Exhibit 4.2
EXHIBIT A-2
SERIES 2COMMON STOCK PURCHASE
WARRANT
HECLA MINING
COMPANY
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Warrant Shares:
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Initial Exercise Date: December
, 2008
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THIS SERIES 2 COMMON STOCK PURCHASE
WARRANT (the “ Warrant ”) certifies that, for
value received,
(the “ Holder ”) is entitled, upon the terms and
subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the
“ Initial Exercise Date ”) and on or prior to
the close of business on February 28, 2009 (the “
Termination Date ”) but not thereafter, to subscribe
for and purchase from Hecla Mining Company, a Delaware corporation
(the “ Company ”), up to ______ shares (the
“ Warrant Shares ”) of Common Stock. The
purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in
Section 2(b).
Section 1
. Definitions . Capitalized
terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the
“ Purchase Agreement ”), dated December 10,
2008, among the Company and the purchasers signatory
thereto.
Section 2
. Exercise .
a) Exercise of Warrant .
Exercise of the purchase rights represented by this Warrant may be
made, in whole or in part, but not as to fractional shares of
Common Stock, at any time or times on or after the Initial Exercise
Date and on or before the Termination Date by delivery to the
principal executive office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to
the registered Holder at the address of the Holder appearing on the
books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within 3 Trading Days
of the date said Notice of Exercise is delivered to the Company,
the Company shall have received payment of the aggregate Exercise
Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank.
Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which
case, the Holder shall surrender this Warrant to the Company for
cancellation within 3 Trading Days of the date the final Notice of
Exercise is delivered to the Company. Partial exercises of this
Warrant resulting in purchases of a portion of the total number of
Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant
Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of
such
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purchases. The Company shall deliver
any objection to any Notice of Exercise Form within 2 Business Day
of receipt of such notice. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.
b) Exercise Price . The
exercise price per share of the Common Stock under this Warrant
shall be $2.35 , subject to adjustment hereunder (the
“ Exercise Price ”). Notwithstanding anything
herein to the contrary, in no event shall the Exercise Price be
adjusted to below the per share par value of the Company’s
Common Stock.
c) Intentionally Omitted.
d) Holder’s
Restrictions . A Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any
other person or entity acting as a group together with the Holder
or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates and (B) exercise
or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any
other Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2(d), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this
Section 2(d) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates) and of which portion of
this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant
is exercisable, in each case subject to the Beneficial Ownership
Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For
purposes of this Section 2(d), in determining the number of
outstanding shares of Common Stock, a
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Holder may rely on
the number of outstanding shares of Common Stock as reflected in
(A) the Company’s most recent periodic report on Form
10-K or Form 10-Q, as applicable, (B) a more recent public
announcement by the Company or (C) any other notice by the
Company or the Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within two Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. The “ Beneficial Ownership Limitation
” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The
Holder, upon not less than 61 days’ prior notice to the
Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(d), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(d) shall continue to apply. Any such increase
will not be effective until the 61 st day after such notice is
delivered to the Company. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(d) to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor
holder of this Warrant. The holders of Common Stock shall be third
party beneficiaries of this paragraph and the Company may not waive
this paragraph without the consent of holders of a majority of its
Common Stock.
e) Mechanics of Exercise
.
i. Delivery of Certificates Upon
Exercise . Certificates for shares purchased hereunder shall be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository
Trust Company through its Deposit Withdrawal Agent Commission
(“ DWAC ”) system if the Company is then a
participant in such system and either (A) there is an
effective Registration Statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder or
(B) this Warrant is being exercised via cashless exercise, and
otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the
delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (the “ Warrant Share Delivery
Date ”). This Warrant shall be deemed to have been
exercised on the date the Exercise Price is received by the
Company. The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named
therein
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shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the
Exercise Price (or by cashless exercise, if permitted) and all
taxes required to be paid by the Holder, if any, pursuant to
Section 2(e)(vi) prior to the issuance of such shares, have
been paid. If at the time of an exercise the issuance of the
Warrant Shares is not registered, then (and only then) the Company
may require the Holder to give standard private placement
representations to the Company, and the Company may place a
standard restrictive legend on any such certificate.
ii. Delivery of New Warrants Upon
Exercise . If this Warrant shall have been exercised in part
and shall not have expired, the Company shall, at the request of a
Holder and upon surrender of this Warrant certificate, at the time
of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
iii. Rescission Rights . If
the Company fails to cause the Transfer Agent to transmit to the
Holder a certificate or the certificates representing the Warrant
Shares pursuant to Section 2(e)(i) by the Warrant Share
Delivery Date, then the Holder will have the right to rescind such
exercise.
iv. Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise . In
addition to any other rights available to the Holder, if the
Company fails to cause the Transfer Agent to transmit to the Holder
a certificate or the certificates representing the Warrant Shares
pursuant to a proper exercise on or before the second Trading Day
following the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “
Buy-In ”), then the Company shall (A) pay in cash
to the Holder the amount by which (x) the Holder’s total
purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (1) the number of Warrant Shares that
the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the
sell order giving rise to such purchase obligation was executed,
and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery
obligations hereunder against payment of the Exercise Price. For
example, if the Holder purchases Common Stock
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having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
v. No Fractional Shares or
Scrip . No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to
purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in
an amount equal to such fraction multiplied by the Exercise Price
or round up to the next whole share.
vi. Charges, Taxes and
Expenses . Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the
Holder or in such name or names as may be directed by the Holder;
provided , however , that in the event certificates
for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.
vii. Closing of Books . The
Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant
to the terms hereof.
Section 3
. Certain Adjustments
.
a) Stock Dividends and Splits
. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant or
by the terms of any preferred stock which is outstanding on the
issuance date
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hereof), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares,
or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after
the record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
b) Subsequent Rights
Offerings . If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders
of Common Stock (and not to Holders) entitling them to subscribe
for or purchase shares of Common Stock at a price per
sha
