Document:

Exhibit 4.2

 

UNLESS AND UNTIL
IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED
HEREBY, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE.  BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE ORDINARY SHARES
ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER OR A
SUBSIDIARY THEREOF; (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A ADOPTED UNDER THE SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS OTHER
THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES ACT OR ANOTHER AVAILABLE
EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL,
PRIOR TO ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED PURSUANT
TO THE INDENTURE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES”

 

 

AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. 
IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE
IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT AS PERMITTED BY THE
SECURITIES ACT.

 

THE
FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.

 

2

 

APEX SILVER MINES LIMITED

4.0% Convertible Senior Subordinated Note due 2024

 

	
  No. A-1

  	
   

  	
  CUSIP: 03760XAC5

  
	
  Issue Date: October 15,
  2004

  	
   

  	
  Principal Amount: $100,000,000

  
	
  Issue Price:
  $1,000.00

  	
   

  	
   

  
	
  (for each $1,000
  Principal Amount)

  	
   

  	
   

  

 

APEX
SILVER MINES LIMITED, a Cayman Islands company, promises to pay to Cede &
Co. or registered assigns, on September 15, 2024, the Principal Amount of
this Security.  This Security is issued
with a Principal Amount of ONE HUNDRED MILLION DOLLARS  ($100,000,000).

 

This
Security shall not bear interest except as specified on the other side of this
Security.  This Security is convertible
as specified on the other side of this Security.

 

Additional
provisions of this Security are set forth on the other side of this Security.

 

3

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed.

 

	
  Dated:  October 15,
  2004

  	
   

  
	
   

  	
   

  
	
   

  	
  APEX SILVER
  MINES LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mark A. Lettes

  	
   

  
	
   

  	
   

  	
  Name: Mark A. Lettes

  	
   

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  BANK OF NEW
  YORK,

  as Trustee, certifies that this

  is one of the Securities referred

  to in the within-mentioned Indenture.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Beata Hryniewicka

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  October 15,
  2004

  	
   

  

 

4

 

4.0% Convertible Senior Subordinated Note due 2024

 

1.               Interest.

 

The Company promises to pay interest in cash on the
Principal Amount of this Security at the rate of 4.0% per year from the Issue
Date, or from the most recent date to which interest has been paid or provided
for, until the Stated Maturity.  During
such period, the Company will pay interest semiannually in arrears on each
Interest Payment Date to Holders of record at the close of business on each
Regular Record Date immediately preceding such Interest Payment Date.  Each payment of interest on the Securities
will include interest accrued through the day immediately preceding the most
recent Interest Payment Date (or the Repurchase Date, Redemption Date, the
Fundamental Change Redemption Date or, in certain circumstances, the Conversion
Date, as the case may be).  Any payment
required to be made on any day that is not a Business Day will be made on the
next succeeding Business Day.  The
interest rate will be calculated using a 360-day year composed of twelve 30-day
months.

 

Interest
on any Security that is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the person in whose name that
Security is registered at the close of business on the Regular Record Date for
such interest at the office or agency of the Company maintained for such
purpose.  Each installment of interest on
any Security shall be paid in same-day funds by transfer to an account
maintained by the payee located inside the United States.

 

2.               Method of Payment.

 

Subject
to the terms and conditions of the Indenture, the Company will make payments in
respect of Principal Amount, Redemption Prices, Make-Whole Payments, Repurchase
Prices, Fundamental Change Redemption Prices and at Stated Maturity to Holders
who surrender Securities to a Paying Agent to collect such payments in respect
of the Securities.  In addition, the
Company will pay interest from the Issue Date until Stated Maturity, as more
fully described in paragraph 1 hereof. 
The Company will pay any cash amounts in money of the United States that
at the time of payment is legal tender for payment of public and private
debts.  However, the Company may make
such cash payments by check payable in such money.

 

3.               Paying Agent, Conversion Agent,
Registrar and Calculation Agent.

 

Initially,
The Bank of New York (the “Trustee”) will act as Paying Agent,
Conversion Agent, Registrar and Calculation Agent.  The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar, co-registrar or Calculation Agent without
notice, other than notice to the Trustee except that the Company will maintain
at least one Paying Agent in the State of New York, City of New York, Borough
of Manhattan, which shall initially be an office or agency of the Trustee.  The Company or any of its Subsidiaries or any
of their Affiliates may act as Paying Agent, Conversion Agent, Registrar,
co-registrar or Calculation Agent.

 

5

 

4.               Indenture.

 

The
Company issued the Securities pursuant to an Indenture dated as of October 15,
2004 (the “Indenture”), between the Company and the Trustee.  The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Securities themselves and the Trust Indenture Act of 1939, as in effect
from time to time (the “TIA”). 
Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture.  The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.

 

The
Securities are unsecured obligations of the Company limited to $100,000,000
aggregate Principal Amount (subject to Sections 2.07 and 2.14 of the Indenture)
and rank (i) subordinate in right of payment to future unsubordinated
indebtedness for the construction and development of the San Cristobal Project
which will be secured by the San Cristobal property and other project assets or
other assets, (ii) subordinate in right of payment to any guarantee of the
indebtedness described in (i) by the Company or its Affiliates for the period
the guarantee is in effect, and (iii) equal in right of payment to all other
existing and future unsecured and unsubordinated indebtedness of the Company.

 

The
Company may, without the consent of the Holders of the Securities, increase the
Principal Amount of the Securities by issuing additional notes in the future on
the same terms and conditions, except for any differences in the issue price
and interest accrued prior to the issue date of the additional notes, and with
the same CUSIP number as the Securities. The Securities and any additional
notes would rank equally and ratably and would be treated as a single class for
all purposes under the Indenture.  No
additional notes may be issued if any Event of Default has occurred with
respect to the Securities.  The Indenture
does not limit other indebtedness of the Company, secured or unsecured.

 

5.               Provisional Redemption.

 

No
sinking fund is provided for the Securities.

 

The
Company may redeem for cash any portion of the Securities at any time prior to September 15,
2014 upon at least 30 days and not more than 60 days’ notice by mail to the
Holders of the Securities, at a Redemption Price equal to 100% of the Principal
Amount of the Securities to be redeemed plus accrued and unpaid interest and
the Make-Whole Payment, if (1) the Closing Sale Price of the Ordinary Shares
has exceeded 140% of the then applicable Conversion Price for at least 20
trading days in any consecutive 30-day trading period ending on the trading day
prior to the mailing of the notice of redemption and (2) the shelf registration
statement covering resales of the Securities and the Ordinary Shares is
effective and available for use and is expected to remain effective and
available for use for the 30 days following the Redemption Date, unless
registration is no longer required.  The
Make-Whole Payment on the redeemed Securities will equal $396.67 per $1,000
Principal Amount of Securities, minus the amount of any interest actually paid
or accrued and unpaid on the Securities prior to the Redemption Date.  The Company will make Make-Whole Payments on
all Securities called for redemption prior to September 15, 2014,
including Securities converted after the date the Company mailed the
notice.  The Company may make Make-Whole
Payments, at its option,

 

6

 

either in cash or in
Ordinary Shares or a combination thereof. 
The Company will specify the type of consideration for the Make-Whole
Payment in the Redemption Notice (appropriately adjusted to take into account
the occurrence of certain events that would result in an adjustment of the
Conversion Rate with respect to the Ordinary Shares).  Payments made in Ordinary Shares will be
valued at 95% of the average of the closing sales prices of Ordinary Shares for
the five consecutive trading days ending on the third trading day prior to the
Redemption Date.  Because the sale price
of Ordinary Shares will be determined before the Redemption Date, if the
Company specifies that it will make payment of the Redemption Price in Ordinary
Shares, Holders of Securities bear the market risk that Ordinary Shares will
decline in value between the date the sale price is calculated and the
Redemption Date.

 

6.               Optional Redemption.

 

Beginning
on September 15, 2014, the Company may redeem the Securities for cash, as
a whole or from time to time in part at the option of the Company at a
Redemption Price equal to 100% of the Principal Amount plus accrued and unpaid
interest, if any, to but not including the Repurchase Date.  The Company will give no less than 30 days or
more than 60 days notice of redemption by mail to Holders of Securities.

 

7.               Purchase by the Company at the Option of
the Holder.

 

Subject
to the terms and conditions of the Indenture, the Company shall become
obligated to purchase, at the option of the Holder, the Securities held by such
Holder on September 15, 2014 and September 15, 2019 at a Repurchase
Price equal to 100% of the Principal Amount of such Securities on the
applicable Repurchase Date plus accrued and unpaid interest, if any, to but not
including the Repurchase Date, upon delivery of a Repurchase Notice containing
the information set forth in the Indenture, at any time from the opening of
business on the date that is 25 Business Days prior to such Repurchase Date
until the close of business on the third Business Day prior to such Repurchase
Date and upon delivery of the Securities to the Paying Agent by the Holder as
set forth in the Indenture.

 

The
Repurchase Price may be paid, at the option of the Company, in cash or by the
issuance and delivery of Ordinary Shares of the Company, or in any combination
thereof in accordance with the Indenture. 
If the Company elects to pay the Repurchase Price, in whole or in part,
in Ordinary Shares, the number of shares to be delivered in exchange for the
portion of the Repurchase Price to be paid in Ordinary Shares will be equal to
that portion of the Repurchase Price divided by 95% of the average closing sale
price of Ordinary Shares for the five trading days ending on the third business
day prior to the applicable Repurchase Date (appropriately adjusted to take
into account the occurrence of certain events that would result in an
adjustment of the conversion rate with respect to Ordinary Shares).  The Company will not, however, deliver
fractional shares in repurchases using Ordinary Shares as consideration.  Securityholders who would otherwise be
entitled to receive fractional shares will instead receive cash in an amount
equal to the market price of an Ordinary Share multiplied by such fraction.

 

At the
option of the Holder and subject to the terms and conditions of the Indenture,
the Company shall become obligated to purchase all or a portion of the
Securities in integral multiples of $1,000 Principal Amount held by such Holder
no later than 30 days after the

 

7

 

Fundamental Change Notice
of the Company for a Fundamental Change Redemption Price equal to 100% of the
Principal Amount of such Securities plus accrued and unpaid interest, if any,
to but not including the Fundamental Change Redemption Date, which Fundamental
Change Redemption Price shall be paid in cash.

 

A
third party may make the offer and purchase of the Securities in lieu of the
Company in accordance with the Indenture.

 

Holders
have the right to withdraw any Repurchase Notice or Fundamental Change
Redemption Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the
Indenture.

 

If
cash (and/or securities if permitted under the Indenture) sufficient to pay the
Repurchase Price or Fundamental Change Redemption Price, as the case may be, of
all Securities or portions thereof to be purchased as of the Repurchase Date or
the Fundamental Change Redemption Date, as the case may be, is deposited with
the Paying Agent on the Business Day following the Repurchase Date or the
Fundamental Change Redemption Date, as the case may be, interest, if any, shall
cease to accrue on such Securities (or portions thereof) on such Repurchase Date
or Fundamental Change Redemption Date, as the case may be, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Repurchase Price or Fundamental Change Redemption Price, as the case may be, if
any, upon surrender of such Security).

 

8.               Notice of Redemption.

 

Notice
of redemption will be mailed at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Securities to be redeemed at the Holder’s
registered address.  If money and/or Ordinary
Shares (if permitted under the Indenture) sufficient to pay the Redemption
Price of, and accrued and unpaid interest, if any, with respect to, all
Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, on such
Redemption Date, interest, if any, shall cease to accrue on such Securities or
portions thereof.  Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part
but only in integral multiples of $1,000 of Principal Amount.

 

9.               Conversion.

 

Conversion Based on Ordinary Shares Price.  Subject to the provisions of this paragraph 9
and notwithstanding the fact that any other condition to conversion described
below has not been satisfied, Holders may convert the Securities into Ordinary
Shares on a Conversion Date (1) in any fiscal quarter commencing prior to September 15,
2019 if the Closing Sale Price of the Ordinary Shares for at least 20 trading
days in a period of 30 consecutive trading days ending on the last trading day
of such preceding fiscal quarter is greater than the conversion trigger price
per share and (2) after September 15, 2019 and prior to Stated Maturity,
if the Closing Sale Price of the Ordinary Shares is greater than or equal to
the conversion trigger price per share on any day after September 15,
2019.  The “conversion trigger price”
for any fiscal quarter shall be 120% of the Conversion Price per share of
Ordinary Shares on the last trading day of such

 

8

 

preceding fiscal
quarter.  If either of the foregoing
conditions is satisfied, then the Securities will be convertible at any time of
the option of the Holder, through their maturity.

 

Conversion Based on Trading Price of Securities.  Subject to the provisions of this paragraph 9
and notwithstanding the fact that any other condition to conversion described
below has not been satisfied, Holders may convert the Securities into Ordinary
Shares during the five Business Day period after any five consecutive trading
day period in which the Trading Price per $1,000 Principal Amount of the
Securities for each day of such five day period was less than 98% of the
product of the Closing Sale Price on the applicable date and the number of
Ordinary Shares issuable upon conversion of $1,000 Principal Amount of the
Securities.

 

The “Trading Price” means, on any date, the
average of the secondary market bid quotations for the Securities obtained by
the Trustee for $5,000,000 Principal Amount of Securities at approximately 3:30
p.m., New York City time, on such date from three independent nationally
recognized securities dealers selected by the Company; provided that if at
least three such bids cannot reasonably be obtained by the Trustee, but two
bids are obtained, then the average of the two bids shall be used, and if only
one such bid can reasonably be obtained by the Trustee, one bid shall be used;
and provided further that if the Trustee cannot reasonably obtain at least one
bid for $5,000,000 Principal Amount of Securities from a nationally recognized
securities dealer, then the Trading Price per $1,000 Principal Amount of
Securities shall be deemed to be less than 98% of the product of (a) the number
of Ordinary Shares issuable upon conversion of $1,000 Principal Amount of
Securities and (b) the Closing Sale Price on such date.

 

The
Trustee (or other conversion agent appointed by the Company) shall have no
obligation to determine the Trading Price unless the Company has requested such
a determination; and the Company shall have no obligation to make such request
unless a Holder provides it with reasonable evidence that the Trading Price per
$1,000 Principal Amount of Securities would be less than 98% of the product of
the Closing Sale Price of Ordinary Shares and the number of Ordinary Shares
issuable upon conversion of $1,000 Principal Amount of Securities.  If such evidence is provided, the Company
shall instruct the Trustee (or other conversion agent) to determine the Trading
Price of the Securities beginning on the next trading day and on each
successive trading day until the Trading Price per $1,000 Principal Amount of
Securities is greater than 98% of the product of the Closing Sale Price and the
number of shares issuable upon conversion of $1,000 Principal Amount of the
Securities.

 

Conversion Upon Redemption.  Subject to the provisions of this paragraph 9
and notwithstanding the fact that any other condition described herein to
conversion has not been satisfied, a Holder may convert into Ordinary Shares a
Security or portion of a Security which has been called for redemption pursuant
to paragraph 6 hereof, provided such Securities are surrendered for conversion
prior to the close of business on the second Business Day immediately preceding
the Redemption Date.

 

Conversion Upon Occurrence of Certain Corporate Transactions.  Subject to the provisions of this paragraph 9
and notwithstanding the fact that any other condition described herein to
conversion has not been satisfied, in the event the Company is a party to a
consolidation, merger or binding share exchange  pursuant to which the Ordinary Shares would be converted into
cash, securities or other property as set forth in Section 10.15 of the
Indenture,

 

9

 

the Securities may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the date announced by the Company as the anticipated effective time
until 15 days after the actual effective date of such transaction, and at the
effective time of such transaction the right to convert a Security into
Ordinary Shares will be deemed to have changed into a right to convert it into
the kind and amount of cash, securities or other property which the holder
would have received if the holder had converted its Security into Ordinary
Shares immediately prior to the transaction. 
If such transaction also constitutes a Fundamental Change, a Holder will
be able to require the Company to redeem all or a portion of such Holder’s
Securities pursuant to Paragraph 7 hereof and Section 3.14 of the
Indenture.  In addition, if such
transaction constitutes a Fundamental Change, the Securities will cease to be
convertible after the 15th day following the actual effective date of the transaction
giving rise to such Fundamental Change.

 

A
Security in respect of which a Holder has delivered a Repurchase Notice or
Fundamental Change Redemption Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

 

The
initial Conversion Rate is 34.9406 Ordinary Shares per $1,000 Principal Amount
of each Security, subject to adjustment for certain events described in the
Indenture.  The Company will deliver cash
or a check in lieu of any fractional Ordinary Share.  The ability to surrender Securities for
conversion will expire at the close of business on September 15, 2024.

 

To
exercise its conversion right, a Holder must (1) complete and manually sign the
conversion notice (or complete and manually sign a facsimile of such notice)
and deliver such notice to the Conversion Agent, (2) surrender the Security to
the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar taxes, if required.

 

A
Holder may convert a portion of a Security if the Principal Amount of such
portion is $1,000 or an integral multiple of $1,000.  No payment or adjustment will be made for
dividends on the Ordinary Shares except as provided in the Indenture.

 

The
Conversion Rate will be adjusted for dividends or distributions on Ordinary
Shares payable in Ordinary Shares or other Capital Stock of the Company;
subdivisions, combinations or certain reclassifications of Ordinary Shares;
distributions to all holders of Ordinary Shares of certain rights to purchase
Ordinary Shares for a period expiring within 60 days of the record date for
such distribution at less than the Closing Sale Price of the Ordinary Shares at
the Time of Determination; distributions to such holders of assets (including
cash and Capital Stock of a Subsidiary) or debt or other securities of the
Company or certain rights to purchase securities of the Company; a tender or
exchange offer by the Company or any Subsidiary for the Ordinary Shares to the
extent that the cash and value of any other consideration included in the
payment per share of Ordinary Shares exceeds the current market price per share
of Ordinary Shares on the trading day next succeeding the Expiration Time.  However, no adjustment need be made if
Securityholders may participate in the transaction or in certain other
cases.  The Company from time to time may
voluntarily increase the Conversion Rate.

 

10

 

Subject
to Sections 10.22 and 10.23 of the Indenture, if the Company is a party to a
consolidation, merger or binding share exchange or a transfer of all or
substantially all of its assets, or upon certain distributions described in the
Indenture, the right to convert a Security into Ordinary Shares may be changed
into a right to convert it into securities, cash or other assets of the Company
or another person.

 

The
Conversion Rate will not be adjusted for accrued and unpaid interest.  Upon conversion, a holder will not receive
any cash payment of interest (unless such conversion occurs between a regular
Record Date and the interest payment date to which it relates).  Instead, accrued and unpaid interest will be
deemed to be paid in full by the Ordinary Shares received by the Holder on
conversion.

 

Conversion After a Public
Acquirer Change of Control.  In the event of a Public
Acquirer Change of Control, the Company may, in lieu of increasing the
Conversion Rate by the Additional Ordinary Shares pursuant to Section 10.23
of the Indenture, elect to adjust the Conversion Rate such that from and after
the Effective Date of such Public Acquirer Change of Control, Holders of the
Securities will be entitled to convert their Securities into a number of shares
of Public Acquirer Common Stock by adjusting the Conversion Rate in effect
immediately before the Public Acquirer Change of Control by multiplying it by a
fraction: the numerator of which will be (i) in the case of a share exchange,
consolidation, merger or binding share exchange, pursuant to which the Ordinary
Shares are converted into cash, securities or other property, the average value
of all cash and any other consideration (as determined by the Board of
Directors) paid or payable per Ordinary Share or (ii) in the case of any other
Public Acquirer Change of Control, the average of the Closing Sale Price of the
Ordinary Shares for the five consecutive trading days prior to but excluding
the Effective Date of such Public Acquirer Change of Control, and the
denominator of which will be the average of the Closing Sale Price of the
Public Acquirer Common Stock for the five consecutive Trading Days commencing
on the Trading Day next succeeding the effective date of such Public Acquirer
Change of Control.

 

Adjustment for Conversion Upon a
Cash Take-Over Transaction.  If a Holder
elects to convert Securities in connection with a Fundamental Change referred
to in clause (iii) of Section 3.14 of the Indenture pursuant to which 10%
or more of the consideration for the Ordinary Shares (excluding cash payments
for fractional shares and cash payments made in respected dissenters’ appraisal
rights) in the transaction or transactions otherwise constituting the
Fundamental Change does not consist of shares of Publicly Traded Securities (a “Cash
Take-Over Transaction”), the Company will increase the number of Ordinary
Shares issuable upon conversion of the Securities by a number of additional
Ordinary Shares (the “Additional Ordinary Shares”) as set forth in Section 10.23(b)
of the Indenture.  The number of
Additional Ordinary Shares should be determined by reference to Section 10.23(b)
of the Indenture, based on the date on which the Cash Take-Over Transaction
becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid
per share for the Ordinary Shares in the Cash Take-Over Transaction.  If shareholders of Ordinary Shares receive
only cash in the Cash Take-Over Transaction, the Stock Price shall be the cash
amount paid per share.  Otherwise, the
Stock Price shall be the average of the Closing Sale Price of the Ordinary
Shares on the five trading-days prior to but not including the Effective Date
of such Cash Take-Over Transaction.

 

11

 

10.         Conversion Arrangement on Call for Redemption.

 

Any
Securities called for redemption, unless surrendered for conversion before the
close of business on the Redemption Date, may be deemed to be purchased from
the Holders of such Securities at an amount not less than the Redemption Price
and Make-Whole Payments, if applicable, by one or more investment bankers or
other purchasers who may agree with the Company to purchase such Securities
from the Holders, to convert them into Ordinary Shares of the Company and to
make payment for such Securities to the Trustee in trust for such Holders.

 

11.         Defaulted Interest.

 

Except
as otherwise specified with respect to the Securities, any Defaulted Interest
on any Security shall forthwith cease to be payable to the registered Holder
thereof on the relevant Regular Record Date or accrual date, as the case may
be, by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company as provided for in Section 11.02 of the Indenture.

 

12.         Denominations; Transfer; Exchange.

 

The
Securities are in fully registered form, without coupons, in denominations of
$1,000 of Principal Amount and integral multiples of $1,000.  A Holder may transfer or exchange Securities
in accordance with the Indenture.  The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture.  The
Registrar need not transfer or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities in respect of which a Repurchase
Notice or Fundamental Change Redemption Notice has been given and not withdrawn
(except, in the case of a Security to be purchased in part, the portion of the
Security not to be purchased) or any Securities for a period of 15 days before
the mailing of a notice of redemption of Securities to be redeemed.

 

13.         Persons Deemed Owners.

 

The
registered Holder of this Security may be treated as the owner of this Security
for all purposes.

 

14.         Unclaimed Money or Securities.

 

The
Trustee and the Paying Agent shall return to the Company upon written request
any money or securities held by them for the payment of any amount with respect
to the Securities that remains unclaimed for two years, subject to applicable
unclaimed property laws.  After return to
the Company, as the case may be, Holders entitled to the money or securities
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.

 

12

 

15.         Amendment; Waiver.

 

Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Securities may be amended with the written consent of the Holders of at least a
majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain Defaults may be waived with the written consent of
the Holders of a majority in aggregate Principal Amount of the Securities at
the time outstanding.  Subject to certain
exceptions set forth in the Indenture, without the consent of any Securityholder,
the Company and the Trustee may amend the Indenture or the Securities to cure
any ambiguity, omission, defect or inconsistency, or to comply with Article 5
or Section 10.15 of the Indenture, to secure the Company’s obligations
under this Security or to add to the Company’s covenants for the benefit of the
Securityholders or to surrender any right or power conferred, in exchange for
Holders agreeing to waive their right to require the Company to purchase all or
a portion of their Securities on a specified Repurchase Date, to add additional
Repurchase Dates on which Holders may require the Company to purchase all or a
portion of their Securities at the applicable Repurchase Price and, in
addition, to pay such Holders additional cash payments in connection therewith,
to comply with any requirement of the SEC in connection with the qualification
of the Indenture under the TIA, or as necessary in connection with the
registration of the Securities under the Securities Act or to make any change
that does not adversely affect the rights of any Holders.

 

16.         Defaults and Remedies.

 

Under
the Indenture, Events of Default include (i) the Company defaults in payment of
interest when due under the Securities and such default continues for 30 days;
(ii) default in payment of the Principal Amount, Redemption Price, Make-Whole
Payment, Repurchase Price or Fundamental Change Redemption Price, as the case
may be, in respect of the Securities when the same becomes due and payable;
(iii) failure by the Company to comply with other agreements in the Indenture
or the Securities, other than those referred to in clauses (i) and (ii) above,
subject to notice and lapse of time; (iv) certain events of bankruptcy or
insolvency affecting the Company or certain of its subsidiaries; and (v) the
Pledge Agreement shall cease to be in full force and effect or enforceable,
other than in accordance with its terms, or fails to give the Trustee the
liens, rights, powers and privileges purported to be created thereby.  A Default under clause (iii) above is not an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in aggregate Principal Amount of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and the Company
does not cure such Default (and such Default is not waived) within the time
specified in the Indenture after actual receipt of such notice.

 

Securityholders
may not enforce the Indenture or the Securities except as provided in the
Indenture.  The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or
security reasonably satisfactory to it. 
Subject to certain limitations, Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the Trustee
in its exercise of any trust or power. 
The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of amounts specified in clause (i) or (ii)
above) if it determines that withholding notice is in their interests.

 

13

 

17.         Trustee Dealings with the Company.

 

Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the Company or its Affiliates and may otherwise deal with the Company or their
Affiliates with the same rights it would have if it were not Trustee.

 

18.         No Recourse Against Others.

 

A
director, officer, employee, agent, representative, stockholder or equity
holder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation.  By accepting a Security, each
Securityholder shall waive and release all such liability.  The waiver and release shall be part of the
consideration for the issue of the Securities.

 

19.         Authentication.

 

This
Security shall not be valid until an authorized signatory of the Trustee
manually signs the Trustee’s Certificate of Authentication on the other side of
this Security.

 

20.         Abbreviations.

 

Customary
abbreviations may be used in the name of a Securityholder or an assignee, such
as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN
(=joint tenants with right of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

21.         GOVERNING LAW.

 

THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.

 

14

 

The Company will furnish
to any Securityholder upon written request and without charge a copy of the
Indenture that has in it the text of this Security in larger type.  Requests may be made to:

 

APEX
SILVER MINES LIMITED

c/o
Apex Silver Mines Corporation

1700
Lincoln Street

Suite
3050

Denver,
Colorado 80203

 

15

 

	
  ASSIGNMENT FORM

  	
   

  	
  CONVERSION NOTICE

  
	
   

  	
   

  	
   

  
	
  To assign this
  Security, fill in the form below:

  	
   

  	
  To convert this
  Security into Ordinary Shares of the Company, check the box:

  
	
   

  	
   

  	
   

  
	
  I or we assign
  and transfer this Security to

  	
   

  	
  o

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To convert only
  part of this Security, state the Principal Amount to be converted (which must
  be $1,000 or an integral multiple of $1,000):

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Insert assignee’s
  soc. sec. or tax ID no.)

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If you want the stock certificate made out in
  another person’s name,

  
	
   

  	
   

  	
  fill in the form below:

  
	
  (Print or type
  assignee’s name, address and zip code)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and irrevocably
  appoint

  	
   

  	
  (Insert other
  person’s soc. sec. or tax ID no.)

  
	
   

  	
   

  	
   

  
	
                                 agent
  to transfer this Security on the books of the Company. The agent may
  substitute another to act for him.

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  (Print or type
  other person’s name, address and zip code)

  

 

16

 

	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
    Your
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  (Sign exactly as your name appears on the other side
  of this Security)Exhibit 4.3

 

EXECUTION
COPY

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
October 15, 2004 between Apex Silver Mines Limited, a Cayman Islands company
(the “Company”), and the Initial Purchasers, pursuant to the Purchase
Agreement, dated October 11, 2004 (the “Purchase Agreement”), between the
Company and the Initial Purchasers.  In
order to induce the Initial Purchasers to enter into the Purchase Agreement,
the Company has agreed to provide the registration rights set forth in this
Agreement.  The execution of this
Agreement is a condition to the closing under the Purchase Agreement.

 

The
Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners
(including the Initial Purchasers) from time to time of the Notes (as defined
herein), and the beneficial owners from time to time of the Underlying Ordinary
Shares (as defined herein) issuable upon conversion of the Notes (each of the
foregoing a “Holder” and together the “Holders”), as follows:

 

SECTION 1. 
Definitions.  Capitalized
terms used herein without definition shall have their respective meanings set
forth in the Purchase Agreement.  In
addition to the terms that are defined elsewhere in this Agreement, the
following terms shall have the following meanings:

 

“Additional
Amount” has the meaning specified in Section 2(e) hereof.

 

“Additional
Amount Accrual Period” has the meaning specified in Section 2(e)
hereof.

 

“Additional
Amount Payment Date” means each March 15 and September 15.

 

“Additional
Notes” means up to an additional $50,000,000 aggregate principal amount of
4.0% Convertible Senior Subordinated Notes due 2024 of the Company to be
purchased pursuant to the Purchase Agreement.

 

“Affiliate”,
with respect to any specified person, has the meaning specified in Rule 144.

 

“Business
Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not
a day on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.

 

“Company”
has the meaning specified in the first paragraph of this Agreement.

 

“Conversion
Price” means, with respect to each $1,000 principal amount of Notes, as of
any date of determination, the principal amount divided by the Conversion Rate
in effect as of such date of determination or, if no Notes are then
outstanding, the Conversion Rate that would be in effect were Notes then
outstanding.

 

1

 

“Conversion
Rate” has the meaning assigned to such term in the Indenture.

 

“Deferral
Notice” has the meaning specified in Section 3(i) hereof.

 

“Deferral
Period” has the meaning specified in Section 3(i) hereof.

 

“Effectiveness
Deadline Date” has the meaning specified in Section 2(a) hereof.

 

“Effectiveness
Period” means the period of two years from the Issue Date or such period  ending on the date that all Registrable
Securities have ceased to be Registrable Securities.

 

“Event”
has the meaning specified in Section 2(e) hereof.

 

“Event
Date” has the meaning specified in Section 2(e) hereof.

 

“Event
Termination Date” has the meaning specified in Section 2(e) hereof.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder.

 

“Filing
Deadline Date” has the meaning specified in Section 2(a) hereof.

 

“Firm
Notes” means an aggregate of $100,000,000 principal amount of the 4.0%
Convertible Senior Subordinated Notes due 2024 of the Company to be purchased
pursuant to the Purchase Agreement.

 

“Holder”
has the meaning specified in the second paragraph of this Agreement.

 

“Indenture”
means the Indenture dated as of the date hereof, as amended from time to time,
between the Company and The Bank of New York, as trustee, pursuant to which the
Notes are being issued.

 

“Initial
Purchasers” means the several parties named in Schedule I of the Purchase
Agreement.

 

“Initial
Shelf Registration Statement” has the meaning specified in Section 2(a)
hereof.

 

“Issue
Date” means October 15, 2004.

 

“Material
Event” has the meaning specified in Section 3(i) hereof.

 

“Notes”
means the Firm Notes, the Additional Notes and any additional notes issued
pursuant to the Indenture that are consolidated to form a single series with
the Firm Notes and the Additional Notes.

 

2

 

“Notice
and Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum dated October 11, 2004 of the Company relating to the Notes.

 

“Notice
Holder” means on any date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date.

 

“Ordinary
Shares” means any of the ordinary shares, $0.01 par value, of the Company
and any other ordinary shares as may constitute “Ordinary Shares” for purposes
of the Indenture, including the Underlying Ordinary Shares.

 

“Prospectus”
means the prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 415 promulgated under the Securities Act), as amended or supplemented
by any amendment or prospectus supplement, including post-effective amendments,
and all materials incorporated by reference or explicitly deemed to be
incorporated by reference in such Prospectus.

 

“Purchase
Agreement” has the meaning specified in the first paragraph of this
Agreement.

 

“Record
Holder” means, with respect to any Additional Amount Payment Date relating
to any Note or Underlying Ordinary Shares as to which any Additional Amount has
accrued, the registered holder of such Note or such shares of Underlying
Ordinary Shares, as the case may be, on the 15th day immediately prior to the
next succeeding Additional Amount Payment Date.

 

“Registrable
Securities” means the Notes and the Underlying Ordinary Shares until such
securities have been converted or exchanged and, at all times subsequent to any
such conversion or exchange, any securities into or for which such securities
have been converted or exchanged, and any security issued with respect thereto
upon any stock dividend, split, merger or similar event until, in the case of
any such security, the earlier of (i) the sale pursuant to Rule 144 under the
Securities Act or a shelf registration statement of all the securities registered
thereunder or (ii) the expiration of the holding period applicable thereto
under Rule 144(k) were it not held by an Affiliate of the Company.

 

“Registration
Statement” means any registration statement of the Company that covers any
of the Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.

 

“Rule
144” means Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar or successor rule or regulation hereafter
adopted by the SEC having substantially the same effect as such Rule.

 

3

 

“Rule
144A” means Rule 144A under the Securities Act, as such Rule may be amended
from time to time, or any similar or successor rule or regulation hereafter
adopted by the SEC having substantially the same effect as such Rule.

 

“SEC”
means the United States Securities and Exchange Commission and any successor
agency.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.

 

“Shelf
Registration Statement” has the meaning specified in Section 2(a)
hereof.

 

“Subsequent
Shelf Registration Statement” has the meaning specified in
Section 2(b) hereof.

 

“TIA”
means the Trust Indenture Act of 1939, as amended.

 

“Trustee”
means The Bank of New York (or any successor entity), the Trustee under the
Indenture.

 

“Underlying
Ordinary Shares” means the Ordinary Shares into which the Notes are
convertible or issued upon any such conversion.

 

SECTION 2. 
Shelf
Registration.

 

(a) 
The
Company shall prepare and file or cause to be prepared and filed with the SEC
no later than a date which is ninety (90) days after the Issue Date (the “Filing
Deadline Date”) a Registration Statement for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act (a “Shelf
Registration Statement”) registering the resale from time to time by Holders of
all of the Registrable Securities (the “Initial Shelf Registration Statement”).  The Initial Shelf Registration Statement
shall be on Form S-3 or another appropriate form permitting registration of
such Registrable Securities for resale by such Holders in accordance with the
methods of distribution reasonably elected by the Holders and set forth in the
Initial Shelf Registration Statement; provided, that in no event will
such method(s) of distribution take the form of an underwritten offering of the
Registrable Securities without the prior agreement of the Company.  The Company shall use its commercially reasonable
efforts to cause the Initial Shelf Registration Statement to be declared
effective under the Securities Act no later than the date (the “Effectiveness
Deadline Date”) that is two-hundred and ten (210) days after the Issue Date,
and to keep, subject to Section 3(i)(A) hereof, the Initial Shelf Registration
Statement (or any Subsequent Shelf Registration Statement) continuously
effective under the Securities Act until the expiration of the Effectiveness
Period.  Each Holder that became a Notice
Holder on or prior to the date ten (10) Business Days prior to the time that
the Initial Shelf Registration Statement became effective shall be named as a
selling security holder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with
applicable law (other than laws not generally applicable to all such
Holders).  

 

4

 

Notwithstanding the foregoing, no Holder shall be entitled to have the
Registrable Securities held by it covered by such Shelf Registration Statement
unless such Holder has provided a Notice and Questionnaire in accordance with
Section 2(d) and is in compliance with Section 4.  The Company shall not permit any of its
security holders (other than the Holders of Registrable Securities) to include
any of the Company’s securities in the Initial Shelf Registration Statement (or
any Subsequent Shelf Registration Statement).

 

(b) 
If
the Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement ceases to be effective for any reason at any time during the
Effectiveness Period, the Company shall use its commercially reasonable efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration Statement in a manner reasonably
expected by the Company to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf Registration Statement”).  If a Subsequent Shelf Registration Statement
is filed, the Company shall use commercially reasonable efforts to cause the
Subsequent Shelf Registration Statement to become effective as promptly as is
reasonably practicable after such filing or, if filed during a Deferral Period,
after the expiration of such Deferral Period, and to keep such Registration
Statement (or Subsequent Shelf Registration Statement), subject to Section
3(i)(A) hereof, continuously effective until the end of the Effectiveness
Period.

 

(c) 
The
Company shall supplement and amend the Initial or any Subsequent Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement, if required by the Securities Act or, to the extent to
which the Company does not reasonably object, as reasonably requested by the
Initial Purchasers or by the Trustee on behalf of the registered Holders.

 

(d) 
Each
Holder of Registrable Securities agrees that if such Holder wishes to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(d),
Section 3(i) and Section 4. 
Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to the Initial or any Subsequent Shelf Registration
Statement and related Prospectus agrees to deliver a Notice and Questionnaire
to the Company at least five (5) Business Days prior to any intended
distribution of Registrable Securities under the Shelf Registration
Statement.  From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as is reasonably practicable after the date a fully completed and
legible Notice and Questionnaire is received by the Company, (i) if
required by applicable law, file with the SEC a post-effective amendment to the
Shelf Registration Statement or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other document required
by the SEC so that the Holder delivering such Notice and Questionnaire is named
as a selling security holder in the Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law (other than laws not generally 

 

5

 

applicable to all Holders of Registrable Securities wishing to sell
Registrable Securities pursuant to the Shelf Registration Statement and related
Prospectus) and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use commercially reasonable efforts to cause such
post-effective amendment to be declared effective under the Securities Act as
promptly as is reasonably practicable; (ii) provide such Holder copies of
any documents filed pursuant to Section 2(d)(i); and (iii) notify
such Holder as promptly as is reasonably practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i); provided, that if such Notice and Questionnaire is
delivered during a Deferral Period, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth
in clauses (i), (ii) and (iii) above upon expiration of the Deferral
Period in accordance with Section 3(i), provided, further,
that if under applicable law the Company has more than one option as to the
type or manner of making any such filing, they will make the required filing or
filings in the manner or of a type that is reasonably expected to result in the
earliest availability of the Prospectus for effecting resales of Registrable
Securities. Notwithstanding anything contained herein to the contrary, the
Company shall be under no obligation to name any Holder that is not a Notice
Holder as a selling security holder in any Registration Statement or related
Prospectus; provided, however, that any Holder that becomes a
Notice Holder pursuant to the provisions of this Section 2(d) of this
Agreement (whether or not such Holder was a Notice Holder at the time the
Registration Statement was initially declared effective) shall be named as a
selling security holder in the Registration Statement or related Prospectus
subject to and in accordance with the requirements of this Section 2(d).

 

(e) 
The
parties hereto agree that the Holders of Registrable Securities will suffer
damages, and that it would not be feasible to ascertain the extent of such
damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, or
(iii) the aggregate duration of Deferral Periods in any period exceeds the
number of days permitted in respect of such period pursuant to
Section 3(i) hereof (each of the events of a type described in any of the
foregoing clauses (i) through (iii) is individually referred to herein as
an “Event,” and the Filing Deadline Date in the case of clause (i), the
Effectiveness Deadline Date in the case of clause (ii), and the date on
which the aggregate duration of Deferral Periods in any period exceeds the
number of days permitted by Section 3(i) hereof in the case of
clause (iii), being referred to herein as an “Event Date”).  Events shall be deemed to continue until the “Event
Termination Date,” which shall be the following dates with respect to the
respective types of Events:  the date the
Initial Shelf Registration Statement is filed in the case of an Event of the
type described in clause (i), the date the Initial Shelf Registration
Statement is declared effective under the Securities Act in the case of an
Event of the type described in clause (ii), and termination of the
Deferral Period that caused the limit on the aggregate duration of Deferral
Periods in a period set forth in Section 3(i) to be exceeded in the case
of the commencement of an Event of the type described in clause (iii).

 

Accordingly,
commencing on (and including) any Event Date and ending on (but excluding) the
next date after an Event Termination Date (an “Additional Amount Accrual Period”),
the Company agrees to pay an additional amount (the “Additional Amount”),
payable on the Additional Amount Payment Dates to Record Holders of then 

 

6

 

outstanding Notes that are Registrable Securities or of then
outstanding shares of Underlying Ordinary Shares issued upon conversion of
Notes that are Registrable Securities, as the case may be, accruing, for each
portion of such Additional Amount Accrual Period beginning on and including an
Additional Amount Payment Date (or, in respect of the first time that the
Additional Amount is to be paid to Holders on an Additional Amount Payment Date
as a result of the occurrence of any particular Event, from the Event Date) and
ending on but excluding the first to occur of (A) the date of the end of
the Additional Amount Accrual Period or (B) the next Additional Amount
Payment Date, at a rate per annum equal to one-quarter of one percent (0.25%)
for the first ninety (90)-day period from the Event Date, and thereafter at a
rate per annum equal to one-half of one percent (0.50%) of the aggregate
principal amount of such Notes and the aggregate Conversion Price of the shares
of Underlying Ordinary Shares, as the case may be, in each case determined as
of the Business Day immediately preceding the next Additional Amount Payment
Date; provided, that any Additional Amount accrued with respect to any
Note or portion thereof called for redemption on a redemption date or converted
into Underlying Ordinary Shares on a conversion date prior to the Additional
Amount Payment Date shall, in any such event, be paid instead to the Holder who
submitted such Note or portion thereof for redemption or conversion on the
applicable redemption date or conversion date, as the case may be, on such date
(or promptly following the conversion date, in the case of conversion).  Notwithstanding the foregoing, no Additional
Amounts shall accrue as to any Registrable Security from and after the earlier
of (x) the date such security is no longer a Registrable Security and
(y) expiration of the Effectiveness Period.  The rate of accrual of the Additional Amount
with respect to any period shall not exceed the rate provided for in this
paragraph notwithstanding the occurrence of multiple concurrent Events.  Following the cure of all Events requiring
the payment by the Company of Additional Amounts to the Holders of Registrable
Securities pursuant to this Section, the accrual of Additional Amounts will
cease (without in any way limiting the effect of any subsequent Event requiring
the payment of Additional Amounts by the Company).

 

The
Trustee, subject to the applicable provisions of the Indenture, shall be
entitled on behalf of Holders of Notes or Underlying Ordinary Shares, to seek
any available remedy for the enforcement of this Agreement, including for the
payment of any Additional Amount. 
Notwithstanding the foregoing, the parties agree that the sole monetary
damages payable for a violation of the terms of this Agreement with respect to
which additional amounts are expressly provided shall be such Additional
Amount.  Nothing shall preclude a Notice
Holder or Holder of Registrable Securities from pursuing or obtaining specific
performance or other equitable relief with respect to this Agreement.

 

All of
the Company’s obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

 

The
parties hereto agree that the Additional Amounts provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be 

 

7

 

filed or declared effective or available for effecting resales of
Registrable Securities in accordance with the provisions hereof.

 

SECTION 3. 
Registration Procedures. 
In connection with the registration obligations of the Company under
Section 2 hereof, the Company shall:

 

(a) 
Before
filing any Registration Statement or Prospectus or any amendments or
supplements (other than supplements that do nothing more substantive than name
one or more Notice Holders as selling security holders) thereto with the SEC, furnish
to the Initial Purchasers copies of all such documents proposed to be filed and
use commercially reasonable efforts to reflect in each such document when so
filed with the SEC such comments as the Initial Purchasers reasonably shall
propose within three (3) Business Days of the delivery of such copies to the
Initial Purchasers.

 

(b) 
Prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable period specified in
Section 2(a); cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act;
and use commercially reasonable efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the Effectiveness
Period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement as so amended or such
Prospectus as so supplemented.

 

(c) 
As
promptly as reasonably practicable give notice to the Notice Holders and the
Initial Purchasers (i) when any Prospectus, Prospectus supplement,
Registration Statement or post-effective amendment to a Registration Statement
has been filed with the SEC and, with respect to a Registration Statement or
any post-effective amendment, when the same has been declared effective,
(ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other
federal or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order or injunction suspending or enjoining
the use of any Prospectus or the effectiveness of any Registration Statement or
the initiation or threatening of any proceedings for that purpose, (iv) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) of the occurrence of (but not the nature
of or details concerning) a Material Event (provided, however, that no notice by
the Company shall be required pursuant to this clause (v) in the event
that the Company promptly files a Prospectus supplement to update the
Prospectus or the Company files a Current Report on Form 8-K or other
appropriate Exchange Act report that is incorporated by reference into the
Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading)

 

8

 

and (vi) of the determination by the Company that a post-effective
amendment to a Registration Statement will be filed with the SEC, which notice
may, at the discretion of the Company (or as required pursuant to
Section 3(i)), state that it constitutes a Deferral Notice, in which event
the provisions of Section 3(i) shall apply.

 

(d) 
Use
commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment or, if any
such order or suspension is made effective during any Deferral Period, at the
earliest possible moment after the expiration of such Deferral Period.

 

(e) 
If
reasonably requested by the Initial Purchasers or any Notice Holder, as
promptly as reasonably practicable incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers or such Notice Holder shall, on the basis of an opinion of
nationally recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such Prospectus supplement or such post-effective amendment as required by
applicable law; provided, that the Company shall not be required to take
any actions under this Section 3(e) that are not, in the reasonable
opinion of counsel for the Company, in compliance with applicable law.

 

(f) 
As
promptly as reasonably practicable after the filing of such documents with the
SEC, furnish to each Notice Holder and the Initial Purchasers, upon their
request and without charge, at least one (1) conformed copy of the Registration
Statement and any amendment thereto, including financial statements, but
excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing to the
Company by such Notice Holder or the Initial Purchasers, as the case may be).

 

(g) 
During
the Effectiveness Period (except during such periods that a Deferral Notice is
outstanding and has not been revoked), deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities and any amendment or supplement thereto
as such Notice Holder may reasonably request; and the Company hereby consents
(except during such periods that a Deferral Notice is outstanding and has not
been revoked) to the use of such Prospectus or each amendment or supplement
thereto by each Notice Holder in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto in the manner set forth therein.

 

(h) 
Subject
to Section 3(i), prior to any public offering of the Registrable
Securities pursuant to the Shelf Registration Statement, use commercially
reasonable efforts to register or qualify or cooperate with the Notice Holders
in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Notice Holder reasonably requests in writing (which
request may be 

 

9

 

included in the Notice and Questionnaire), it being agreed that no such
registration or qualification will be made unless so requested; prior to any
public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, use commercially reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with such Notice Holder’s offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things necessary to
enable the disposition in such jurisdictions of such Registrable Securities in
the manner set forth in the relevant Registration Statement and the related
Prospectus; provided, that the Company will not be required to
(i) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it is not otherwise qualified or (ii) take any action
that would subject it to general service of process in suits or to taxation in
any such jurisdiction where it is not then so subject.

 

(i) 
Upon
(A) the issuance by the SEC of a stop order suspending the effectiveness
of the Shelf Registration Statement or the initiation of proceedings with
respect to the Shelf Registration Statement under Section 8(d) or 8(e) of
the Securities Act, (B) the occurrence of any event or the existence of
any fact (a “Material Event”) as a result of which any Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (including, in any such case, as a result of the
non-availability of financial statements), or (C) the occurrence or
existence of any development, event, fact, situation or circumstance relating
to the Company that, in the discretion of the Company, makes it appropriate to
suspend the availability of the Shelf Registration Statement and the related
Prospectus, (i) in the case of clause (B) above, subject to the next
sentence, as promptly as practicable prepare and file a post-effective
amendment to such Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any other
required document that would be incorporated by reference into such
Registration Statement and Prospectus so that such Registration Statement does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a post-effective
amendment to a Registration Statement, subject to the next sentence, use
commercially reasonable efforts to cause it to be declared effective as
promptly as is reasonably practicable, and (ii) give notice to the Notice
Holders that the availability of the Shelf Registration Statement is suspended
(a “Deferral Notice”) and, upon receipt of any Deferral Notice, each Notice
Holder agrees not to sell any Registrable Securities pursuant to the
Registration Statement until such Notice Holder’s receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or
until it is advised in writing by the Company that the Prospectus may be used,
and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.  The Company will use commercially reasonable
efforts to ensure that the use of the Prospectus may be resumed (x) in the
case of clause (A) above, as promptly as is 

 

10

 

practicable, (y) in the case of clause (B) above, as soon as,
in the sole reasonable judgment of the Company, public disclosure of such
Material Event would not be prejudicial to or contrary to the interests of the
Company or, if necessary to avoid unreasonable burden or expense, as soon as
reasonably practicable thereafter and (z) in the case of clause (C)
above, as soon as, in the reasonable discretion of the Company, such suspension
is no longer appropriate.  So long as the
period during which the availability of the Registration Statement and any
Prospectus is suspended (the “Deferral Period”) does not exceed thirty (30)
days during any three (3) month period or ninety (90) days during any twelve
(12) month period, the Company shall not incur any obligation to pay Additional
Amounts pursuant to Section 2(e).

 

(j) 
If
reasonably requested in writing in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make reasonably available for
inspection during reasonable business hours by a representative for the Notice
Holders of such Registrable Securities and any broker-dealers, attorneys and
accountants retained by such Notice Holders, all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate executive officers, directors and
designated employees of the Company and its subsidiaries to make reasonably
available for inspection during normal business hours all relevant information
reasonably requested by such representative for the Notice Holders or any such
broker-dealers, attorneys or accountants in connection with such disposition,
in each case as is customary for similar “due diligence” examinations; provided,
however, that such persons shall first agree in writing with the Company
that any information that is reasonably designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities; (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement),
(iii) such information becomes generally available to the public other
than as a result of a disclosure or failure to safeguard by any such person or
(iv) such information becomes available to any such person from a source
other than the Company and such source is not bound by a confidentiality
agreement or otherwise obligated to keep such information confidential; and provided,
further, that the foregoing inspection and information gathering shall,
to the greatest extent possible, be coordinated on behalf of all the Notice
Holders and the other parties entitled thereto by the counsel referred to in
Section 5.

 

(k) 
Comply
with all applicable rules and regulations of the SEC and make generally
available to its security holders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) no later than forty-five (45) days after the end of any twelve (12)-month
period (or ninety (90) days after the end of any twelve (12)-month period if
such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a Registration
Statement, which statements shall cover said twelve (12)-month periods.

 

11

 

(l) 
Cooperate
with each Notice Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities sold pursuant to a
Registration Statement, and cause such Registrable Securities to be in such
denominations as are permitted by the Indenture and registered in such names as
such Notice Holder may request in writing at least two (2) Business Days prior
to any sale of such Registrable Securities.

 

(m) 
Provide
a CUSIP number for all Registrable Securities covered by each Registration
Statement not later than the effective date of such Registration Statement and
provide the Trustee for the Notes and the transfer agent for the Ordinary
Shares with certificates for the Registrable Securities that are in a form
eligible for deposit with The Depository Trust Company.

 

(n) 
Make
a reasonable effort to provide such information as is required for any filings
required to be made with the National Association of Securities Dealers, Inc.

 

(o) 
Upon
(i) the filing of the Initial Shelf Registration Statement and
(ii) the effectiveness of the Initial Shelf Registration Statement,
announce the same, in each case by release to Reuters Economic Services,
Bloomberg Business News or any other means of dissemination reasonably expected
to make such information known publicly.

 

(p) 
Take
all actions necessary, or reasonably requested by the holders of a majority of
the Registrable Securities being sold, in order to expedite or facilitate
disposition of such Registrable Securities; provided, that the Company
shall not be required to take any action in connection with an underwritten
offering without its consent.

 

(q) 
Cause
the Indenture to be qualified under the TIA not later than the effective date
of any Registration Statement; and in connection therewith, cooperate with the
Trustee to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and
execute, and use commercially reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture
to be so qualified in a timely manner.

 

SECTION 4. 
Holder’s Obligations.  Each
Holder agrees, by acquisition of the Registrable Securities, that no Holder of
Registrable Securities shall be entitled to sell any of such Registrable
Securities pursuant to a Registration Statement or to receive a Prospectus
relating thereto, unless such Holder has furnished the Company with a Notice
and Questionnaire as required pursuant to Section 2(d) hereof (including
the information required to be included in such Notice and Questionnaire) and
the information set forth in the next sentence. 
Each Notice Holder agrees promptly to furnish to the Company in writing
all information required to be disclosed in order to make the information
previously furnished to the Company by such Notice Holder not misleading, any
other information regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the Registration
Statement under applicable law or pursuant to SEC comments and any information
otherwise required by the Company to comply with applicable law or
regulations.  Each Holder further agrees,
following termination of the Effectiveness Period, to notify the Company,
within ten (10) Business Days of a request, of the amount of 

 

12

 

Registrable Securities sold pursuant to the Registration Statement and,
in the absence of a response, the Company may assume that all of the Holder’s
Registrable Securities were so sold.

 

SECTION 5. 
Registration Expenses.  The
Company shall bear all fees and expenses incurred in connection with the
performance by the Company of its obligations under Sections 2 and 3 of
this Agreement whether or not any of the Registration Statements are declared
effective.  Such fees and expenses shall
include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (x) with respect to
filings required to be made with the National Association of Securities Dealers,
Inc. and (y) of compliance with federal and state securities or Blue Sky
laws to the extent such filings or compliance are required pursuant to this
Agreement (including, without limitation, reasonable fees and disbursements of
the counsel specified in the next sentence in connection with Blue Sky
qualifications of the Registrable Securities under the laws of such
jurisdictions as the Notice Holders of a majority of the Registrable Securities
being sold pursuant to a Registration Statement may designate)),
(ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company), (iii) duplication expenses relating to
copies of any Registration Statement or Prospectus delivered to any Holders
hereunder, (iv) fees and disbursements of counsel for the Company in
connection with the Shelf Registration Statement, and (v) reasonable fees
and disbursements of the Trustee and its counsel and of the registrar and
transfer agent for the Ordinary Shares. 
In addition, the Company shall bear or reimburse the Notice Holders for
the fees and disbursements of one firm of legal counsel for the Holders, which
shall, upon the written consent of the Initial Purchasers (which shall not be
unreasonably withheld), be a nationally recognized law firm experienced in
securities law matters designated by the Company.  In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
officers and employees performing legal or accounting duties), and its expenses
for any annual audit, the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange on which the
same securities of the Company are then listed and the fees and expenses of any
person, including special experts, retained by the Company.

 

SECTION 6. 
Indemnification;
Contribution.

 

(a) 
The
Company agrees to indemnify and hold harmless the Initial Purchasers and each
Holder of Registrable Securities and each person, if any, who controls the
Initial Purchasers or any Holder of Registrable Securities within the meaning
of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, as follows:

 

(i)            against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), 

 

13

 

or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;

 

(ii)           against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, provided that
(subject to Section 6(d) below) any such settlement is effected with the
prior written consent of the Company; and

 

(iii)          subject
to Section 6(c) below, against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;

 

provided, however, that this
indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Initial Purchasers, such Holder of Registrable Securities (which also
acknowledges the indemnity provisions herein) or any person, if any, who
controls the Initial Purchasers or any such Holder of Registrable Securities
expressly for use in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, further, that this indemnity agreement shall
not apply to any loss, liability, claim, damage or expense (1) arising
from an offer or sale of Registrable Securities occurring during a Deferral
Period, if a Deferral Notice was given to such Notice Holder or (2) if the
Holder fails to deliver at or prior to the written confirmation of sale, the
most recent Prospectus, as amended or supplemented, and such Prospectus, as
amended or supplemented, would have corrected such untrue statement or omission
or alleged untrue statement or omission of a material fact and the delivery
thereof was required by law.

 

(b) 
In
connection with any Shelf Registration Statement in which a Holder, including,
without limitation, the Initial Purchasers, of Registrable Securities is
participating, in furnishing information relating to such Holder of Registrable
Securities to the Company in writing expressly for use in such Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto, the Holders of such Registrable Securities agree,
severally and not jointly, to indemnify and hold harmless the Initial
Purchasers and each person, if any, who controls the Initial Purchasers within
the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act and the Company and each person, if any, who controls the
Company within the meaning of either such Section, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to 

 

14

 

untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder of Registrable Securities (which
also acknowledges the indemnity provisions herein) or any person, if any, who
controls any such Holder of Registrable Securities expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

 

The
Initial Purchasers agrees to indemnify and hold harmless the Company, the
Holders of Registrable Securities, and each person, if any, who controls the
Company or any Holder of Registrable Securities within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 6, as incurred,
but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Initial Purchasers expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).

 

(c) 
Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action or proceeding commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have
otherwise than on account of these indemnity provisions.  The indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying party
may designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified party
shall have the right to retain a separate firm as its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them.  It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (A) the reasonable fees and expenses
of more than one firm (in addition to any local counsel) for the Initial
Purchasers, Holders of Registrable Securities, and all persons, if any, who
control the Initial Purchasers or Holders of Registrable Securities within the
meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act or (B) the reasonable fees and expenses of more than one
firm (in addition to any local counsel) for the Company, its directors, and
each person, if any, who controls the Company within the 

 

15

 

meaning of either such Section, and that all such reasonable fees and
expenses shall be reimbursed as they are incurred.  In the event a separate firm is retained for
the Initial Purchasers, Holders of Registrable Securities, and control persons
of the Initial Purchasers and Holders of Registrable Securities, such firm
shall be designated in writing by the Initial Purchasers.  In the event a separate firm is retained for
the Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company.  No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.

 

(d) 
If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written
consent if (i) such settlement is entered into more than sixty (60) days
after receipt by such indemnifying party of aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least forty-five (45) days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement; provided,
that an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party (1) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (2) provides written notice to the
indemnified party describing any  unpaid
balance it believes is unreasonable and the reasons therefor, in each case
prior to the date of such settlement.

 

(e) 
If
the indemnification to which an indemnified party is entitled under this
Section 6 is for any reason unavailable to or insufficient although
applicable in accordance with its terms to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

 

The
relative fault of the Company on the one hand and the holders of the
Registrable Securities or the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information 

 

16

 

supplied by the Company or by the holder of the Registrable Securities
or the Initial Purchasers and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.

 

The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(e) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 6(e).  The aggregate amount of losses, liabilities,
claims, damages, and expenses incurred by an indemnified party and referred to
above in this Section 6(e) shall be deemed to include any out-of-pocket
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.

 

Notwithstanding
the provisions of this Section 6, neither the Holder of any Registrable
Securities nor the Initial Purchasers shall be required to indemnify or
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by such Holder of Registrable Securities or by
the Initial Purchasers, as the case may be, and distributed to the public were
offered to the public exceeds the amount of any damages that such Holder of
Registrable Securities or the Initial Purchasers has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.

 

No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.

 

For
purposes of this Section 6(e), each person, if any, who controls the
Initial Purchasers or any Holder of Registrable Securities within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Initial Purchasers or such
Holder, and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Company.

 

SECTION 7. 
Information Requirements. 
The Company covenants that, if at any time before the end of the
Effectiveness Period the Company is not subject to the reporting requirements
of the Exchange Act, it will cooperate with any Holder of Registrable
Securities and take such further reasonable action as any Holder of Registrable
Securities may reasonably request in writing (including, without limitation,
making such reasonable representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act
within the limitations of Rule 144 and Rule 144A under the Securities Act and
customarily taken in connection with sales pursuant to such exemptions.  Upon the written request of any Holder of
Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements, unless
such a statement has been included in the Company’s most recent annual or
quarterly 

 

17

 

report required to be filed and filed pursuant to Section 13 or
Section 15(d) of the Exchange Act. 
Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities under any
section of the Exchange Act.

 

SECTION 8. 
Miscellaneous

 

(a) 
No
Conflicting Agreements.  The Company is not, as of the date hereof, a
party to, nor shall they, on or after the date of this Agreement, enter into,
any agreement with respect to the Company’s securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement.  The Company represents and warrants that the
rights granted to the Holders of Registrable Securities hereunder do not in any
way conflict with the rights granted to the holders of the Company’s securities
under any other agreements.

 

(b) 
Amendments
and Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Ordinary Shares constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Ordinary Shares into which such Notes are or would be convertible or
exchangeable as of the date on which such consent is requested).  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement; provided,
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.  Each Holder of
Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant
to this Section 8(b), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder.

 

(c) 
Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery, by
telecopier, by courier guaranteeing overnight delivery or by first-class mail,
return receipt requested, and shall be deemed given (i) when made, if made
by hand delivery, (ii) upon confirmation, if made by telecopier,
(iii) one (1) Business Day after being deposited with such courier, if
made by overnight courier, or (iv) on the date indicated on the notice of
receipt, if made by first-class mail, to the parties as follows:

 

if to
a Holder of Registrable Securities that is not a Notice Holder, at the address
for such Holder then appearing in the Registrar (as defined in the Indenture);

 

18

 

if to
a Notice Holder, at the most current address given by such Holder to the
Company in a Notice and Questionnaire or any amendment thereto;

 

if to
the Company, to:

 

Apex Silver Mines Limited

c/o Apex Silver Mines
Corporation

1700 Lincoln Street

Suite 3050

Denver, Colorado  80203

Attention: Chief
Financial Officer

Facsimile No. (303)
839-5907

 

with a copy to:

 

Davis Graham & Stubbs
LLP

1550 Seventeenth Street,
Suite 500

Denver, Colorado  80202

Attention:  Deborah J. Friedman, Esq.

Facsimile No. (303) 893-1379

 

and

 

if to
the Initial Purchasers, to:

 

Citigroup Global Markets
Inc.

390 Greenwich Street

New York, New York  10013

Attention:  General Counsel

Facsimile No.  (212) 816-7912

 

or to such other address as such person may have
furnished to the other persons identified in this Section 8(c) in writing
in accordance herewith.

 

(d) 
Approval
of Holders.  Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its Affiliates (other than the
Initial Purchasers or subsequent Holders of Registrable Securities if such
subsequent Holders are deemed to be such Affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.

 

(e) 
Successors
and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto
and, without requiring any express assignment, shall inure to the benefit of
and be binding upon each Holder of any Registrable Securities; provided,
that nothing herein shall be deemed to permit any assignment, transfer of other
disposition of Registrable Securities in violation of the terms of the Purchase
Agreement.  If any transferee of any
Holder shall acquire Registrable 

 

19

 

Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be subject to all of the terms of this
Agreement and by taking and holding such Registrable Securities, such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement.

 

(f) 
Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.

 

(g) 
Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(h) 
Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(i) 
Severability.  If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their reasonable best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction, it being intended that all of
the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.

 

(j) 
Entire
Agreement.  This Agreement is intended by the parties
hereto as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities.  Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities.  This Agreement supersedes
all prior agreements and undertakings among the parties hereto with respect to
such registration rights.

 

(k) 
Termination.  This Agreement and the obligations of the
parties hereunder shall terminate upon the expiration of the Effectiveness
Period, except for (i) any liabilities or obligations under
Section 4, 5 or 6 hereof and the obligations to make payments of and
provide for Additional Amounts under Section 2(e) hereof to the extent
such damages accrue prior to the end of the Effectiveness Period, each of which
shall remain in effect in accordance with its terms.

 

20

 

IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  APEX SILVER MINES
  LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mark A. Lettes

  	
   

  
	
   

  	
   

  	
  Name: Mark A. Lettes

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  

 

Agreed and accepted as of
the date

first above written for itself and the

other Initial Purchasers:

 

	
  CITIGROUP GLOBAL MARKETS INC.

  
	
   

  
	
  By: 

  	
  /s/ Irene Mavroyannis

  	
   

  
	
   

  	
  Name: Irene Mavroyannis

  	
   

  
	
   

  	
  Title:

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