EXHIBIT 1.2
Apex Silver Mines Limited
1,800,000 Shares //1/
Ordinary Shares
($.01 par value)
International Underwriting Agreement
London, England
November __, 1997
Salomon Brothers International Limited
PaineWebber International
ABN AMRO Rothschild
Smith Barney Inc.
As International Representatives of the several
International Underwriters,
c/o Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB ENGLAND
Ladies and Gentlemen:
Apex Silver Mines Limited, a Cayman Islands corporation (the
"Company"), proposes to sell to the underwriters named in Schedule I hereto (the
"International Underwriters"), for whom you (the "International
Representatives") are acting as representatives, 1,800,000 shares of Ordinary
Shares, $.01 par value ("Ordinary Shares"), of the Company, (said shares to be
issued and sold by the Company being hereinafter called the "International
Underwritten Securities"). The Company also proposes to grant to the
International Underwriters an option to purchase up to 270,000 additional shares
of Ordinary Shares (the "International Option Securities"; the International
Option Securities, together with the International Underwritten Securities,
being hereinafter called the "International Securities"). It is understood that
the Company is concurrently entering into a U.S. Underwriting Agreement dated
the date hereof (the "U.S. Underwriting Agreement") providing for the sale by
the Company of an aggregate of 7,200,000 shares of Ordinary Shares (said shares
to be sold by the Company pursuant to the U.S. Underwriting Agreement being
hereinafter called the "U.S. Underwritten Securities"), in the United States and
Canada through arrangements with certain underwriters in the United States and
Canada (the "U.S.
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/1/ Plus an option to purchase from Apex Silver Mines Limited up to 1,350,000
additional shares to cover over-allotments.
Underwriters"), for whom Salomon Brothers Inc, PaineWebber Incorporated, Scotia
Capital Markets (USA) Inc. and Smith Barney Inc. are acting as representatives
(the "Representatives"), and providing for the grant to the U.S. Underwriters of
an option to purchase from the Company up to 1,080,000 additional shares of
Ordinary Shares (the "U.S. Option Securities"; the U.S. Option Securities,
together with the U.S. Underwritten Securities, being hereinafter called the
"U.S. Securities" and the International Securities, together with the U.S.
Securities, being hereinafter called the "Securities"). It is further understood
and agreed that the U.S. Underwriters and the International Underwriters have
entered into an Agreement Between U.S. Underwriters and International
Underwriters dated the date hereof (the "Agreement Between U.S. Underwriters and
International Underwriters"), pursuant to which, among other things, the
International Underwriters may purchase from the U.S. Underwriters a portion of
the U.S. Securities to be sold pursuant to the U.S. Underwriting Agreement and
the U.S. Underwriters may purchase from the International Underwriters a portion
of the International Securities to be sold pursuant to the International
Underwriting Agreement. To the extent there are no additional International
Underwriters listed on Schedule I other than you, the term International
Representatives as used herein shall mean you, as International Underwriters,
and the terms International Representatives and International Underwriters shall
mean either the singular or plural as the context requires.
1. Representations and Warranties.
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(a) The Company represents and warrants to, and agrees with, each
International Underwriter as set forth below in this Section 1. Certain terms
used in this Section 1 are defined in Section 17 hereof.
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (file number 333-
34685) on Form S-1, including related preliminary prospectuses, for the
registration under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, including the
related preliminary prospectuses, each of which has previously been
furnished to you. The Company will next file with the Commission either (A)
prior to the Effective Date of such registration statement, a further
amendment to such registration statement (including the form of final
prospectus) or (B) after the Effective Date of such registration statement,
final prospectuses in accordance with Rules 430A and 424(b)(1) or (4). In
the case of clause (B), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectuses. As filed,
such amendment and form of final prospectuses, or such final prospectuses,
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the International
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to
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you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest International
Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
It is understood that two forms of prospectus are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be offered and
sold to persons other than United States and Canadian Persons. The two
forms of prospectus are identical except for the outside front cover
page, the inside front cover page, the discussion under the heading
"Underwriting" and the outside back cover page. Such form of prospectus
relating to the U.S. Securities as first filed pursuant to Rule 424(b)
after the Execution Time or, if no filing pursuant to Rule 424(b) is
made, such form of prospectus included in the Registration Statement at
the Effective Date, is hereinafter called the "U.S. Prospectus"; such
form of prospectus relating to the International Securities as first
filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is made, such form of prospectus included in
the Registration Statement at the Effective Date, is hereinafter called
the "International Prospectus"; and the U.S. Prospectus and the
International Prospectus are hereinafter collectively called the
"Prospectuses".
(ii) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which shares sold in respect of the International
Underwriters' over-allotment option are purchased, if such date is not
the Closing Date (a "settlement date"), each Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, each Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date and any settlement date, each Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that the Company makes no representations or warranties as to
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the information contained in or omitted from the Registration
Statement, or the Prospectuses (or any supplement thereto) in reliance
upon and in conformity with information furnished herein or in writing
to the Company by or on behalf of any International Underwriter through
the International Representatives
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specifically for inclusion in the Registration Statement or the
Prospectuses (or any supplement thereto).
(iii) The subsidiaries of the Company listed on Annex A hereto
(individually a "Significant Subsidiary" and collectively, the
"Significant Subsidiaries") are the Significant Subsidiaries of the
Company (within the meaning of Rule 1-02 of Regulation S-X under the
Act). The Company and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own its properties
and conduct its business as described in each Prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where any failure to be so qualified would not
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole.
(iv) All the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set
forth in the Prospectuses, all outstanding shares of capital stock of
the Subsidiaries are owned directly or indirectly by the Company free
and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances.
(v) The Company's authorized equity capitalization is as set
forth in the Prospectuses; the Ordinary Shares of the Company conform
in all material respects to the description thereof contained in the
Prospectuses; the outstanding shares of Ordinary Shares have been duly
and validly authorized and issued and are fully paid and nonassessable;
the International Securities being sold hereunder have been duly and
validly authorized, and, when issued and delivered to and paid for by
the International Underwriters pursuant to this Agreement, will be
fully paid and nonassessable; the International Securities have been
duly authorized for listing, subject to official notice of issuance on
the American Stock Exchange; the certificates for the International
Securities are in valid and sufficient form; the holders of outstanding
shares of Ordinary Shares of the Company are not entitled to preemptive
or other rights to subscribe for the International Securities; and,
except as set forth in the Prospectuses, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares
of Ordinary Shares of or ownership interests in the Company are
outstanding.
(vi) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectuses, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements
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in the Prospectuses under the heading "Taxation", and the summaries of
legal and regulatory matters and proceedings under the headings
"Republic of Bolivia," "Description of Ordinary Shares" and "Title and
Ownership Rights" (under both of the "Development Project" and
"Advanced Exploration Properties" headings) fairly summarize the
matters therein described.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
(viii) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectuses, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(ix) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectuses.
(x) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries or (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which
their respective property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties, which breach, violation or imposition
would individually or in the aggregate have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole.
(xi) Except as set forth in the Prospectuses, no holders of
securities of the Company have rights to the registration of such
securities under the Securities Act.
(xii) The consolidated financial statements and schedules of the
Company
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and its consolidated subsidiaries included in the Prospectuses and the
Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and the
rules and regulations thereunder and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Prospectuses and
Registration Statement fairly present, on the basis stated in the
Prospectuses and the Registration Statement, the information included
therein.
(xiii) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or their property is pending or
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) could reasonably
be expected to have a material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectuses (exclusive of any
supplement thereto) (except, in the case of this clause (ii), for those
that have been disclosed in the Prospectuses).
(xiv) Except as set forth in the Prospectuses, each of the
Company and each of its subsidiaries, owns or leases all such
properties as are necessary to the conduct of its operations as
presently conducted and each of the Company and each of its
subsidiaries owns, leases or possesses the rights to all properties as
are necessary to explore, develop and exploit the San Cristobal Project
(as defined in the Prospectuses) in Bolivia, except where the failure
to own, lease or possess the rights for any property would not
singularly or in the aggregate have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole.
(xv) Except as set forth in the Prospectuses, neither the
Company nor any subsidiary is in violation of any law, rule or
regulation of any foreign national, federal, state or local
governmental or regulatory authority applicable to it or is not in non-
compliance with any term or condition of, or has failed to obtain and
maintain in effect, any license, certificate, permit, registration,
concession, franchise, or other governmental authorization required for
the ownership or lease of its property or the conduct of its business,
which violation, non-compliance or failure would individually or in the
aggregate have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary
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course of business, except as set forth in or contemplated in the
Prospectuses; and the Company has not received notice of any
proceedings relating to the revocation or material modification of any
such license, certificate, permit or other authorization.
(xvi) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its
properties, as applicable, which violation or default would
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole.
(xvii) Price Waterhouse LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectuses, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(xviii) There are no transfer taxes or other similar fees or
charges under foreign national law, federal law or the laws of any
state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Securities,
except as set forth in the Prospectuses or where the failure to pay any
such taxes, fees or charges would not individually or in the aggregate
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole.
(xix) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectuses and has paid all taxes required to
be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or as would not have a
material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not
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arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectuses.
(xx) Except as set forth in the Prospectuses, no labor dispute
with the employees of the Company or any of its subsidiaries exists or
is threatened or imminent that could result in a material adverse
change in the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the
Prospectuses.
(xxi) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectuses.
(xxii) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Prospectuses.
(xxiii) The Company and its subsidiaries possess all
certificates, authorizations, registrations, qualifications, licenses,
concessions, franchises and permits issued by the appropriate federal,
state, foreign national or local regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization,
registration, qualification, license, concession, franchise or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change
in the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the
Prospectuses.
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(xxiv) Neither the Company nor any of its subsidiaries is in
violation of any federal, state, foreign national or local law or
regulation relating to occupational safety and health or to the
storage, handling or transportation of hazardous or toxic materials and
the Company and its subsidiaries have received all permits, licenses or
other approvals required of them under applicable federal, state,
foreign national and local occupational safety and health and
environmental laws and regulations to conduct their respective
businesses, and the Company and each such subsidiary is in compliance
with all terms and conditions of any such permit, license or approval,
except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals which
would not, singly or in the aggregate, result in a material adverse
change in the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the
Prospectuses.
(xxv) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxvi) The subsidiaries listed on Annex A attached hereto are
the only significant subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X.
(xxvii) The Company's independent technical consultants Kvaerner
Metals, Davy Nonferrous Division, Mine Reserves Associates Inc.,
Pincock, Allen & Holt, Mineral Resources Development Inc., Knight
Piesold LLC and Behre Dolbear who have affirmed and verified the proven
and probable ore reserves located at the San Cristobal Project as of
___________, 1997 and as set forth in or incorporated by reference in
the Prospectuses are experts (as such term is used in Section 11 (b)
(3) of the Act) in the field of mining engineering and have consented
to being named in the Registration Statement.
(xxviii) The information set forth in the Registration Statement
and the Prospectuses relating to the proven and probable ore reserves
located at the San Cristobal Project as of __________, 1997 has been
prepared by the Company, Kvaerner Metals, Davy Nonferrous Division,
Mine Reserves Associates Inc., Pincock, Allen & Holt, Mineral Resources
Development Inc., Knight Piesold LLC and Behre
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Dolbear, respectively, materially in accordance with methods generally
applied in the mining industry and conforms in all material respects to
the rules and regulations of the Commission.
(xxix) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the several Underwriters or International Underwriters to
the Cayman Islands or any political subdivision or taxing authority
thereof or therein purely as a direct consequence of the issue of
Securities by the Company to or for the respective accounts of the
several Underwriters and International Underwriters, in each case for
resale and delivery to the initial purchasers thereof in the manner
contemplated herein and in the U.S. Underwriting Agreement.
(xxx) The Shareholders' Agreements dated July, 1996 by and among
the Company, Apex Silver Mines LDC, Consolidated Commodities Ltd., Mr.
Thomas S. Kaplan, Litani Capital Management LDC, Silver Holdings LDC
and each shareholder a signatory thereto have been duly authorized,
executed and delivered and are valid and binding obligations
enforceable, against the parties thereto, including, without
limitation, the "Holdback" provisions of Section 7 thereto.
Any certificate signed by any director of the Company and any
executive officer of Apex Corporation and delivered to the
International Representatives or counsel for the International
Underwriters in connection with the offering of the Securities shall be
deemed a representation and warranty by the Company, as to matters
covered thereby, to each International Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees, to sell to each International Underwriter, and each International
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of $ per share, the amount of the International Underwritten
Securities set forth opposite such International Underwriter's name in Schedule
I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several International Underwriters to purchase, severally and not
jointly, up to shares of the International Option Securities at the
same purchase price per share as the International Underwriters shall pay for
the International Underwritten Securities. Said option may be exercised only to
cover over-allotments in the sale of the International Underwritten Securities
by the International Underwriters. Said option may be exercised in whole or in
part at any time (but not more than once) on or before the 30th day after the
date of the International Prospectus upon written or facsimile notice by the
International Representatives to the Company setting forth the number of shares
of the International Option Securities as
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to which the several International Underwriters are exercising the option and
the settlement date. Delivery of certificates for the shares of International
Option Securities by the Company, and payment therefor to the Company, shall be
made as provided in Section 3 hereof. The number of shares of the International
Option Securities to be purchased by each International Underwriter shall be the
same percentage of the total number of shares of the International Option
Securities to be purchased by the several International Underwriters as such
International Underwriter is purchasing of the International Underwritten
Securities, subject to such adjustments as you in your absolute discretion shall
make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the International
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Underwritten Securities and the International Option Securities (if the option
provided for in Section 2(b) hereof shall have been exercised on or before the
second Business Day prior to the Closing Date) shall be made at 10:00 AM, New
York City time, on , 1997, or at such time on such later
date not more than two Business Days after the foregoing date as the
International Representatives and the Representatives shall designate, which
date and time may be postponed by agreement among the International
Representatives, the Representatives and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the International
Securities being herein called the "Closing Date"). Delivery of the
International Securities shall be made to the International Representatives for
the respective accounts of the several International Underwriters against
payment by the several International Underwriters through the International
Representatives of the respective aggregate purchase prices of the International
Securities being sold by the Company to or upon the order of the Company by wire
transfer payable in same-day funds to an account specified by the Company.
Delivery of the International Underwritten Securities and the International
Option Securities shall be made through the facilities of The Depository Trust
Company unless the International Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the second business day prior to the Closing Date, the Company will deliver the
International Option Securities (at the expense of the Company) to the
International Representatives, at Seven World Trade Center, New York, New York,
on the date specified by the International Representatives (which shall be
within two Business Days after exercise of said option), certificates for the
International Option Securities in such names and denominations as the
International Representatives shall have requested for the respective accounts
of the several International Underwriters, against payment by the several
International Underwriters through the International Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. If settlement
for the International Option Securities occurs after the Closing Date, the
Company will deliver to the International Representatives on the settlement date
for the International Option Securities, and the obligation of the International
Underwriters to purchase the International Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions,
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certificates and letters delivered on the Closing Date pursuant to Section 6
hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the U.S. Underwriting Agreement,
and that the settlement date, if any, shall occur simultaneously with the
"settlement date" under the U.S. Underwriting Agreement.
4. Offering by Underwriters. It is understood that the several
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International Underwriters propose to offer the International Securities for
sale to the public as set forth in the International Prospectus.
5. Agreements.
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(a) The Company agrees with the several International Underwriters
that:
(i) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectuses or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectuses is otherwise required under Rule
424(b), the Company will cause the Prospectuses, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the International Representatives of
such timely filing. The Company will promptly advise the International
Representatives (A) when the Registration Statement, if not effective at
the Execution Time, shall have become effective, (B) when the Prospectuses,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (C) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (D) of
any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectuses or of any additional information, (E) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (F) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance of any such
-12-
stop order or the suspension of any such qualification and, if issued, to
obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which either of the Prospectuses as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or supplement either of the Prospectuses
to comply with the Act or the rules thereunder, the Company promptly will
(i) prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (ii)
supply any supplemented Prospectuses to you in such quantities as you may
reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the International Representatives
an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(iv) The Company will furnish to the International Representatives
and counsel for the International Underwriters, without charge, four (4)
signed copies of the Registration Statement (including exhibits thereto)
and to each other International Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an International Underwriter or dealer may be required by the
Act or otherwise required, as many copies of each International Preliminary
Prospectus and the International Prospectus and any supplement thereto as
the International Representatives may reasonably request. The Company will
pay the expenses of printing or other production of all documents relating
to the offering.
(v) The Company will cooperate with the International
Representatives and counsel for the International Representatives in
connection with endeavoring to obtain qualification of the Securities for
sale under the laws of such jurisdictions as the International
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the International Securities
and will pay any fee of the National Association of Securities Dealers,
Inc., in connection with its review of the offering; provided, however,
that the Company shall not be required to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not otherwise so subject.
(vi) The Company will not, for a period of 180 days following the
Execution Time, without the prior written consent of Salomon Brothers
International Limited, offer, sell or contract to sell, or otherwise
dispose of (or enter into any
-13-
transaction which is designed to, or could be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, or announce the offering
of, any other shares of Ordinary Shares or any securities convertible into,
or exchangeable for, shares of Ordinary Shares; provided, however, that the
-----------------
Company may issue and sell Ordinary Shares pursuant to any employee or
director stock option plan, stock ownership plan or dividend reinvestment
plan of the Company in effect at the Execution Time and described in the
Prospectuses; and the Company may issue Ordinary Shares issuable upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time or pursuant to the Buy-Sell Agreement as disclosed in the
Prospectuses.
(b) Each International Underwriter agrees that (i) it is not
purchasing any of the International Securities for the account of any United
States or Canadian Person, (ii) it has not offered or sold, and will not offer
or sell, directly or indirectly, any of the International Securities or
distribute any International Prospectus to any person in the United States or
Canada, or to any United States or Canadian Person, and (iii) any dealer to whom
it may sell any of the International Securities will represent that it is not
purchasing for the account of any United States or Canadian Person and agree
that it will not offer or resell, directly or indirectly, any of the
International Securities in the United States or Canada, or to any United States
or Canadian Person or to any other dealer who does not so represent and agree;
provided, however, that the foregoing shall not restrict (A) purchases and sales
- -----------------
between the U.S. Underwriters on the one hand and the International Underwriters
on the other hand pursuant to the Agreement Between U.S. Underwriters and
International Underwriters, (B) stabilization transactions contemplated under
the Agreement Between U.S. Underwriters and International Underwriters,
conducted through Salomon Brothers International Limited (or through the
Representatives and International Representatives) as part of the distribution
of the Securities, and (C) sales to or through (or distributions of
International Prospectuses or International Preliminary Prospectuses to) persons
not United States or Canadian Persons who are investment advisors, or who
otherwise exercise investment discretion, and who are purchasing for the account
of any United States or Canadian Person.
(c) The agreements of the International Underwriters set forth in
paragraph (b) of this Section 5 shall terminate upon the earlier of the
following events:
(i) a mutual agreement of the Representatives and the International
Representatives to terminate the selling restrictions set forth in
paragraph (b) of this Section 5 and in Section 5(b) of the U.S.
Underwriting Agreement; or
(ii) the expiration of a period of 30 days after the Closing Date,
unless (A) the International Representatives shall have given notice to the
Company and the Representatives that the distribution of the International
Securities by the International
-14-
Underwriters has not yet been completed, or (B) the Representatives shall
have given notice to the Company and the International Underwriters that
the distribution of the U.S. Securities by the U.S. Underwriters has not
yet been completed. If such notice by the Representatives or the
International Representatives is given, the agreements set forth in such
paragraph (b) shall survive until the earlier of (1) the event referred to
in clause (i) of this subsection (c) or (2) the expiration of an additional
period of 30 days from the date of any such notice.
(d) Each International Underwriter severally represents and agrees
that:
(i) it has not offered or sold and will not offer or sell in the
United Kingdom, by means of any document, any International Securities
other than to persons whose ordinary business it is to buy or sell shares
or debentures, whether as principal or agent or in circumstances which do
not constitute an offer to the public within the meaning of the Companies
Act 1985;
(ii) it has complied and will comply with all applicable provisions
of The Financial Services Act 1986 with respect to anything done by it in
relation to the International Securities, in, from or otherwise involving
the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on
to any person in the United Kingdom any document received by it in
connection with the issue of the International Securities if that person is
of a kind described in Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1992 or a person to whom the
document may otherwise lawfully be issued or passed on.
6. Conditions to the Obligations of the International Underwriters.
---------------------------------------------------------------
The obligations of the International Underwriters to purchase the International
Underwritten Securities and the International Option Securities, as the case may
be, shall be subject to the accuracy of the representations and warranties on
the part of the Company contained herein as of the Execution Time, the Closing
Date and any settlement date pursuant to Section 3 hereof, to the accuracy of
the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives and the International
Representatives agree in writing to a later time, the Registration
Statement will become effective not later than (i) 6:00 PM New York City
time on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such
date or (ii) 9:30 AM on the Business Day following the day on which the
public offering price was determined, if such determination occurred after
3:00 PM New York City time on such date;
-15-
if filing of either of the Prospectuses, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectuses, and any such
supplement, will be filed in the manner and within the time period required
by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the International
Representatives the opinion of W.S. Walker & Company, Cayman Islands counsel for
the Company, dated the Closing Date, to the effect that:
(i) each of the Company and its subsidiaries (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Prospectuses, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification, except where such
breach, violation or imposition would not individually or in the aggregate
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of each Significant
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the
Prospectuses, all outstanding shares of capital stock of the Subsidiaries
are owned directly or indirectly by the Company free and clear of any
perfected security interest and, to the knowledge of such counsel, after
due inquiry, any other security interests, claims, liens or encumbrances;
(iii) the outstanding shares of Ordinary Shares have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by the
International Underwriters pursuant to this Agreement and by the U.S.
Underwriters pursuant to the U.S. Underwriting Agreement, will be fully
paid and nonassessable; the certificates for the Securities are in valid
and sufficient form; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to subscribe
for the Securities;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be disclosed
in the Registration Statement which is not
-16-
adequately disclosed in the Prospectuses, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectuses, or to be filed as an exhibit
thereto, which is not described or filed as required; and the summaries of
legal and regulatory matters and proceedings under the heading "Description
of Ordinary Shares" fairly summarize the matters therein described;
(v) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated herein or in the
U.S. Underwriting Agreement nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the charter or by-laws of the Company or its
subsidiaries or (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which their respective
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or its subsidiaries or
their respective properties, except where such breach, violation or
imposition would not individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole;
(vi) The Company's agreement to the choice of law provisions set
forth in Section 15 hereof and in Section 14 of the U.S. Underwriting
Agreement will be recognized by the courts of the Cayman Islands; the
Company can sue and be sued in its own name under the laws of the Cayman
Islands, the irrevocable submission of the Company to the non-exclusive
personal jurisdiction of a New York Court, the waiver by the Company of any
objection to the venue of a proceeding of a New York Court and the
agreement of the Company that this Agreement shall be governed by and
construed in accordance with the laws of the State of New York are legal,
valid and binding; and judgment obtained in a New York Court arising out of
or in relation to the obligations of the Company under this Agreement and
the U.S. Underwriting Agreement, not being a sum payable in respect of
taxes or other charges of a like nature or a fine or other penalty, is
enforceable against the Company in the courts of the Cayman Islands; and
(vii) The Company is not entitled to any immunity on the basis of
sovereignty or otherwise in respect of its obligations under this Agreement
or the U.S. Underwriting Agreement and could not successfully interpose any
such immunity as a defense in any suit or action brought or maintained in
respect of its obligations under this Agreement or the U.S. Underwriting
Agreement.
-17-
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the laws of the
Cayman Islands, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the U.S. Underwriters and (B)
as to matters of fact, to the extent they deem proper, on certifi cates of
responsible officers of the Company and public officials. Reference to the
Prospectuses in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Company shall have furnished to the International
Representatives the opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
counsel for the Company, dated the Closing Date, to the effect that:
(i) each of the Company and its subsidiaries incorporated in the
United States (individually a "Domestic Subsidiary" and collectively the
"Domestic Subsidiaries") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and authority
to own its properties and conduct its business as described in the
Prospectuses, and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires
such qualification, except where such breach, violation or imposition would
not individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of each Domestic
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the
Prospectuses, all outstanding shares of Ordinary Shares of the Domestic
Subsidiaries are owned by the Company, directly or indirectly, free and
clear of any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests, claims, liens or
encumbrances;
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectuses; the Ordinary Shares of the Company conform in all
material respects to the description thereof contained in the Prospectuses;
the Securities being sold hereunder by the Company are duly authorized for
listing, subject to official notice of issuance, on the American Stock
Exchange; and, except as set forth in the Prospectuses, to such counsel's
knowledge, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of Ordinary Shares or ownership
interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened
-18-
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectuses, and there
is no franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectuses, or to be filed as
an exhibit thereto, which is not described or filed as required; the
descriptions contained in the Prospectuses under the heading "Taxation"
constitute fair summaries of those statues and regulations discussed
therein applicable to the offering of the U.S. Securities;
(v) the Registration Statement has become effective under the Act;
any required filing of the Prospectuses, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened
and the Registration Statement and each of the Prospectuses (other than the
financial statements and other financial information contained therein, as
to which such counsel need not express any opinion) comply as to form in
all material respects with the applicable requirements of the Act and the
rules thereunder; and such counsel has no reason to believe that on the
Effective Date or at the Execution Time the Registration Statement contains
or contained any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectuses as of their
date and on the Closing Date include any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (in each case, other than the financial statements and
other financial information contained therein, as to which such counsel
need not express any opinion);
(vi) this Agreement and the U.S. Underwriting Agreement have been
duly authorized, executed and delivered by the Company;
(vii) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction (and the securities laws of any jurisdiction outside the
United States) in connection with the purchase and
-19-
distribution of the Securities by the International Underwriters in the
manner contemplated in this Agreement and in the Prospectuses and such
other approvals (specified in such opinion) as have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated herein or in the
U.S. Underwriting Agreement nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or its
subsidiaries is a party or bound or to which their respective property is
subject, or (ii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or its subsidiaries or
any of its or their respective properties, except where such breach,
violation or imposition would not individually or in the aggregate have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole; and
(x) Except as set forth in the Prospectuses, no holders of securities
of the Company have rights to the registration of such securities under the
Securities Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the International Underwriters and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company and
public officials. Reference to the Prospectuses in this paragraph (b) include
any supplements thereto at the Closing Date.
(d) The Company shall have furnished to the International
Representatives the opinion of Quintanilla & Soria, Bolivian counsel for the
Company, dated the Closing Date, with respect to matters of title and to
corporate status in Bolivia and other related matters as the International
Representatives may reasonably require.
(e) The Company shall have furnished to the International
Representatives the opinion of Bufete Gutierrez-Falla, Honduran counsel for the
Company, dated the Closing Date, with respect to matters of title and to
corporate status in Honduras and other related matters as the International
Representatives may reasonably require.
(f) The Company shall have furnished to the International
Representatives
-20-
the opinion of Rodriguez-Mariategui & Vidal, Peruvian counsel for the Company,
dated the Closing Date, with respect to matters of title and corporate status in
Peru and other related matters as the International Representative may
reasonably require.
(g) The International Representatives shall have received from
Winston & Strawn, counsel for the International Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale of the
International Securities, the Registration Statement, the Prospectuses (together
with any supplement thereto) and other related matters as the International
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(h) The Company shall have furnished to the International
Representatives a certificate of the Company, signed by the Chairman of the
Company and the Vice President of Finance and Chief Financial Officer of Apex
Corporation, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectuses, any supplements to the Prospectuses and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectuses (exclusive of any supplement thereto), there has been
no material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectuses (exclusive of any supplement thereto).
(i) At the Execution Time and at the Closing Date, Price Waterhouse,
LLP shall have furnished to the International Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the International Representatives, confirming that
they are independent accountants within the meaning of the Act and the
applicable published rules and regulations thereunder and stating in effect
that:
(i) in their opinion the audited financial statements and financial
statement
-21-
schedules included in the Registration Statement and the Prospectuses and
reported on by them comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71 of the unaudited interim financial information
for the nine month period ended September 30, 1997, and as at September 30,
1996; carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments set
forth in such letter; a reading of the minutes of the meetings of the
stockholders, directors and audit committees of the Company and the
Subsidiaries; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to December 31, 1996,
nothing came to their attention which caused them to believe that :
(1) any unaudited financial statements included in the
Registration Statement and the Prospectuses do not comply in form in
all material respects with applicable accounting requirements of the
Act and with the published rules and regulations of the Commission
with respect to registration statements on Form S-1; and said
unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in
the Registration Statement and the Prospectuses;
(2) with respect to the period subsequent to September 30, 1997,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the accumulated deficit of the
Company and its subsidiaries or capital stock of the Company or
decreases in the shareholders' equity of the Company as compared with
the amounts shown on the September 30, 1997, consolidated balance
sheet included in the Registration Statement and the Prospectuses, or
for the period from October 1, 1997 to such specified date there were
any decreases, as compared with the corresponding period in the
preceding year; in interest income or in total or per share amounts of
interest income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter, in which
case the letter shall be accompanied by an explanation by the Company
as to the significance thereof unless said explanation is not deemed
necessary by the International Representatives;
(3) The unaudited amounts of [describe the capsule information
-22-
and its location] do not agree with the amounts set forth in
the unaudited financial statements for the same periods or were
not determined on a basis substantially consistent with that of
the corresponding amounts in the audited financial statements
included in the Registration Statement and the Prospectuses;
(4) the information included in the Registration
Statement and Prospectuses in response to Regulation S-K, Item
301 (Selected Financial Data), Item 302 (Supplementary
Financial Information) and Item 402 (Executive Compensation) is
not in conformity with the applicable disclosure requirements
of Regulation S-K; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the
Prospectuses agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectuses in this paragraph (i)
include any supplement thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectuses (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (i) of this Section 6 or (ii) any change, or
any development involving a prospective material change, in or affecting the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectuses (exclusive of any supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the International Representatives, so material and adverse as
to make it impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Prospectuses (exclusive of any supplement
thereto).
(k) On or prior to the Execution Time, the American Stock
Exchange shall have approved the International Underwriters' participation in
the distribution of the International Securities to be sold hereunder.
(l) At the Execution Time, the Company shall have furnished
to the International Representatives a letter substantially in the form of
Exhibit __ hereto from each
-23-
officer and director of the Company addressed to the International
Representatives, in which each such person agrees not to offer, sell, contract
to sell, pledge or otherwise dispose of, or file a registration statement with
the Commission in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act with respect to, any shares of Ordinary Shares of
the Company or any securities convertible into or exercisable or exchangeable
for such Ordinary Shares or publicly announce an intention to effect any such
transaction, for a period of 180 days after the date of this Agreement, other
than (i) any shares of Ordinary Shares to be sold hereunder, (ii) any option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus to which this Agreement relates and (iii) other
than shares of Ordinary Shares disposed of as bona fide gifts approved by
Salomon Brothers International Limited.
(m) Prior to the Closing Date, the Company shall have
furnished to the International Representatives such further information,
certificates and documents as the International Representatives may reasonably
request.
(n) The closing of the purchase of the U.S. Underwritten
Securities to be issued and sold by the Company pursuant to the U.S.
Underwriting Agreement shall occur concurrently with the closing described
herein.
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the International Representatives and
counsel for the International Underwriters, this Agreement and all obligations
of the International Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the International Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel
for the Company, at 590 Madison Avenue, New York, New York, on the Closing Date.
7. Reimbursement of International Underwriters' Expenses. If
-----------------------------------------------------
the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the International Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the International Underwriters, the
Company will reimburse the International Underwriters severally through Salomon
Brothers International Limited on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in
-24-
connection with the proposed purchase and sale of the International Securities.
8. Indemnification and Contribution. (a) The Company
--------------------------------
agrees to indemnify and hold harmless each International Underwriter, the
directors, officers, employees and agents of each International Underwriter and
each person who controls any International Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in any U.S. or International
Preliminary Prospectus or in either of the Prospectuses, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any International Underwriter
through the International Representatives specifically for inclusion therein,
and (ii) such indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any International Underwriter (or any person controlling
such International Underwriter) from whom the person asserting such loss, claim,
damage, or liability purchased the International Securities which are the
subject thereof if such person did not receive a copy of the International
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendment or supplement thereto) at or prior to the confirmation of the sale
of such International Securities to such person in any case where such delivery
is required by the Act and the untrue statement or omission of a material fact
contained in such preliminary prospectus was corrected in the Prospectuses (as
so amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each International Underwriter severally agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity to each International Underwriter, but only
with reference to written information relating to such International Underwriter
furnished to the Company by or on behalf of such International Underwriter
through the International Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability
-25-
which any International Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the International Securities, the stabilization legend in block
capital letters on page (ii) and, under the heading "Underwriting" or ["Plan of
Distribution",] (i) the sentences related to concessions and reallowances and
(ii) the paragraph related to stabilization in any U.S. or International
Preliminary Prospectus and the Prospectuses constitute the only information
furnished in writing by or on behalf of the several International Underwriters
for inclusion in any U.S. or International Preliminary Prospectus or the
Prospectuses.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than pursuant to the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided however, that such counsel shall be reasonably satisfactory to the
- -------- ------
Party Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
-26-
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the International Underwriters
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the International Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and by the International Underwriters from the offering of the
International Securities; provided, however, that in no case shall any
-------- -------
International Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the International Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such International Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the International Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the
International Underwriters in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by it, and
benefits received by the International Underwriters shall be deemed to be equal
to the total underwriting discounts and commissions, in each case as set forth
on the cover page of the International Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company, or the
International Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the International Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
International Underwriter within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of an International
Underwriter shall have the same rights to contribution as such International
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an International Underwriter. If any one or
---------------------------------------
more International Underwriters shall fail to purchase and pay for any of the
International Securities agreed to be purchased by such International
Underwriter or International Underwriters
-27-
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
International Underwriters shall be obligated severally to take up and pay for
(in the respective proportions which the amount of International Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount
of International Securities set forth opposite the names of all the remaining
International Underwriters) the International Securities which the defaulting
International Underwriter or International Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
-------- -------
International Securities which the defaulting International Underwriter or
International Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate amount of International Securities set forth in Schedule I hereto, the
remaining International Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the International
Securities, and if such nondefaulting International Underwriters do not purchase
all the International Securities, this Agreement will terminate without
liability to any nondefaulting International Underwriter or the Company. In the
event of a default by any International Underwriter as set forth in this Section
9, the Closing Date shall be postponed for such period, not exceeding five
Business Days, as the International Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectuses or
in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting International Underwriter of its
liability, if any, to the Company and any nondefaulting International
Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
-----------
termination in the absolute discretion of the International Representatives, by
notice given to the Company prior to delivery of and payment for the
International Securities, if at any time prior to such time (i) trading in the
Company's Ordinary Shares shall have been suspended by the Commission or the
American Stock Exchange or trading in securities generally on the New York Stock
Exchange or the American Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on either of such Exchanges, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the International Representatives, impractical
or inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the International Prospectus (exclusive of any supplement.
11. Representations and Indemnities to Survive. The
------------------------------------------
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the International Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any
International Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the International Securities. The provisions of Sections 7
and 8 hereof shall survive the
-28-
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
-------
and effective only on receipt, and, if sent to the International
Representatives, will be mailed, delivered or telefaxed to the Salomon Brothers
International Limited General Counsel (fax no.: (212) 783-1752) and confirmed to
the General Counsel, care of Salomon Brothers International Limited, at Victoria
Plaza, 111 Buckingham Palace Road, London SW1W 0SB ENGLAND, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Thomas S. Kaplan (facsimile number ) and confirmed to him at Apex Silver Mines
Corporation, 1700 Lincoln Street, Suite 3050, Denver, Colorado 80203, attention
of the Legal Department.
13. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
--------------
construed in accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be signed in one or
------------
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
--------
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
-----------
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments thereto and
any Rule 462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Execution Time" shall mean the date and time that this
Agreement is
-29-
executed and delivered by the parties hereto.
"International Preliminary Prospectus" shall have the meaning
set forth under "U.S. Preliminary Prospectus."
"Preliminary Prospectus" shall have the meaning set forth
under "U.S. Preliminary Prospectus."
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the Execution Time
or, if no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any Rule
430A Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect
to the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration statement.
"U.S. Preliminary Prospectus" and the "International
Preliminary Prospectus", respectively, shall mean any preliminary prospectus
with respect to the offering of the U.S. Securities and the International
Securities, as the case may be, referred to in paragraph (i) above and any
preliminary prospectus with respect to the offering of the U.S. Securities and
the International Securities, as the case may be, included in the Registration
Statement at the Effective Date that omits Rule 430A Information; and the U.S.
Preliminary Prospectus and the International Preliminary Prospectus are
hereinafter collectively called the "Preliminary Prospectuses".
"United States or Canadian Person" shall mean any person who
is a national
-30-
or resident of the United States or Canada, any corporation, partnership, or
other entity created or organized in or under the laws of the United States or
Canada or of any political subdivision thereof, or any estate or trust the
income of which is subject to United States or Canadian Federal income taxation,
regardless of its source (other than any non-United States or non-Canadian
branch of any United States or Canadian Person), and shall include any United
States or Canadian branch of a person other than a United States or Canadian
Person. "U.S." or "United States" shall mean the United States of America
(including the states thereof and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
-31-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several International Underwriters.
Very truly yours,
Apex Silver Mines Limited
By:
--------------------------------
Chairman
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers International Limited
PaineWebber International
ABN AMRO Rothschild
Smith Barney Inc.
By: Salomon Brothers International Limited
By:
...........................................
Vice President
For themselves and the other
several International Underwriters
named in Schedule I to the foregoing
Agreement.
-32-
SCHEDULE I
----------
Number of Shares
to be
Underwriters Purchased
- ------------ ----------------------
Salomon Brothers International Limited. . . . . . .
PaineWebber International. . . . . . .
ABN AMRO Rothschild. . . . . . .
Smith Barney Inc. . . . . . .
-------------
Total . . . . . . . . . 1,800,000
=========
EXHIBIT __
[Letterhead of officer or director of the Company]
Apex Silver Mines Limited
-------------------------
Public Offering of Ordinary Shares
----------------------------------
, 1997
Salomon Brothers International Limited
PaineWebber International
ABN AMRO Rothschild
Smith Barney Inc.
As Representatives of the several International Underwriters,
c/o Salomon Brothers International Limited
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
International Underwriting Agreement (the "Underwriting Agreement"), between
Apex Silver Mines Limited, a Cayman Islands corporation (the "Company"), and
each of you as representatives of a group of Underwriters named therein,
relating to an underwritten public offering of Ordinary Shares, $.01 par value
(the "Ordinary Shares"), of the Company.
In order to induce you and the other International Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Salomon Brothers International Limited, offer, sell, contract
to sell, pledge or otherwise dispose of, or file a registration statement with
the Commission in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act with respect to, any shares of capital stock of
the Company or any securities convertible into or exercisable or exchangeable
for such capital stock, or publicly announce an intention to effect any such
transaction, for a period of 180 days after the date of this Agreement, other
than (i) any shares of Ordinary Shares to be sold hereunder, (ii) any option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus to which this Agreement relates and (iii) shares
of Ordinary Shares disposed of as bona fide gifts approved by Salomon Brothers
International Limited.
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
[Signature of officer or director]
[Name and address of officer or director]