-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HPjkdbbL524hTIebwQ0xGTGKZp4d9CexjVbcW13S5aYxQaKbXyYyfblDtqDokk0w S5m9cm7cv20e/smjN/Ksmg== 0001169853-02-000001.txt : 20020502 0001169853-02-000001.hdr.sgml : 20020501 ACCESSION NUMBER: 0001169853-02-000001 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020502 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BENITZ BRYAN CENTRAL INDEX KEY: 0001169853 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: CHANTREY VELLACOTT DFK STREET 2: 1012 RUSSELL SQUARE CITY: LONDON ENGLAND STATE: A1 ZIP: 00000 MAIL ADDRESS: STREET 1: CHANTREY VELLACOTT DFK STREET 2: 1012 RUSSELL SQUARE CITY: LONDON ENGLAND STATE: A1 ZIP: 00000 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CROWN RESOURCES CORP CENTRAL INDEX KEY: 0000841555 STANDARD INDUSTRIAL CLASSIFICATION: MINERAL ROYALTY TRADERS [6795] IRS NUMBER: 841097086 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40472 FILM NUMBER: 02631636 BUSINESS ADDRESS: STREET 1: 4251 KIPLING STREET STREET 2: SUITE 390 CITY: WHEAT RIDGE STATE: CO ZIP: 80033 BUSINESS PHONE: 3035341030 MAIL ADDRESS: STREET 1: 4251 KIPLING STREET STREET 2: SUITE 390 CITY: WHEAT RIDGE STATE: CO ZIP: 80033 FORMER COMPANY: FORMER CONFORMED NAME: NEW CROWN TRADING CORP DATE OF NAME CHANGE: 19890313 SC 13D 1 benit13d.txt BENITZ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. ___) Crown Resources Corporation (Name of Issuer) Common Stock, $.01 Par Value (Title of Class of Securities) 228569 (CUSIP Number) Bryan Benitz, c/o Gascoigne Trust, Chantrey Vellacott DFK, 10-12 Russell Square, London, WC1 B5L, England, 011/44/(207)-499-4455 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 19, 2001 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f), or Rule 13d-1(g) check the following box ?. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to who copies are to be sent. (Continued on following Pages) (Page 1 of 5) 1. Name of Reporting Persons Gascoigne Trust 2. Check the Appropriate Box if a Member of a Group A ? B ? 3. SEC Use Only 4. Source of Funds WC 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) ? 6. Citizenship or Place of Organization United Kingdom 7. Sole Voting Power 857,142 shares 8. Shared Voting Power 0 9. Sole Dispositive Power 857,142 shares 10. Shared Dispositive Power 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person 857,142 shares 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares ? 13. Percent of Class Represented by Amount in Row (11) 5.6% 14. Type of Reporting Persons PN Item 1. Security and Issuer Common Stock Crown Resources Corporation 4251 Kipling Street, Suite 390 Wheat Ridge, Colorado 80033 Item 2. Identity and Background (a) This Statement is filed by C.M Jones and Others, re: Gascoigne Trust, a United Kingdom Trust ("Gascoigne"). Bryan Benitz is the trust manager of Gascoigne. (b) Gascoigne's principal office is located at Chantrey Vellacott, DFK, 10-12 Russell Square, London, WC1 B5L England (c) The principal business of Gascoigne is the investing in securities for the benefit of the Trust. The principal occupation of Mr. Benitz is serving as an investment advisor to private trusts and partnerships. (d) During the last five years, neither Gascoigne nor Mr. Benitz has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, neither Gascoigne nor Mr. Benitz have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding were or are subject to a judgment, decree or final or order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. (f) Mr. Benitz is a citizen of the United Kingdom. Item 3. Source and Amount of Funds or Other Consideration Funds of $150,000 for the purchase of the Gascoigne Note (See Item 4) came from Gascoigne's working capital reserves. Any funds needed for any anticipated exercise of the Warrants (See Item 4) are expected to come from working capital reserves. Item 4. Purpose of Transaction On October 19, 2001, Crown received and accepted subscription agreements for the purchase of $3,200,000 in a private placement of convertible secured notes (the "Secured Notes") and warrants the "Warrants"). Prior to the termination of the subscription period, Crown completed the sale of an additional $400,000 of the Secured Notes and Warrants. For additional information concerning the private placement see the Convertible Note Purchase Agreement, reproduced and incorporated herein as Exhibit 1. Crown has indicated that the proceeds from the private placement will be used to restructure Crown's existing $15,000,000 subordinated debentures and to initiate permitting on its "Crown Jewel" gold project in the State of Washington. The Secured Notes are secured by all the assets of Crown. Crown's primary assets include the Crown Jewel property and its wholly-owned subsidiary, Crown Resource Corporation of Colorado, whose assets consist primarily of a 41% equity interest in Solitario Resources Corporation, a Colorado corporation principally engaged in the exploration and mining of metals ("Solitario"). Gascoigne's portion of the financing consists of a Secured Note in the amount of $150,000 (the "Gascoigne Note") and a Warrant. The Secured Notes have a five-year term and carry a 10% interest rate payable quarterly in cash or in additional shares of Crown's common stock at Crown's option. Except as described below, all of the Secured Notes (including the Gascoigne Note) are convertible into shares of Crown's common stock at a conversion price of $0.35 per share, subject to adjustment. In addition, each of the Secured Note holders (including Gascoigne) was issued a Warrant, which may be exercised at any time over the next five years, for each share into which the Secured Notes are convertible into Crown's common stock at an exercise price of $0.75 per share. Solitario was issued a Secured Note in the amount of $350,000 (the "Solitario $350,000 Note"). The Solitario $350,000 Note is convertible into Crown's common stock at a conversion price of $0.29167 per share, subject to adjustment. In addition, Solitario was issued a Warrant, which may be exercised at any time over the next five years for each share into which the Solitario $350,000 Note is convertible into Crown's common stock at an exercise price of $0.60 per share, subject to adjustment. The proceeds from the Secured Notes (other than the Solitario $350,000 Note) are being held in escrow pending restructuring of the debentures pursuant to an agreement or a plan of reorganization under United States federal bankruptcy laws. The proceeds of the Solitario $350,000 Note have been made immediately available to Crown for general corporate purposes. The release of the funds held in escrow is also conditioned upon certain corporate restructuring requirements, which must be approved by the Secured Note holders. It is expected that Crown's restructuring of its existing debt will require the issuance of additional convertible securities to the existing debt holders, which will cause a substantial downward adjustment to the effective conversion price of the Secured Notes as well as the effective exercise price of the Warrants under the anti-dilution provisions of the Secured Notes and Warrants. In anticipation of the above transactions and reorganization, Crown applied for voluntary delisting from the Toronto Stock Exchange (the "TSE") pursuant to the rules of the TSE. Such delisting was granted by the TSE effective October 19, 2001. Crown's Common Stock has been suspended from trading on the TSE since August 13, 2001 as a result of Crown's inability to meet the continued listing requirements of the TSE. Item 5. Interest in the Securities of the Issuer Gascoigne has received the right to convert its notes and exercise warrants into an aggregate of 857,142 shares of Crown common stock. These shares would represent 5.6% of the voting shares of Crown computed in accordance with Rule 13d-3. Gascoigne has sole voting power these shares of common stock. For a description of the transaction in which Gascoigne acquired its notes and warrants, see Item 4, "Purpose of Transaction." Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. See Item 4 "Purpose of Transaction." Item 7. Material to be Filed as Exhibits Exhibit 1: Convertible Note Purchase Agreement Exhibit 2: Intercreditor Agreement Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. November 9, 2001 Gascoigne Trust By: Bryan Benitz By: HOUSTON 583055v2 CUSIP No. 228569 13D Page 5 of 5 Pages HOUSTON 583055v2 HOUSTON 583055v2 EX-1 3 exh113d.txt CONVERTIBLE NOTE PURCHASE AGREEMENT THIS CONVERTIBLE NOTE PURCHASE AGREEMENT (this "Agreement") is made and entered into as of October ___, 2001, by and between CROWN RESOURCES CORPORATION, a Washington corporation (the "Company"), CROWN RESOURCE CORP. OF COLORADO, a Colorado corporation (the "Subsidiary") and the lenders named in Subscription Agreements (the "Subscription Agreements") in the form attached hereto as Exhibit A hereto (collectively, the "Senior Lenders," and individually, a "Senior Lender"). Background: The Company and the Subsidiary have authorized the issuance and sale to the Senior Lenders of up to $4.0 million of promissory notes in substantially the form attached hereto as Exhibit B (the "Notes"). The Notes are convertible into that number of shares of the Company's common stock (the "Common Stock"), equal to the outstanding principal balance from time to time of the Note divided by the Conversion Price, as defined in the Note. Upon issuance of the Notes under the terms of this Agreement, the Company shall (i) issue to such investors warrants, in substantially the form attached hereto as Exhibit C (the "Warrants"), to purchase shares of Common Stock and (ii) with its Subsidiary, grant to such investors a security interest in and to the Collateral, as defined below, under the terms of a security agreement, pledge agreement, deed of trust and collateral assignment, each in substantially the form attached hereto as Exhibit D-1 through D-7 (collectively, the "Security Agreements"), to secure the repayment of the Company's and its Subsidiary's obligations under the Notes. Shares of Common Stock issuable upon conversion of the Notes (or payment of interest) and exercise of the Warrants (collectively, the "Shares") will be entitled to registration as provided in a Registration Rights Agreement (the "Registration Rights Agreement") in substantially the form attached hereto as Exhibit E. Various agreements among the Senior Lenders shall be governed by an intercreditor agreement substantially in the form attached hereto as Exhibit F-1 (the "Intercreditor Agreement") and a collateral agency agreement substantially in the form attached hereto as Exhibit F-2 (the "Collateral Agency Agreement"). Pending disbursement, funds received from Senior Lenders in payment of the purchase price of the Notes shall be deposited in Escrow pursuant to the terms of an escrow agreement substantially in the form attached hereto as Exhibit G (the "Escrow Agreement"). This Agreement, the Subscription Agreements, the Notes, the Warrants, the Registration Rights Agreement, the Security Agreements, the Intercreditor Agreement, the Collateral Agency Agreement and the Escrow Agreement are collectively referred to herein as the "Transaction Documents." NOW THEREFORE, the parties agree as follows: 1. Purchase and Sale. a. Purchase and Sale of Notes. Upon the terms and subject to the conditions herein, and in reliance on the representations and warranties contained herein, each Senior Lender hereby agrees, severally and not jointly, to purchase from the Company, and the Company hereby agrees to issue and sell, and to cause its Subsidiary to issue and sell, to each Senior Lender, a Note in the principal amount (the "Purchase Price") set forth in a Subscription Agreement executed and delivered by such Senior Lender in consideration for the payment by the Senior Lender to the Company of the Purchase Price in immediately available funds. By executing and delivering a Subscription Agreement (in the manner provided in Section 1.b), each Senior Lender shall (i) become a party to the Escrow Agreement; (ii) be deemed to have made an offer to purchase a Note as described in Section 1.b, and (iii) upon acceptance of the Subscription Agreement by the Company shall become a party to this Agreement which shall thereupon constitute a contract between such Senior Lender and the Company. b. Subscription; Delivery into Escrow. Except as provided in Section 1.c(1), to subscribe for Notes, a Senior Lender must execute and deliver into escrow (the "Escrow"), under the terms of the Escrow Agreement, a Subscription Agreement, the Purchase Price in immediately available funds and executed or identified copies of each of the other Transaction Documents to which the Senior Lender is to become a party, or obtain the benefits of, at Closing (as defined below). Within five business days following receipt by the escrow agent under the Escrow Agreement of a Subscription Agreement, the Purchase Price and the other Transaction Documents as set forth above, the Company shall accept or reject such Subscription Agreement. If the Company accepts such Subscription Agreement, it shall execute and deliver to the agent designated in the Escrow Agreement the Transaction Documents to which it is to be a party at Closing and shall promptly so notify the Senior Lender of such acceptance. Senior Lender acknowledges and agrees that Senior Lender will not withdraw, cancel, terminate, or revoke a Subscription Agreement and that such Subscription Agreement constitutes an irrevocable offer until accepted or rejected by the Company and shall survive the death or disability of such Senior Lender. Each Senior Lender further agrees to notify the Company immediately if any representation or warranty by it made herein shall become untrue or misleading prior to the Closing. c. Closing; Additional Solicitations; Escrow. (1) Additional Subscription by Solitario Resource Corporation. If Solitario Resources Corporation, a Colorado corporation ("Solitario"), has subscribed for a Note and Warrant in the manner provided in Section 1.b, then at Closing, in addition to the Note and Warrant subscribed for, and Purchase Price delivered, under Section 1.b, Solitario shall purchase, and the Company shall issue and sell, under the terms of this Agreement, an additional Note (the "Solitario Note") in the principal amount of three hundred fifty thousand dollars ($350,000) (the "Solitario Purchase Price") and an additional Warrant (the "Solitario Warrant"), each in the form attached hereto as Exhibits B and C, respectively, provided (i) the Conversion Price, as defined in the Solitario Note, shall be $0.29167 and (ii) the Exercise Price, as defined in the Solitario Warrant, shall be $0.60. At Closing, (x) Solitario shall execute an additional Subscription Agreement in the amount of the Solitario Purchase Price and deliver to the Company such additional Subscription Agreement and the Solitario Purchase Price in immediately available funds and (y) if the Company accepts the additional Subscription Agreement, the Company shall issue and deliver to Solitario the Solitario Note and Solitario Warrant. Except as provided in this Section 1.c(1) or otherwise specifically provided, all references to the Notes or the Warrants in this Agreement (or any related agreement) shall be deemed to include the Solitario Note and the Solitario Warrant, respectively. Solitario shall be deemed a "Senior Lender" under this Agreement and all other Transaction Documents with respect to its purchase of the Solitario Note and Solitario Warrant. (2) Closing. When (i) Subscription Agreements at least equal to two million six hundred and fifty thousand dollars ($2,650,000), including a Subscription Agreement from Solitario at least equal to six hundred and fifty thousand dollars ($650,000) (the "Minimum Offering Amount") have been delivered, together with the Purchase Price and other Transaction Documents, into Escrow, (ii) a Subscription Agreement from Solitario equal to the Solitario Purchase Price has been delivered, together with the Solitario Purchase Price, to the Company pursuant to Section 2.c(1) hereof, and (iii) all such subscriptions have been accepted by the Company as provided in Section 1.b above, the Transaction Documents (with original signatures or copies thereof) shall be released to each of the Company and the Senior Lenders pursuant to the terms of the Escrow Agreement. The delivery of the above described documents is herein referred to as the "Closing." As a further condition to the Closing, the Company will: (i) cause its legal counsel to deliver to the Senior Lenders its legal opinions for the benefit of the Senior Lenders substantially as set forth on Exhibit H (the "Legal Opinion") and (ii) deliver to the Senior Lenders a certificate, dated the date of Closing, signed by the Company's President certifying that the representations and warranties in Section 2 are true and correct as of the date of Closing or, with respect to additional subscriptions under subsection 1.c(3), such later date as the certificate may be delivered (except to the extent any representation or warranty is made as of a specific date). To the extent any Notes are converted into Shares, funds in Escrow in an amount equal to the principal converted under the Notes will be immediately released for application by the Company. (3) Additional Subscriptions after Closing. Following the Closing and until October 30, 2001, the Company may solicit and accept additional subscriptions for Notes pursuant to the terms of this Agreement up to an aggregate Purchase Price (including the Notes issued upon Closing) of Four Million Dollars ($4,000,000.00). Any such Notes issued following Closing shall have the same rights as the holders of the Notes issued at Closing, and shall have the right to share pari passu in the Collateral held by the holders of the Notes issued at Closing. Prior to and as conditions to acceptance of any subscription for additional Notes following Closing the Company shall deliver to the subscribers for such Notes the instruments, documents, rights and other things required to be provided to the Senior Lenders upon Closing. (4) Title Opinion. Within one hundred twenty (120) days after the Closing, the Company shall deliver to the Senior Lenders a title opinion satisfactory to the Senior Lenders acting in their sole discretion pursuant to the Intercreditor Agreement (the "Title Opinion"), covering the specific claims subject to the patent application covering the gold deposit known as the "Crown Jewel". For purposes of clarity, the Title Opinion need not cover claims that do not cover any part of such gold deposit. If the Company does not deliver the Title Opinion to the Senior Lenders within one hundred twenty (120) days after the Closing, the Senior Lenders, acting pursuant to the Intercreditor Agreement, may give notice to the escrow agent under the Escrow Agreement requiring that the escrow agent release the funds in Escrow to the Senior Lenders. Such amounts released from Escrow shall be paid to the Senior Lenders as payments of amounts due under the Notes, such payment to be applied to principal. (5) Release of Funds. Except as provided in this Section 1.c, funds deposited in the Escrow shall be retained in the Escrow and administered pursuant to the terms of the Escrow Agreement until the earlier of: (a) the Senior Lenders consent in writing, pursuant to the terms of the Intercreditor Agreement, to the Company's agreement with all of the holders of the Company's five and three quarter percent Convertible Subordinated Debentures due 2001 (the "Debentures") on a plan to refinance the Debentures; (b) the entry of an order by a federal bankruptcy court with jurisdiction over the Company's voluntary bankruptcy filing under Chapter 11 of Title 11, United States Code, 11 U.S.C. subsection 101, et seq. (the "Bankruptcy Code"), confirming a plan of reorganization substantially conforming with the Framework for Plan of Reorganization attached hereto as Exhibit J and approved by the Senior Lenders, acting in their sole discretion, pursuant to the terms of the Intercreditor Agreement, that satisfies the Company's obligations under the Debentures and that has not been appealed in the time in which appeals are allowed to be taken under the rules applied to bankruptcy proceedings (either event (a) or (b) above being referred to herein as a "Restructuring Event"); or (c) March 31, 2002. If a Restructuring Event occurs as provided above prior to March 31, 2002, the funds remaining in the Escrow shall be disbursed to the Company. If the Restructuring Event has not occurred by March 31, 2002, then all funds in the Escrow shall be paid to the Senior Lenders as payment of amounts due under the Notes (other than the Solitario Note), such payment to be applied to principal. d. Return of Subscriptions. Subscription Agreements and related funds received by the Company will be returned to the Senior Lenders, without interest or deduction, if (i) the Subscription Agreement is rejected by the Company (a failure to accept a Subscription Agreement as provided in Section 1.b above shall constitute a rejection), or (ii) Subscription Agreements for the Minimum Offering Amount and the Solitario Purchase Price have not been accepted by the Company by October 30, 2001. e. Warrant. At Closing or at the time of acceptance of a subscription after the Closing, as the case may be, the Company shall issue and deliver to each Senior Lender whose subscription is then accepted a Warrant exercisable for a number of shares of Common Stock equal to the principal amount of the Note issued to such Senior Lender divided by $0.35 (or in the case of the Solitario Warrant, the principal amount of Solitario Note divided by $0.29167). f. Registration Rights. The Company will grant each Senior Lender Registration Rights in substantially the form attached hereto as Exhibit E. g. Security Interest. The due and punctual payment of any Note shall be secured by a grant of a security interest in all of the Company's assets and the assets of the Subsidiary, as described in, and under the terms of, the Security Agreements (the "Collateral"). The Company and the Subsidiary will sign any documents reasonably requested by the Senior Lenders to evidence this lien, and each Senior Lender will sign any documents reasonably requested by the Company to evidence the release of this lien upon repayment or conversion in full of any Note. h. Intercreditor Agreement. The Company shall not accept any subscription that is not accompanied by an executed Intercreditor Agreement. 2. Company Representations and Warranties. In order to induce the Senior Lenders to enter into this Agreement, the Company represents and warrants to the Senior Lenders the following: a. Organization and Corporate Power. The Company is a corporation duly organized and validly existing under the laws of the State of Washington, and has all required corporate power and corporate authority to carry on its business as presently conducted, to enter into and perform this Agreement and the agreements contemplated hereby to which it is a party, and to carry out the transactions contemplated hereby and thereby. b. Authorization and Non-Contravention. The execution, delivery and performance by the Company of this Agreement and each other agreement, document and instrument to be executed and delivered by the Company pursuant to or as contemplated by this Agreement and the issuance, execution, delivery and performance of the Transaction Documents and the issuance of the Shares have been duly authorized by all necessary corporate action of the Company. This Agreement and each such other agreement, document, and instrument constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as rights to indemnity and contribution may be limited by applicable law and public policy and subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally and (ii) general principles of equity, whether such enforceability is considered in a proceeding in equity or at law. The execution and delivery by the Company of this Agreement and each other agreement, document and instrument to be executed and delivered by the Company pursuant hereto or as contemplated hereby and the performance by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance and delivery of the Transaction Documents and the issuance of the Shares, do not and will not: (A) violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under any material contract or obligation to which the Company is a party or by which it or its assets are bound, or any provision of the Articles of Incorporation or Bylaws of the Company, or cause the creation of any encumbrance upon any of the assets of the Company except as provided herein; (B) violate or result in a violation of, or constitute a default under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by, any court or governmental agency applicable to the Company; (C) require from the Company any notice to, declaration or filing with, or consent or approval of any governmental authority or third party other than as may be required to secure an exemption from qualification of the offer and sale of the Notes, the Warrants and the Shares (collectively, the "Instruments") under the Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities and blue sky laws; or (D) accelerate any obligation under, or give rise to a right of termination of, any material agreement, permit, license or authorization to which the Company is a party or by which the Company is bound. c. Capitalization. As of the Closing, the authorized capital stock of the Company will consist of 50,000,000 shares of Common Stock, of which 14,553,302 shares are issued and outstanding, and 20,000,000 shares of Preferred Stock, of which 1,000,000 preferred shares are issued and outstanding. The Company owns all of the outstanding securities of the Subsidiary. The Shares will, upon issuance, be duly authorized, validly issued, and fully paid and non-assessable (subject to receipt by the Company of the exercise price for the Common Stock issuable upon exercise of the Warrants), free of any liens or encumbrances imposed thereon, provided that such securities may be subject to restrictions on transfer under state and federal securities laws as set forth therein. Except as set forth in the SEC Documents (as defined below) or on Schedule 2.c to the Disclosure Letter (as defined below), there are outstanding (i) no shares of capital stock or other voting securities of the Company; (ii) no securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of the Company; (iii) no options or other rights to acquire from the Company, and no obligation of the Company to issue or sell, any shares of capital stock or other voting securities of the Company or any securities of the Company convertible into or exchangeable for such capital stock or voting securities; and (iv) no equity equivalents, interests in the ownership or earnings, or other similar rights of or with respect to the Company. The issuances of the Shares and the Warrants are not subject to any preemptive or similar rights. d. SEC Documents. The Company has made available to the Senior Lenders (either in written form or by reference to the Securities and Exchange Commission's on-line EDGAR database) true and complete copies of its Annual Report on Form 10-K for the fiscal year ending December 31, 2000, its definitive Proxy Statement relating to its Annual Meeting of Shareholders held on June 26, 2001, and its most recent Quarterly Report on Form 10-Q for the period ending June 30, 2001 (collectively, the "SEC Documents"). As of their respective filing dates, each of the SEC Documents complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder. e. Absence of Certain Changes. Except as disclosed in Section 4.f and Exhibit I of this Agreement and in the SEC Documents (collectively, the "Disclosure Documents") or as listed on Schedule 2.e to the disclosure letter delivered to the Senior Lenders at or before Closing (the "Disclosure Letter") since June 30, 2001, there has not been any change that by itself or in conjunction with all other such changes, has had or could reasonably be expected to have a material adverse effect on the business, operations, properties, prospects, assets, or condition of the Company. f. Other. No representation or warranty made by the Company in this Agreement, including the SEC Documents, and no statement in this Agreement or any other document or certificate furnished or to be furnished to the Senior Lenders pursuant hereto contains any untrue statement of a material fact or omits or will omit to state any material fact necessary to make the statements made herein and therein, when taken as a whole, not misleading. g. Exempt Transaction. Assuming the accuracy of the representations and warranties of the Senior Lenders in Section 3 hereof and in each Senior Lender's Subscription Agreement hereto, the Shares are exempt from registration under the Securities Act. h. Finder's Fees. The Company represents that there are no claims for investment banking fees, brokerage commissions, finder's fees or similar compensation (exclusive of professional fees to lawyers and accountants) in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Company. i. Litigation. Except as disclosed in the Disclosure Documents or on Schedule 2.i to the Disclosure Letter, at the Closing, there is no litigation, legal, administrative or arbitral proceeding, investigation or other action of any nature pending or, to the knowledge of the Company or the Subsidiary, threatened against or affecting the Company or the Subsidiary. j. Assets. Each of the Company and the Subsidiary has good and defensible title, in all material respects, to its real and personal property, including, without limitation, the property that is the subject of the Security Agreements, free and clear of all liens, claims and encumbrances of any kind or nature. Except as disclosed in the Disclosure Documents or on Schedule 2.j to the Disclosure Letter, all leases and agreements necessary for the conduct of the business of the Company and the Subsidiary are valid and subsisting, in full force and effect and there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases. k. Compliance with the Law. Except as disclosed in the Disclosure Documents or on Schedule 2.k to the Disclosure Letter, neither the Company nor the Subsidiary (i) has violated any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, including, without limitation, those pertaining to the environment (including, without limitation, the Clean Air Act, as amended, the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection laws), and occupational, safety and health standards or controls, of any court or tribunal in any jurisdiction (domestic or foreign) or any public, governmental, or regulatory body, agency, department, commission, board, bureau or other authority or instrumentality (domestic or foreign), or (ii) has failed to obtain any license, permit, franchise or other governmental authorization necessary for the ownership of any of its properties or the conduct of its business. 3. Subsidiary Representations and Warranties. In order to induce the Senior Lenders to enter into this Agreement, the Subsidiary represents and warrants to the Senior Lenders the following: a. Organization and Corporate Power. The Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado, and has all required corporate power and corporate authority to carry on its business as presently conducted, to enter into and perform this Agreement and the agreements contemplated hereby to which it is a party, and to carry out the transactions contemplated hereby and thereby. b. Authorization and Non-Contravention. The execution, delivery and performance by the Subsidiary of this Agreement and each other agreement, document and instrument to be executed and delivered by the Subsidiary pursuant to or as contemplated by this Agreement and the issuance, execution, delivery and performance of the Transaction Documents have been duly authorized by all necessary corporate action of the Subsidiary. This Agreement and each such other agreement, document, and instrument constitute valid and binding obligations of the Subsidiary, enforceable in accordance with their respective terms, except as rights to indemnity and contribution may be limited by applicable law and public policy and subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally and (ii) general principles of equity, whether such enforceability is considered in a proceeding in equity or at law. The execution and delivery by the Subsidiary of this Agreement and each other agreement, document and instrument to be executed and delivered by the Subsidiary pursuant hereto or as contemplated hereby and the performance by the Subsidiary of the transactions contemplated hereby and thereby, including, without limitation, the issuance and delivery of the Transaction Documents do not and will not: (A) violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under any material contract or obligation to which the Subsidiary is a party or by which it or its assets are bound, or any provision of the Articles of Incorporation or Bylaws of the Subsidiary, or cause the creation of any encumbrance upon any of the assets of the Subsidiary except as provided herein; (B) violate or result in a violation of, or constitute a default under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by, any court or governmental agency applicable to the Subsidiary; (C) require from the Subsidiary any notice to, declaration or filing with, or consent or approval of any governmental authority or third party other than as may be required to secure an exemption from qualification of the offer and sale of the Instruments under the Securities Act, and applicable state securities and blue sky laws; or (D) accelerate any obligation under, or give rise to a right of termination of, any material agreement, permit, license or authorization to which the Subsidiary is a party or by which the Subsidiary is bound. c. Capitalization. As of the Closing, the authorized capital stock of the Subsidiary will consist of 15,000,000 shares of common stock of the Subsidiary, of which 100 shares are issued and outstanding. The Company owns all of the outstanding securities of the Subsidiary. The issued and outstanding shares of common stock of the Subsidiary have been duly authorized and validly issued, and are fully paid and non-assessable, free of any liens or encumbrances imposed thereon, provided that such securities may be subject to restrictions on transfer under state and federal securities laws as set forth therein. Except for the foregoing shares of common stock, there are outstanding (i) no shares of capital stock or other voting securities of the Subsidiary; (ii) no securities of the Subsidiary convertible into or exchangeable for shares of capital stock or other voting securities of the Subsidiary; (iii) no options or other rights to acquire from the Subsidiary, and no obligation of the Subsidiary to issue or sell, any shares of capital stock or other voting securities of the Subsidiary or any securities of the Subsidiary convertible into or exchangeable for such capital stock or voting securities; and (iv) no equity equivalents, interests in the ownership or earnings, or other similar rights of or with respect to the Subsidiary. d. Absence of Certain Changes. Except as disclosed in the Disclosure Documents or Schedule 3.d to the Disclosure Letter, since June 30, 2001, there has not been any change that by itself or in conjunction with all other such changes, has had or could reasonably be expected to have a material adverse effect on the business, operations, properties, prospects, assets, or condition of the Subsidiary. e. Other. No representation or warranty made by the Subsidiary in this Agreement, including the SEC Documents, and no statement in this Agreement or any other document or certificate furnished or to be furnished to the Senior Lenders pursuant hereto contains any untrue statement of a material fact or omits or will omit to state any material fact necessary to make the statements made herein and therein, when taken as a whole, not misleading. f. Finder's Fees. The Subsidiary represents that there are no claims for investment banking fees, brokerage commissions, finder's fees or similar compensation (exclusive of professional fees to lawyers and accountants) in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Subsidiary. g. Litigation. Except as disclosed in the Disclosure Documents or on Schedule 3.g to the Disclosure Letter, at the Closing, there is no litigation, legal, administrative or arbitral proceeding, investigation or other action of any nature pending or, to the knowledge of the Subsidiary, threatened against or affecting the Subsidiary. h. Assets. The Subsidiary has good and defensible title, in all material respects, to its real and personal property, including, without limitation, the property that is the subject of the Security Agreements, free and clear of all liens, claims and encumbrances of any kind or nature. Except as disclosed in the Disclosure Documents or Schedule 3.h to the Disclosure Letter, all leases and agreements necessary for the conduct of the business of the Subsidiary are valid and subsisting, in full force and effect and there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases. i. Compliance with the Law. Except as disclosed in the Disclosure Documents or Schedule 3.i to the Disclosure Letter, the Subsidiary (i) has not violated any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, including, without limitation, those pertaining to the environment (including, without limitation, the Clean Air Act, as amended, the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection laws), and occupational, safety and health standards or controls, of any court or tribunal in any jurisdiction (domestic or foreign) or any public, governmental, or regulatory body, agency, department, commission, board, bureau or other authority or instrumentality (domestic or foreign), and (ii) has not failed to obtain any license, permit, franchise or other governmental authorization necessary for the ownership of any of its properties or the conduct of its business. 4. Representations and Warranties of the Senior Lenders. Each Senior Lender, individually and not jointly and severally, represents and warrants to the Company as follows: a. Investment Experience, etc. The Senior Lender (i) has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of the investment contemplated by this Agreement and making an informed investment decision with respect thereto; (ii) is able to bear the economic risk of an investment in the Instruments and can afford to sustain a substantial loss on such investment; (iii) has had, during the course of this transaction, the opportunity to ask questions and receive answers from the Company concerning the Company and this Agreement; (iv) is an "accredited investor" as such term is defined in Rule 501 under the Securities Act; and (v) is purchasing the Instruments for his, her or its own account, for investment only and not with a view to, or any present intention of, effecting a distribution of such securities or any part thereof except pursuant to a registration or an available exemption under applicable law. b. Restricted Securities. The Senior Lender understands that the Instruments have not been registered under the Securities Act or the securities laws of any state or other jurisdiction and cannot be disposed of unless they are subsequently registered under the Securities Act and any applicable state laws or an exemption from such registration is available. The Senior Lender understands further that there is no public market for the Notes and the Warrants and that the Senior Lender must bear the economic risk of investment in the Company for an indefinite period of time. c. Authorization and Non-Contravention. The Senior Lender has full right, authority and power to enter into this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of such Senior Lender pursuant to or as contemplated by this Agreement and to carry out the transactions contemplated hereby and thereby, and the execution, delivery and performance by such Senior Lender of this Agreement and each such other agreement, document and instrument have been duly authorized by all necessary action. This Agreement and each agreement, document and instrument executed and delivered by the Senior Lender pursuant to or as contemplated by this Agreement constitute, or when executed and delivered will constitute, valid and binding obligations of each such Senior Lender enforceable in accordance with their respective terms, except as rights to indemnity and contribution may be limited by applicable law and public policy and subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally and (ii) general principles of equity, whether such enforceability is considered in a proceeding in equity or at law. The execution, delivery and performance by the Senior Lender of this Agreement and each such other agreement, document and instrument, and the performance of the transactions contemplated hereby and thereby do not and will not: (A) violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under any material contract or obligation to which any such Senior Lender is a party or by which it or its assets are bound, or cause the creation of any material encumbrance upon any of the assets of such Senior Lender; (B) violate or result in a violation of, or constitute a default under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by, any court or other governmental agency applicable to such Senior Lender; (C) require from such Senior Lender any notice to, declaration or filing with, or consent or approval of any governmental authority or other third party; or (D) accelerate any obligation under, or give rise to a right of termination of, any material agreement, permit, license or authorization to which any such Senior Lender is a party or by which such Senior Lender is bound. d. Finder's Fees. The Senior Lender represents that there are no claims for investment banking fees, brokerage commissions, finder's fees or similar compensation (exclusive of professional fees to lawyers and accountants) in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of such Senior Lender. e. Disclosure. The Senior Lender represents that it has carefully reviewed the SEC Documents and has had the opportunity to ask management of the Company any questions, whether arising from such review or otherwise, that it may have relating to the Company, its business and its financial condition and that all such questions have been answered to the Senior Lender's satisfaction. f. Insolvency of Company. The Senior Lender is aware that the Company is indebted to the holders of the Debentures in an aggregate principal amount of $15,000,000, that such amount was due and payable on August 27, 2001, that the Company does not have, and does not expect to have the funds to repay this indebtedness at any time in the foreseeable future, and that the Company has no agreement with the holders of the Debentures relating to such indebtedness or its repayment, other than the terms of the Debentures. Senior Lender has carefully read and, to the extent it believes appropriate, has discussed with legal counsel, the Risk Disclosure attached hereto as Exhibit I and has chosen to purchase the Note and the Warrant with the full knowledge, awareness and understanding of the risks disclosed therein. 5. General. a. Survival of Representations and Warranties. Each of the representations and warranties made by the Company and each Senior Lender in this Agreement or pursuant hereto shall survive the Closing Date. b. Amendments, Waivers and Consents. Any term of this Agreement may be amended with the written consent of the Company and the Senior Lenders under the terms and in the manner provided in the Intercreditor Agreement. No waivers of, or exceptions to, any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. For the purposes of this Agreement and all agreements executed pursuant hereto, no course of dealing between or among any of the parties hereto and no delay on the part of any party hereto in exercising any rights hereunder or thereunder shall operate as a waiver of the rights hereof and thereof. c. Legend on Securities. The Senior Lenders acknowledge and agree that a legend in substantially the form set forth below (in addition to any legends required by applicable state securities laws) shall be stamped or imprinted on each certificate evidencing any of the Instruments held by a Senior Lender: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES AND BLUE SKY LAWS RELATING TO THE DISPOSITION OF SECURITIES, PROVIDED THAT AN OPINION OF COUNSEL TO SUCH EFFECT IS PROVIDED TO THE COMPANY IN CONNECTION THEREWITH. d. Notices and Demands. Any notice or demand that is required or provided to be given under this Agreement shall be deemed to have been sufficiently given and received for all purposes when delivered by hand, five (5) days after being sent by certified or registered mail, postage prepaid, return receipt requested, or two (2) days after being sent by overnight delivery providing receipt of delivery, to the following addresses: If to the Company: Crown Resources Corporation 4251 Kipling Street, Suite 390 Wheat Ridge, Colorado 80033 Attention: Chief Financial Officer If to a Senior Lender: at the mailing address shown on such Senior Lenders Subscription Agreement or at any other address designated by such Senior Lender to the Company in writing. e. Integration. This Agreement, including the exhibits, documents and instruments referred to herein or therein, constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. f. Assignments, Successors and No Third-Party Rights. No party may assign any of his, her or its rights under this Agreement without the prior consent of the other parties hereto, except for an assignment by a Senior Lender in connection with an assignment of the Note or Warrant of such Senior Lender. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any party other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns. g. Governing Law. This Agreement shall be construed and enforced according to, and governed by, the laws of the State of Washington without reference to conflicts of laws provisions which, but for this provision, would require the application of the law of any other jurisdiction. The venue of any action brought to interpret or enforce the provisions of this Agreement shall be laid only in Jefferson County, Colorado, and the Company and the Senior Lender hereby consent to the jurisdiction of the courts of such state and county. h. Section Headings. The descriptive headings in this Agreement have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provision thereof or hereof. i. Counterparts. This Agreement may be executed from time to time in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute but one and the same document. j. No Rights of a Shareholder. Nothing contained in this Agreement or the Notes shall be construed as conferring upon any Senior Lender or any other person the right to vote or consent or to receive notice as a shareholder in respect of meetings of shareholders for the election of directors of the Company or any other matters or any rights whatsoever as a shareholder of the Company prior to the time that the Note is converted into Common Stock pursuant to its terms. k. Termination Fee. In the event that a Restructuring Event has not occurred on or before March 31, 2002 (the "Termination Date") other than due to the fault of the Senior Lenders (which fault shall not include the Senior Lenders exercising their right to approve or disapprove any plan of reorganization for the Company pursuant to Section 1.c(5) hereof or any other right under the Transaction Documents), the Company shall pay to the Senior Lenders a termination fee equal to ten percent of the funds deposited into Escrow by the Senior Lenders (the "Termination Fee") within five days after the Termination Date. The Company and the Senior Lenders acknowledge that the Termination Fee constitutes liquidated damages and not a penalty for Company's failure to conclude a Restructuring Event. The parties hereby acknowledge that the Termination Fee is intended to compensate the Senior Lenders for (i) lost opportunity costs associated with the anticipated restructure and the Senior Lenders' economic interest in the restructured Company; (ii) the expenses incurred by the Senior Lenders during the course of negotiating and implementing the Transaction Documents; (iii) the extended period during which the Senior Lenders' funds will be held in Escrow prior to Closing; and (iv) the inability of the Company and the Senior Lenders to determine, with any reasonable degree of accuracy, the actual damages Senior Lenders will suffer if a Restructuring Event does not occur. IN WITNESS WHEREOF, the undersigned and the Senior Lenders executing the Subscription Agreements hereby agree to be bound to the terms and conditions of this Agreement. CROWN RESOURCES CORPORATION By: Name: Christopher E. Herald Title: President CROWN RESOURCE CORP. OF COLORADO By: Name: Christopher E. Herald Title: President EXHIBIT A FORM OF SUBSCRIPTION AGREEMENT EXHIBIT B FORM OF PROMISSORY NOTE EXHIBIT C FORM OF WARRANT EXHIBIT D-1 FORM OF GENERAL SECURITY AGREEMENT EXHIBIT D-2 FORM OF JOINT SECURITY AGREEMENT EXHIBIT D-3 FORM OF SECURITY AGREEMENT OF CROWN COLORADO EXHIBIT D-4 FORM OF CRC PLEDGE AGREEMENT EXHIBIT D-5 FORM OF CRCC PLEDGE AGREEMENT EXHIBIT D-6 FORM OF DEED OF TRUST EXHIBIT D-7 FORM OF COLLATERAL ASSIGNMENT EXHIBIT E FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT F-1 FORM OF INTERCREDITOR AGREEMENT EXHIBIT F-2 FORM OF COLLATERAL AGRENCY AGREEMENT EXHIBIT G FORM OF ESCROW AGREEMENT EXHIBIT H FORM OF LEGAL OPINION EXHIBIT I RISK DISCLOSURE EXHIBIT J FRAMEWORK 23 1 Seattle-3105602.16 0023170-00017 Seattle-3105602.16 0023170-00017 EX-2 4 exh213d.txt INTERCREDITOR AGREEMENT THIS AGREEMENT is made as of this ____ day of October, 2001, among the parties hereto executing the same, and any others who hereafter become parties hereto as herein provided, Background: Senior Lenders have made individual loans to the Company evidenced by Crown Resources Corporation 10% Secured Convertible Promissory Notes pursuant to the terms of the Convertible Note Purchase Agreement between each respective Senior Lender and Crown Resources Corporation, a Washington corporation (the APurchase Agreement@); The Notes are secured by security interests in the Collateral as provided in the Security Agreements, except for the Note held by Solitario Resources Corporation, which is secured by all of the Collateral except the Solitario Common Stock Collateral; The Senior Lenders are intended to and do have the same priority in interest in the Collateral; The Senior Lenders desire to provide for collective decision-making with respect to certain aspects of their rights under the Notes as set forth in this Agreement, and accordingly agree that they will apportion their recoveries arising from enforcement of the Notes and the Security Agreements in accordance with the terms of this Agreement. Covenants: NOW, THEREFORE, the parties agree as follows: 1. Definitions. a. Terms Specific to this Agreement. As used in this Agreement the following terms shall have the following respective meanings: ACollateral Agent@ shall mean Wells Fargo Bank West, National Association., or its successor in interest as collateral agent for the Senior Lenders. ACompany@ means Crown Resources Corporation, a Washington corporation, which is the maker of the Notes. AMajority in Interest@ means the holders of Notes having an outstanding balance of principal and interest exceeding fifty percent (50%) of the aggregate outstanding balance of principal and interest under all of the Notes. With respect to matters regarding sale or disposition of the Solitario Common Stock Collateral or the enforcement of or modification of any right of the Senior Lenders with respect thereto, the AMajority in Interest@ shall be determined without regard to the wishes or vote of Solitario, and without including the principal owed upon any Note held by Solitario. ANote Proceeds@ means all cash or other property paid to or received by the Senior Lenders or any agent for the Senior Lenders on account of the Notes or the Security Agreements whether such payment or receipt is made voluntarily or through or as a result of any enforcement proceedings under the Notes or the Security Agreements, including without limitation, insurance proceeds and payments under a bankruptcy plan of reorganization, provided however, ANote Proceeds@ shall not include the Warrants, the Common Stock issuable upon exercise of the Warrants, any Common Stock received by a Senior Lender on account of interest payable under the Note held by such Senior Lender prior to occurrence of an event of default under the Notes, or any rights or recoveries by any Senior Lender under the Registration Rights Agreement. ANote Proceeds@ shall also include any amounts received by any Senior Lender upon a claim for rescission of such Senior Lender=s purchase of a Note, or for damages arising in connection with the purchase of the Note. ANote@ or ANotes@ shall mean the Crown Resources Corporation 10% Secured Convertible Promissory Notes issued pursuant to the Purchase Agreement held by the Senior Lenders or their assigns or successors in interest. ASenior Lenders@ shall have the meaning given to such term in the Purchase Agreement. AShort-Term Investments@ means (i) any direct obligation of or obligations which are guaranteed by the United States of America, or (ii) certificates of deposit, time deposits, demand deposits and bankers acceptances of banks or trust companies believed by the Collateral Agent to be creditworthy. ASolitario@ means Solitario Resources Corporation, a Colorado corporation. ASolitario Common Stock Collateral@ means: (a) 3,140,162 shares of Solitario Resources Corporation currently held in escrow (the AEscrowed Shares@), subject to the consent of the Toronto Stock Exchange under the terms of the Escrow Agreement dated July 1, 1994 between Solitario Resources Corporation, Montreal Trust Company of Canada, Crown Resources Corporation, and the Toronto Stock Exchange (the AToronto Exchange Escrow Agreement@); and (b) 6,493,423 shares of Solitario Resources Corporation, a Colorado corporation, held by Crown Resource Corp. of Colorado (the ASolitario Shares@); and (c) all rights of Crown Resources Corp. of Colorado under the Toronto Exchange Escrow Agreement; and (d) proceeds of the foregoing. b. Other Definitions. Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Purchase Agreement. AIncludes@ and Aincluding@ is not limiting. 2. Collective Actions Required. Each Senior Lender agrees that the following actions shall be taken by the Senior Lender with respect to such Senior Lender=s rights and interests pursuant to the Notes, the Security Agreements, and the Purchase Agreement and the Escrow Agreement, if at all, only consistently with the actions of a Majority in Interest of the holders of the Notes: a. Commencement or continuation of legal proceedings upon or under the Notes or the Security Agreements, provided however, that nothing in this Agreement shall preclude or limit any Senior Lender from filing a proof of claim or interest evidencing its obligation under any Note held by such Senior Lender in any insolvency or reorganization proceeding brought by or against the Company or its assets or affecting the Collateral; b. Declaration of a default under the Notes or the Security Agreements; c. Commencement of proceedings for reorganization or liquidation of the Company; d. Enforcement of any remedy available upon default under the Notes or the Security Agreements; e. Waiver, amendment, modification, settlement or release of any term of the Notes, the Purchase Agreement or the Security Agreements or the Escrow Agreement; f. Making any election, or casting any vote in connection with any reorganization or liquidation proceedings affecting the Company or the Collateral; g. Selection, retention, and engagement of professionals, including without limitation, attorneys, accountants, appraisers, auctioneers, and other advisors to represent and advise the Senior Lenders with respect to proceedings to enforce the Notes, the Security Agreements, the Purchase Agreement, or reorganization or liquidation proceedings respecting the Company or the Collateral, provided however, that nothing in this Agreement shall limit the ability of any Senior Lender to retain other professionals to represent or advise such Senior Lender at the sole cost and expense of such Senior Lender; or h. Termination of the services of the Collateral Agent; replacement of the Collateral Agent, and approval of the compensation and expenses of the Collateral Agent; 3. Method of Taking Collective Action. At any time or from time to time hereunder, one or more of the Senior Lenders may request by written notice to all other Senior Lenders that the Senior Lenders consent to any action proposed by such Senior Lender. If, within ten days of the date of such request or such lesser period of time as is specified in the notice, a Majority in Interest of the Senior Lenders have approved the proposed action by written notice to the requesting Senior Lenders, the action shall be taken by and on behalf of all of the Senior Lenders as described in the notice. The requesting Senior Lender shall promptly give notice to all Senior Lenders if a proposed action has been approved. Notwithstanding the generality of the foregoing, the Senior Lenders agree that no special consideration or inducement may be given to any Senior Lender that is not given ratably to all Senior Lenders, and that any amendment or modification of the rights of the Senior Lenders approved hereunder must apply to all Senior Lenders equally and ratable in accordance with the outstanding balances of their respective notes. The costs of any action approved by a Majority in Interest of the Senior Lenders shall be allocated and paid out of the Note Proceeds by all of the Senior Lenders, ratably in proportion to the total principal amount outstanding on each Lender=s Note to the total outstanding principal amount of all Notes held by the Senior Lenders. Any one or more Senior Lenders may (but shall not be required to) advance such sums as may be necessary to take any action required by such Senior Lender. Any Note Proceeds received by the Collateral Agent or otherwise subject to the control of the Senior Lenders shall secure the obligation of each Senior Lender to pay or reimburse such expenses, and the amount of a Senior Lenders= such obligations may be deducted and offset against any amounts otherwise paid or distributed to such Senior Lender hereunder. 4. Sharing of Note Proceeds. Each Senior Lender agrees that if it shall receive a proportion of the total outstanding amount of any Note held by such Senior Lender which is greater than the proportion received by any other Senior Lender in respect of the total outstanding amount of any Notes held by such other Senior Lender, the Senior Lender receiving such proportionately greater payment shall pay to such other Senior Lender such as may be required so that all payments of Note Proceeds on account of the Notes held by the Senior Lenders shall be shared by the Senior Lenders proportionately to the total outstanding amount of the Notes. All Note Proceeds, as soon as practicable after receipt by the Collateral Agent, less any amounts due and owing from any Senior Lender for the costs of enforcement and any amounts reasonably contemplated to be required to pay contemplated expenses shall be paid to the Senior Lenders ratably in proportion to the total amount outstanding on each Senior Lender=s Note to the total amount of such Note, and thereafter in accordance with applicable law. 5. Power of Attorney. Each Senior Lender does hereby constitute and appoint the Collateral Agent as such Senior Lender=s true and lawful representative and attorney-in-fact, in such Senior Lender=s name, place and stead to: a. make, execute, sign and file and all instruments, documents and certificates as may from time to time be required or convenient to effectuate, implement or continue the validity, perfection, continuation, or subsisting existence of the security interests granted under the Security Agreements or contemplated under the Purchase Agreement; b. make, execute, sign and file and all instruments, documents and certificates and take such other actions as may authorized in writing by a Majority in Interest of the Senior Lenders, provided that such actions are matters as to which the Senior Lenders have agreed to act collectively under paragraph 2 hereof; c. hold Note Proceeds received by the Collateral Agent for the account of the Senior Lenders in kind or in Short Term Investments; and d. distribute Note Proceeds received by the Collateral Agent in accordance with paragraph 4 of this Agreement. The power of attorney granted herein shall be deemed coupled with an interest in the subject matter of the appointment, shall not be terminated by the death or incapacity of any Senior Lender, and shall not be terminable by any Senior Lender without the consent of a Majority in Interest of the Senior Lenders, or upon termination of this Agreement. 6. Amendments; Additional Senior Lenders. Any amendment to this Agreement approved by a Majority in Interest of the Senior Lenders shall be binding upon all of the Senior Lenders, provided however, that no such amendment shall (a) reduce the rights of proportionate distribution of Note Proceeds or sharing of Note Proceeds provided in paragraph 4 hereof without the express written consent of the Senior Lender adversely affected by such amendment; or (b) require any Senior Lender to pay the cost or expense of any action taken by a Majority in Interest of the Senior Lenders, other than out of the Note Proceeds received by or payable to such Senior Note Holder; or (c) amend the provisions of this paragraph 6. Any person may be admitted as an additional party to this Agreement, provided: (a) the proposed party is a holder of a Note issued in accordance with the terms of the Purchase Agreement; and (b) the proposed party submits an executed counterpart of this Agreement to each of the Senior Lenders at their notice address provided herein and thereby accepts and agrees to the terms of this Agreement by execution thereof. Except as provided above in this paragraph 6, this Agreement may only be amended by a writing executed by each of the Senior Lenders, which amendment may be executed in counterparts. 7. Termination. This Agreement may be terminated by ten days written notice to all Senior Lenders given by a Majority in Interest of the Senior Lenders, or if at the time of such notice there is no balance owing under any of the Notes, by written notice of the holder of Notes representing a majority in interest of the original principal balance of all of the Notes to all of the Senior Lenders. The provisions of paragraph 9 of this Agreement shall survive any such termination. Termination of this Agreement shall not affect the validity of any action taken pursuant to this Agreement prior to such termination or the appointment of the Collateral Agent. 8. Duty to Cooperate. Each Senior Lender hereby agrees to provide and execute such other and further statements of interest, designations, powers of attorney, certificates and other instruments necessary to carry out the terms of this Agreement. 9. Miscellaneous. a. Relationship of Parties. Nothing contained in this Agreement shall create any relationship between the parties hereto other than that of owners of Notes secured by interests in the same collateral and as contracting parties, and it is acknowledged and agreed that no party shall be deemed to be a partner, agent or principal of, or fiduciary to any other in the conduct of its business, or a joint venturer or a member of a joint or common enterprise with the other by reason of the execution of this Agreement or the taking of any action pursuant hereto. b. No Third Party Benefit. No person (including without limitation the Company) shall be a third party beneficiary of any provision of any of this Agreement. All provisions of this Agreement are intended solely for the benefit of Senior Lenders, and no third party shall be entitled to assume or expect that Senior Lenders will not waive or consent to modification of any such provision in Senior Lenders= sole discretion. c. No Setoff. This Agreement shall be construed as though the covenants herein are independent of any other obligation or relationship between or among the Senior Lenders or any of them, and no Senior Lender shall be entitled to or subject to any setoff, offset, abatement or deduction from or credit against any amounts due hereunder arising from any obligation or relationship other than rights under or in connection with the Notes, the Security Agreements or this Agreement. d. Successors and Assigns. All covenants of this Agreement shall extend to, bind and (subject to the limitations upon assignment contained herein) inure to the benefit of parties, their personal representatives, heirs, successors and assigns. e. Governing Law. This Agreement shall be construed and enforced according to, and governed by, the laws of Washington without reference to conflict of laws provisions which, but for this provision, would require the application of the laws of any other jurisdiction. f. Consent to Jurisdiction. The venue for any action brought to interpret or enforce this Agreement shall be in Jefferson County, Colorado (or if jurisdiction is available in the Federal Courts of the United States, in the United States District Court for the District of Colorado) and the Senior Lenders hereby consent to the in personam jurisdiction of such courts for purposes of any action to enforce or interpret this Agreement. Service of process in any such action may be accomplished by certified mail, return receipt requested, to the addresses of the Senior Lenders. g. Notices. Any notices by or among the Senior Lenders shall be sent to the addresses of the Senior Lenders set forth in signature page to this Agreement executed by such Senior Lender, and shall be given by first class mail or overnight delivery service; provided, however, if given by first class mail such notice shall not be deemed given unless or until three business days after mailing and if given by overnight delivery service such notice shall not be deemed given unless or until one day after dispatching by overnight delivery service. Any Senior Lender may change the address to which notices shall be sent to such Senior Lender, by written notice to all other Senior Lenders given in accordance with this paragraph. h. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the content hereof, supersedes all prior oral and written agreements with respect to the content hereof and may not be modified, deleted or amended in any manner except by further written agreement of the parties in accordance with the express terms of this Agreement. i. Drafting of Agreement. Each Senior Lender acknowledges that this Agreement has been drafted by and is the result of negotiations between and among the Company, Solitario and the Other Senior Lenders and was drawn for the mutual benefit of the Senior Lenders, and that the terms of this Agreement shall not be construed or interpreted strictly, in the event of an ambiguity, against any party. j. Invalidity. Unenforceability of any provision contained in this Agreement shall not affect or impair validity of any other provision of this Agreement. If for any reason any provision of this Agreement shall be deemed by a court of competent jurisdiction to be legally invalid or unenforceable in any jurisdiction to which it applies, the validity of the remainder of the Agreement shall not be affected and such provision shall be deemed modified to the minimum extent necessary to make such provision consistent with applicable law, and in such modified form, such provision shall then be enforceable and enforced. l. Counterparts. This Intercreditor Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement, binding upon all of the Senior Lenders, notwithstanding that all Senior Lenders have not signed the same counterpart. (Counterpart signature pages will be attached, following this page) ACKNOWLEDGMENT AND AGREEMENT BY THE COMPANY As an inducement to the Senior Lenders to execute the foregoing Intercreditor Agreement and to purchase the Notes, Crown Resources Corporation, (the ACompany@) and Crown Resource Corp. of Colorado (collectively with the Company the "Makers") the makers of the Notes referenced in the foregoing Intercreditor Agreement hereby acknowledge and agree (i) that the Intercreditor Agreement limits the ability of any one of the Senior Lenders to modify or waive its separate rights as provided in Section 2 of the Intercreditor Agreement under the Note, the Security Agreement, and the Purchase Agreement; and (ii) that the Makers will not assert, as against any of the Senior Lenders, the existence of any set-off, defense, recoupment, modification, amend or waiver not enforceable as against all of the Senior Lenders. CROWN RESOURCES CORPORATION By:_______________________________________ Name: Christopher E. Herald Title: President Date: CROWN RESOURCE CORP. OF COLORADO By:_______________________________________ Name: Christopher E. Herald Title: President Date: SENIOR LENDER __________________________________________ Type or Print Name of Senior Lender Tax I.D. Number: ___________________________ Total Notes Purchased: _______________________ Notice Address for Senior Lender: __________________________________________ __________________________________________ __________________________________________ The undersigned hereby executed this Agreement on behalf of the Senior Lender: __________________________________________ By: _______________________________________ Title: _____________________________________ 1 Seattle-3110386.1 0023170-00003 SIGNATURE PAGE CROWN RESOURCES CORPORATION 10% SECURED CONVERTIBLE PROMISSORY NOTES INTERCREDITOR AGREEMENT -----END PRIVACY-ENHANCED MESSAGE-----