment in the ordinary course of
business consistent with its past practice;
(j) enter into any swap, futures or derivatives transaction,
except a hedging activity in the ordinary course of business consistent with
its past practice and internal policy guidelines;
(k) acquire any real property for an amount in excess of
$400,000 or with respect to which the representations and warranties in
Section 5.23 cannot be made;
(l) acquire an equity interest in any Person;
(m) acquire any assets for a price in excess of $400,000, except
in the ordinary course of business consistent with past practice;
(n) cancel or compromise any Indebtedness in excess of $400,000
owed to it or waive any Claims having a value in excess of $400,000, either
individually or in the aggregate in a series of related Indebtedness or
Claims;
(o) compromise or settle any Claims for an amount in excess of
$400,000, either individually or in the aggregate in a series of related
Claims, except for the Claims described on Schedule 6.1;
(p) make any capital expenditure or commitment in excess of
$400,000; except in the ordinary course of business consistent with past
practice;
(q) make any change in any method of accounting or keeping of
books of account or accounting practices or principles, except as may be
required, in the opinion of the independent public accountants of the Company,
by GAAP;
(r) institute a temporary shutdown or close, other than in the
ordinary course of business consistent with past practice, any facilities
which are material to the results of operations or business of the Company;
(s) mortgage, pledge or subject to any Lien any assets, except
for Permitted Encumbrances;
(t) grant any rebates, discounts, advances or allowances to any
customers, except in the ordinary course of business and consistent with its
past practice;
(u) fail to renew any material lease of real or personal
property or federal land patent or renew any such lease or patent on
commercially unreasonable terms or at rates above market;
(v) other than in the ordinary course or pursuant to existing
Contracts, increase the salaries of, or make any bonus or similar payments,
establish or modify any Employee Plans for any employees, or enter into or
modify any employment, severance, consulting or similar contracts with any
such persons;
(w) (i) make or change any Tax elections, (ii) change any Tax
principles or methods, or (iii) settle or compromise any Tax liability, with
respect to (i) and (iii), which, individually or in the aggregate, could
reasonably be expected to have a current or future impact on the Company's Tax
liabilities in excess of $400,000.
(x) grant any new Royalty;
(y) fail to renew or maintain a Governmental Approval the
absence of which would have a Material Adverse Effect; or
(z) enter into any Contract to do any of the foregoing.
6.2 Notice of Claims; Breaches. Promptly after obtaining Knowledge
thereof, the Company shall give notice to Buyer of (i) any Claim or other
event, occurrence or development that would cause, or potentially cause,
either individually or in the aggregate in a series of related Claims, events,
occurrences or developments, loss, expense or liability in excess of $200,000;
(ii) the occurrence of any Casualty or Condemnation Loss; or (iii) any
material breach of a representation, warranty, covenant, or agreement
hereunder, or (iv) any other event, occurrence or development that would
impair in any material respect the Company's ability to perform its
obligations under the Transaction Documents.
6.3 Access to Business. Prior to the Closing, the Company shall, to
the extent legally permissible under applicable Laws, give Buyer's
representatives, upon reasonable prior notice and at reasonable times and
taking into account the Company's schedule of operations and availability of
relevant personnel, full access to the premises, books, records, contracts,
assets and accounts of the Company's business. The Company will make available
to Buyer and its representatives, the officers and employees and independent
accountants of the Company for interviews upon reasonable notice and at times
and places reasonable in light of such persons' duties to the Company, to
verify all information furnished to Buyer and its representatives. Except as
otherwise agreed in writing by the Company, each Party shall be bound by the
terms of the Confidentiality Agreements in connection with all activities
pursuant to this Section 6.3.
6.4 Insurance. Until the Closing Date, the Company shall use
reasonable efforts to keep in full force and effect all insurance policies and
bonds substantially similar in coverage and amounts to the insurance and bonds
maintained as of the date hereof. In the event of a Casualty or Condemnation
Loss, the Company shall, if commercially reasonable, restore its business to
substantially the same position it was in immediately prior to such Casualty
or Condemnation Loss.
6.5 Acquisition Proposals.
(a) Immediately upon signing this Agreement, the Company shall,
and shall cause its directors, officers, employees, agents and
representatives, to, cease any discussions or negotiations conducted prior to
the date hereof with respect to any Acquisition Proposal. Except as provided
in Sections 6.5(c) or (d), the Company shall not, and shall cause its
directors, officers, employees, agents and representatives not to, (i)
initiate or solicit, directly or indirectly, any inquiries with respect to, or
the making of, any Acquisition Proposal, (ii) engage in any negotiations or
discussions with, furnish any information or data to, or (iii) enter into any
agreement with any Person (other than Buyer and its Affiliates) relating to
any Acquisition Proposal.
(b) The Company will promptly after receiving any written or
oral communication from any third party regarding any Acquisition Proposal,
provide Buyer with a summary of the material terms of such discussion or
communication or proposal.
(c) Superior Acquisition Proposals. Notwithstanding anything to
the contrary contained in this Section 6.5, in the event that the Company
receives an unsolicited, bona fide written Acquisition Proposal from a third
party that its Board of Directors has in good faith concluded (following
consultation with its outside legal counsel and its financial advisor), is, or
could reasonably lead to a Superior Acquisition Proposal, it may then take the
following actions (but only (A) if and to the extent that its Board of
Directors concludes in good faith, following consultation with its outside
legal counsel, that there is a reasonable possibility that the failure to do
so could result in a breach of its fiduciary obligations under applicable Law
and (B) after the Company has given written notice ("Superior Acquisition
Proposal Notice") to Buyer to the effect that (1) that it has received such
Acquisition Proposal, (2) the identity of the third party making such
Acquisition Proposal and the material terms and conditions of such Acquisition
Proposal, and (3) the nature of the action that the Company intends to take):
(i) Furnish nonpublic information to the third party making
such Acquisition Proposal, and
(ii) Engage in negotiations with the third party with
respect to the Acquisition Proposal.
(d) Changes of Recommendation. The Company's Board of Directors
shall not withdraw, modify or change, or propose publicly to withdraw, modify
or change, in a manner adverse to Buyer, the Company Board of Directors'
recommendation that the stockholders of the Company vote to approve and adopt
the Transaction Documents. Notwithstanding the foregoing, (A) in response to
the receipt of a Superior Acquisition Proposal that has not been withdrawn and
continues to constitute a Superior Acquisition Proposal after the Company's
compliance with this Section 6.5(d), the Board of Directors of the Company may
withhold or withdraw its recommendation that the stockholders of the Company
vote to approve and adopt the Transaction Documents, and, (B) in the case of a
Superior Acquisition Proposal that is a tender or exchange offer made directly
to its stockholders, may recommend that its stockholders accept the tender or
exchange offer (any of the foregoing actions in (A) or (B), whether by a Board
of Directors or a committee thereof, a "Change of Company Recommendation"), if
in the case of (A) or (B) all of the following conditions in clauses (i)
through (iii) are met:
(i) It shall have provided to Buyer written notice which
shall state expressly (1) that it has received a Superior Acquisition
Proposal, (2) the material terms and conditions of the Superior
Acquisition Proposal and the identity of the Person or group making the
Superior Acquisition Proposal, and (3) that it intends to effect a Change
of Company Recommendation and the manner in which it intends to do so;
(ii) Its Board of Directors has concluded in good faith,
after consultation with its outside legal counsel, that, in light of such
Superior Acquisition Proposal, there is a reasonable possibility that
failure of the Company's Board of Directors to effect a Change of Company
Recommendation could result in a breach of its fiduciary obligations to
its stockholders under applicable Law; and
(iii) It shall not have breached in any material respect any
of the provisions set forth in this Section 6.5.
6.6 Payment of Debt. The Company shall comply with the terms of all
outstanding Indebtedness according to the terms thereof, except as would not
have a Material Adverse Effect.
6.7 Bank Waiver. The Company shall use its reasonable efforts to
obtain such Consents or amendments as the Company and Buyer mutually deem
appropriate pursuant to the $250,000,000 Credit Agreement, dated as of
February 23, 2001, among the Company, N M Rothschild & Sons Limited,
Westdeutsche Landesbank Girozentrale, New York Branch, Toronto Dominion
(Texas), Inc., and TD Securities (USA) Inc., as amended from time to time, in
connection with the Transaction Documents and the transactions contemplated
thereby.
ARTICLE VII
COVENANTS OF BUYER AND NORILSK NICKEL
7.1 Covenants of Buyer and Norilsk Nickel. Buyer and Norilsk Nickel
covenant that from and after the date of this Agreement until the Closing:
(a) they shall not fail to renew or maintain any existing, nor
shall they fail to take steps to obtain any Governmental Approval reasonably
necessary to carry out their respective roles in the transactions contemplated
by the Transaction Documents to which each is a party and to fulfill their
respective obligations under such Transaction Documents;
(b) they shall not take any action or fail to take any action
which would result in their respective representations and warranties set
forth in this Agreement not being true and correct if they were made at any
time prior to or as of the Closing Date, impair in any material respect their
ability to perform their respective obligations under this Agreement in any
material respect or otherwise have a Material Adverse Effect;
(c) to the fullest extent permissible under applicable Laws,
they shall make available to the Company their quarterly and annual financial
statements and give the Company reasonable access to their information and
personnel relevant to consummation of the transactions contemplated hereby and
the discharge of the Company's duties to its stockholders.
(d) Buyer covenants that it shall provide to the Company within
sixty (60) days of the signing of this Agreement the names of all Persons that
Buyer is designating to be elected to the Board of Directors of the Company
from and after the Closing Date (the "Buyer Directors"). The Buyer Directors
shall be reasonably satisfactory to the Company, and no Buyer Director shall
be an officer or director of any Norilsk Party. Buyer shall also provide all
information regarding the Buyer Directors which is required to be included by
the Company in such proxy statement pursuant Section 14(a) under the Exchange
Act, including the information required pursuant to Item 5 and Item 7(a)-(c)
of Schedule 14A promulgated under the Exchange Act which information shall be
true, complete and correct.
7.2 Investment.
(a) Buyer will not at any time following the Closing Date,
directly or indirectly, voluntarily offer, sell, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire) any of the
Shares except in compliance with the Securities Act and any applicable state
blue sky laws and the rules and regulations promulgated thereunder. Buyer
understands that it may be required to hold the Shares until a sale can be
made in compliance with the registration requirements of, or pursuant to an
exemption under, the Securities Act.
(b) Promptly following the Closing Date, Buyer shall timely
prepare and make all filings as may be required under applicable Law in
connection with the purchase of the Shares, including, but not limited to,
such filings pursuant to Sections 13(d) and 16(a) of the Exchange Act.
ARTICLE VIII
COVENANTS OF THE PARTIES
8.1 Reasonable Efforts. Subject to its respective rights under this
Agreement, each of the Company, Buyer and Norilsk Nickel will use its
reasonable best efforts to take all actions (including obtaining necessary
Consents and Governmental Approvals) necessary in order to consummate the
transactions contemplated by the Transaction Documents (including the
satisfaction, but not waiver, of the conditions set forth in Sections 3.2, 3.3
and 3.4, as applicable). The Parties agree to cooperate with one another in
connection with making any filing with or providing any notice to any
Governmental Authority or obtaining any Governmental Approval necessary to
consummate such transactions. Except with the prior written consent of the
other Parties, no Party shall take any action or fail to take any action which
would cause the representations and warranties of such Party set forth in the
Transaction Documents to become untrue and or incorrect in any respects,
except as would not have a Material Adverse Effect on such Party or materially
adverse effect on such Party's ability to consummate such transactions.
Notwithstanding the foregoing, any Party may take or fail to take any such
action, as the case may be, if such Party determines, based upon advise of
outside counsel, that it is necessary to comply with applicable Law.
8.2 Certain Filings and Regulatory Approvals.
(a) The Parties shall cooperate and consult with one another (i)
in determining whether any Governmental Approvals or Consents are required, in
connection with the consummation of the transactions contemplated by the
Transaction Documents and (ii) in seeking timely to obtain any such
Governmental Approvals or Consents. Without limiting the provisions of this
Section 8.2, and, subject to this Section 8.2, each Party will promptly and
fully take or cause to be taken all actions necessary, including to promptly
and fully comply with any requests for information from Governmental
Authorities (except as such Party may in good faith, after consulting with
outside counsel, determine is prohibited by the Law of another Governmental
Authority having jurisdiction over it), to obtain any and all Governmental
Approvals that are necessary to enable the Parties to consummate the
transactions contemplated by the Transaction Documents.
(b) Subject to Section 8.2(c), the Parties shall use their best
efforts to (i) resolve such objections as promptly as possible, if any, as may
be asserted with respect to the transactions contemplated by the Transaction
Documents under any Law and (ii) if any Claim, including any Claim proceeding
by a private party, is instituted (or threatened to be instituted) challenging
any transaction contemplated by the Transaction Documents as violative of any
Law, the Parties shall, as long as doing so will not result in a Material
Adverse Effect on either Party, each cooperate in all respects and use their
respective best efforts to contest and resist any such action or proceeding
and to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent) that
is in effect and that restricts, prevents or prohibits consummation of such
transactions, including, without limitation, by pursuing all reasonable
avenues of administrative and judicial appeal.
(c) If any objections are asserted with respect to the
transactions contemplated by the Transaction Documents under any Law or if any
Claim is instituted by any Governmental Authority or any other Person
challenging any of such transactions as violative of any Law, each Party
shall, as long as doing so will not result in a Material Adverse Effect on
either Party, use its best efforts to take promptly such action as may be
required in order to resolve any such objections or challenge as such
Governmental Entity or other Person may have to such transactions under such
Law so as to permit consummation of such transactions.
(d) Each Party shall promptly inform the other Parties of any
material communication received by such Party from the U.S. Federal Trade
Commission, the Antitrust Division of the U.S. Department of Justice, or any
other Governmental Authority regarding any of such transactions.
8.3 Public Announcements.
(a) As soon as practicable following the signing of this
Agreement, Norilsk Nickel and the Company shall issue a joint press release
announcing the transactions contemplated by the Transaction Documents, and
which press release shall be mutually acceptable to both of them, which press
release shall be filed by Buyer on Schedule TO, as required under the Exchange
Act.
(b) From and after the date hereof, each Party and its
Affiliates shall utilize its best efforts to consult with the other Party
before issuing any press release or otherwise making any oral or written
public statement with respect to the Transaction Documents or the transactions
contemplated thereby. Notwithstanding the foregoing, no Party shall be
required to make such consultation if such Party determines, based upon the
advise of its outside counsel, that such consultation is contrary to, or would
seriously risk violation of, applicable Law. In such case, the Parties shall
cooperate to the fullest extent permitted by applicable Law to reach mutual
agreement regarding the content of such release or statement.
8.4 Insurance.
(a) For a period of six (6) years following the Closing Date,
each of Buyer and Norilsk Nickel shall use its best efforts to cause the
Company to, and the Company shall, maintain in effect, if available,
directors' and officers' liability insurance covering those Persons who are
currently covered by the Company's directors' and officers' liability
insurance policy (the "Indemnified Employees") (a copy of which has been made
available to Buyer) on terms (including the amounts of coverage and the
amounts of deductibles, if any) that are no less favorable to the terms now
applicable to them under the Company's current policy. This Section 8.4 shall
indefinitely survive the Closing Date and is intended to benefit the Company
and the Indemnified Employees, shall be binding on all successors and assigns
of the Company and shall be enforceable by the Indemnified Employees.
(b) Following the Closing Date, Buyer shall utilize its best
efforts to cause the Company to, and the Company shall, to the fullest extent
permitted under applicable Law, and the terms of the Amended Certificate of
Incorporation and By-Laws, indemnify and hold harmless, each present and
former director, officer or employee of the Company against any Costs (x)
arising out of or pertaining to the transactions contemplated by the
Transaction Documents or (y) otherwise with respect to any acts or omissions
or alleged acts or omissions occurring at or prior to the Closing; provided,
however, that Buyer shall cause the Company not to, and the Company shall not,
amend the terms of its Organizational Documents to be less favorable with
respect to such indemnification than the Company's Organizational Documents in
effect on the date hereof, provided, further, that neither (x) nor (y) is the
result of fraud, willful misconduct, or gross negligence of such director,
officer or employee.
8.5 Company Stockholder Approval.
(a) The Company shall duly call and hold a special meeting of
the Company's stockholders as soon as practicable following the execution of
this Agreement. The purpose of such meeting shall be to approve all matters
required to be submitted to the vote of the Company's stockholders pursuant to
applicable Law in connection with the Transaction Documents and the
transactions contemplated thereby, which may include, but are not limited to,
the purchase and sale of the Shares pursuant to Section 2.1 and the election
of the Buyer Directors to the Company's Board of Directors on the Closing Date.
(b) Buyer and Norilsk Nickel shall supply the Company any
information with respect to it or its nominees, designees, officers, directors
and affiliates and the Offer (as defined in Section 9.1(a)) as may be required
pursuant to applicable Law in connection with the proxy or information
statement to be mailed to the Company's stockholders in connection with such
meeting. Such information shall be true, complete and correct in all material
respects at the time it is initially provided to the Company, and Buyer shall
promptly correct such information to the extent that it shall have become
false and misleading in any material respect prior to such meeting.
(c) Buyer shall supply the Company with financial statements of
Buyer and Norilsk Nickel as may be required pursuant to applicable Law in
connection with the proxy or information statement to be mailed to the
Company's stockholders in connection with such meeting. Such information shall
be true, complete and correct in all material respects at the time it is
initially provided to the Company, and Buyer or Norilsk Nickel shall promptly
correct such information to the extent that it shall have become false and
misleading in any material respect prior to such meeting.
(d) The Company shall have no obligation to mail its proxy
statement to Stockholders until the Palladium portion of the Purchase Price is
delivered to the Buyer Allotment Account pursuant to Section 3.5 hereof or, in
the alternative, the letter of credit is delivered to the Company pursuant to
Section 3.5(d).
8.6 Operations following the Closing. As of the date hereof,
Buyer does not have any plans or proposals to liquidate the Company, sell its
assets to or merge it with any other Persons, or, except as contemplated by
the Transaction Documents, to make any other major change in its business or
corporate structure. The Parties agree that the Company shall continue to
operate in the best interests of all of its stockholders following the
Closing. Neither Buyer, Norilsk Nickel, nor any of their Affiliates (i) has
any plan, intention or proposal to liquidate (or cause to be liquidated)
Buyer, or otherwise to distribute (or cause to be distributed) to any
shareholder or creditor of Buyer (or to Norilsk Nickel or any of its
Affiliates) any Shares acquired from the Company pursuant to the transactions
contemplated by this Agreement or (ii) has any plan or intention of treating
the acquisition of Shares pursuant to this Agreement on any Return as part of
a transaction qualifying under Section 351 or 368(a) of the Code or a
comparable provision of state or local law.
8.7 Schedules. From and after the date hereof until the Closing
Date, each Party shall from time to time amend and supplement the schedules
provided by such Party to the other Party simultaneously herewith or provide
to the other Party new schedules (the "Schedules") as may be necessary to
cause the representations and warranties of such Party set forth in the
Transaction Documents to be true and correct in all material respects. Subject
to Sections 3.3(b) and 3.4(b), any such new Schedules provided by any Party
following the date hereof shall be deemed to constitute exceptions to such
Party's corresponding representation, warranty, covenant or agreement in this
Agreement, whether or not an exception for such Schedule is expressly
specified in such representation, warranty, covenant or agreement.
8.8 Organizational Documents. Following the Closing Date and no later
than the Company's next annual meeting of stockholders, Buyer (by voting the
Shares) and the Company (by presenting the Organizational Documents for
approval by the stockholders at such meeting) shall use their best efforts to
cause the Company's Organizational Documents to be amended and restated in the
forms attached hereto as Exhibits B and C, respectively.
8.9 Board of Directors. Effective upon Closing, the Board of
Directors shall be composed of nine directors, five of whom shall be the
Designees, one of whom shall be the chief executive officer of the Company,
and three of whom shall be directors to be selected by the Company's Board of
Directors prior to the Closing from the current members of the Company's
current Board of Directors. From and after the Closing Date, the chief
executive officer of the Company shall be the Chairman of the Board of
Directors. The newly elected members of the Board of Directors shall serve
until their successors are duly appointed or elected as provided in the
Organizational Documents and the Stockholders Agreement.
8.10 PGM Agreement. Promptly following the Closing, the Parties will
negotiate in good faith to enter into an agreement, pursuant to which the
Company will purchase from the Buyer, or, at Buyer's election, any other
member of the Norilsk Nickel Group, and will resell in the Western Hemisphere,
at least one million (1,000,000) ounces of Palladium annually, such agreement
to be on commercially reasonable terms (the "PGM Agreement"); provided, that
this Section 8.10 not be construed as a guarantee of the Company's performance
under the PGM Agreement. It is the intent of the Parties that such agreement
will be entered into not later than six (6) months after the Closing Date. The
consent of the Public Directors to the PGM Agreement shall not be unreasonably
withheld or delayed.
ARTICLE IX
THE OFFER
9.1 The Offer.
(a) As promptly as practicable (but in no event later than
thirty (30) days after the Closing Date), Norilsk Nickel shall cause the Buyer
to commence (within the meaning of Rule 14d-2 under the Exchange Act) a tender
offer (the "Offer") for 4,350,000 outstanding shares of Common Stock
(excluding the shares held by Buyer and its Affiliates) at a price of U.S.
$7.50 per Share, net to the seller in cash subject to Section 9.4 (such price,
or such higher price per Share as may be paid in the Offer, being referred to
herein as the "Offer Price"), subject to the conditions set forth in Annex A
hereto.
(b) Subject to Section 9.1(d), the obligations of Norilsk Nickel
to cause Buyer to commence the Offer and to accept for payment and to pay for
any Shares validly tendered on or prior to the expiration of the Offer and not
withdrawn shall be subject only to the conditions set forth in Annex A hereto.
The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") containing the terms set forth in this Agreement and the conditions
set forth in Annex A hereto.
(c) Buyer expressly reserves the right to modify the terms of
the Offer; provided, that, except as provided in Section 9.1(d), without the
prior written consent of a majority of the Public Directors, Buyer shall not
decrease the Offer Price, change the form of consideration to be paid in the
Offer or increase or decrease the number of shares sought or amend any other
condition of the Offer in any manner adverse to the Company's stockholders
(other than with respect to insignificant changes or amendments) or impose
additional conditions without the prior written consent of a majority of the
Public Directors; provided, further, that, if on the initial scheduled
expiration date of the Offer, which shall be twenty (20) business days after
the date that the Offer is commenced, all conditions to the Offer shall not
have been satisfied or waived, Buyer may, from time to time until such time as
all such conditions are satisfied or waived, in its sole discretion, extend
the expiration date for a period not to exceed ten (10) business days. In
addition, the Offer Price may be increased and the Offer may be extended to
the extent required by applicable Law in connection with such increase, in
each case without the consent of the Company. Buyer shall, on the terms and
subject to the prior satisfaction or waiver of the conditions of the Offer,
accept for payment and pay for Shares validly tendered as promptly as
practicable.
(d) In the event that the average closing price of the Common
Stock on the NYSE is above $7.50 per Share for the period consisting of the 15
consecutive trading days after the Closing, Buyer shall have no obligation to
commence the Offer.
9.2 SEC Documents.
(a) On the date the Offer is commenced, Buyer shall file with
the SEC a Tender Offer Statement on Schedule TO in accordance with the
Exchange Act with respect to the Offer (together with all amendments and
supplements thereto and including the exhibits thereto, the "Schedule TO").
The Schedule TO will include, as exhibits, the Offer to Purchase and a form of
letter of transmittal (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). In accordance with the Exchange
Act, the Company will concurrently with the filing of the Schedule TO by
Buyer, file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"); provided that the Schedule 14D-9 shall state
that the Company has not taken any position regarding whether its stockholders
shall tender their shares of Common Stock pursuant to such Offer.
(b) Buyer shall take all steps necessary to ensure that the
Offer Documents, and the Company will take all steps necessary to ensure that
the Schedule 14D-9, will comply in all material respects with the provisions
of applicable federal and state securities Laws. Buyer shall take all steps
necessary to cause the Offer Documents, and the Company will take all steps
necessary to cause the Schedule 14D-9, to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable U.S. federal and state securities Laws. Each of Buyer,
on the one hand, and the Company, on the other hand, will promptly correct any
information provided by it for use in the Offer Documents and the Schedule
14D-9 if and to the extent that it shall have become false and misleading in
any material respect, and Buyer will take all steps necessary to cause the
Offer Documents, and the Company will take all steps necessary to cause the
Schedule 14D-9, as so corrected to be filed with the SEC and to be
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable federal and state securities Laws. The Parties and
their counsel shall be given a reasonable opportunity to review and comment
upon the respective Schedule TO and Schedule 14D-9 and all amendments and
supplements thereto prior to their filing with the SEC or dissemination to
stockholders of the Company. Each Party shall provide the other Party and its
counsel with copies of any written comments that it may receive from the SEC
or its staff with respect to its filings promptly after the receipt of such
comments.
9.3 Purchase of Shares pursuant to the Offer.
(a) Paying Agent. Prior to the expiration of the Offer, Buyer
shall designate a bank, trust company or other Person, reasonably acceptable
to the Company, to act as agent in connection with the Offer (the "Paying
Agent") to receive the funds to which the stockholders who tender their shares
of Common Stock shall become entitled pursuant to Section 9.2. Prior to the
closing of the Offer, Buyer shall, and Norilsk Nickel shall cause the Buyer to
deliver to, the Paying Agent funds in an amount necessary for the payment of
the Offer Consideration as provided herein. All interest earned on such funds
shall be paid to Buyer.
(b) Exchange Procedures. As soon as practicable after the record
date for the Offer, Buyer shall cause the Paying Agent to mail to each record
holder of Common Stock as of such record date: (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the shares of Common Stock shall pass, only upon delivery of the
certificates representing such shares to the Paying Agent and shall be in such
form not inconsistent with this Agreement as Buyer may specify) and (ii)
instructions for use in surrendering such certificates in exchange for payment
of the Offer Price. Upon surrender of a certificate to the Paying Agent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, Buyer shall cause
the Paying Agent to pay to the holder of such shares of Common Stock the Offer
Price. In the event of a surrender of shares of Common Stock which are not
registered in the transfer records of the Company under the name of the Person
surrendering such shares, payment may be made to a Person other than the
Person in whose name such shares so surrendered is registered if the
certificate representing such shares of Common Stock shall be properly
endorsed or otherwise be in proper form for transfer and the Person requesting
such payment shall pay any transfer or other Taxes required by reason of
payment to a Person other than the registered holder of such shares of Common
Stock or establish to the satisfaction of the Paying Agent that such Tax has
been paid or is not applicable. No interest shall be paid or will accrue on
the Offer Price payable to stockholders of the Company pursuant to the
provisions of this Article IX.
9.4 Withholding Taxes. Buyer shall be entitled to deduct and
withhold, or cause the Paying Agent to deduct and withhold, from the Offer
Price any Taxes and such amounts as are required to be deducted or withheld
under the Code, or any applicable provision of state, local or foreign Tax
Law. To the extent that amounts are so deducted or withheld by Buyer, such
deducted or withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Common Stock in
respect of which such deduction or withholding was made by Buyer.
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated prior to the
Closing Date:
(a) with the written consent of Buyer and the Company;
(b) by Buyer or the Company if (i) any court of competent
jurisdiction or other Governmental Authority has issued any order, decree or
ruling or taken any other final action restraining, enjoining or otherwise
preventing or prohibiting the consummation of the transactions contemplated by
this Agreement, or (ii) as of September 30, 2003, any Governmental Approval
necessary for consummation of the transactions contemplated by the Transaction
Documents has not been issued, has been revoked or not renewed, or any other
condition set forth in Section 3.2 has not been satisfied, due to no fault of
the Party seeking termination;
(c) by Buyer if (i) the Company has breached any of its
representations or warranties set forth in this Agreement so that the
condition set forth in Section 3.4(b) is not satisfied and such breach is not
cured within forty-five (45) days after the date written notice of such breach
is given by Buyer to the Company, and such breach has or potentially may have
a Material Adverse Effect, (ii) the Company has breached any of its covenants
or agreements contained in this Agreement so that the condition set forth in
Section 3.4(b) is not satisfied and such breach is not cured within forty-five
(45) days after the date written notice of such breach is given by Buyer to
the Company, and such breach has or potentially may have a Material Adverse
Effect, (iii) prior to the meeting of the Company's stockholders to approve
the transactions contemplated by the Transaction Documents, the Board of
Directors of the Company has withdrawn or amended in any manner adverse to
Buyer its recommendation and approval of this Agreement, (iv) the Company
Stockholder Approval has not been obtained at a meeting duly called for such
purpose, (v) any other condition to the Buyer's obligation to close set forth
in Section 3.3 has not been satisfied by September 30, 2003, or (vi) the
Closing has not occurred on or before September 30, 2003 for any other reason
not set forth in this Section 10.1(c) (unless the failure of the Closing to
have occurred by such date results primarily from Buyer's material breach of
any of its respective representations, warranties, covenants or agreements
contained in this Agreement);
(d) by the Company if (i) Buyer or Norilsk Nickel has materially
breached any of its representations or warranties set forth in this Agreement
so that the condition set forth in Section 3.3(b) is not satisfied and such
breach is not cured within forty-five (45) days after the date written notice
of such breach is given by the Company to Buyer and Norilsk Nickel, (ii) Buyer
or Norilsk Nickel has materially breached any of its respective covenants or
agreements contained in this Agreement and such breach is not cured within
forty-five (45) days after the date written notice of such breach is given by
the Company to Buyer and Norilsk Nickel, (iii) the Company Stockholder
Approval has not been obtained at a meeting duly called for such purpose, (iv)
any other condition to the Company's obligation to close set forth in Section
3.4 has not been satisfied by September 30, 2003, or (v) the Closing has not
occurred on or before September 30, 2003 (unless the failure of the Closing to
have occurred by such date results primarily from the Company's material
breach of any of its respective representations, warranties, covenants or
agreements contained in this Agreement); or
(e) by the Company if a party has made a Superior Acquisition
Proposal and the Company enters into any agreement with respect to such
Superior Acquisition Proposal in accordance with the provisions of Section
6.5; provided that termination of this Agreement pursuant to this Section
10.1(e) will not become effective until the payment by the Company to Buyer of
the Termination Fee provided in Section 10.3.
10.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 10.1, this Agreement will forthwith become void and will be deemed
to have terminated without liability to either Party (except for any liability
of either Party for damages for material breach of any covenant or agreement);
provided that the provisions of the Confidentiality Agreements and Section
10.3 of this Agreement will continue in full force and effect notwithstanding
such termination.
10.3 Termination Fees.
(a) If the Company terminates this Agreement pursuant to the
provisions of Section 10.1(e), then, in such case, the Company will pay to
Buyer, within three (3) business days following the delivery of notice of such
termination, a termination fee equal to $12,500,000 (the "Termination Fee"),
payable by wire transfer of immediately available funds to an account
designated by Buyer.
(b) If a Person unrelated to the Norilsk Parties shall make an
Acquisition Proposal and, thereafter, this Agreement is terminated pursuant to
Sections 10.1(c)(iv) or 10.1(d)(iii), upon the consummation of such
Acquisition Proposal within nine (9) months of such termination, the Company
shall pay to Buyer the Termination Fee within three (3) business days after
such consummation by wire transfer of immediately available funds to an
account designated by Buyer.
(c) The Company acknowledges that the agreements regarding the
payment of fees contained in this Section 10.3 are an integral part of the
transactions contemplated by this Agreement and that, in the absence of such
agreements, Buyer would not have entered into this Agreement. The Company
accordingly agrees that in the event that it fails to pay the Termination Fee
pursuant to this Section 10.3, the Company will in addition to such fee pay
Buyer all of the reasonable costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Buyer in the enforcement of its
rights under this Section 10.3, together with interest, if any, on such amount
at the JP Morgan prime lending rate for U.S. dollars plus 2% per annum,
commencing on the first day following the date upon which such fee was due. In
the event such JP Morgan rate is not available, interest shall accrue at the
prime rate as published in the Wall Street Journal from time to time.
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification by the Company.
(a) The Company shall indemnify and hold harmless Buyer, its
Affiliates and the officers, directors, employees, advisors, agents and
controlling persons thereof from any liability, damage, loss, penalty, cost or
expense, including reasonable attorneys' fees and costs of investigating and
defending against lawsuits, complaints, actions or other pending or threatened
litigation (collectively, the "Costs"), incurred by Buyer, and arising from or
attributable either to any breach of any representation, warranty or agreement
made by the Company in the Transaction Documents (including the environmental
compliance representation and warranty set forth in Section 5.23), which
breach shall be determined giving effect to any and all amendments and
supplements of the Schedules by the Company pursuant to Section 8.7; provided
that (in addition to the limitation set forth in Section 11.4) if such Costs
do not arise in connection with any lawsuit, complaint, action or other
pending or threatened litigation asserted against Buyer by any Person other
than the Company, any indemnification by the Company pursuant to this Section
11.1(a) shall be no greater than a percentage of such Costs equal to the
percentage of outstanding voting securities of the Company Owned by Buyer at
the time such Costs were incurred.
(b) All actions by the Company in connection with any
indemnification by it pursuant to any section of this Agreement shall be made
by a vote of a majority of the Public Directors, the scheduling of such vote
by the Company not to be unreasonably withheld or delayed.
11.2 Indemnification by Buyer and Norilsk Nickel. Buyer and Norilsk
Nickel shall indemnify and hold harmless the Company, its officers, directors,
employees, advisors, agents and controlling persons from any and all Costs
arising from or attributable to any breach of any representation, warranty,
covenant or agreement made by Buyer or Norilsk Nickel in the Transaction
Documents, which breach shall be determined giving effect to any and all
amendments and supplements of the Schedules by the Buyer pursuant to Section
8.7.
11.3 Procedures for Third-Party Claims. Promptly after the assertion
by any third party of any Claim against any Party entitled to be indemnified
under this Article XI (the "Indemnitee") that, in the judgment of such
Indemnitee, may result in the incurrence by such Indemnitee of Costs for which
such Indemnitee would be entitled to indemnification pursuant to this
Agreement, such Indemnitee shall deliver to the other Party (the "Indemnitor")
a written notice describing such Claim. The Indemnitor may participate in and,
at its option upon acknowledgement of Indemnitees' right to indemnification
for such matter, assume the defense of the Indemnitee against such claim,
including the employment of counsel, who shall be reasonably satisfactory to
such Indemnitee. In such case, Indemnitee shall have the right to employ
separate counsel in connection with any such Claim and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be paid
by the Indemnitor unless (i) the Indemnitor shall have failed, within a
reasonable time after having been notified by the Indemnitee of the existence
of such Claim as provided in the preceding sentence, to assume the defense of
such Claim, (ii) the employment of such counsel has been specifically
authorized in writing by the Indemnitor or (iii) the named parties to any such
action (including any impleaded parties) include both such Indemnitee and the
Indemnitor and such Indemnitee shall have been advised in writing by its
proposed counsel that there is likely to be a conflict of interest between the
Indemnitee and the Indemnitor in the legal defense thereof.
11.4 Limits For Recovery for Indemnified Costs.
(a) Except with respect to claims for indemnification by the
Norilsk Nickel Parties under Section 11.6(b) and claims for indemnification by
the Company under 11.6(a) (both of which claims shall survive for as long as
the applicable statutes of limitations), claims for indemnification hereunder
can be made only during the term of survival of the representations and
warranties as set forth in Section 12.1.
(b) Except as provided in this Section 11.4 and in addition to
the limitation set forth in Section 11.1, the Indemnitee shall be liable for
any of the Indemnitee's Costs under this Article XI until such time as the
aggregate amount of Indemnitee's Costs exceeds $5,000,000. From and after such
time: (i) the Indemnitee shall be liable for such first $5,000,000 of Costs
and (ii) the Indemnitor shall be liable for the amount of Indemnitee's Costs
in excess of $5,000,000, up to a maximum amount of $100,000,000. Any such
payment by the Company shall be made in cash and Palladium, in the same
proportion as the Palladium (valued at $275 per ounce) and cash components of
the Purchase Price, delivery of the Palladium portion of such indemnity
payment to occur at the Warehouse by transfer from the Company Pool Account to
the Buyer Allotment Account. Any resulting Transfer Taxes shall be borne by
the Indemnitor. Notwithstanding the foregoing, the Company may elect to make
such indemnity payment entirely in cash.
(c) The Company's liability to the Norilsk Nickel Parties for
breach by the Company of the covenants contained in Section 8.10 shall not be
subject to Section 11.4(b).
(d) Any indemnity payment made by any Party to any Indemnitee
pursuant to this Article XI shall be net of any amounts actually recovered
(after deducting any related costs and expenses) by such Indemnitee for the
Costs for which such indemnity payment is made, under any insurance policy,
provided that (i) no Indemnitee shall be obligated to obtain insurance
coverage or pursue a claim under any insurance policy, and (ii) the
availability of insurance shall not relieve the indemnifying Party of its
obligation to make an indemnity payment promptly.
11.5 Environmental Claims. With respect to any Costs incurred or
alleged to have been incurred as a result of a breach or alleged breach of
Section 5.23 (notwithstanding whether such Costs may also have been incurred
as a result of a breach or alleged breach of any other representation and
warranty set forth in Article V), the rights of Buyer, its Affiliates and the
officers, directors, employees, advisors, agents and controlling persons
thereof (collectively "Buyer Indemnitees") to indemnification set forth in
this agreement shall constitute a Buyer Indemnitee's exclusive remedy for such
Costs, and each Buyer Indemnitee expressly waives and relinquishes, on behalf
of itself, its successors and any assigns, any and all rights, claims, or
remedies such Person may have against any and all of the Indemnitors
(including, without limitation, the Company) under any Environmental Laws, as
presently in force or hereafter enacted, promulgated, or amended (including,
without limitation, under the Comprehensive Environmental Response
Compensation and Liability Act, or any similar state or local law) or at
common Law.
11.6 Transfer Taxes.
(a) Buyer shall timely pay (or cause to be paid) to the
appropriate Governmental Authority, and indemnify and hold harmless the
Company and its Affiliates and the officers, directors, employees, advisors,
agents and controlling persons thereof, with respect to any transfer,
recordation, deed, stamp, grantor or grantee's, or other similar Taxes
("Transfer Taxes") imposed by a jurisdiction other than the United States or
any state or locality of the United States in connection with the execution of
this Agreement, and the delivery and transfer of Palladium contemplated by
Sections 2.2, 3.1 and 3.5 of this Agreement, including the Company's issuance
of the Shares to the Buyer, but not including any such Taxes imposed by reason
of any transfer or disposition of the Palladium by or on behalf of the Company
after its delivery pursuant to Sections 3.1 and 3.5 hereof (the "Buyer
Transfer Taxes"). The Company shall cooperate in the preparation, execution
and filing of all Returns regarding any Buyer Transfer Taxes. Buyer shall, at
its own expense, file, to the extent required by Law, all necessary Returns
with respect to all Buyer Transfer Taxes, and, if required by applicable Law,
the Company shall join in the execution of any such Returns. If governing Law
does not allow Buyer, but requires the Company, to file a Return with respect
to a Buyer Transfer Tax, Buyer shall prepare such Return, present such Return
to the Company within ten (10) days of the due date of such Return, and the
Company shall sign and file (or shall cause the appropriate Person to sign and
file) such Return as prepared by Buyer, unless filing such Return in the
manner prepared by Buyer would violate applicable Law.
(b) The Company shall timely pay (or cause to be paid) to the
appropriate Governmental Authority, and indemnify and hold harmless Buyer and
its Affiliates and the officers, directors, employees, advisors, agents and
controlling persons thereof, with respect to any Transfer Taxes imposed in
connection with the execution of this Agreement, and the delivery and transfer
of Palladium contemplated by Sections 2.2, 3.1, 3.5 and 11.4(b) of this
Agreement, including the Company's issuance of the Shares to the Buyer, other
than the Buyer Transfer Taxes (the "Company Transfer Taxes"). Buyer shall
cooperate in the preparation, execution and filing of all Returns regarding
any Company Transfer Taxes. The Company shall, at its own expense, file, to
the extent required by Law, all necessary Returns with respect to all Company
Transfer Taxes, and, if required by applicable Law, Buyer shall join in the
execution of any such Returns. If governing Law does not allow the Company,
but requires Buyer, to file a Return with respect to a Company Transfer Tax,
the Company shall prepare such Return, present such Return to Buyer within ten
(10) days of the due date of such Return, and Buyer shall sign and file (or
shall cause the appropriate Person to sign and file) such Return as prepared
by the Company, unless filing such Return in the manner prepared by the
Company would violate applicable Law. The Company shall upon its receipt of a
written request of Buyer issue to Buyer a resale certificate where applicable
in connection with Buyer's transfer of Palladium to the Company pursuant to
Sections 2.2, 3.1 and 3.5 hereof. Such resale certificate shall be validly
issued and executed so as to meet the requirements of the applicable Law of
the jurisdictions in which any taxable transfer from Buyer to the Company
takes place. The Company's indemnification and payment obligations of this
Section 11.6(b) are not subject to the limits set forth in the first sentence
of Section 11.4(b).
ARTICLE XII
MISCELLANEOUS
12.1 Survival of Representations and Warranties. All representations
and warranties made pursuant to or in connection with the Transaction
Documents shall survive the execution and delivery of this Agreement and the
Closing, but shall terminate one year following the Closing Date; provided,
however, that the representations and warranties contained in Section 5.18)
the representations and warranties with respect to the Tax line items of the
Financial Statements, and the representations and warranties set forth in the
last sentence of Section 8.6 shall survive and terminate on the expiration of
the relevant statute of limitations, and provided, further, that any
representation or warranty as to which a bona fide claim has been asserted
prior to such date shall terminate upon resolution of such claim.
12.2 Governing Law; Consent to Jurisdiction.
(a) This Agreement shall be governed by the Law of the State of
Delaware, without regard to conflict of Law principles. Delaware Law shall
govern any dispute, claim or controversy arising out of, in relation to, or in
connection with the Agreement or the existence, validity, interpretation,
enforceability, breach or termination of the Agreement.
(b) Buyer and Norilsk Nickel shall maintain at all times a duly
appointed agent in the State of Delaware, which may be changed upon ten days
notice to the Company, for the service of any process or summons in connection
with any issue, litigation, arbitration, action or proceeding brought in any
such court. Any such process or summons may also be served on it by mailing a
copy of such process or summons to it at its address set forth, and in the
manner provided in Section 12.8. Buyer and Norilsk Nickel hereby irrevocably
consents to the exclusive personal jurisdiction and venue of any Delaware
state or United States Federal court of competent jurisdiction sitting in New
Castle County, Delaware, in any action, claim or proceeding arising out of or
in connection with this Agreement and agrees not to commence or prosecute any
action, claim or proceeding in any other court. Buyer hereby expressly and
irrevocably waives and agrees not to assert the defense of lack of personal
jurisdiction, forum non conveniens or any similar defense with respect to the
maintenance of any such action or proceeding in New Castle County, Delaware.
12.3 Amendment. This Agreement may be amended at any time prior to
the Closing Date by the execution and delivery of a written instrument by or
on behalf of each Party; provided, that any such amendment following the
Closing Date shall require the prior written consent of a majority of the
Public Directors. Notwithstanding the foregoing, after the date of the Company
Stockholder Approval, no amendment to this Agreement will be made without the
approval of stockholders of the Company to the extent such approval is
required under the DGCL or the rules and regulations of the New York Stock
Exchange.
12.4 Extension and Waiver. At any time prior to the Closing, either
Buyer or Norilsk Nickel, on the one hand, of the Company, on the other hand,
may extend the time for performance of or waive compliance with any of the
covenants or agreements of the opposite Party or Parties to this Agreement and
may waive any breach of the representations or warranties of such opposite
Party or Parties. No agreement extending or waiving any provision of this
Agreement will be valid or binding unless it is in writing and is executed and
delivered by or on behalf of the Party for whose benefit the representation,
warranty or covenant was made.
12.5 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable Law. If any provision of this Agreement prohibited or invalid
under applicable Law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
12.6 Adjustment to Purchase Price. The Parties hereto shall (or shall
cause each Indemnitor and Indemnitee to) treat any indemnity payment made
under the Agreement as an adjustment to the Purchase Price for all Tax
purposes.
12.7 Counterparts. This Agreement may be executed simultaneously in
two original counterparts, any one of which need not contain the signatures of
both Parties, all such counterparts taken together will constitute one and the
same Agreement.
12.8 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given (i) when delivered
personally to the recipient or when sent to the recipient by telecopy (receipt
confirmed); or (ii) three days after the date when sent to the recipient by
reputable express courier service (charges prepaid). Such notices, demands and
other communications will be sent to Buyer and the Company at the addresses
indicated below:
If to Buyer:
Norimet Limited
Managing Director
Cassini House, 6th Floor
57 St. James Street
London SW1A 1LD
Fax: 44 207 565 6463
with a copy to
(which will not constitute
notice to):
Baker Botts L.L.P.
1299 Pennsylvania Ave., N.W.
Washington, DC 20004-2400
Attn: David N. Powers, Esq.
Telephone No: (202) 639-7769
Facsimile No: (202) 639-7890
If to Norilsk Nickel:
Usadba Center
22, Voznesensky per.
Moscow 103009
Russia
Telephone: 7 095 797 8610
Fax: 7 095 797 8611
Attn: General Director
with a copy to
(which will not constitute
notice to):
Baker Botts L.L.P.
1299 Pennsylvania Ave., N.W.
Washington, DC 20004-2400
Attn: David N. Powers, Esq.
Telephone No: (202) 639-7769
Facsimile No: (202) 639-7890
If to the Company:
Stillwater Mining Company
536 East Pike Avenue
Columbus, Montana 59019
Attn: Chief Executive Officer
Telephone No: (406) 322-8700
Facsimile No:
with a copy to
(which will not constitute
notice to):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attn: Jeffrey W. Tindell
Telephone No: (212) 735-3380
Facsimile No: (917) 777-3380
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
12.9 Expenses and Payments.
(a) Except as specifically provided in any Transaction Document,
each Party shall bear its own expenses incurred in connection with the
transactions contemplated by the Transaction Documents, whether or not such
transactions are consummated.
(b) Unless expressly specified otherwise, all payments and
monetary amounts set forth in the Transaction Documents are in United States
dollars.
12.10 Specific Performance. The Parties acknowledge and agree that
the breach of the provisions of the Transaction Documents by the Company, on
the one hand, or Buyer and Norilsk Nickel on the other hand, could not be
adequately compensated with monetary damages, and the parties hereto agree
accordingly that injunctive relief and specific performance shall be
appropriate remedies to enforce the provisions of the Transaction Documents
and waive any claim or defense that there is an adequate remedy at law for
such breach; provided, however, that nothing herein shall limit the remedies
herein, legal or equitable, otherwise available and all remedies herein are in
addition to any remedies available at law or otherwise.
12.11 Entire Agreement. The Transaction Documents constitute the
entire agreement and understanding among the parties and supersede all other
prior agreements and undertakings, both written and oral, among the parties,
or any of them, with respect to the subject matter thereof.
12.12 Assignment. This Agreement may not be assigned by any Party
without the prior written consent of the other Parties, and any assignment
made in contravention of the foregoing prohibition shall be null and void. The
Company shall not unreasonably withhold its consent to any such assignment to
an Affiliate of Buyer. Prior to any assignment by any Party pursuant to this
Section 12.12, the assignee shall confirm in writing to the non-assigning
Parties that such assignee shall assume all obligations of the assigning party
hereunder. Subject to the preceding sentences of this Section 12.12, all the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto. This Agreement shall not inure to the benefit of or be
enforceable by any Person other than the Parties to this Agreement and its
successors and assigns.
12.13 Company Actions. Notwithstanding any provisions of this
Agreement, in the event any Company action, Consent, approval or similar item
is required to be obtained after Closing hereunder, such Company action shall
require the approval of a majority of the Public Directors.
12.14 Headings. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
12.15 Gender and Number. When the context requires, the gender of all
words used herein shall include the masculine, feminine and neuter and the
number of all words shall include the singular and plural.
12.16 Reference to Days. All references to "days" herein shall mean
calendar days.
12.17 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party. The use
of the word "including" in this Agreement means "including without limitation"
and is intended by the parties to be by way of example rather than limitation.
IN WITNESS WHEREOF, the Company, Buyer and Norilsk Nickel have caused
this Agreement to be executed as of the date first above written.
STILLWATER MINING COMPANY
By: /s/ Francis R. McAllister
--------------------------------------
Name: Francis R. McAllister
Title: Chairman and Chief Executive Officer
MMC NORILSK NICKEL
By: /s/ Mikhail D. Prokhorov
--------------------------------------
Name: Mikhail D. Prokhorov
Title: General Director
NORIMET LIMITED
By: /s/ Mikhail D. Prokhorov
--------------------------------------
Name: Mikhail D. Prokhorov
Title: Authorized Representative
ANNEX A
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CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Share Purchase Agreement of which this Annex A is a part.
Notwithstanding any other provision of the Offer, Buyer shall not be required
to accept for payment or, subject to any applicable rules and regulations of
the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Buyer's
obligation to pay for or return tendered shares of Common Stock promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered shares of Common Stock, and may amend the Offer consistent
with the terms of the Agreement or terminate the Offer and not accept for
payment any tendered shares of Common Stock, if at any time prior to the
expiration of the Offer, any of the following events shall occur:
(a) there shall be pending any suit, action or proceeding by a
Governmental Authority (i) challenging the acquisition by Buyer of any shares
of Common Stock pursuant to the Offer, (ii) seeking to restrain or prohibit
the making or consummation of the Offer or (iii) seeking to impose material
limitations on the ability of Buyer, or rendering Buyer unable, to accept for
payment, pay for or purchase some or all of the shares of Common Stock
pursuant to the Offer;
(b) there shall be any Law enacted, entered, enforced, promulgated or
deemed applicable to the Offer, or any other action shall be taken by any
Governmental Authority, that results in any of the consequences referred to in
paragraph (a) above; or
(c) the Agreement shall have been terminated in accordance with its
terms;
which, in the reasonable judgment of Buyer, in any such case, and regardless
of the circumstances (including any action or inaction by Buyer) giving rise
to such condition, makes it inadvisable to proceed with the Offer and/or with
such acceptance for payment of or payments for shares of Common Stock.
The foregoing conditions are for the sole benefit of Buyer and may be
waived by Buyer, in whole or in part, at any time and from time to time, in
the reasonable discretion of Buyer. The failure by Buyer at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any right
and each such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.