Exhibit 1.1
Stillwater Mining Company
2,000,000 Shares
Common Stock
($.01 par value)
Form of
Underwriting Agreement
New York, New York
October ___, 1998
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Stillwater Mining Company, a corporation organized under the laws of
Delaware (the "Company"), proposes to sell to the several underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, the number of shares of Common Stock, $.01 par
value ("Common Stock"), of the Company set forth in Schedule I hereto (the
"Securities") (said shares to be issued and sold by the Company being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase up to the number of additional
shares of Common Stock set forth in Schedule II hereto to cover over-allotments
(the "Option Securities;" the Option Securities, together with the Underwritten
Securities, being hereinafter called the "Securities"). To the extent there are
no additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final 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 Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act or pursuant to Rule 462(d) under the Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed
to be incorporated therein by reference. Certain terms used herein are defined
in Section 17 hereof.
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(the file number of which is set forth in Schedule I hereto) on Form S-3,
including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments or supplements thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission one of the following: (1) after
the Effective Date of such registration statement, a final prospectus
supplement relating to the Securities in accordance with Rules 430A and
424(b), (2) prior to the Effective Date of such registration statement, an
amendment to such registration statement (including the form of final
prospectus supplement) or (3) a final prospectus in accordance with Rules
415 and 424(b). In the case of clause (1), 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
Final Prospectus. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
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 Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on any
date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the respective
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, the Final Prospectus, if filed as a
post-effective amendment and not pursuant to Rule 424(b), will not, and on
the date of any filing pursuant to
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Rule 424(b) and on the Closing Date and any settlement date, the Final
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
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warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement thereto)
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 inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
(c) The Company has no significant subsidiaries within the meaning of
Rule 1-02 of Regulation S-X under the Act. The Company 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 Final Prospectus, and is duly qualified to
do business as a foreign corporation and is in good standing under the laws
of Colorado, Montana and each other jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business, 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), earnings, business or properties of the
Company and its subsidiaries, taken as a whole.
(d) The Company's authorized equity capitalization is as set forth in
the Final Prospectus; the Common Stock of the Company conforms in all
material respects to the description thereof contained in the Final
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder 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; the Securities have
been duly authorized for listing, subject to official notice of issuance on
the American Stock Exchange; the certificates for the Securities are in
valid and sufficient form; the holders of outstanding shares of Common
Stock of the Company are not entitled to preemptive or other rights to
subscribe for the Securities; and, except as set forth in the Final
Prospectus, 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 Common Stock of or ownership
interests in the Company are outstanding.
(e) Except for the Rights Agreement Dated October 25, 1995 and the
Registration Agreement dated April 29, 1996, no person or entity has any
right, contractual or otherwise, to cause the Company or any of its
affiliates to issue to such person or entity, or register for offer or sale
pursuant to the Act, any securities of the Company of any of its
affiliates, in connection with the transactions contemplated by this
Underwriting Agreement or the Registration Statement.
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(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required.
(g) This Underwriting Agreement has been duly authorized by the
Company and, at the Closing Date, will have been duly executed and
delivered by the Company.
(h) 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 Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) 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
Final Prospectus.
(j) 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 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
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 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), earnings, business or properties of the Company and its
subsidiaries, taken as a whole.
(k) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in, the due
performance and observance of any term, covenant or condition of any
material indenture, credit agreement, mortgage, deed of trust, lease or
other agreement or instrument to which the Company is a party or by which
the Company or any of its properties is bound except such as would not have
a material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Company.
(l) The consolidated financial statements and schedules of the
Company and its consolidated subsidiary included in the Final Prospectuses
and the Registration Statement
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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 operating and financial data set forth under
the captions "Summary Operating and Financial Information" and "Selected
Financial Information" in the Final Prospectus and Registration Statement
accurately summarize the information included therein.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company and its subsidiaries or their respective properties is pending or
to the Company's knowledge, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance by the
Company of this Agreement or the consummation by the Company of any of the
transactions contemplated hereby or (ii) could reasonably be expected to
have a material adverse effect on 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 Final Prospectus
(exclusive of any supplement thereto) (except, in the case of this clause
(ii), for those that have been disclosed in the Final Prospectus).
(n) Except as set forth in the Final Prospectus, each of the Company
and its subsidiaries, owns, leases or has possessory rights to all such
properties as are necessary to the conduct of its operations as presently
conducted, and the Company, directly or indirectly through its
subsidiaries, owns, leases or has possessory rights to all properties as
are necessary to explore, develop and exploit the expansion at the
Stillwater Mine in Nye, Montana and the East Boulder site in Sweet Grass
County, Montana (as described in the Final Prospectus), subject, to the
extent such properties consist of unpatented mining claims, to the
paramount title of the United States of America, to the rights of third
parties to have access to the surface of those claims and to explore and
develop leasable minerals from within the boundaries of those claims except
where the failure to own, lease or possess the rights for any property
would not individually or in the aggregate have a material adverse effect
on the condition (financial or otherwise), earnings, business or properties
of the Company and its subsidiaries, taken as a whole. Nothing herein
shall be deemed to be a representation or warranty by the Company that any
of its unpatented claims (whether owned or leased) contain a discovery of
valuable minerals.
(o) Except as set forth in the Final Prospectus, neither the Company
nor its subsidiaries is in violation of any law, rule or regulation of any
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
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effect on 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; and
the Company has not received written notice of any proceedings relating to
the revocation or material modification of any such license, certificate,
permit or other authorization which, individually 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),
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 Final
Prospectus.
(p) Neither the Company nor its subsidiaries is in violation or
default of (i) any provision of its charter or bylaws, or (ii) any
judgment, order or decree 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 properties,
as applicable, which violation or default would individually or in the
aggregate have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole.
(q) 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 Final Prospectus, and its successor entity,
PricewaterhouseCoopers LLP, are independent public accountants with respect
to the Company within the meaning of the Act and the applicable published
rules and regulations thereunder.
(r) The Company has filed all 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 effect on 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 Final Prospectus
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 would not have a material
adverse effect on 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 Final Prospectus.
(s) No labor dispute with the employees of the Company or its
subsidiaries exists or to the Company's knowledge, is threatened or
imminent that would result in a material adverse change in the condition
(financial or otherwise), earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
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transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus.
(t) The Company and 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 its subsidiaries has been refused any
insurance coverage sought or applied for; and neither the Company nor its
subsidiaries 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), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, except as
set forth in or contemplated in the Final Prospectus.
(u) Neither the Company nor its subsidiaries is in violation of any
federal, state 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 and local occupational safety and health and environmental
laws and regulations to conduct their respective businesses as presently
conducted, and the Company and its subsidiaries are 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), earnings, business or properties of the Company
and its subsidiaries, taken as a whole, except as set forth in or
contemplated in the Final Prospectus.
(v) 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.
(w) The Company's independent technical consultants, Xxxxx Xxxxxxx &
Company, who have affirmed and verified the proven and probable ore
reserves located at Stillwater in Nye, Montana and East Boulder, Sweet
Grass County, Montana as of January 1, 1998 set forth in the Final
Prospectus 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.
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(x) The information set forth in the Registration Statement and the
Final Prospectus relating to the proven and probable ore reserves located
at the Stillwater Mine in Nye, Montana and East Boulder, Sweet Grass
County, Montana as of January 1, 1998 has been prepared materially in
accordance with methods generally applied in the mining industry and such
proven and probable ore reserves information conforms in all material
respects to the rules and regulations of the Commission.
(y) The Company has not taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company.
(z) Subsequent to the respective dates as of which information is
given in the Final Prospectus, (i) the Company has not incurred any
material liability or obligation, direct or contingent, nor entered into
any material transaction in the ordinary course of business (other than the
transactions contemplated by this Underwriting Agreement); (ii) the Company
has not purchased any of its outstanding Common Stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its Common
Stock; and (iii) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company, except in each
case as described in the Final Prospectus.
(aa) The Company owns or possesses all material patents, patent
applications, trademarks, service marks, trade names, licenses, copyrights
and proprietary or other confidential information currently employed by it
in connection with its business, and the Company has not received any
written notice of infringement of, or conflict with, asserted rights of any
third party with respect to any of the foregoing which, individually 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), earnings, business or properties of the Company,
except as described in or contemplated in the Final Prospectus or
Prospectus Supplement.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the 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 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 Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $ _____ per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule II 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 300,000 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
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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 Final Prospectus upon written or telegraphic
notice by the Representatives to the Company setting forth the number of
shares of the Option Securities as to which the several Underwriters are
exercising the option and the settlement date. The number of shares of the
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of
the 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
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Underwritten Securities and the Option Securities (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 on the date and at the time
specified in Schedule I hereto or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the 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 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. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
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 the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the 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
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 the Option Securities 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 Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters
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that:
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(a) 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 (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus 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 Final Prospectus is otherwise required under Rule
424(b), the Company will cause the Final Prospectus, 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 Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (2) when the Final Prospectus, 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, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (4) 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 Final
Prospectus or for any additional information, (5) 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 (6) 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 institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible 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 Final Prospectus 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 the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event, (2)
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 (3) supply
any supplemented Final Prospectus to you in such quantities as you 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
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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 (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (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 Preliminary Final Prospectus and Final
Prospectus and any supplement thereto as the Representatives may reasonably
request. The Company will pay the expenses of printing or other production
of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any
fee of the National Association of Securities Dealers, Inc., in connection
with its review of the offering; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or 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.
(f) Until the Business Day set forth on Schedule I hereto, the
Company will not, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx
Inc., offer, sell or contract to sell, or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably 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 Common Stock or any securities convertible
into, or exchangeable for, shares of Common Stock; provided, however, that
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the Company may issue and sell Common Stock pursuant to any employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time and the Company may issue Common
Stock issuable upon the conversion of securities or the exercise of
warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under 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.
6. Conditions to the Obligations of the Underwriters. The
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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
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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 its 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 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; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, 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 requested and caused Xxxxx, Xxxxxx &
Xxxxxx LLP, counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as
described in the Final 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 the failure to be qualified would not have a material adverse
effect, singly or in the aggregate, on the business, results or
operations, financial condition or business affairs of the Company;
(ii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof contained
in the Final Prospectus; 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; the Securities are duly listed, and admitted and
authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the American 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 any statutory preemptive rights to subscribe for
the Securities;
(iii) to the knowledge of such counsel, there is no pending
action, suit or proceeding by or before any court or governmental
agency, authority or body or
12
any arbitrator involving the Company or any of its subsidiaries or its
or their property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements included or
incorporated by reference in the Final Prospectus under the headings
"Description of Capital Stock," "Risk Factors -- Governmental
Regulations and Permitting" and "Risk Factors -- Impact of Possible
New Mining Legislation and Title to Mining Claims" fairly summarize
the matters therein described;
(iv) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, 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 the Final Prospectus (other than the financial
statements and other financial 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 the
Exchange Act and the respective rules thereunder;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) 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 Final Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(vii) 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 in this Agreement and in the Final Prospectus and such
other approvals (specified in such opinion) as have been obtained;
(viii) 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 of 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, (ii) the terms of any indenture, contract, lease,
mortgage, deed of
13
trust, note agreement, loan agreement or other agreement filed as a
material contract by the Company under the Exchange Act, to which the
Company or its subsidiaries is a party or bound or to which its or
their 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 any of its or their
properties; and
Such counsel may disclaim responsibility for, and state that they have
not independently verified, the accuracy, completeness or fairness of the
financial statements, the notes thereto, and the other financial and
reserve and operating data included or incorporated by reference in the
Registration Statement and Final Prospectus, and have not examined the
accounting, financial, reserve or operating records from which such
financial statements, notes and data were derived. Such counsel may note
that, while certain portions of the Registration Statement and Final
Prospectus (including financial statements, the notes thereto, and other
financial and reserve data) have been included on the authority of
"experts" (as defined in the Act), such counsel are not such experts with
respect to any portion of the Registration Statement and Final Prospectus,
including, without limitation, such financial statements, the notes
thereto, or other financial or reserve and operating data included or
incorporated by reference therein. Subject to the foregoing, such counsel
shall state that such counsel has participated in conferences with the
officers and other representatives of the Company, representatives of the
independent accountants for the Company, representatives of the experts
referred to above, and the Purchaser and its counsel, at which the contents
of the Registration Statement and Final Prospectus and related matters were
discussed and, although such counsel is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in Registration Statement and the Final Prospectus
and have not made any independent check or verification thereof, during the
course of such participation (relying as to factual matters as to
materiality to a large extent upon the statements of officers and other
representatives of the Company), no facts came to such counsel's attention
that caused such counsel to believe that on the Effective Date or at the
Execution Time the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Final Prospectus, as of its date and on the Closing Date contained or
contains an 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 are made, not misleading
(except that such statements by such counsel shall not be deemed to include
any statement with respect to any financial information or other financial
or reserve or operating data).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Delaware or Colorado 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 Underwriters and (B) as to matters
14
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Final
Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Company shall have furnished to the Purchaser the opinion of
Gough, Shanahan, Xxxxxxx & Xxxxxxxx, special regulatory counsel for the
Company, dated the Closing Date, to the effect that:
(i) to the best knowledge of such counsel, except where the lack
of possession would not have a material adverse effect on the
financial condition of the Company, the Company has all necessary
consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies to own, lease and
operate its properties and conduct its business as now being conducted
and as described in the Final Prospectus; and
(ii) the descriptions in the Final Prospectus of statutes and
regulations described therein are accurate in all material respects
and fairly present the information required to be shown.
(d) The Representatives shall have received from Winston & Xxxxxx
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and addressed to the Representatives, with respect to the issuance and
sale of the Securities, the Registration Statement, the Final Prospectus
(together with any supplement thereto) and other related matters as the
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.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final Prospectus,
any supplements to the Final Prospectus 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
15
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no 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 course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and caused Pricewaterhouse
Coopers LLP to have furnished to the Representatives, at the Execution Time
and at the Closing Date, letters (which may refer to letters previously
delivered to one or more of the Representatives), dated respectively as of
the Execution Time 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 the Exchange Act and the
respective applicable published rules and regulations thereunder and that
they have performed a review of the unaudited interim financial information
of the Company for the nine-month period ended September 30, 1998, and as
at September 30, 1998, in accordance with Statement on Auditing Standards
No. 71, and stating in effect, except as provided in Schedule I hereto,
that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statement and the Final Prospectus and reported on by
them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange 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,
1998, and as at September 30, 1998 incorporated by reference in the
Registration Statement and the Final Prospectus; 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, compensation and marketing
committees of the Company; 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, 1997, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Final Prospectus do not comply as to form in all material
respects with applicable accounting
16
requirements of the Act and with the published 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; 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
or incorporated by reference in the Registration Statement and
the Final Prospectus;
(2) with respect to the period subsequent to September 30,
1998, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the long-term debt
of the Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity of the Company
as compared with the amounts shown on the September 30, 1998
consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Final Prospectus, or for
the period from October 1, 1998 to such specified date in the
corresponding period in the preceding year there were any
decreases, as compared with October 1, 1997, in net revenues 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 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; and
(3) the information included or incorporated by reference in
the Registration Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed
Charges) is not in conformity with the applicable disclosure
requirements of Regulation S-K
(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 Final Prospectus and in
Exhibit 12 to the Registration Statement, including, but not limited
to, the information set forth under the captions "Summary Operating
and Financial Information" and "Selected Financial Information" in the
Final Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7 and 11 of the Company's Annual Report on
Form 10-K, incorporated by reference in the Registration Statement and
the Final Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition and
Results
17
of Operations" included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q, incorporated by reference in the
Registration Statement and the Final Prospectus, agrees with the
accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to Final Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) 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 Final Prospectus (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 (e) of this Section 6 or
(ii) any change, or any development involving a prospective 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 Final Prospectus (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 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 Final
Prospectus (exclusive of any supplement thereto).
(h) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(i) The Securities shall have been listed and admitted and authorized
for trading on the American Stock Exchange, and satisfactory evidence of
such actions shall have been provided to the Representatives.
(j) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each executive officer and director of the Company addressed to the
Representatives.
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 Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled 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
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at
the office of Xxxxx, Xxxxxx & Xxxxxx LLP, counsel for the Company, at 000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx, 00000 on the Closing Date.
18
7. Reimbursement of Underwriters' Expenses. 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 through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
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 each person who controls any
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 the Basic
Prospectus, any Preliminary Final Prospectus or the Final 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
in light of the circumstances under which they were made, 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 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 Underwriter through the Representatives specifically for
inclusion therein; provided, further, that the foregoing indemnity with
-------- -------
respect to any untrue statement contained in or omission from the Basic
Prospectus or Preliminary Final Prospectus shall not inure to the benefit
of any Underwriter (or any of the directors, officers, employees and agents
of such 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 Final Prospectus (or the Final Prospectus as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) 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 Basic Prospectus or Preliminary Final Prospectus was corrected in
the Final Prospectus (or the Final Prospectus as so amended or supplemented
if the Company shall have furnished any amendments or supplements thereto),
and it is finally judicially determined that such
19
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 and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, each person who controls the Company
within the meaning of either the Act or the Exchange Act, and each other
officer, employee and agent of the Company, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in 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 that
the language on page S-33 related to stabilization, syndicate covering
transactions and penalty bids and the information under the heading
"Underwriting", constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary
Final Prospectus or the Final Prospectus.
(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
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 indemnified 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 (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
firm to act as separate counsel (plus one local counsel in each applicable
jurisdiction) in connection with any proceeding or related proceedings in
the same jurisdiction) 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
20
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 in writing 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.
(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 Underwriters
severally 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 Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and by the Underwriters on the other from
the offering of the Securities; provided, however, that in no case shall
-------- -------
any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission 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 severally shall contribute
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and of
the Underwriters on the other 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 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 Final 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 on the one hand or the Underwriters on
the other, 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 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
21
fraudulent misrepresentation. For purposes of this Section 8, each person
who controls an Underwriter within the meaning of either the Act or the
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 either the
Act or the Exchange Act, each officer of the Company who shall have signed
the Registration Statement, each director of the Company and each other
officer, employee or agent 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 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 II 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 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 II 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 five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
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 at any time prior to
such time (i) trading in the Company's Common Stock 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
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive of
any supplement thereto).
22
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers 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 any 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 Securities. The provisions of
Sections 7 and 8 hereof shall survive the 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 telefaxed to the Xxxxxxx Xxxxx Barney Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx
Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Xxxxx X. Xxxxxx (fax no.: (000) 000-0000 and confirmed at Xxxxx, Xxxxxx &
Xxxxxx, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, attention
Xxxx Xxxxxx.
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 applicable to contracts
made and to be performed within 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, and the rules and
regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph 1(a)
above contained in the Registration Statement at the Effective Date.
"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.
23
"Commission" shall mean the Securities and Exchange Commission.
"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,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"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, 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 415", "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 registration statement referred to in Section 1(a)
hereof.
24
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,
Stillwater Mining Company
By: __________________________
Name: ____________________
Title: ___________________
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
TD Securities (USA) Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By: ____________________
Name: _______________
Title: ______________
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated: October ___, 1998
Registration Statement No.: 333-58251
Representatives: Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
TD Securities (USA) Inc.
Title, Purchase Price and Description of Securities:
Title: Common Stock, par value $.01
Number of Shares to be sold by the Company: 2,000,000
Price to Public per Share: $ ____
Price to Public -- total: $ ______
Underwriting Discount per Share: $ _____
Underwriting Discount -- total: $ ______
Proceeds to Company per Share: $ ______
Proceeds to Company -- total: $___,000,000
Other provisions: option to purchase an additional 300,000 shares ("Option
Shares")
Closing Date, Time and Location: October ___, 1998 at 10:00 a.m. (Eastern
Standard Time),
Xxxxx, Xxxxxx & Xxxxxx
000 Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Type of Offering: Non-Delayed
Date referred to in Section 5(f) after which the Company may offer or sell
securities issued or guaranteed by the Company without the consent of the
Representatives: [90 days after the Execution Time]
Modification of items to be covered by the letter from Pricewaterhouse Coopers
LLP delivered pursuant to Section 6(e) at the Execution Time:
SCHEDULE II
-----------
NUMBER OF MAXIMUM MAXIMUM TOTAL
UNDERWRITTEN NUMBER OF OPTION NUMBER OF
SECURITIES TO BE SECURITIES SECURITIES
UNDERWRITERS PURCHASED AVAILABLE TO BE AVAILABLE TO BE
PURCHASED PURCHASED
-----------------------------------------------------------------------------------
Xxxxxxx Xxxxx Barney Inc.
-----------------------------------------------------------------------------------
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx
Incorporated
-----------------------------------------------------------------------------------
TD Securities (USA) Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
TOTAL 2,000,000 300,000 2,300,000
-----------------------------------------------------------------------------------
EXHIBIT A
[Letterhead of Stillwater Mining Company]
Stillwater Mining Company
Public Offering of Common Stock
October ___, 1998
Xxxxxxx Xxxxx Barney Inc.
Xxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
TD Securities (USA) Inc.
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Stillwater Mining
Company, a Delaware corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, or file (or participate in the filing of) a registration
statement with the Securities and Exchange 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 Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder 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 90 days after the date of the
Underwriting Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by Xxxxxxx Xxxxx Barney Inc.
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,
Print Name: ____________________
Title: _________________________
