EXHIBIT 1.3
Amax Gold Inc.
Underwriting Agreement
New York, New York
August 4, 1994
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
As Representatives of the several Underwriters
Ladies and Gentlemen:
Amax Gold Inc., a Delaware corporation (the "Company"), proposes to sell to
the underwriters named in Schedule I hereto (the "Underwriters"), for whom you
are acting as representatives (the "Representatives"), 1,600,000 shares of its
$3.75 Series B Convertible Preferred Stock, $1.00 par value per share (the
"Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option, exercisable by the Representatives, to purchase up to
240,000 additional shares of such Series B Convertible Preferred Stock (the
"Option Securities"; the Option Securities that may be sold to the Underwriters,
together with the Underwritten Securities, being hereinafter called the
"Securities").
1. Representations and Warranties.
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The Company represents and warrants to, and agrees with, each Underwriter
that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (file number
33-53963) on such Form, including a related basic prospectus, in accordance
with Rule 415 (a)(1)(x) and Rule 424(b) for the registration under the Act of
the offering and sale of $200,000,000 principal amount of securities. The
Company may have filed one or more
amendments thereto, each of which has previously been furnished to you. Such
registration statement and amendments thereto have become effective prior to
the date of this Agreement. Such registration statement, as amended at the
date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(x)
and complies in all material respects with such Rule. The Company has filed
with the Commission pursuant to the applicable paragraphs of Rule 415 and Rule
424(b) a preliminary supplement to the form of prospectus included in such
registration statement relating to the Securities and plan of distribution
thereof (the "Preliminary Prospectus Supplement"). The Company has filed or
will file with the Commission pursuant to the applicable paragraphs of Rule
415 and Rule 424(b) a final supplement to the form of prospectus included in
such registration statement relating to the Securities and plan of
distribution thereof (the "Prospectus Supplement"). As filed, the Prospectus
Supplement shall be in all substantive respects in the form furnished to you
prior to the Execution Time (as such term is defined in the immediately
following paragraph) or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes as
the Company has advised you, prior to the Execution Time, will be included or
made therein and to which you shall not have objected.
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date and
time that this Agreement is executed and delivered by the parties hereto.
"Material Subsidiaries" shall mean, collectively, the following: AGI Chile
Credit Corp., Inc., a Delaware corporation, Amax Gold B.C. Ltd, a British
Columbia corporation, Amax Gold Exploration, Inc., a Delaware corporation,
Amax Gold Refugio, Inc., a Delaware corporation, Amax Precious Metals, Inc., a
Delaware corporation, Compania Minera Amax Guanaco (90% owned by the Company),
a Chile corporation, Compania Minera Maricunga (50% owned by the Company), a
Chile corporation, Fairbanks Gold Ltd., a British Columbia corporation,
Fairbanks Gold Mining, Inc., a Delaware corporation, Haile Mining Company,
Inc., a Delaware corporation, Guanaco Mining Company, Inc., a Delaware
corporation, Lancaster Mining Company, Inc., a Delaware corporation, Lassen
Gold Mining, Inc., a Delaware corporation, Melba Creek Mining, Inc., an Alaska
corporation, Nevada Gold Mining, Inc., a Delaware corporation and Wind
Mountain Mining, Inc., a Delaware corporation. "Basic Prospectus" shall mean
the form of basic prospectus contained in the Registration Statement at the
Effective Date. "Prospectus" shall mean the Basic Prospectus as supplemented
by the Prospectus Supplement. "Preliminary Prospectus" shall mean any
preliminary prospectus
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with respect to the offering of the Securities referred to in the preceding
paragraph, including, without limitation, the Preliminary Prospectus
Supplement. "Registration Statement" shall mean the registration statement
referred to in the preceding paragraph, including documents incorporated by
reference, exhibits and financial statements, as amended at the Execution Time
and, in the event, if any, that any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined) or any settlement
date pursuant to Section 3 hereof, shall also mean such registration statement
as so amended on such date. Such term shall include Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such rules
under the Act. "Rule 430A Information" means 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. Any
reference herein to the Registration Statement, any Preliminary Prospectus,
the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934 (the "Exchange Act") on or before the Effective Date or the date
of such Preliminary Prospectus, the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date or the date of any Preliminary Prospectus, the Basic Prospectus, the
Prospectus Supplement or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(b) No order preventing or suspending the use of any Preliminary
Prospectus, the Basic Prospectus, the Prospectus Supplement or the Prospectus
has been received by the Company. Each of the Preliminary Prospectuses, at the
time of filing thereof, conformed in all material respects to the requirements
of the Act and the rules and regulations thereunder and with respect to
documents incorporated therein by reference the Exchange Act and the rules and
regulations thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
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that the Company makes no representations or warranties as to the information
contained in or omitted from any Preliminary Prospectus in reliance upon and
in conformity with information forwarded in writing to the
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Company by or on behalf of any Underwriter through the Representatives
specifically for use therein.
(c) On the Effective Date, at the Execution Time, when the Prospectus
Supplement is first filed with the Commission in accordance with Rule 424(b),
on the Closing Date and on any settlement date pursuant to Section 3 hereof,
(i) the Registration Statement, as amended as of each such time, and the
Prospectus, as supplemented as of each such time, did and will comply in all
material respects with the applicable requirements of the Act and the rules
and regulations thereunder and, with respect to the documents incorporated
therein by reference, the Exchange Act and the rules and regulations
thereunder; (ii) the Registration Statement, as amended as of each such time,
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, (iii) the Prospectus, as
supplemented as of each such time, did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading; provided, however, that
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the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or Prospectus, as
supplemented as of each such time, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for use therein.
(d) The documents incorporated by reference in the Registration
Statement and Prospectus pursuant to Item 12 of Form S-3, at the times they
were filed with the Commission, complied in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder and,
when read together with the other information in the Prospectus, on the
Effective Date, when the Preliminary Prospectus Supplement was first filed
with the Commission in accordance with Rule 424(b), at the Execution Time,
when the Prospectus Supplement is first filed with the Commission in
accordance with Rule 424(b), on Closing Date, and on any settlement date
pursuant to Section 3 hereof, did not and will not contain an untrue statement
of a material fact or omit to state a material fact.
(e) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under: (i) any
statute, any indenture, mortgage, deed of trust, credit agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which any of them is bound or to which any of the property of the
Company or any of its
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subsidiaries is subject, which in any such case is material to the Company and
its subsidiaries considered as a whole; (ii) the Company's or any of its
subsidiaries' certificate or articles of incorporation or by-laws; or (iii)
any order, rule or regulation of any Federal, state, local or foreign court or
governmental agency or body having jurisdiction over the Company, any of its
subsidiaries or any of their respective properties, which in any such case is
material to the Company and its subsidiaries considered as a whole. No
consent, approval, authorization or order of, or filing with, any Federal,
state, local or foreign court or governmental agency or body is required for
the consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Securities except such as may be
required by The National Association of Securities Dealers, Inc. or under the
Act or state securities or blue sky laws.
(f) Neither the Company nor any of its subsidiaries is in violation of
any term of its certificate or articles of incorporation or by-laws. Neither
the Company nor any of its subsidiaries is in violation of any term of any
license, contract, instrument or other agreement, or, to the Company's
knowledge, after due inquiry, any judgment, decree, order, statute, rule or
governmental regulation applicable to it which violation or violations,
individually or in the aggregate, has resulted in, or could be reasonably
anticipated to result in, a material adverse effect on the Company and its
subsidiaries considered as a whole.
(g) All contracts, agreements, instruments, leases, licenses, claims,
concessions and governmental permits required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed.
(h) The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Prospectus and
elsewhere in the Registration Statement, fairly present, on the basis stated
therein, the financial position and results of operations and cash flows of
the entities covered thereby at the respective dates and for the respective
periods therein specified. Such financial statements and related notes and
schedules have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the respective periods
involved, except as noted therein, fairly present on the basis set forth
therein the information set forth therein, and are in accordance with the
books and records of the entities covered thereby. Any quarterly or other
unaudited interim financial statements, and the related notes and schedules
thereto, included or incorporated by reference in the Prospectus and elsewhere
in the Registration Statement
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have been prepared in compliance with the applicable requirements of the Act
and the rules and regulations thereunder and of the Exchange Act and the rules
and regulations thereunder and have been prepared on a basis substantially
consistent with that of the applicable audited consolidated financial
statements included or incorporated by reference in the Registration Statement
and Prospectus, except as described therein. The selected financial data set
forth in the Prospectus under the captions "Ratio of Earnings to Fixed
Charges", "Summary Consolidated Financial Information," "Gold Production and
Production Costs" and "Capitalization" fairly presents, on the basis stated in
the Prospectus, the information set forth therein. No other financial
statements are required by Form S-3 or otherwise to be included or
incorporated by reference in the Registration Statement or Prospectus. The
reserve data set forth in the Registration Statement, Prospectus and
Prospectus Supplement under the caption "Proven/Probable Gold Ore Reserves"
presents a fair summary of the information described therein.
(i) Coopers & Lybrand, who have certified the financial statements of the
Company and its consolidated subsidiaries, are, and during the periods covered
by their respective reports included or incorporated by reference in the
Registration Statement were, independent public accountants as required by the
Act and the applicable rules and regulations thereunder. Price Waterhouse, the
Company's accountants since March 1, 1994, are independent public accountants
as required by the Act and the applicable rules and regulations thereunder.
(j) Each of the Company and its Material Subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and its
Material Subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be
so qualified or in good standing that could not individually or in the
aggregate have a material adverse effect on the Company and its Material
Subsidiaries considered as a whole. Each of the Company and its Material
Subsidiaries has all requisite corporate power and authority to own, lease,
license, mine and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and Prospectus.
(k) As of the date of this Agreement, the issued shares of Common Stock
and Preferred Stock of the Company conform to the description thereof in the
Prospectus and have been duly
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authorized and validly issued and are fully paid and nonassessable and were
not issued in violation of or subject to any preemptive or other rights; the
stockholders of the Company have no preemptive rights with respect to any
shares of capital stock of the Company; and all outstanding shares of capital
stock of each Material Subsidiary have been duly authorized and are or will be
validly issued, fully paid and nonassessable and were not issued or will not
be issued, as the case may be, in violation of or subject to any preemptive or
other rights and are owned directly by the Company or by another subsidiary of
the Company free and clear of any liens, encumbrances, equities or claims
except as described in the Notes to the Consolidated Financial Statements of
the Company contained in its Annual Report on Form 10-K for the year ended
December 31, 1993. There is no commitment, plan or arrangement to issue, and
no outstanding option, warrant or other right or security calling for the
issuance of, any share of capital stock of the Company or any of its Material
Subsidiaries, or any security or other instrument which by its terms is
convertible into or exchangeable or exercisable for any capital stock of the
Company or any of its Material Subsidiaries, except as described in the
Prospectus. The Securities to be issued and sold by the Company to the
Underwriters hereunder when issued, delivered and sold in accordance with this
Agreement will be duly and validly issued and outstanding, fully paid and
nonassessable, and will not have been issued in violation of or subject to any
preemptive or other rights. The shares of the Company's common stock, $.01 par
value per share ("Common Stock"), issuable upon conversion of the Securities
have been duly authorized and validly reserved for issuance and when issued at
the option of the holders thereof upon conversion of the Securities shall be
validly issued, fully paid and nonassessable and shall not have been issued in
violation of or subject to any preemptive or other rights.
(l) The Company has full corporate power and authority to enter into this
Agreement and to issue, sell and deliver the Securities to be issued, sold and
delivered by it hereunder and this Agreement has been duly and validly
authorized, executed and delivered by the Company.
(m) No person or entity has the right to require registration of shares of
Common Stock, Preferred Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement or offering or sale
of the Securities.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as described therein, (i)
there has been no material adverse change in the condition, financial or
otherwise, of
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the Company or any of its Material Subsidiaries or in the earnings, business,
properties or prospects of the Company or any of its Material Subsidiaries,
whether or not arising in the ordinary course of business, (ii) there have
been no transactions material to the Company or any of its Material
Subsidiaries entered into by the Company or any of its Material Subsidiaries,
other than those entered into in the ordinary course of business consistent
with past custom and practice and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(o) Except as described in the Registration Statement and Prospectus, the
Company and each of its Material Subsidiaries possess all consents, approvals,
certificates, authorizations, registrations, qualifications, licenses,
concessions and permits issued by the appropriate Federal, state, local and
foreign public, regulatory or governmental agencies or bodies necessary to
own, lease, mine and operate its properties, as the Company and its Material
Subsidiaries currently own, lease, mine and operate its properties and to
conduct the business now operated by it as described in the Registration
Statement and Prospectus, the absence of which could reasonably be expected to
have a material adverse effect on the Company and its Material Subsidiaries
considered as a whole, and neither the Company nor any of its Material
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such consent, approval, certificate, authorization,
registration, qualification, license, concession or permit which, individually
or in the aggregate, could reasonably be expected to have a material adverse
affect on the Company and its Material Subsidiaries considered as a whole.
(p) Each of the Company and its Material Subsidiaries has sufficient
title to all of its properties and assets to conduct its business as presently
conducted and as contemplated to be conducted as described in the Registration
Statement and Prospectus. Except as described or incorporated by reference in
the Registration Statement and Prospectus, such properties and assets are
owned by the Company or such Material Subsidiary, as the case may be, free and
clear of all material liens, charges, encumbrances or restrictions.
(q) All subsidiaries of the Company other than Material Subsidiaries,
considered in the aggregate, would not constitute a "significant subsidiary"
under Commission Regulation S-X.
(r) Except as disclosed in the Registration Statement and Prospectus and
except as would not individually or in the aggregate have a material adverse
effect on the Company and
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its Material Subsidiaries considered as a whole, (i) the Company and its
Material Subsidiaries are each in compliance with all applicable Environmental
Laws, (ii) the Company and its Material Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, and (iii) there are no
pending or, to the best knowledge of the Company, threatened Environmental
Claims against the Company or any of its Material Subsidiaries.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any Federal, state, local or
foreign statute, law, rule, regulation, ordinance or code or any judicial or
administrative order, consent decree or judgment binding on the Company or one
of the Material Subsidiaries, relating to the environment, health or safety or
any hazardous material or substance, exposure to which is prohibited or
regulated by any governmental authority. "Environmental Claims" means any and
all administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law.
(s) The Securities and the shares of Common Stock issuable upon
conversion of the Securities have been authorized for trading on the New York
Stock Exchange subject to notice of issuance or sale, as the case may be.
(t) Neither the Company nor any of its officers, directors or affiliates
(as defined in the Act and the rules and regulations thereunder) has taken or
will take, directly or indirectly, any action designed to or which has
constituted or which could be anticipated to cause or result, under the Act,
the Exchange Act or otherwise, in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities.
(u) The Company and each of its subsidiaries is in compliance with
Florida blue sky law relating to disclosure of issuers doing business with
Cuba. The Company is not presently doing business with the government of Cuba
or with any person or affiliate located in Cuba and will notify the Florida
Department of Banking and Finance, Division of Securities and Investor
Protection, if the Company or any of its subsidiaries commences doing business
with the government of Cuba or any person or affiliate located in Cuba.
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 Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase
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from the Company at a purchase price of $48.38 per share, the amount of the
Underwritten Securities set forth opposite such 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 Underwriters to purchase, severally and not jointly, up to
225,000 shares of the Option Securities at the same purchase price per share as
the Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the 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 Prospectus upon written or telegraphic notice by the Representatives
to the Company setting forth the number of Option Securities as to which the
several Underwriters are exercising the option and the settlement date.
Delivery of certificates for the Option Securities by the Company, and payment
therefor to the Company, shall be made as provided in Section 3 hereof. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as the Representatives in their absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
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Securities and the Option Securities that are purchased by the Underwriters (if
the option provided for in Section 2(b) hereof shall have been exercised on or
before the third business day prior to the Closing Date) shall be made at the
offices of Davis, Graham & Stubbs, 370 17th Street, Denver, Colorado, at 9:00
AM, Denver time, on August 11, 1994, or such later date (not later than August
18, 1994) as the Representatives shall designate, which place may be moved by
agreement of the Representatives and Company to such other location as may be
agreed upon and which date and time may be postponed by agreement between the
Representatives and Company or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the aggregate purchase price of the
Securities being sold by the Company to or upon the order of the Company by
certified or official bank check or checks drawn on or by a New York Clearing
House bank and payable in next day funds. Certificates for the Securities shall
be registered in such names and denominations as the Representatives may request
not less than three business days in advance of the Closing Date.
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The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York not later
than 1:00 PM, two business days prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised after the
third business day prior to the Closing Date, the Company will deliver (at the
expense of the Company) to the Representatives, at Salomon Brothers Inc, Seven
World Trade Center, New York, New York 10048 or at such other place as the
Representatives may direct, on the date specified by the Representatives (which
shall be within three business days after exercise of said option), certificates
for the Option Securities to be purchased by the Underwriters in such names and
denominations as the Representatives shall have requested against payment of the
purchase price thereof to or upon the order of the Company by certified or
official bank check or checks drawn on or by a New York Clearing House bank and
payable in next day funds. If settlement for the Option Securities occurs after
the Closing Date, the Company will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of the
Underwriters to purchase such Option Securities to be purchased by them shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
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Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
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(a) The Company will use all reasonable efforts to cause the Registration
Statement, and any amendment thereof, if not effective at the Execution Time,
to become effective. The Company will cause the Prospectus Supplement,
properly completed and in form and substance reasonably acceptable to the
Representatives, to be filed with the Commission pursuant to Rule 424(b)
within the time period prescribed and will provide evidence satisfactory to
the Representatives of such timely filing. The Company will promptly advise
the Representatives (i) when the Prospectus, and any supplement thereof, shall
have been filed with the Commission pursuant to Rule 424(b) or otherwise, (ii)
when any amendment of the Registration Statement shall have been filed or
become effective, (iii) of any request by the Commission for any amendment or
supplement of the Registration Statement or Prospectus or for any additional
information, (iv) of the receipt by the Company of any stop order suspending
the effectiveness of the Registration Statement or the institution
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or threatening of any proceeding for that purpose and (v) 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 not file
any amendment of the Registration Statement or supplement to the Prospectus
unless the Company has furnished to you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which you
reasonably object. The Company will use all reasonable efforts to prevent the
issuance of any such stop order and, if issued, will use all reasonable
efforts to obtain as soon as practicable the withdrawal thereof.
(b) 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
the Registration Statement, as then amended, or the Prospectus, as then
supplemented, would include any untrue statement of a material fact or omit to
state any material fact, any facts or events arise which, individually or in
the aggregate, would represent a material change in the information set forth
in the Registration Statement, as then amended, or the Prospectus, as then
supplemented, or if it shall be necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act or the rules or
regulations thereunder or, with respect to any information incorporated by
reference in the Registration Statement or Prospectus, the Exchange Act or the
rules or regulations thereunder, the Company will promptly (i) prepare and
file with the Commission, subject to paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission, reflect
such change or effect such compliance and (ii) supply such amended
Registration Statement or supplemented Prospectus to the Representatives in
such quantities as they may reasonably request.
(c) As soon as practicable, the Company will make generally available to
its security holders and to the 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.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement and
all amendments thereto (including all exhibits thereto) and to each other
Underwriter a copy of the Registration Statement and all amendments thereto
(without exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of the
Prospectus and any Preliminary
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Prospectus and any supplements thereto as the Representatives may request.
(e) The Company will arrange for the qualification of the Securities for
sale under the laws of such jurisdictions as the Representatives may designate
and will maintain such qualifications in effect for so long as required for
the distribution of the Securities; provided, that no such qualification shall
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be required in any jurisdiction where, solely as a result thereof, the Company
would be subject to taxation or qualification as a foreign corporation doing
business in such jurisdiction where it is not now so qualified or required to
take any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. In addition, the Company will
arrange for the determination of the legality of the Securities for purchase
by institutional investors and will pay the fee of the National Association of
Securities Dealers, Inc. in connection with its review of the offering.
(f) The Company will reserve and keep available at all times, free of
preemptive and other rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion of the Securities.
(g) Neither the Company nor any of its directors or officers will, for a
period of 90 days following the Execution Time, without the prior written
consent of the Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, (i) any
shares of Common Stock or any securities convertible into, or exchangeable
for, shares of Common Stock or (ii) shares of any class of capital stock of
the Company which is preferred as to the payment of dividends, or as to the
distribution of assets upon any liquidation or dissolution of the Company,
over shares of any other class of capital stock of the Company; provided,
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however, that the Company may offer, issue and sell Common Stock pursuant to
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the Directors' Deferred Compensation Plan, the Nonemployee Directors' Stock
Grant Plan, or any employee stock option plan, thrift plan, excess benefit
plan or dividend reinvestment plan of the Company in effect at the Execution
Time, the DOCLOC Agreement and the Stock Purchase Agreement and the Company
may issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding on the date of this Agreement.
(h) The Company will use all reasonable efforts to maintain the listing
of the Securities and the shares of Common Stock issuable upon conversion of
the Securities on The New York Stock Exchange.
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(i) The Company will promptly deliver to the Representatives copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Securities under the Act or The New
York Stock Exchange in connection with the listing of the Securities and of
the shares of Common Stock issuable upon conversion of such Securities.
(j) Prior to the Closing Date, the Company will issue no press release
or other communication directly or indirectly and hold no press conference
with respect to the Company or any of its subsidiaries, or with respect to the
financial condition, results of operations, business, properties, assets,
liabilities or prospects of any of them, or the offering of the Securities,
without your prior consent which will not be unreasonably withheld.
(k) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
An Act Relating to Disclosure of Doing Business with Cuba, and the Company
---------------------------------------------------------
further agrees that if it commences engaging in business with the government
of Cuba or with any person or affiliate located in Cuba after the date the
Registration Statement becomes or has become effective with the Securities and
Exchange Commission or with the Florida Department of Banking and Finance (the
"Florida Department"), whichever date is later, or if the information reported
in the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Florida Department notice of such business or change,
as appropriate, in a form acceptable to the Florida Department for so long as
the Florida Department requires such notice.
6. Conditions to the Obligations of the Underwriters. The obligations
-------------------------------------------------
of the Underwriters to purchase the Underwritten Securities and the 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 and completeness of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b).
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.
-14-
(b) The Company shall have furnished to the Representatives, on behalf
of the Underwriters, the opinion of Paul J. Hemschoot, Jr., Vice President,
Secretary and General Counsel of the Company, dated the Closing Date, to the
effect that:
(i) all the outstanding shares of capital stock of each Material
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassess able, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of each of the Material
Subsidiaries are owned by the Company either directly or through wholly-
owned Material Subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, any other security
interests, claims, liens or encumbrances, except as described in the Notes
to the Consolidated Financial Statements set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 1993;
(ii) to such counsel's knowledge, neither the Company nor any of its
Material Subsidiaries is in breach of, or in default under (nor has any
event occurred which with notice, lapse of time, or both, would constitute
a breach of or default under), any indenture, mortgage, deed of trust,
credit agreement, contract, license or other agreement or instrument to
which the Company or any of its Material Subsidiaries is a party or by
which any of them or their respective properties may be bound or affected
where such breach or default could reasonably be expected to have a
material adverse effect on the Company and its Material Subsidiaries
considered as a whole;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) neither the issue and sale of the Securities, nor the issuance
of the shares of Common Stock issuable upon conversion of the Securities,
nor the consummation of the transactions contemplated hereby will conflict
with, result in a breach of, or constitute a default under (or constitute
any event which with notice, lapse of time, or both, would constitute a
breach of or default under) the terms of any material indenture, mortgage,
deed of trust, credit agreement, contract, license or other material
agreement or instrument to which the Company or any of its Material
Subsidiaries is a party or bound;
(v) to the knowledge of such counsel, there is no pending or
threatened action, suit, investigation or proceeding before any court or
governmental agency,
-15-
authority or body or any arbitrator involving the Company or any of its
Material Subsidiaries of a character required to be disclosed or
incorporated by reference in the Registration Statement or Prospectus which
is not adequately disclosed or incorporated by reference in the
Registration Statement and Prospectus; and
(vi) to such counsel's knowledge, no person has the right,
contractual or otherwise, to cause the Company to issue, or register
pursuant to the Act, any shares of capital stock of the Company upon the
issue and sale of the Securities to be sold by the Company to the
Underwriters pursuant to this Agreement or upon the issuance of shares of
Common Stock issuable upon conversion of the Securities, nor does any
person have preemptive rights, rights of first refusal or other rights to
purchase any capital stock of the Company.
In addition, such counsel shall state that no facts have come to such
counsel's attention that lead him to believe that, as of the Effective Date,
when the Preliminary Prospectus Supplement was filed with the Commission in
accordance with Rule 424(b), at the Execution Time, when the Prospectus
Supplement was filed with the Commission in accordance with Rule 424(b) or on
the Closing Date, the Registration Statement, or any amendment thereto filed
with the Commission by the Company prior to the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that, as of its date, the Basic Prospectus, Preliminary Prospectus
Supplement, Prospectus and Prospectus Supplement, and any amendment or
supplement thereto filed with the Commission by the Company prior to the Closing
Date contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein in the light of the
circumstances in which they were made, not misleading or that, as of the Closing
Date, the Prospectus, as then supplemented, contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading (it being understood that such counsel has not been requested to and
does not express any view with respect to the financial statements, financial
schedules, geological and engineering reports and other financial, statistical,
geological and engineering information contained or incorporated by reference in
the Registration Statement or the Prospectus, Preliminary Prospectus Supplement
and Prospectus Supplement, as so amended or supplemented).
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, to the extent he deems proper and specified in such opinion, upon the
opinion of other counsel of
-16-
good standing whom he believes to be reliable and who are reasonably
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent he deems proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this paragraph
(b) include any supplements thereto.
(c) The Company shall have furnished to the Representatives, on behalf
of the Underwriters, the opinion of Davis, Graham & Stubbs, counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company and each of its Material 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, lease and operate its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing in all jurisdictions in which the character of properties owned,
leased, licensed or otherwise held by the Company or one of its Material
Subsidiaries or the transaction of business by the Company or one of its
Material Subsidiaries as now conducted requires such qualification and
where the failure to be so qualified would have a material adverse effect
on the Company and its Material Subsidiaries considered as a whole;
(ii) the Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms to the
description thereof contained in the Prospectus; the issued and outstanding
shares of Common Stock and Preferred Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the Securities
have been duly and validly authorized and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be fully paid
and nonassessable and will be free of any pledge, lien, security interest,
encumbrance, claim or preemptive or other rights; the Securities are
convertible at the option of the holders thereof into shares of Common
Stock as described in the Prospectus, the shares of Common Stock issuable
upon conversion of the Securities have been duly and validly reserved for
issuance and when issued at the option of the holders of the Securities
will be validly issued, fully paid and nonassessable and will be free of
any pledge, lien, security interest, encumbrance, claim or preemptive or
other rights; the Securities and the shares of Common Stock issuable upon
conversion of the Securities are duly
-17-
authorized for listing, subject to official notice of issuance or sale, as
the case may be, on The New York Stock Exchange; 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,
to the knowledge of such counsel, other rights to subscribe for the
Securities or shares of Common Stock issuable upon conversion of the
Securities;
(iii) to the knowledge of such counsel, there is no mortgage,
indenture, contract or other agreement of a character required to be
described in the Registration Statement or Prospectus, to be incorporated
by reference therein, or to be filed as an exhibit thereto, which is not
described, incorporated by reference, or filed as required; the statements
included or incorporated by reference in the Prospectus describing material
agreements fairly summarize such agreements; the description contained in
the Prospectus under the heading "U.S. Federal Income Tax Consequences"
constitutes a fair summary of the statutes and regulations discussed
therein as applicable to the offering and ownership of the Securities;
(iv) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, or any supplement thereto, pursuant
to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); no stop order suspending the effectiveness of the
Registration Statement has been received by the Company and, to the
knowledge of such counsel, no proceedings for that purpose have been
instituted or threatened; the Registration Statement (and any amendments
thereto) and the Prospectus (and any supplements thereto) (other than the
financial statements, related schedules, geological and engineering reports
and other financial, geological, engineering and statistical information
contained therein as to which such counsel need express no opinion) comply
as to form in all material respects with the applicable requirements of the
Act and, as applicable, the rules and regulations thereunder and the
Exchange Act and, as applicable, the rules and regulations thereunder;
(v) The documents incorporated by reference in the Registration
Statement and any amendments thereto and the Prospectus and any supplements
thereto (other than the financial statements, related schedules, geological
and engineering reports and other financial, geological, engineering and
statistical information contained therein as to which such counsel need
express no opinion), when
-18-
they were filed with the Commission, complied as to form in all material
respects with the applicable requirements of the Exchange Act and the rules
and regulations thereunder;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement, except such as have been
obtained under the Act and such as may be required under the state
securities or blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters and such
other approvals (which shall be specified in such opinion) as have been
obtained;
(viii) neither the issue and sale of the Securities, nor the
issuance of the shares of Common Stock issuable upon conversion of the
Securities, nor the consummation of the transactions contemplated hereby
will conflict with, result in a breach of, or constitute a default under
(or constitute any event which with notice, lapse of time, or both, would
constitute a breach of or default under) the certificate or articles of
incorporation or by-laws of the Company or any of its Material Subsidiaries
or the terms of any indenture, mortgage, deed of trust, credit agreement,
contract, license or other agreement or instrument to which the Company or
any of its Material Subsidiaries is a party or bound that is filed as an
exhibit to the Registration Statement, or, to such counsel's knowledge, any
order or regulation applicable to the Company or any of its Material
Subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company or any
of its Material Subsidiaries; and
(ix) to such counsel's knowledge, no person has the right,
contractual or otherwise, to cause the Company to issue, or register
pursuant to the Act, any shares of capital stock of the Company upon the
issue and sale of the Securities to be sold by the Company to the
Underwriters pursuant to this Agreement or upon the issuance of shares of
Common Stock issuable upon conversion of the Securities, nor, to such
counsel's knowledge, does any person have preemptive rights, rights of
first refusal or other rights to purchase any capital stock of the Company.
-19-
In addition, such counsel shall state that no facts have come to such
counsel's attention that lead them to believe that, as of the Effective Date,
when the Preliminary Prospectus Supplement was filed with the Commission in
accordance with Rule 424(b), at the Execution Time, when the Prospectus
Supplement was filed with the Commission in accordance with Rule 424(b) or on
the Closing Date, the Registration Statement, or any amendment thereto filed
with the Commission by the Company prior to the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that, as of its date, the Basic Prospectus, Preliminary Prospectus
Supplement, Prospectus and Prospectus Supplement, and any amendment or
supplement thereto filed with the Commission by the Company prior to the Closing
Date, contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein in the light of the
circumstances in which they were made, not misleading or that, as of the Closing
Date, the Prospectus, as then supplemented, contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading (it being understood that such counsel have not been requested to and
do not express any view with respect to the financial statements, financial
schedules, geological and engineering reports and other financial, statistical,
geological and engineering information contained or incorporated by reference in
the Registration Statement or the Prospectus, Preliminary Prospectus Supplement
and Prospectus Supplement, as so amended or supplemented).
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
Colorado, 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 reasonably satisfactory to counsel for the 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. References to the Prospectus in
this paragraph (c) include any supplements thereto.
(d) The Representatives shall have received from Winston & Strawn,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the shares of
Common Stock issuable upon conversion of the Securities, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel all
such information, instruments, certificates and documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
-20-
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman, President and Chief
Executive Officer and the Vice President and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects 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 received by the Company and no proceedings for that
purpose have been instituted or, to the Company's knowledge, threatened;
and
(iii) subsequent to the date of the most recent financial statements
included in the Registration Statement and Prospectus, and except as set
forth in the Prospectus, (A) neither the Company nor any of its Material
Subsidiaries has incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions not in the
ordinary course of business consistent with past custom and practice, and
(B) there has not been any material adverse change in the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company or any of its Material Subsidiaries or any change
in the capital stock or increase in the long-term debt of the Company or
any of its Material Subsidiaries.
(f) At the Execution Time and on the Closing Date, Price Waterhouse, with
respect to clause (ii) below and, to the extent applicable, clauses (iii) and
(iv) below, and Coopers & Lybrand with respect to clause (i) below and, to the
extent applicable, clauses (iii) and (iv) below, shall each have furnished to
the Representatives a letter or letters, dated respectively as of the date of
this Agreement and as of the Closing Date, in form and substance satisfactory
to the Representatives, confirming that they are independent accountants
within the meaning of the Act and Exchange Act and the applicable rules and
regulations thereunder and stating to the extent applicable that:
-21-
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated by reference in the
Registration Statement and Prospectus and reported on by them comply in
form in all material respects with the applicable accounting requirements
of the Act and Exchange Act and the related rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; carrying out
certain specified procedures (but not an audit 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
executive, audit and other board committees of the Company and its
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 the date of the
most recent audited financial statements and financial statement schedules
included or incorporated by reference in the Registration Statement and
Prospectus; nothing came to their attention which caused them to believe
that:
(1) the unaudited financial statements included or
incorporated by reference in the Registration Statement and Prospectus
do not comply in form in all material respects with the applicable
accounting requirements of the Act and Exchange Act and with the rules
and regulations of the Commission with respect to financial statements
included or incorporated by reference in Quarterly Reports on Form 10-
Q under the Exchange Act; or 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 or incorporated by reference in the
Registration Statement and Prospectus;
(2) with respect to the period subsequent to the date of the
most recent financial statements and financial statement schedules
(other than any capsule information), audited or unaudited, included
or incorporated by reference in the Registration Statement and
Prospectus, there were any changes, at a specified date not more than
five business days prior to the date of the letter, in the long-term
debt of the Company and its
-22-
subsidiaries or capital stock of the Company and its subsidiaries, or
decreases in the stockholders' equity of the Company and its
subsidiaries or increases in the short-term debt of the Company and
its subsidiaries as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated by reference in
the Registration Statement and Prospectus, or for the period from the
date of the most recent financial statements and financial statement
schedules (other than any capsule information) included or
incorporated by reference in the Registration Statement and Prospectus
to such specified date there were any decreases, as compared with the
corresponding period in the preceding year, in net sales or income
before income taxes or in total or per share amounts of net income of
the Company and its subsidiaries, except in all instances for changes
(increases 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 Representatives;
(iii) the amounts included in any unaudited "capsule" information
included or incorporated by reference in the Registration Statement and
Prospectus 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 and financial statement schedules included or
incorporated by reference in the Registration Statement and Prospectus; and
(iv) they have performed certain other specified procedures, in
form and substance acceptable to the Representatives, 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
Prospectus agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (f) include any supplements
thereto at the date of the letters.
(g) Subsequent to the Execution Time or, if earlier, the respective
dates as of which information is given in the
-23-
Registration Statement and Prospectus, there shall not have been (i) any
change or increase or decrease specified in the letters referred to in
paragraph (f) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the business, assets,
operations, financial condition, properties or prospects of the Company or any
of its subsidiaries, the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the reasonable judgment of the Representatives,
material and adverse enough to make it impractical or inadvisable to proceed
with the public offering or delivery of the Securities as contemplated by the
Registration Statement and Prospectus.
(h) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt or equity securities by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of any review of or any possible
change in any such rating that does not indicate the direction of the possible
change.
(i) At the Execution Time, the Company shall have furnished to the
Representatives a letter from Cyprus and each officer and director of the
Company, addressed to the Representatives, in which each such person agrees
not to offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common or Preferred
Stock beneficially owned by such person or any securities convertible into, or
exchangeable for, any shares of Common or Preferred Stock for a period of 90
days following the Execution Time without the prior written consent of the
Representatives, other than shares of Common Stock disposed of by officers and
directors as bona fide gifts.
(j) Prior to the Closing Date, the Company shall have furnished to the
Representatives and rating agencies such further information, certificates and
documents as the Representatives or any rating agency may reasonably request.
If any of the conditions specified in this Section 6 shall not, in the
reasonable judgment of the Representatives, have been fulfilled in all material
respects when and as provided in this Agreement, or if any of the opinions,
certificates or letters mentioned above or elsewhere in this Agreement shall not
be in all material respects satisfactory in form and substance to the
Representatives and their counsel, this Agreement and all obligations of the
Underwriters hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing.
-24-
7. Expenses; Reimbursement of Underwriters' Expenses.
-------------------------------------------------
(a) The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and the sale of
the Securities and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectuses
and the Prospectus and any amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing, producing or distributing this Agreement, the Blue Sky Memorandum
and any other agreements or documents in connection with the offering, purchase,
sale, distribution and delivery of the Securities; (iii) all expenses in
connection with the qualification of the Securities for offering and sale as
provided in Section 5(e) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification; (iv) all expenses in
connection with authorizing the Securities and the shares of Common Stock
issuable upon conversion of the Securities for trading on The New York Stock
Exchange; (v) the filing fees incident to securing any required review by The
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities, including the fees and disbursements of counsel for the Underwriters
in connection therewith; (vi) the cost of preparing stock certificates; (vii)
the cost and charges of any transfer agent or registrar; and (viii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. The Company
shall not be liable to any of the Underwriters for loss of anticipated profits
from the transaction covered by this Agreement.
(b) If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the 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 Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including fees and disbursements of counsel) that shall have been reasonably
incurred by them in connection with the proposed purchase and sale of the
Securities. If the sale of the Securities provided for herein is not
consummated for any other reason, the Company shall not be obligated to
reimburse the Underwriters for their out-of-pocket expenses.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and
-25-
each person who controls any Underwriter within the meaning of 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 any other Federal, state or foreign statutory law or regulation,
at common law, in equity 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 Preliminary Prospectus, the Basic
Prospectus, the Prospectus Supplement or the Prospectus, 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 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 an 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 Underwriter through the Representatives
specifically for use in connection with the preparation thereof, and (ii) such
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Securities which are the subject thereof if such person did not receive a
copy of the Prospectus (or the Prospectus as amended or supplemented) excluding
documents incorporated therein by reference at or prior to the confirmation of
the sale of such 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 Prospectus (or
the Prospectus as amended or supplemented) and, if a copy of such Prospectus
(or the Prospectus as amended or supplemented) had been so sent or given, such
delivery would have cured the defect giving rise to the claim asserted by such
person and it is finally judicially determined that such delivery was required
to be made under the Act and was not so made. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and 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 Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Underwriter, but only with reference to
written
-26-
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representatives specifically for use in
the preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges and agrees that the statements set
forth under the heading "Underwriting" in the Preliminary Prospectus Supplement
and Prospectus Supplement constitute the only information furnished in writing
by or on behalf of the several Underwriters for inclusion in the Registration
Statement, the Prospectus, the Basic Prospectus, the Prospectus Supplement or
any Preliminary Prospectus, and the several Underwriters hereby confirm that
such statements are correct in all material respects.
(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 omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified
party, unless the failure to so notify the indemnifying party shall have
materially impaired the defense of such claim. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to appoint
counsel reasonably satisfactory to such indemnified party to represent the
indemnified party in such action; provided, however, that if the defendants in
-------- -------
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, the
indemnified party or parties shall have the right to defend such action, at the
indemnifying party's expense, on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to the indemnified party of
its election so to appoint counsel to defend such action and approval by the
indemnified party of such counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediate preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (plus any local counsel), approved by
the Representatives in the case of paragraph (a) of this Section 8, representing
the indemnified parties under such paragraph (a) who are parties to such
action), (ii) 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 commencement of the
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action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party 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, action, suit or proceeding) 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.
No indemnifying party shall be liable for any settlement of any such claim,
action, suit or proceeding effected without its prior written consent.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraphs (a) and
(b) of this Section 8 is due in accordance with its terms but is for any reason
unavailable or insufficient (including, without limitation, because of any
holding by a court that such indemnification is unenforceable or otherwise
unavailable on grounds of public policy or otherwise), the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses incurred in connection with
investigating or defending same) (collectively, "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Securities; provided, however, that in no
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case shall any Underwriter (except as may be provided in the agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the 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 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 of the Securities (before deducting
expenses) and benefits received by the several 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 Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Underwriters and the
parties' relevant intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other
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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 paragraph
(d), each person who controls an Underwriter within the meaning of the Act or
Exchange Act and each director, officer, employee and agent of an Underwriter
shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of the Act or Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or preceding against such party in
respect of which a claim for contribution may be made against another party or
parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have hereunder.
9. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
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Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that required
changes in the Registration Statement and Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve a defaulting Underwriter of its liability, if any, to the Company and
nondefaulting Underwriters for damages occasioned by its default hereunder.
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10. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i) trading
in the Company's Common Stock or other securities shall have been suspended by
the Commission, The New York Stock Exchange, The American Stock Exchange or The
Toronto Stock Exchange or trading in securities generally on The New York Stock
Exchange or any other national securities exchange or market shall have been
suspended or limited or minimum prices shall have been established on The New
York Stock Exchange or any such other exchange or market, (ii) a banking
moratorium shall have been declared by Federal, Colorado or New York 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 the financial markets is such as to
make it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus.
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers or directors and of the 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 the Representatives, any
Underwriter or the Company or any of the officers, directors, employees, agents
or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive any 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 Representatives, will be mailed,
delivered or telegraphed and confirmed to it at Salomon Brothers Inc, Seven
World Trade Center, New York, New York, 10048, with a copy to Winston & Strawn,
35 West Wacker Drive, Chicago, Illinois 60601, Attention: F. Ellen Duff, Esq.,
or if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 9100 East Mineral Circle, Englewood, Colorado 80112,
Attention: Paul J. Hemschoot, Jr., Esq., Vice President, Secretary and General
Counsel, with a copy to: Davis, Graham & Stubbs, 370 17th Street, Suite 4700,
Denver, Colorado 80201, Attention: Paul Hilton.
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.
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14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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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 Underwriters.
Very truly yours,
AMAX Gold Inc.
By: /s/ Mark A. Lettes
-------------------------------
Its: Vice President CFO
------------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
By: /s/ R. Stribling Koster
------------------------------
Its: Vice President
-----------------------------
Goldman, Sachs & Co.
By: /s/ Goldman, Sachs & Co.
------------------------------
Its:
-----------------------------
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
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SCHEDULE I
Number of Shares of
Underwritten Securities
Underwriters To Be Purchased
- ------------ -----------------------
Salomon Brothers Inc ........... 800,000
Goldman, Sachs & Co. ........... 800,000
---------------
Total.................................. 1,600,000
===============
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