EXHIBIT 10.12
CREDIT AGREEMENT
This Credit Agreement, dated as of March 19, 1996 ("Agreement"),
by and between Amax Gold Inc., a Delaware corporation (the
"Borrower"), and Cyprus Amax Minerals Company, a Delaware corporation
(the "Lender");
WITNESSETH:
WHEREAS, on the date of this Agreement the Lender indirectly owns
shares of the Borrower's common stock, par value $0.01 per share
("Common Stock") constituting approximately 51.2% of the Borrower's
outstanding Common Stock;
WHEREAS, the Borrower needs financial support from the Lender to
finance increases in actual and projected capital expenditures
necessary to construct and develop the Fort Knox mine and to provide
working capital, and the Lender is willing to provide to the Borrower
up to $250,000,000 of financing for such needs and for general
corporate purposes, on the terms of this Agreement;
WHEREAS, each party has determined, after consulting with an
independent investment banking firm, that it is in the best interest
of such party that such financing from the Lender be provided on the
terms and conditions set forth in this Agreement;
WHEREAS, the Borrower and the Lender each have had the
transactions contemplated by this Agreement approved by its Board of
Directors (and the Borrower having had such transactions approved
separately by the Special Committee of the Borrower's Board of
Directors, which consists solely of those Directors who are
unaffiliated with the Lender);
NOW THEREFORE, the parties hereby agree to the following terms
and conditions:
ARTICLE I
AMOUNTS AND TERMS OF THE LOAN
SECTION 1.01 Amount of Credit. Subject to the terms and
conditions hereof, the Lender agrees to make one or more loans
(individually a "Loan" and collectively the "Loans") to the Borrower
from time to time during the period that commences on the date hereof
and ends on the earlier of (i) December 31, 2001 or (ii) the date on
which the Lender notifies Borrower that Loans will no longer be made
available hereunder (the expiration date determined by (i) or (ii) is
herein called the "Expiration Date"), in an aggregate principal amount
up to but not exceeding at any one time outstanding the sum of
$250,000,000 (the "Maximum Loan Amount"). During such period the
Borrower may borrow, pay and prepay in whole or in any part, all in
accordance with the terms and conditions hereof. Each borrowing and
cash prepayment of principal, if any, shall be in an amount equal to
an integral multiple of $1,000,000.
SECTION 1.02 Making the Loans. The Borrower shall give the Lender
notice of each borrowing hereunder not later than 11:00 a.m. Denver,
Colorado, time at least two (2) Business Days prior to the date a Loan
is requested to be made, specifying the inception date, the amount
thereof and the initial Interest Period for such Loan.
The Lender shall have no obligation to make any Loans hereunder. The
Lender shall advise the Borrower prior to the end of the Business Day
prior to the date upon which a Loan is requested to be made whether
the Lender has agreed to make the Loan. If the Lender agrees to make a
Loan hereunder, the Lender will arrange the Loan and confirm the
details in writing to the Borrower. On the inception date of the
borrowing, the Lender will make the proceeds of the Loan available to
the Borrower in immediately available funds at the Borrower's account
with Chemical Bank, New York (or any successor thereto), or as the
Borrower may otherwise direct in such notice.
Without regard to the applicable Interest Period of any Loan, the
Loans hereunder shall be payable upon demand by Lender specifying the
amount of Loans to be repaid and the date of payment.
The Loans to the Borrower shall be evidenced by a grid Note of
the Borrower substantially in the form of Exhibit A hereto (the
"Note"). The Note will evidence the obligation of the Borrower to pay
the aggregate unpaid principal amount of all Loans made by the Lender
upon demand by the Lender pursuant to Section 1.01 of this Agreement,
together with all accrued interest on such Loans. Entries made on the
grid schedules of the Note by the Lender reflecting borrowings,
payments and interest rate calculations under this Agreement shall
constitute, absent proven error, prima facie evidence of the
transactions represented by such entries. The Note shall (i) be dated
the date of the initial Loan hereunder, (ii) be payable in accordance
with its terms and the terms of this Agreement and (iii) evidence the
obligation of the Borrower to pay interest on each Loan made hereunder
from the date of such Loan on the unpaid principal amount thereof
outstanding from time to time, calculated in accordance with the
provisions of Section 1.03 and the outstanding principal amount of
such Loan in accordance with Section 1.06 or Section 1.07 of this
Agreement pursuant to the repayment notice given by the Borrower under
the applicable section of this Agreement. Except for the payment
referenced in Section 1.07 hereof, the Borrower shall make each
payment (including any cash prepayment) hereunder and under the Note,
not later than the close of business of the day when due by wire
transfer, in lawful money of the United States of America to the
Lender, at its address referred to in Section 7.02 or as otherwise
directed by the Lender, in immediately available funds.
SECTION 1.03 Payment of Interest. Each Loan made by the Lender
pursuant to this Agreement shall bear interest on the principal
balance thereof from time to time unpaid at an annual rate equal to
the LIBOR Rate (as defined herein) for the interest period selected by
the Borrower at its option for a period of one, three or six months,
or such other periods as are agreed between the Borrower and the
Lender (each, an "Interest Period"), and as set forth in the notice of
borrowing referred to in Section 1.02 hereof or the notice of Interest
Period selection referred to in Section 1.05 hereof, as the case may
be, plus 2.25% per annum, except as otherwise provided in this
Section. Interest on each Loan shall be due and payable in full on the
earlier of (i) last day of the Interest Period applicable to such Loan
and (ii) the date upon which the Lender demands that the Loan be
repaid, and, in the case of any Interest Period in excess of three
months, at the end of each calendar quarter occurring during the term
thereof. The term "LIBOR Rate" shall have the meaning ascribed to it
in the Revolving Credit Agreement, dated as of April 15, 1994, between
the Lender and the Borrower, whether or not such Agreement shall have
been terminated at the time of such interest calculation. If the
Borrower fails to make any payment to the Lender of the principal of
or interest on any Loan when such payment becomes due, such Loan shall
accrue interest at a rate that is 1.0% per annum higher than the rate
otherwise payable with respect to such Loan and such higher rate shall
continue until such default in payment by the Borrower is cured. All
computations of interest under the Note shall be made by the Lender on
the basis of a year of 360 days, consisting of twelve 30-day months,
for the actual number of days (including the first day but excluding
the last day) elapsed.
SECTION 1.04 Prepayments in Cash. On any interest payment date,
or as otherwise agreed by the Lender, the Borrower may make cash
prepayments of principal of one or more Loans (which Loans shall be
designated by the Borrower) in an amount equal to an integral multiple
of $1,000,000, and shall be made without premium or penalty, but
together with interest accrued, if any, on the amount of each prepaid
Loan (at the interest rate
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applicable to such Loan) to the date of prepayment and shall be
applied to the Loans as requested by the Lender. The Borrower shall
give Lender at least ten (10) Business Days notice of any such
prepayment; provided, that, if the Lender shall require additional
time to obtain the approvals that are necessary to elect to accept
such payment in Common Stock pursuant to Section 1.07, the Lender may
extend such payment date for a reasonable period of time. All such
cash payments shall be made by wire transfer in immediately available
funds to an account designated by the Lender.
SECTION 1.05 Interest Period Selection. The Borrower shall have
the option to select a new Interest Period for each Loan, which period
shall take effect at the end of the then current Interest Period with
respect to such Loan. The Borrower shall give the Lender notice of
such Interest Period selection pursuant to this Section 1.05 not later
than 11:00 a.m. Denver, Colorado, time at least two (2) Business Days
prior to the last day of the applicable Interest Period, specifying
the new Interest Period for such Loan. If the Borrower does not
deliver such notice of Interest Period selection to the Lender as set
forth herein, the Interest Period for such Loan shall be the same
number of months as the immediately preceding Interest Period for such
Loan. The selection of a subsequent Interest Period shall not be
deemed to constitute a new Loan for purposes of this Agreement.
SECTION 1.06 Payment on Non-Business Days. Whenever any payment
to be made hereunder or under the Note shall be stated to be due on a
date which is a Saturday, Sunday or a public holiday or the equivalent
for Lender or for banks generally under the laws of the State of
Colorado (any other day being a "Business Day"), such payment may be
made on the next succeeding Business Day and such extension of time
shall in such case be included in the computation of interest due.
SECTION 1.07 Payment in Common Stock. At the Lender's election,
which may be exercised by its giving written notice to the Borrower at
least two (2) Business Days prior to the date (i) upon which the
Lender has demanded payment of the Note, (ii) upon which any interest
payment is due, or (iii) on which any repayment or prepayment of the
Note is to be made in accordance with Section 1.04 (unless such date
is extended for a reasonable period of time by the Lender at the
Lender's election), the Lender may require the Borrower to issue to
the Lender Common Stock in lieu of a payment of amounts outstanding
under the Note; provided, that such issuance shall be subject to (a)
the acceptance by the New York Stock Exchange (the "NYSE") of a
listing application for the issuance of shares of Common Stock of the
Borrower therefor and (b) shareholder approval by the shareholders of
the Borrower as to such issuance. The number of shares of Common Stock
that shall be issued shall be equal to (I) the dollar amount of
payment demanded or due on such date divided by (II) the Average
Market Price (as defined below). The "Average Market Price" shall
equal the average of the closing prices of the Common Stock on the
NYSE over the five (5) NYSE trading days ending on the Business Day
prior to the date that such demand is made, provided, that such
Average Market Price shall be subject to adjustment for extraordinary
dividends or distributions, stock splits, stock dividends and similar
capital events occurring during such five (5) NYSE trading-day period.
SECTION 1.08 Regulatory Approvals. As a condition precedent to
issuing any Common Stock to the Lender pursuant to Section 1.07
hereof, the Borrower shall have obtained all authorizations and
approvals of, and all other actions required to be taken by, any
applicable governmental authority or regulatory body or stock exchange
and shall have given all notices to, and made all filings with, any
such governmental authority or regulatory body or stock exchange, that
may be required in connection with such issuance of such Common Stock.
SECTION 1.09 Failure to Obtain Regulatory Approvals. In the event
the Borrower is unable to obtain all authorizations and approvals
required for the issuance of any Common Stock pursuant to Section 1.08
hereof, such failure shall not constitute a default. If the Common
Stock was to be issued to pay an interest or principal payment due
under the Note, such payment shall be made by the Borrower in
immediately available funds on the date such payment is due in
accordance with Section 1.03 or 1.04 of this Agreement, as the case
may be, and the Note.
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ARTICLE II
CONDITIONS OF LENDING
SECTION 2.01 Conditions Precedent to Making the Initial Loan. The
obligation of the Lender to make the initial Loan is subject to the
following conditions precedent:
(a) The Lender shall have received on or before the day the
initial Loan is made all of the following, in form and substance
reasonably satisfactory to the Lender:
(i) The Note duly executed by the Borrower;
(ii) Copies of the borrowing resolutions of the
Board of Directors of the Borrower authorizing the execution
and delivery of this Agreement and the Note as well as the
Borrower's performance of all of the covenants, obligations
and other undertakings of the Borrower contemplated by this
Agreement and the Note and of all documents evidencing other
necessary corporate action and governmental approvals, if
any, with respect to this Agreement and the Note, certified
by the Secretary or an Assistant Secretary of the Borrower;
(iii) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized
to sign this Agreement and the Note and any other documents
to be delivered hereunder;
(iv) A favorable opinion of counsel of the
Borrower, as to matters referred to in Section 3.01 of this
Agreement; and
(v) A Notice of Borrowing under Section 1.02.
(b) On the date of such Loan the following statements shall
be true:
(i) The representations and warranties of the
Borrower contained in Section 3.01 are true and correct in
all material respects and shall be deemed to have been made
on and as of the date of such Loan (or of a subsequent Loan
for the purposes of Section 2.02);
(ii) No event has occurred and is continuing, or
would result from such Loan (or from a subsequent Loan for
the purposes of Section 2.02), which constitutes an Event of
Default (as defined in Article V) or would constitute an
Event of Default but for the requirement that notice be
given or time elapse or both; and
SECTION 2.02 Conditions Precedent to Subsequent Loans. The
obligation of the Lender to make each subsequent Loan is subject to
the conditions precedent that on the date of any such subsequent Loan
the statements made in Section 2.01(b)(i) and (ii) shall be true.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power to execute,
deliver and perform its obligations under this Agreement and the
Note.
(b) The execution, delivery and performance by the Borrower
of this Agreement and the Note have been, or in the case of the
issuance of Common Stock will be on or prior to the date of
issuance, duly authorized by all necessary corporate action
(including authorization of the Board of Directors of the
Borrower to issue the Common Stock required to be issued pursuant
to Articles of this Agreement) and do not (and, in the case of
the Common Stock, such Common Stock will not at the time the same
is to be issued):
(i) violate any provision of the Certificate of
Incorporation, as amended, or By-Laws of the Borrower or any
law, order, writ, judgment, decree, determination or award,
in each case as presently in effect and having applicability
to the Borrower; or
(ii) result in a breach of or constitute a default
under any material indenture, bank loan agreement, credit
agreement, bullion loan or other material agreement to which
the Borrower is a party or by which any of its properties or
the properties of any of its Subsidiaries, are presently
bound. As used in this Agreement, the term "Subsidiary"
shall mean, as to the Borrower, any corporation of which at
least a majority of the outstanding shares of stock, having
by the terms thereof ordinary voting power to elect a
majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency), is at the time directly or indirectly owned or
controlled by the Borrower or one of more of its
Subsidiaries.
(c) No authorization or approval of, or other action by,
and no notice to or filing with, any governmental authority or
regulatory body, other than the Securities and Exchange
Commission ("SEC"), is required for the due execution, delivery
and performance by the Borrower of this Agreement (except for
such notices, any necessary shareholder approvals, registrations,
stock exchange listings or filings as may be required in
connection with issuing the Common Stock) or the Note.
(d) This Agreement is, and the Note when executed and
delivered will be, legal, valid and binding obligations of the
Borrower enforceable against it in accordance with their
respective terms (subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles).
(e) The Common Stock, when issued in accordance with the
terms of this Agreement will be validly issued, fully paid and
nonassessable.
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ARTICLE IV
COVENANTS OF THE BORROWER
SECTION 4.01 Payment of Principal, Premium and Interest. The
Borrower duly and punctually will pay or cause to be paid the
principal of and interest on the Loans evidenced by the Note according
to the terms thereof.
SECTION 4.02 Reports, etc. The Borrower will furnish to the
Lender the following reports, information and documents:
(i) within 15 days after the Borrower is required to
file the same with the SEC, copies of the annual reports on Form
10-K, proxy statements, quarterly reports on Form 10-Q, and of
such reports, notices, documents and other information (or copies
of such portions of any of the foregoing as the SEC may from time
to time by rules and regulations prescribe) that the Borrower may
be required to file with the SEC pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended,
or with the principal securities exchange (or successor thereto)
in the United States on which securities of the Borrower are
listed and, upon distribution thereof, a copy of each report,
proxy statement, notice, document or other information sent by
the Borrower to all of its stockholders; and
(ii) promptly upon demand, such other information
respecting the financial condition, operations and properties of
the Borrower and its consolidated Subsidiaries as the Lender
reasonably may request; provided that the Lender shall maintain
the confidentiality thereof in the same manner as the Lender
maintains the confidentiality of its own information of like
nature.
SECTION 4.03 Inspection. So long as this Agreement is in effect
or the Note is outstanding, the Borrower will permit the Lender or any
of its authorized representatives, at the Lender's expense, to inspect
at all reasonable times all properties, books and records of the
Borrower or any of its consolidated Subsidiaries reasonably related to
the overall financial and business condition of the Borrower and its
consolidated Subsidiaries or to the observance and performance by the
Borrower of its obligations hereunder and under the Note, and to
discuss the business and affairs of the Borrower and its consolidated
Subsidiaries with its officers and independent accountants (and by
this provision the Borrower authorizes said accountants to discuss
with the Lender or such authorized representatives, the finances and
affairs of the Borrower and its consolidated Subsidiaries), all as
often as reasonably may be requested, subject to appropriate
obligations of confidentiality.
SECTION 4.04 Compliance With Laws. The Borrower shall comply, in
all material respects, with all applicable laws, rules, regulations
and orders, except where the failure would not have a material adverse
effect on the Borrower's ability to perform under this Agreement and
the Note.
SECTION 4.05 Listing Approval. The Borrower promptly shall use
all reasonable efforts to obtain the acceptance of the NYSE of a
listing application for the Common Stock to be issued pursuant to the
terms of this Agreement and, if so required as a condition to such
listing, to obtain the approval of a majority of its shareholders for
the issuance for such Common Stock.
SECTION 4.06 Security for Obligations. As security for the full
and punctual payment when due of all obligations arising under this
Agreement (including all such amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code,
11 U.S.C. Sections 502(b) and 506(b), and any other similar provisions
arising under applicable law), the Borrower hereby grants to the
Lender
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a security interest in all of the Borrower's right, title and
interest, whether now existing or hereafter arising or acquired, in
the Collateral (as defined in the Collateral Agreements referred to in
the Loan Agreement pursuant to which the Borrower is financing the
construction of the Fort Knox Mine) in the form and manner
contemplated by the Collateral Agreements. The Borrower agrees to
execute such documents and to make such filings as shall be necessary
and desirable in the opinion of the Lender to perfect and protect the
security interest granted hereby over the Collateral as soon as
practicable after the date hereof.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01 Events of Default. If any of the following events
(each, an "Event of Default") shall occur and be continuing:
(a) The Borrower shall (i) fail to pay the principal of or
any interest on the Note when due, or (ii) fail to perform or
observe any other term, covenant or condition contained in this
Agreement or in the Note on its part to be performed or observed
and any such failure shall remain unremedied for five (5)
Business Days in the case of clause (i) and thirty (30) days in
the case of clause (ii) after the same is discovered by any
Senior Officer of the Borrower; or
(b) Any representation or warranty made by the Borrower
herein or by the Borrower (or any of its officers) in any
certificate or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material
respect when made and such incorrect representation or warranty
shall not have been corrected within ten (10) days after the same
is discovered by any Senior Officer of the Borrower; or
(c) The Borrower shall admit in writing its inability to
pay its debts, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against
the Borrower or seeking to adjudicate it a bankrupt or insolvent
or seeking reorganization, arrangement, adjustment, or
composition of it or its debts under the law of any jurisdiction
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its
property and, with respect to any involuntary proceeding
instituted against the Borrower, such proceeding shall not be
dismissed within sixty (60) days;
then, and in any such event, the Lender, by notice to the Borrower,
may take either or both of the following actions: (i) terminate this
Agreement; or (ii) declare the principal balance outstanding under the
Note and all interest accrued and unpaid thereon, and all other sums
due hereunder, to be due and payable without presentment, demand,
protest, or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that upon the
occurrence of an Event of Default specified in subparagraph (c) above,
(x) the Borrower's ability to borrow hereunder automatically shall be
terminated and (y) the Note, all such principal and interest and all
such other sums due hereunder automatically shall become and be due
and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
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ARTICLE VI
PROVISIONS REGARDING COMMON STOCK
SECTION 6.01 Reservation of Shares of Common Stock. The Borrower
agrees that it will, at all times prior to the Expiration Date,
undertake all such further acts and assurances as may be reasonably
required to reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued shares of Common
Stock for the purpose of enabling it to satisfy any obligation to
issue shares of Common Stock pursuant to Section 1.07, shares of
Common Stock deliverable pursuant to Section 1.07. Before taking any
action that would cause an issuance of shares of Common Stock below
the then par value (if any) of the shares of Common Stock issuable
pursuant to Section 1.07, the Borrower shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that
the Borrower may validly and legally issue fully paid and
non-assessable shares of Common Stock.
SECTION 6.02 Transfer Taxes, Etc. The Borrower shall pay any and
all documentary stamp, issue or transfer taxes, and any other similar
taxes payable in respect of the issue or delivery of shares of Common
Stock issuable pursuant to Section 1.07; provided, however, that the
Borrower shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the Lender and no such issue
or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Borrower the amount of any such tax
or has established, to the satisfaction of the Borrower, that such tax
has been paid.
SECTION 6.03 Consolidation or Merger or Sale of Assets.
Notwithstanding any other provision herein to the contrary, in case of
any consolidation or merger, sale or transfer to which the Borrower is
a party and pursuant to which there is a change in the Common Stock of
the Borrower, then lawful provision, in a manner and on terms
reasonably satisfactory to counsel for the Lender, shall be made by
the corporation formed by such consolidation or the corporation whose
securities, cash or other property will immediately after the merger
or consolidation be owned, by virtue of the merger or consolidation,
by the holders of Common Stock immediately prior to the merger or
consolidation, or the corporation which shall have acquired such
assets or securities of the Borrower (collectively the "Formed,
Surviving or Acquiring Corporation"), as the case may be, providing
that the Lender shall have the right thereafter to receive shares of
common stock of such Formed, Surviving or Acquiring Entity pursuant to
Section 1.07. The above provisions of this Section 6.06 shall
similarly apply to successive consolidations, mergers, sales, leases
or transfers.
SECTION 6.04 Transfer Restrictions.
(a) Legends on Common Stock.
(i) Until the third anniversary of the date of
original issuance of the shares of Common Stock,
certificates representing the shares of Common Stock issued
pursuant to Section 1.07 and not otherwise registered
pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act")
shall bear a legend substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY SIMILAR STATE SECURITIES LAWS
AND THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION
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STATEMENT, OR AN EXEMPTION FROM REGISTRATION, UNDER
SAID ACT AND LAWS."
The shares of Common Stock issued pursuant to
Section 1.07 and not otherwise registered pursuant to an
effective registration statement under the Securities Act
shall be subject to the restrictions on transfer set forth
in the legends referred to above until the third anniversary
of the date of original issuance of such shares of Common
Stock; provided, however, and notwithstanding the foregoing,
such shares of Common Stock may be resold under and pursuant
to the terms and conditions of Regulation S of the
Securities Act, prior to the end of the third anniversary
date of the issuance of such shares.
(ii) The certificates evidencing shares of Common
Stock issued to the Lender pursuant to Section 1.07 and not
otherwise registered pursuant to an effective registration
statement under the Securities Act shall bear, until such
time as the Borrower and the transfer agent for the Common
Stock shall have received evidence satisfactory to each of
them that the transfer of such shares of Common Stock has
been effected in accordance with the limitations on transfer
set forth in paragraph (a)(i) above, the following
additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES, OPINIONS OF COUNSEL AND OTHER INFORMATION
AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(b) Transfer Agent Requirements. The transfer agent and
registrar for the Common Stock shall not be required to accept
for registration of transfer any Common Stock bearing the legend
contained in paragraph (a)(ii) above, except upon presentation of
satisfactory evidence that the restrictions on transfer of the
Common Stock referred to in the legend in paragraph (a)(i) have
been complied with, all in accordance with such reasonable
regulations and procedures as the Borrower may from time to time
agree with the transfer agent and registrar for the Common Stock.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Note, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Lender and the Borrower, in
the case of an amendment, or by the party to be charged, in the case
of a waiver or a consent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose
for which given.
SECTION 7.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and delivered to an officer
of the other party or mailed or transmitted by facsimile; if to the
Lender to its address at 9100 East Mineral Circle, Englewood, Colorado
80112-3299, Attention: Chief Financial Officer (Fax No. 303-643-5269);
if to the Borrower, to its address at 9100 East Mineral Circle,
Englewood, Colorado 80112-3299, Attention: Chief Financial Officer
(Fax No. 303-643-5505) or, as to each party, to such other address as
shall be designated by such party in a written notice to the other
party. All such notices and communications shall, when
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delivered to an officer of the other party, be effective upon such
delivery and, when mailed or transmitted by facsimile, be effective
when deposited in the mails or when transmitted respectively,
addressed as aforesaid; except that notices by the Borrower to the
Lender or by the Lender to the Borrower pursuant to the provisions of
Section 1.05 shall not be effective until received by the Lender or
the Borrower, as the case may be, but such notices may be given by
telephone and confirmed in writing or by facsimile on the same day and
shall be effective upon such telephonic notice.
SECTION 7.03 No Waiver; Remedies. No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder or
under the Note, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder or under the Note
preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that (i) the Borrower shall
not have the right, to assign its rights hereunder or any interest
herein except to a successor by merger, consolidation or sale of all
or substantially all of the Borrower's assets, in each case if
permitted under Section 4.07 above, without the prior written consent
of the Lender, and (ii) the Lender shall not assign any of its rights
or obligations hereunder or under the Note, except to a successor by
merger, consolidation or sale of substantially all of the Lender's
assets without the prior written consent of the Borrower.
SECTION 7.05 Use of Proceeds. The proceeds of the Loans shall be
used by the Borrower to finance increases in actual and projected
capital expenditures necessary to construct and develop the Fort Knox
mine and to provide working capital, and for general corporate
purposes.
SECTION 7.06 Demand Registration Rights.
(i) At any time after the issuance of Common Stock
pursuant to Section 1.07, the Lender may make one or more written
requests to the Borrower (a "Demand") for registration under and
in accordance with the provisions of the Securities Act of all or
part (but not less than 1,000,000 shares per Demand) of the
shares of Common Stock issued to the Lender pursuant to Section
1.07 of this Agreement ("Registrable Shares"). Each such request
shall specify the aggregate number of Registrable Shares proposed
to be registered and the intended method of disposition thereof.
(ii) Upon receipt of a Demand, the Borrower shall use
its best efforts to effect such registration to permit the sale
of Registrable Shares in accordance with the intended method of
disposition thereof and pursuant thereto, the Borrower shall as
expeditiously as possible:
(a) execute and deliver all such instruments and
documents and do or cause to be done all such other acts and
things as may be necessary or, in the opinion of the Lender,
advisable to register such Registrable Shares under the
provisions of the Securities Act, and to use reasonable
efforts to cause the registration statement relating thereto
to become effective and to remain effective for such period
as prospectuses are required by law to be furnished, and to
make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Lender, are
necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and
regulations of the SEC applicable thereto;
(b) use its best efforts to qualify the
Registrable Shares under the applicable state securities or
"Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of
-10-
the Registrable Shares, as requested by the Lender,
provided, that in no event shall the Borrower be obligated
to qualify to do business or file a general consent to
service of process in any jurisdiction;
(c) make available to the Lender, as soon as
practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts
and things as may be necessary to make such sale of the
Registrable Shares or any part thereof valid and binding and
in compliance with applicable law.
(iii) If any such Demand is made at a time when the
Lender directly or indirectly owns less than five percent 5% of
the number of shares of Common Stock outstanding, the Borrower
may, if its Special Committee of its Board of Directors
determines in the good faith exercise of its reasonable judgment
that it would be inadvisable to effect a demand registration,
defer such demand registration until the earliest practicable
time at which such demand registration can be reasonably
effected, which period shall not exceed three (3) months.
(iv) All Registration Expenses incurred in connection
with the first registration statement to be filed hereunder shall
be paid by the Borrower. All Registration Expenses incurred in
connection with each additional registration statement to be
filed hereunder shall be paid by the Lender. For purposes of this
Agreement, "Registration Expenses" shall mean any and all
expenses incident to performance of or compliance with this
Section 7.06, including, without limitation, (i) all SEC and
stock exchange registration and filing fees, (ii) all fees and
expenses of complying with state securities or "Blue Sky" laws
(including fees and disbursements of counsel in connection with
Blue Sky qualifications of the Registrable Shares and
determination of the eligibility of the Registrable Shares for
investment under the laws of such jurisdiction as the Lender may
indicate), (iii) all printing, messenger and delivery expenses,
(iv) all fees and expenses incurred in connection with the
listing of Registrable Shares on any exchange, and (v) the fees
and disbursements of counsel for the Borrower and of its
independent public accountants, but excluding underwriting
discounts and commissions, brokerage fees, transfer taxes, if
any, fees and disbursements of counsel, accountants or other
experts or advisors to the Lender, and National Association of
Securities Dealers Inc. registration and filing fees.
SECTION 7.07 Fees and Expenses. The Borrower shall pay (i) all
reasonable out-of-pocket expenses of the Lender, including reasonable
fees and disbursements of special counsel for the Lender, in
connection with the preparation of this Agreement, any waiver or
consent hereunder or any amendment hereof or any default or alleged
default hereunder and (ii) if an Event of Default occurs, or upon the
occurrence of an event that with notice or the lapse of time or both
would constitute an Event of Default, all reasonable out-of-pocket
expenses incurred by the Lender, including reasonable fees and
disbursements of counsel, in connection with such actual or potential
Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings, actions or negotiations resulting therefrom.
The Borrower shall indemnify the Lender against any transfer taxes,
documentary taxes, assessments or charges made by any governmental
authority by reason of the execution and delivery to the Lender of
this Agreement, or any Note.
SECTION 7.08 Prior Agreement. This Agreement and the Note issued
hereunder shall supersede in their entirety any prior negotiations,
discussions, understandings or arrangements between the Lender and the
Borrower pertaining to the subject matter of this Agreement.
-11-
SECTION 7.09 Governing Law. This Agreement and the Note shall be
governed by, and construed in accordance with, the laws of the State
of Colorado.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
AMAX GOLD INC.
By /s/ Mark A. Lettes
---------------------------------
Title: Vice President and Chief
Financial Officer
ATTEST:
_____________________________
CYPRUS AMAX MINERALS COMPANY
By /s/ Francis J. Kane
--------------------------------
Title: Vice President Investor
Relations and Treasurer
ATTEST:
____________________________
-12-
EXHIBIT A
CREDIT NOTE
$250,000,000.00 Date: March 19, 1996
FOR VALUE RECEIVED, Amax Gold Inc., a Delaware corporation (the
"Borrower"), promises to pay to the order of Cyprus Amax Minerals
Company, a Delaware corporation (the "Lender"), upon demand by the
Lender at the office of the Lender located at 9100 East Mineral
Circle, Englewood, Colorado 80112, or at such other place as the
Lender may direct in writing, in lawful money of the United States of
America and in immediately available funds, the principal amount of
Two Hundred Fifty Million Dollars ($250,000,000) or, if less than such
principal amount, the aggregate unpaid principal amount of all Loans
made by the Lender to the Borrower pursuant to Article I of the
Agreement referred to below in accordance with the respective
Schedules applicable to such Loans attached to and made part of this
Note; provided, that to the extent that the Borrower repays (including
any prepayment) any principal amount of Loans in Common Stock pursuant
to and as defined in Section 1.07 of the Agreement prior to the
Expiration Date (as defined below), the Maximum Loan Amount shall
automatically be reduced by the amount of any Common Stock so issued,
based upon the value of such Common Stock at the time of issuance as
determined in accordance with Section 1.07 of the Agreement. The
Lender shall have the right to demand payment of the Loans at any
time. Loans may be made to the Borrower from time to time during the
period that commences on the date hereof and ends on the earlier of
(i) December 31, 2001 or (ii) the date on which the Lender notifies
Borrower that Loans will no longer be made available hereunder (the
expiration date determined by (i) or (ii) is herein called the
"Expiration Date").
The Borrower further promises to pay interest at said office in
like money, from the date hereof on the unpaid principal amount hereof
outstanding from time to time, at the rates and at the times set forth
in Article I of such Agreement. Notwithstanding anything contained
herein to the contrary, at the election of the Lender, the principal
of and interest on this Note may be paid by the Borrower in Common
Stock of the Borrower, in accordance with the provisions of Section
1.07 of the Agreement, subject to satisfaction of the conditions set
forth in Section 1.08 of such Agreement.
This Note is the Note referred to in Section 1.02 of the Credit
Agreement between the Borrower and the Lender dated as of March 19,
1996, as the same may hereafter from time to time be amended or
supplemented in accordance with the terms thereof ("Agreement"), is
entitled to the benefits thereof and subject to the terms and
conditions set forth therein (including, without limitation, the
Lender's rights to accelerate the due date hereof) and may be paid and
prepaid as provided therein.
Upon the occurrence of any of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Note may be
declared to be or shall automatically become immediately due and
payable as provided therein.
Amax Gold Inc.
By______________________________________
ATTEST:
_____________________________
Secretary
-13-
SCHEDULE OF LOANS AND PAYMENTS
MADE UNDER NOTE DATED MARCH 19, 1996
FROM AMAX GOLD INC.<F1>
TO CYPRUS AMAX MINERALS COMPANY
Principal Amount of the Initial Loan: $__________
Date of the Initial Loan: __________
Interest Rate for the Initial Loan: __________
PRINCIPAL BORROWINGS
AND PAYMENTS OF THIS NOTE
Amount Interest Principal Unpaid
Date Borrowed Rate Paid Paid Balance
- ---- -------- ---- -------- --------- -------
% $ $ $
% $ $ $
% $ $ $
% $ $ $
% $ $ $
% $ $ $
% $ $ $
% $ $ $
____________________
<FN>
<F1> All terms used in this Schedule shall have the meanings given them in the Agreement.
</FN>
March 19, 1996
Cyprus Amax Minerals Company
9100 E. Mineral Circle
Englewood, Colorado 80112
Dear Sirs:
Reference is made to (i) the Guaranty (the
"Guaranty"), dated the date hereof, by Cyprus Amax Minerals
Company ("Cyprus Amax") in favor of N M Rothschild & Sons
Limited, in its capacity as the administrative agent for the
Lender Parties referred to in the Guaranty, and (ii) the Credit
Agreement, dated as of the date hereof ("the Credit
Agreement"), by and between Amax Gold Inc. ("AGI") and
Cyprus Amax. Copies of the Guaranty and Credit Agreement
are attached to this letter.
In consideration of the execution and delivery by
Cyprus Amax of the Guaranty and the Credit Agreement and in
consideration of the obligation by Cyprus Amax to maintain
the Guaranty until the Fort Knox Economic Completion Date
(as defined in the Loan Agreement, as amended (the "Loan
Agreement")), AGI hereby agrees to pay to Cyprus Amax:
Cyprus Amax Minerals Company -2-
(i) an upfront fee (the "Upfront Fee") of
$10,000,000 payable by AGI to Cyprus Amax on any date
after the date hereof upon Cyprus Amax' giving AGI at
least two (2) Business Days prior written notice of a
demand for payment; and
(ii) a commitment fee (the "Commitment Fee") on
each date upon which accrued interest is payable under
Section 3.2.3 of the Loan Agreement, or such later date
as Cyprus Amax may designate, equal to the product of
(A) the portion of the Guaranteed Obligations (as
defined in the Guaranty) constituting principal under
the Loan Agreement to the extent that accrued interest
is due on such principal amount on such interest
payment date times (B) 1.75% per annum, on the basis
and at the times that such interest is calculated and
due pursuant to the Loan Agreement.
AGI agrees to pay (i) all reasonable out-of-pocket
expenses of Cyprus Amax, including reasonable fees and
disbursements of special counsel for Cyprus Amax, in
connection with the preparation of the Guaranty, any waiver
or consent thereunder or any amendment thereof and (ii) if
Cyprus Amax is required to make any payments under the
Guaranty, all reasonable out-of-pocket expenses of Cyprus
Amax, including reasonable fees and disbursements of
Cyprus Amax Minerals Company -3-
counsel, in connection with any collection, bankruptcy,
insolvency or other enforcement proceedings, actions or
negotiations resulting therefrom. AGI also agrees to
indemnify Cyprus Amax against any transfer taxes,
documentary taxes, assessments or charges made by any
governmental authority by reason of the execution or
delivery by Cyprus Amax of the Guaranty. The expenses,
taxes and other amounts set forth in this paragraph are
hereinafter referred to as the "Other Expenses". The Other
Expenses shall be payable from time to time by AGI to Cyprus
Amax on any date after the date incurred upon Cyprus Amax'
giving AGI at least two (2) Business Days prior written
notice of a demand for payment.
At the election of Cyprus Amax, which may be
exercised by its giving written notice to AGI at least two
(2) Business Days prior to the date upon which payment of
the Upfront Fee or the Other Expenses is demanded or a
Commitment Fee payment is due and subject to (i) the
acceptance by the New York Stock Exchange (the "NYSE") of a
listing application for the issuance of shares of Common
Stock of AGI therefor and (ii) shareholder approval by the
shareholders of AGI as to such issuance, Cyprus Amax may
request that the Upfront Fee, the Other Expenses, the
Commitment Fee or any part thereof shall be paid in shares
Cyprus Amax Minerals Company -4-
of Common Stock of AGI equal to (a) the dollar amount of the
Upfront Fee, the Other Expenses, the Commitment Fee or any
part thereof demanded or due, as the case may be, on such
date divided by (b) the Average Market Price (as defined
below). The "Average Market Price" shall equal the average
of the closing prices of the Common Stock of AGI on the NYSE
over the five (5) NYSE trading days ending on the Business
Day prior to the date upon which payment in Common Stock of
AGI is requested, provided, that such Average Market Price
shall be subject to adjustment for extraordinary dividends
or distributions, stock splits, stock dividends and similar
capital events occurring during such five (5) NYSE trading-
day period.
AGI further agrees that, until the occurrence of
the Fort Knox Economic Completion Date, AGI will not make
any borrowing under the Revolving Credit Agreement, dated
April 15, 1994, by and between AGI and Cyprus Amax for
purposes other than making a payment of the Obligations
under the Loan Agreement without the prior written consent
(subject to the DOCLOC Support Agreement, dated
November 3, 1995, between Cyprus Amax on the one hand and
AGI and N M Rothschild & Sons Limited on the other hand, in
respect of the Refugio project) of Cyprus Amax.
Cyprus Amax Minerals Company -5-
This letter shall be governed by and construed in
accordance with the laws of the State of Colorado.
Very truly yours,
AMAX GOLD INC.
/s/ Mark A. Lettes
-------------------------
Mark A. Lettes
Vice President and Chief
Financial Officer
ACCEPTED AND ACKNOWLEDGED:
CYPRUS AMAX MINERALS COMPANY
/s/ Francis J. Kane
- ------------------------
Francis J. Kane
Vice President and Treasurer
AMAX GOLD INC.
9100 East Mineral Circle
Englewood, Colorado 80112
March 19, 1996
Cyprus Amax Minerals Company
9100 East Mineral Circle
Englewood, Colorado 80112
Dear Sirs:
Reference is made to the Guaranty, dated the date
hereof (the "Guaranty"), by Cyprus Amax Minerals Company
("Cyprus Amax") in favor of N M Rothschild & Sons Limited
("Rothschild"), in its capacity as the administrative agent
for the Lender Parties referred to in the Guaranty, a copy
of which Guaranty is attached to this letter as Exhibit A.
Reference is also made to the Collateral Sharing, Priority
and Agency Agreement, dated as of March 19, 1996 (the
"Collateral Agreement"), among Cyprus Amax, Rothschild,
LaSalle National Trust, N.A., Amax Gold Inc. ("AGI"),
Fairbanks Gold Mining, Inc., Lassen Gold Mining, Inc., Melba
Creek Mining, Inc. and Fairbanks Gold Canada Limited, a copy
of which Collateral Agreement is attached to this letter as
Exhibit B.
In consideration of the execution and delivery by
Cyprus Amax of the Guaranty, AGI is entering into this
letter agreement and undertaking the obligations set forth
below.
AGI hereby agrees to reimburse Cyprus Amax for (i)
all payments made by Cyprus Amax under the Guaranty, (ii)
all reasonable out-of-pocket expenses of Cyprus Amax,
including reasonable fees and disbursements of counsel,
incurred in connection with the performance of Cyprus Amax's
obligations under the Guaranty, and (iii) all transfer
taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the performance of
Cyprus Amax's obligations under the Guaranty. Any such
reimbursement obligation that arises shall be in the nature
of a demand loan obligation bearing interest as set forth in
the immediately succeeding paragraph and payable in cash (or
such other consideration as may be agreed by AGI and Cyprus
Amax at the time of such payment) by AGI to Cyprus Amax
within five (5) Business Days (as defined in the Loan
Agreement referred to in the Guaranty) after receipt by AGI
of a written notice of demand from Cyprus Amax.
Any such demand loan obligation shall bear
interest at an annual rate equal to the LIBOR Rate (as
defined herein) for an interest period selected by Cyprus
Amax at its option for a period of one, three or six months,
or such other periods as are agreed between AGI and Cyprus
Amax (each, an "Interest Period"), plus 3.25% per annum,
except as otherwise provided herein. Interest on each
amount shall be due and payable in full on the earlier of
(i) last day of the Interest Period applicable to such
amount and (ii) the date upon which Cyprus Amax demands that
the amount be repaid, and, in the case of any Interest
Period in excess of three months, at the end of each
calendar quarter occurring during the term thereof. The term
"LIBOR Rate" shall have the meaning ascribed to it in the
Revolving Credit Agreement, dated as of April 15, 1994,
between Cyprus Amax and AGI, whether or not such Agreement
shall have been terminated at the time of such interest
calculation. All computations of interest hereunder shall
be made by Cyprus Amax on the basis of a year of 360 days,
consisting of twelve 30-day months, for the actual number of
days (including the first day but excluding the last day)
elapsed.
As security for the full and punctual payment when
due of all obligations arising under this letter agreement
(including all such amounts that would become due but for
the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. Section 362(a),
and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. Sections 502(b) and
506(b), and any other similar provisions arising under
applicable law), AGI hereby grants to Cyprus Amax a security
interest in all of AGI's right, title and interest, whether
now existing or hereafter arising or acquired, in the
Collateral (as defined in the Collateral Agreement) in the
form and manner contemplated by the Collateral Agreement.
AGI agrees to execute such documents and to make such
filings as shall be necessary and desirable in the opinion
of Cyprus Amax to perfect and protect the security interest
granted hereby over the Collateral as soon as practicable
after the date hereof.
AGI agrees, if and to the extent requested by
Cyprus Amax, to execute such documents and to make such
filings as shall be necessary to grant to Cyprus Amax
security interests in the Guanaco project and the Refugio
project with the highest priority permitted after giving
effect to all prior security interests in such projects, and
-2-
subject to the receipt of any necessary governmental and
other approvals from third parties (including, without
limitation, the lenders to such projects).
AGI agrees to indemnify and hold harmless Cyprus
Amax for any losses, claims, damages or liabilities to which
Cyprus Amax may become subject as a result of executing or
delivering the Guaranty or performing the obligations
contemplated thereby.
This letter shall be governed by and construed in
accordance with the laws of the State of Colorado.
Very truly yours,
AMAX GOLD INC.
/s/ Mark A. Lettes
-------------------------
Mark A. Lettes
Vice President and Chief
Financial Officer
ACCEPTED AND ACKNOWLEDGED:
CYPRUS AMAX MINERALS COMPANY
/s/ Francis J. Kane
- -------------------------
Francis J. Kane
Vice President and Treasurer
-3-