Warrant Agreement, dated as of November 5, 1999 (this "Agreement") between
APEX SILVER MINES LIMITED, a Cayman Islands company (the "Company"), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation (the "Warrant
Agent").
WHEREAS, the Company has authorized the issuance, from time to time, of
Warrants, as hereinafter described (the "Warrants"), to purchase up to an
aggregate of up to ten million (10,000,000) fully paid and nonassessable
Ordinary Shares, par value $.01 per share ("Ordinary Shares", and the Ordinary
Shares issuable upon exercise of the Warrants being referred to herein as the
"Warrant Shares"), each Warrant entitling the holder thereof to purchase one
Ordinary Share at an Exercise Price (defined in Section 9 hereof) of $18.00 per
Warrant, subject to adjustment as hereinafter provided; and
WHEREAS, the Company desires that the Warrant Agent act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of the Warrants and the other matters as provided herein.
NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights and
obligations thereunder of the Company and the registered holders of the Warrants
(the "Holders"), the Company and the Warrant Agent hereby agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the
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Warrant Agent to act as agent for the Company in accordance with the provisions
hereinafter set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment. As used herein, the term "Warrant Agent" shall mean the
Warrant Agent and any successor appointed hereunder. The transfer agent for the
Ordinary Shares (the "Transfer Agent") may serve as the Warrant Agent.
SECTION 2. Form and Countersignature of Warrants.
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2.1 Form of Warrant. The text of the Warrant, the subscription form (the
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"Subscription Form"), and form of assignment shall be substantially as set forth
in Exhibit A attached hereto. The Warrants shall be executed on behalf of the
Company by one or more authorized officers or directors. The signature of any
such officers or directors on the Warrants may be made manually or by facsimile.
2.2 Countersignature of Warrants. The Warrants shall be countersigned
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manually or by facsimile by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. Warrants may be countersigned by the Warrant
Agent and may be issued or delivered by the Warrant Agent, notwithstanding that
the persons whose manual or facsimile signatures appear thereon as proper
officers or directors of the Company shall have ceased to be such officers or
directors at the time of such countersignature, issuance or delivery. Warrants
shall be dated as of the date of issuance or countersignature thereof by the
Warrant Agent either upon initial issuance or upon exchange, substitution or
transfer.
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SECTION 3. Issuance and Registration of Warrants.
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3.1 Initial Issuance of Warrants. The Warrant Agent shall issue the
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Warrants upon receipt of, and in accordance with, a statement from an authorized
representative of the Company as contemplated by Section 15.10 hereof specifying
the identity of, and number of Warrants to be issued to, each person or entity
to be issued Warrants.
3.2 Registration. The Warrants shall be numbered and shall be registered
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in a warrant register maintained by the Warrant Agent as they are issued. The
Company and the Warrant Agent may deem and treat the registered holder of a
Warrant Certificate as the absolute owner thereof (notwithstanding any notation
of ownership or other writing thereon made by anyone), for the purpose of any
exercise or conversion thereof and any distribution to the holder thereof and
for all other purposes and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary. The Company shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of any other person.
SECTION 4. Transfer and Exchange of Warrants.
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4.1 Transfer of Warrants. The Warrants shall be transferable only on the
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books of the Warrant Agent maintained at the principal office of the Warrant
Agent upon delivery thereof duly endorsed by the Holder or by his duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer, which endorsement shall be
guaranteed by an eligible guarantor institution which is a member of a signature
guarantee program satisfactory to the Warrant Agent (an "Eligible Institution").
Warrants may be transferred only in whole, so as to allow the Holder of each
Warrant to purchase one full Ordinary Share; provided that each such transfer
shall be in a minimum increment of one hundred Warrants. Without the prior
written consent of the Company, during the thirty-day period commencing on the
date of this Warrant Agreement, no Warrant certificate may be transferred other
than for the full number of unexercised Warrants that such certificate
represents. In all cases of transfer by an attorney-in-fact, the original power
of attorney, duly approved, or a copy thereof, duly certified, in such form and
with such other evidence of authority as the Warrant Agent shall request, shall
be deposited and remain with the Warrant Agent. In case of transfer by
executors, administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, in such form and
with such other evidence of authority as the Warrant Agent shall request, and
may be required to be deposited and remain with the Warrant Agent in its
discretion. Upon any such registration of transfer, the Warrant Agent shall
countersign and deliver a new Warrant or Warrants to the person entitled
thereto.
4.2 Exchange of Warrant Certificates. Each Warrant certificate may be
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exchanged upon surrender at the principal office of the Warrant Agent for
another certificate or certificates entitling the Holder thereof to purchase a
like aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle such Holder to purchase; provided that each certificate
issued to the Holder in such exchange shall be for a minimum increment of one
hundred Warrants. Without the prior written consent of the Company, during the
thirty-day
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period commencing on the date of this Warrant Agreement, no Warrant certificate
may be exchanged other than for the full number of unexercised Warrants that
such certificate represents. Any Holder desiring to exchange a Warrant
certificate or certificates shall make such request in writing delivered to the
Warrant Agent, and shall surrender, properly endorsed, the certificate or
certificates to be so exchanged. Thereupon, the Warrant Agent shall countersign
and deliver to the Holder a new Warrant certificate or certificates, as the case
may be, as so requested, in the name of such Holder. No fractional Warrant
certificates shall be issued and no new Warrant certificate entitling the Holder
thereof to purchase fractional shares will be issued.
SECTION 5. Term of Warrants; Exercise of Warrants.
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5.1 Term of Warrants. Subject to the terms of this Agreement, each Holder
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shall have the right, which may be exercised commencing at the opening of
business on November 5, 1999 until 5:00 p.m., New York time, on November 4, 2002
(the "Expiration Date"), to purchase from the Company the number of fully paid
and nonassessable Warrant Shares which the Holder may at the time be entitled to
purchase on exercise of such Warrants.
5.2 Exercise of Warrants. A Warrant may be exercised upon surrender to
--------------------
the Warrant Agent at its principal office of the certificate or certificates
evidencing the Warrants to be exercised, together with the Subscription Form
duly completed and signed, which signature shall be guaranteed by an Eligible
Institution, and upon payment to the Warrant Agent for the account of the
Company of the Exercise Price (as defined in Section 9 hereof and subject to
adjustment in accordance with the provisions of Section 10 hereof) for the
number of Warrant Shares in respect of which such Warrants are then exercised.
Payment of the aggregate Exercise Price shall be made by certified or official
bank check.
Subject to Section 6 hereof, upon the surrender of Warrants and payment of
the Exercise Price as aforesaid, the Warrant Agent shall instruct the Transfer
Agent to issue and deliver as soon as practicable to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for, the number of full Warrant Shares so purchased
upon the exercise of such Warrants. No certificate for fractional Warrant
Shares, or cash in lieu thereof, will be issued. If permitted by applicable
law, such certificate or certificates shall be deemed to have been issued and
any person so designated to be named therein shall be deemed to have become a
holder of record of such Warrant Shares as of the date of the receipt by the
Warrant Agent of such Warrants and payment of the Exercise Price, as aforesaid;
provided, however, that if at the date of surrender of such Warrants and payment
of such Exercise Price, the transfer books for the Ordinary Shares purchasable
upon the exercise of such Warrants shall be closed, the certificates for the
shares in respect of which such Warrants are then exercised shall be issuable as
of the date on which such books shall be opened, and until such date the Company
shall be under no duty to deliver any certificate for such shares and the holder
of the Warrant shall not be deemed to be the holder of Ordinary Shares issuable
upon exercise of such Warrant until such time as such books shall be opened;
provided, further, however, that such transfer books, unless otherwise required
by law or by applicable rule of any national securities exchange, shall not be
closed at any one time for a period longer than twenty (20) days. The rights of
purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part, and in the
event that a certificate evidencing Warrants is exercised in respect of less
than all of the Warrant Shares purchasable on such
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exercise at any time prior to the date of expiration of the Warrants, a new
certificate evidencing the remaining Warrant or Warrants will be issued to the
Holder thereof, and the Warrant Agent is hereby authorized to countersign and
deliver the required new Warrant certificate or certificates pursuant to the
provisions of this Section and Section 2 hereof.
5.3 Compliance with Government Regulations. The Company covenants that if
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any Ordinary Shares required to be reserved for purposes of exercise of Warrants
require, under any federal securities law or applicable governing rule or
regulation of any national securities exchange, registration with or approval of
any governmental authority, or listing on any such national securities exchange
before such shares may be issued upon exercise, the Company will in good faith
prior to the issuance of such shares endeavor to cause such shares to be duly
registered, approved or listed on the relevant national securities exchange, as
the case may be; provided, however, that in no event shall such Ordinary Shares
be issued, and the Company is hereby authorized to suspend the exercise of all
Warrants, for the period during which such registration, approval or listing is
required but not in effect. The Company covenants that it will use reasonable
efforts to obtain any required approvals or registration under state "blue sky"
securities laws for the issuance of the Warrant Shares; provided, however, that
Warrants may not be exercised by, or Warrant Shares issued to, any Holder in any
state where such exercise or issuance would be unlawful.
SECTION 6. Payment of Taxes. The Company will pay all documentary stamp
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duties or taxes, if any, attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any Warrants or certificates for Warrant
Shares in a name other than that of the Holder of such Warrants, and the Company
shall not be required to issue or deliver such Warrants or certificates for
Warrant Shares or proceeds unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 7. Mutilated or Missing Warrants. In case any of the certificates
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evidencing the Warrants shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue, and the Warrant Agent shall countersign and
deliver in exchange and substitution for and upon cancellation of the mutilated
Warrant certificate, or in lieu of and in substitution for the Warrant
certificate lost, stolen or destroyed, a new Warrant certificate of like tenor
and representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company and the Warrant Agent of such loss, theft
or destruction of such Warrant and an indemnity or bond, if requested, also
satisfactory to them. An applicant for such a substitute Warrant certificate
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 8. Reservation of Warrant Shares; Purchase and Cancellation of
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Warrants.
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8.1 Reservation of Warrant Shares. There have been reserved, and the
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Company shall at all times keep reserved, out of its authorized share capital, a
number of Ordinary Shares sufficient to provide for the exercise of the rights
of purchase represented by the outstanding Warrants. The Transfer Agent and
every subsequent transfer agent for any shares of the
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Company issuable upon the exercise of any of the rights of purchase aforesaid
will be authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company issuable upon the exercise of the
rights of purchase represented by the Warrants. The Warrant Agent is hereby
authorized to requisition from time to time from the Transfer Agent the share
certificates required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply the
Transfer Agent and any such subsequent transfer agent with duly executed share
certificates for such purposes. The Company will furnish the Transfer Agent and
any such subsequent transfer agent a copy of all notices of adjustments
delivered by the Company to the Warrant Agent hereunder.
8.2 Purchase of Warrants by the Company. The Company shall have the
-----------------------------------
right, except as limited by law, other agreements or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
8.3 Cancellation of Warrants. In the event the Company shall purchase or
------------------------
otherwise acquire Warrants, the same shall thereupon be delivered to the Warrant
Agent and be cancelled by it and retired. The Warrant Agent shall cancel any
Warrant surrendered for exchange, substitution, transfer or exercise in whole or
in part and such cancelled Warrant Certificate shall be disposed of by the
Warrant Agent in a manner satisfactory to the Company.
SECTION 9. Exercise Price. The price per share at which a Warrant Share
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shall be purchasable upon exercise of a Warrant (the "Exercise Price") shall be
$18.00, subject to adjustment as provided in Section 10 hereof.
SECTION 10. Adjustments. The Exercise Price and the number and kind of
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securities subject to purchase upon the exercise of each Warrant shall be
subject to adjustment from time to time upon the happening of certain events, as
hereinafter set forth.
10.1 Adjustments. (a) In the event that, on or after the date of this
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Agreement and prior to the Expiration Date, the Company shall (i) declare a
dividend or make a distribution on its Ordinary Shares payable in Ordinary
Shares, (ii) subdivide or reclassify the outstanding Ordinary Shares into a
greater number of Ordinary Shares, or (iii) combine or reclassify the
outstanding Ordinary Shares into a smaller number of Ordinary Shares, the
Exercise Price in effect and number of Warrant Shares which are to be issued
upon exercise of a Warrant at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the Holder of any Warrant exercised
after such time shall be entitled to receive the aggregate number of Ordinary
Shares which, if such Warrant had been exercised immediately prior to such date,
he would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) In the event, on or after the date of this Agreement and prior to
the Expiration Date, of any merger, consolidation, arrangement,
reconstruction or statutory share exchange of the Company with or into any
other person or company, the Holder of
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Warrants shall receive upon such exercise of the Warrants and payment of
the Exercise Price the kind and amount of shares and other securities and
property (including cash) receivable upon such merger, consolidation,
arrangement, reconstruction or statutory share exchange, by a Holder of the
number of Ordinary Shares of the Company into which such Warrants so
exercised might have been exercised immediately prior to such merger,
consolidation, arrangement, reconstruction or statutory share exchange,
subject to adjustments which, for events subsequent to the effective date
of such merger, consolidation, arrangement, reconstruction or statutory
share exchange, shall be on terms as nearly equivalent as practicable to
the adjustments provided above. The above provisions shall similarly apply
to successive mergers, consolidations, arrangements, reconstructions and
statutory share exchanges.
(c) Notwithstanding anything to the contrary contained in this
Section 10.1, no adjustment in the Exercise Price shall be required unless
such adjustments would require an increase or decrease of at least one per
cent in such price; provided, however, that any adjustments which by reason
of this Section 10.1(c) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 10.1 shall be made to the nearest cent.
(d) In any case in which this Section 10 shall require that any
adjustment in the Exercise Price be made effective as of immediately after
a record date for a specified event, the Company may elect to defer until
the occurrence of the event the issuing to the Holder of any Warrant
exercised after that record date of the Ordinary Shares and other capital
stock of the Company, if any, issuable upon the exercise over and above the
Ordinary Shares and other capital stock of the Company, if any, issuable
upon the exercise on the basis of the Exercise Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to the
Holder a due xxxx or other appropriate instrument evidencing the Holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(e) Notwithstanding anything to the contrary contained in this
Section 10.1, no adjustment to the Exercise Price or other terms of the
Warrants need be made if Holders are to participate in any transaction on a
basis, and with notice, that the Board of Directors of the Company
determines to be fair and appropriate in light of the basis and notice on
which holders of Ordinary Shares participate in the transaction.
10.2 Notice of Adjustment. Whenever the Exercise Price is adjusted, as
--------------------
herein provided, the Company shall cause the Warrant Agent promptly to give
notice to the Holders as provided in Section 17 hereof of such adjustment or
adjustments and shall deliver to the Warrant Agent a certificate setting forth
the Exercise Price after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate shall be conclusive evidence of the
correctness of such adjustment. The Warrant Agent shall be entitled to rely on
such certificate and shall be under no duty or responsibility with respect to
any such certificate, except to exhibit the same, from time to time, to any
Holder desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holders to determine whether any facts exist which may require any adjustment of
the Exercise Price or
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other stock or property purchasable on the exercise thereof, or with respect to
the nature or extent of any such adjustment when made, or with respect to the
method employed in making such adjustment.
10.3 Statement on Warrants. Irrespective of any adjustments in the
---------------------
Exercise Price or the number or kind of shares or other property purchasable
upon the exercise of the Warrants or other amendments to or corrections of this
Agreement, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
SECTION 11. No Fractional Interests. No Warrant entitling the Holder to
-----------------------
purchase fractional interests in Warrant Shares and no fractional Warrant
Shares, or cash or other consideration in lieu thereof, will be issued.
SECTION 12. No Rights as Shareholders. Nothing contained in this
-------------------------
Agreement or in any of the Warrants shall be construed as conferring upon the
Holders or their transferees the right to vote or to receive dividends or to
consent or to receive notice as shareholders in respect of any meeting of
shareholders for the election of directors of the Company or any other matter,
or any rights whatsoever as shareholders of the Company, except as otherwise set
forth under Section 5.2 hereof.
SECTION 13. Disposition of Proceeds on Exercise of Warrants; Inspection of
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Warrant Agreement. The Warrant Agent shall account promptly to the Company with
-----------------
respect to Warrants exercised and concurrently pay to the Company all monies
received by the Warrant Agent for the purchase of the Warrant Shares through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices given
or received hereunder available for inspection by the Holders during normal
business hours at its principal office. The Company shall supply the Warrant
Agent from time to time with such number of copies of this Agreement as the
Warrant Agent may request.
SECTION 14. Merger or Consolidation or Change of Name of Warrant Agent.
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Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
substantially all of the business of the Warrant Agent, shall be the successor
to the Warrant Agent hereunder without the execution or filing of any paper or
any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 16 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement any of the
Warrants shall have been countersigned but not delivered, any such successor to
the Warrant Agent may adopt the countersignature of the original Warrant Agent
and deliver such Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, any successor to the Warrant Agent
may countersign such Warrants either in the name of the predecessor Warrant
Agent or in the name of the successor Warrant Agent; and in any such cases such
Warrants shall have the full force provided in the Warrants and in this
Agreement.
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In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignatures under its prior name and
deliver such Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name; and in all such
cases such Warrants shall have the full force provided in the Warrants and in
this Agreement.
SECTION 15. Concerning the Warrant Agent. The Warrant Agent undertakes
----------------------------
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their acceptance
of Warrants, shall be bound.
15.1 Correctness of Statements. The statements contained herein and in
-------------------------
the Warrants shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as
otherwise provided herein.
15.2 Breach of Covenants. The Warrant Agent shall not be responsible for
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any failure of the Company to comply with any of the covenants of the Company
contained in this Agreement or in the Warrant.
15.3 Reliance on Counsel. The Warrant Agent may consult at any time with
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legal counsel satisfactory to it (who may be counsel for the Company) and the
Warrant Agent shall incur no liability or responsibility to the Company or to
any Holder in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
15.4 Proof of Actions Taken. Whenever in the performance of its duties
----------------------
under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively to
be proved and established by a certificate signed by an officer or director of
the Company and delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
15.5 Compensation and Indemnification. The Company agrees to pay the
--------------------------------
Warrant Agent reasonable compensation for all services rendered by the Warrant
Agent in the performance of its duties under this Agreement, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and other charges
of any kind and nature reasonably incurred by the Warrant Agent in the
performance of its duties under this Agreement, and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Warrant
Agent in the performance of its duties under this Agreement except as a result
of the Warrant Agent's gross negligence or bad faith. In connection with such
indemnification, the Company shall be entitled to conduct any litigation and
shall only be required to pay the reasonable costs and fees of one counsel
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selected by the Company. The Warrant Agent will cooperate in the defense of any
such action and will not settle such action without the consent of the Company.
15.6 Other Transactions in Securities of Company. The Warrant Agent and
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any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be interested
or contract with or lend money to the Company or otherwise act as fully and
freely as though the Warrant Agent was not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any legal entity including, without limitation,
acting as a lender to the Company or an affiliate thereof.
15.7 Liability of Warrant Agent. The Warrant Agent shall act hereunder
--------------------------
solely as the agent of the Company and its duties shall be determined solely by
the provisions hereof. The Warrant Agent shall not be liable for anything which
it may do or refrain from doing in connection with this Agreement except for its
own gross negligence or bad faith. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Warrant Agent be liable for special,
indirect or consequential loss or damage whatsoever (including, but not limited
to, lost profits) even if the Warrant Agent has been advised of the likelihood
of such loss or damage and regardless of the form of action.
15.8 Reliance on Documents. The Warrant Agent will not incur any
---------------------
liability or responsibility to the Company or to any Holder for any action taken
in reliance on any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
15.9 Validity of Agreement. The Warrant Agent shall not be under any
---------------------
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity and execution of any Warrant (except its
countersignature thereof); nor shall the Warrant Agent by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Warrant Shares (or other shares) to be issued pursuant to
this Agreement or any Warrant, or as to whether any Warrant Shares (or other
shares) will, when issued, be validly issued, fully paid and nonassessable, or
as to the Exercise Price or the number or amount of Warrant Shares or other
securities or other property issuable upon exercise of any Warrant.
15.10 Instructions from Company. The Warrant Agent is hereby authorized
-------------------------
and directed to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President, any Vice
Chairman of the Board, or any Executive, Senior or other Vice President of the
Company, any director or any other employee of the Company expressly authorized
in writing by any of such persons as having the authority to deliver
instructions hereunder, and to apply to such officers, directors or employees
for advice or instructions in connection with its duties, and shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officers, directors or employees.
9
SECTION 16. Change of Warrant Agent. The Warrant Agent may resign and be
-----------------------
discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company. If the Warrant Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent. After appointment, the successor Warrant Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Warrant Agent without further act or deed; but
the former warrant agent shall deliver and transfer to the successor warrant
agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure
to file any notice provided for in this Section 16, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the warrant agent or the appointment of the successor warrant agent, as the
case may be.
SECTION 17. Notices. Any notice pursuant to this Agreement by the Company
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or by any Holder to the Warrant Agent, or by the Warrant Agent or by any Holder
to the Company, shall be in writing and shall be delivered in person, by
overnight courier, or by facsimile transmission (with hard copy to follow
promptly by first class mail or overnight courier), or mailed first class,
postage prepaid (a) to the Company at its offices at Caledonian House, Xxxxxxx
Street, Xxxxxx Town, Grand Cayman, Cayman Islands, British West Indies,
Attention: Xxxxxx X. Xxxxxx, with a copy to Apex Silver Mines Corporation, 0000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention: Chief Financial
Officer or (b) to the Warrant Agent at its offices at 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. Each party hereto may from time to time change the address and
facsimile numbers to which notices to it are to be delivered or mailed hereunder
by notice to the other party.
Any notice required to be mailed pursuant to this Agreement by the Company
or the Warrant Agent to the Holders shall be in writing and shall be mailed
first class, postage prepaid, or otherwise delivered, to such Holders at their
respective addresses on the books of the Warrant Agent. Any other notices which
the Company or the Warrant Agent may wish to provide to the Holder may be made
in such manner (including by publication in a newspaper of national circulation)
as the Company or the Warrant Agent, as the case may be, shall elect. Any
notice requested by any other person may be dispatched in the discretion of the
Warrant Agent, but at no expense to the Warrant Agent or the Company.
SECTION 18. Supplements and Amendments. The Company and the Warrant Agent
--------------------------
may from time to time supplement or amend this Agreement without the approval of
any Holder in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable, which shall not adversely affect in any material manner
the interest of the Holders. The Company and the Warrant Agent may from time to
time supplement or amend this Agreement in any other respect with the written
consent of the Holders of not less than a majority of the Warrants then
outstanding; provided, however, that no change in the number or nature of the
securities purchasable upon the exercise of any Warrant, or increase in the
Exercise Price of any Warrant, or acceleration of the Expiration Date of any
Warrant, shall be made without the written consent of the Holder of such
Warrant, other than such changes as are
10
specifically prescribed by this Agreement as originally executed or are made in
compliance with applicable law.
SECTION 19. Successors. All the covenants and provisions of this Agreement
----------
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
SECTION 20. Warrant Agent Fees. The fees payable to the Warrant Agent for
------------------
its services under this Agreement will be $200 per month, unless the Company and
the Warrant Agent agree in writing to any other amount.
SECTION 21. Applicable Law. This Agreement and each Warrant issued
--------------
hereunder shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed wholly within
such state.
SECTION 22. Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any person or corporation other than the Company, the
Warrant Agent, and the Holders any legal or equitable right, remedy or claim
under this Agreement; this Agreement shall be for the sole and exclusive benefit
of the Company, the Warrant Agent and the Holders of the Warrants.
SECTION 23. Counterparts. This Agreement may be executed in counterparts
------------
and by facsimile and each of such counterparts and facsimile copies shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
SECTION 24. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
SECTION 25. Captions. The captions of the Sections and subsections of
--------
this Agreement have been inserted for convenience only and shall have no
substantive effect.
11
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be duly executed, all as of the day and year first above written.
APEX SILVER MINES LIMITED
By:_________________________________
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:_________________________________
Name:
Title:
12
Exhibit A
Form of Warrant Certificate (obverse)
EXERCISABLE ONLY ON OR AFTER NOVEMBER 5, 1999 AND ON OR BEFORE 5:00 P.M.
NEW YORK CITY TIME ON NOVEMBER 4, 2002
NUMBER NYW: ________ WARRANTS: ________
SEE REVERSE SIDE FOR DEFINITIONS
ORDINARY SHARES
SUBSCRIPTION WARRANTS CUSIP: G04074 11 1
ISIN: KYG040741111
Incorporated Under the Laws of the Cayman Islands
APEX SILVER MINES LIMITED
This certifies that FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number
of Warrants (the "Warrants") specified above. Each Warrant initially entitles
the Registered Holder to purchase, subject to the terms and conditions set forth
in this Warrant Certificate and the Warrant Agreement (as hereinafter defined),
one fully paid and nonassessable Ordinary Share, $.01 par value (the "Ordinary
Shares"), of Apex Silver Mines Limited, a Cayman Islands company (the
"Company"), at any time between November 5, 1999 and 5:00 p.m. (New York City
time) on November 4, 2002 (the "Expiration Date"), upon surrender of this
Warrant Certificate with the Subscription Form on the reverse hereof duly
executed, at the principal office of American Stock Transfer & Trust Company, as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$18.00 per Warrant (the "Exercise Price") by certified or official bank check
made payable to the Warrant Agent for the account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated as of November
5, 1999, by and between the Company and the Warrant Agent. A copy of the
Warrant Agreement may be obtained by the Registered Holder upon written request
to the Company.
Upon the occurrence of certain events provided for in the Warrant
Agreement, the Exercise Price and the number and kind of securities subject to
purchase upon the exercise of each Warrant represented hereby are subject to
adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional Ordinary Shares, or cash or other
consideration in lieu thereof, will be issued. In the case of the exercise of
less than all of the Warrants represented hereby, the Company shall
execute a new Warrant Certificate, which the Warrant Agent shall countersign and
deliver, for the balance of such Warrants.
Each Warrant is transferable only in whole, so as to allow the Registered
Holder of each Warrant to purchase one full Ordinary Share and each such
transfer shall be in a minimum increment of one hundred Warrants. Without the
prior written consent of the Company, during the thirty-day period commencing on
the date of this Warrant Certificate, this Warrant Certificate may be
transferred only for the full number of unexercised Warrants that this Warrant
Certificate represents. Warrants shall be transferable only on the books of the
Warrant Agent maintained at the principal office of the Warrant Agent upon
delivery of this Warrant Certificate, duly endorsed by the Registered Holder or
by his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer, which endorsement
shall be guaranteed by an eligible guarantor institution which is a member of a
signature guarantee program satisfactory to the Warrant Agent.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the principal office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates entitling such Registered Holder to
purchase a like aggregate number of Ordinary Shares as this Warrant Certificate
entitles such Registered Holder to purchase; provided that each certificate
issued to the Registered Holder in such exchange shall be for a minimum
increment of one hundred Warrants.. Without the prior written consent of the
Company, during the thirty-day period commencing on the date of this Warrant
Certificate, each Warrant Certificate may be exchanged only for the full number
of unexercised Warrants that such certificate represents. A Registered Holder
desiring to exchange this Warrant Certificate shall make such request in writing
delivered to the Warrant Agent, and shall surrender, properly endorsed, this
Warrant Certificate to be so exchanged. Thereupon, the Warrant Agent shall
countersign and deliver to the Registered Holder a new Warrant Certificate or
Warrant Certificates as so requested, in the name of such Registered Holder,
subject to the limitations provided in the Warrant Agreement. No fractional
Warrant Certificate shall be issued and no new Warrant Certificate entitling the
Registered Holder thereof to purchase fractional shares will be issued.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided in the Warrant Agreement.
The Company and the Warrant Agent may deem and treat the Registered Holder
as the absolute owner hereof (notwithstanding any notation of ownership or other
writing hereon made by anyone) for all purposes and shall not be affected by any
notice to the contrary.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile, by two of its officers or directors
thereunto duly authorized and a facsimile of its corporate seal to be imprinted
thereon.
APEX SILVER MINES LIMITED
By:
-------------------------
Title:
By:
-------------------------
Title:
COUNTERSIGNED:
American Stock Transfer & Trust Company, as Warrant Agent
By:
-------------------------
Authorized Officer
(Reverse)
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT-under Uniform Gifts to Minors Act Custodian _______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship and not as
tenants__________________ in common
(State)
Additional abbreviations may also be used though not in the above list.
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
Ordinary Shares, as provided for therein, and tenders herewith payment of the
purchase price in full in the form of a certified or official bank check in the
amount of $___________.
Please issue a certificate or certificates for such Ordinary Shares in the
name of:
Name _____________________________________
(Please Print Name, Address and Social
Security or Taxpayer Identification Number)
_____________________________________
_____________________________________
_____________________________________
_____________________________________
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder.
Signature______________________________ Note: The above signature must
correspond exactly with the name on the face of this Warrant Certificate or with
the name of assignee appearing in the assignment form below.
___________ Signature Guarantee. Signatures should be guaranteed by an eligible
guarantor institution which is a member of a signature guarantee program
satisfactory to the Warrant Agent.
ASSIGNMENT
(To be executed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
____________________________________________________________
(Name and Address of Assignee Must Be Printed or Typewritten)
____________________________________________________________
the within Warrant, hereby irrevocably constituting and appointing
______________, Attorney to transfer said Warrant on the books of the Company,
with full power of substitution in the premises.
Dated:
----------------- -------------------------------------------
Signature of Registered Holder
Note: The above signature must correspond exactly
with the name on the face of this Warrant.
------------------------
Signature Guarantee Signatures should be guaranteed by an eligible
guarantor institution which is a member of a
signature guarantee program satisfactory to the
Warrant Agent.
