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EXHIBIT 1.1
CANYON RESOURCES CORPORATION
3,400,000 Shares of Common Stock
PURCHASE AGREEMENT
June 5, 1997
NATWEST SECURITIES LIMITED
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Dear Sirs:
Canyon Resources Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Purchaser") 3,400,000 shares (the
"Shares") of the Company's Common Stock, $.01 par value per share (the "Common
Stock"). The Company has also agreed to issue to the Purchaser the Warrants (as
hereinafter defined) to purchase up to 278,182 shares of Common Stock, as set
forth in the warrant agreement executed simultaneously with this Agreement (the
"Warrant Agreement").
1. Representations and Warranties.
(a) The Company represents and warrants to, and agrees
with, the Purchaser that:
(i) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, and has filed a
registration statement on such Form (Registration No. 333-18449)
which has become effective, for the registration of the Common Stock
under the Act and the Rules and Regulations. Such registration
statement, as declared effective and each amendment thereto declared
effective through the date of this Agreement, meets the requirements
set forth in Rule 415(a)(1) of the Rules and Regulations and complies
in all other material respects with said Rule. The Company proposes to
file with the Commission pursuant to Rule 424 of the Rules and
Regulations a supplement to the form of prospectus included in such
registration statement relating to the Shares, and describing the
shares of Common Stock issuable upon exercise of the Warrants (the
"Warrant Shares") and the plan of distribution of the Shares and has
previously advised you of all further information (financial and
other) with respect to the Company to be set forth therein. Such
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registration statement, including the exhibits thereto, as amended at
the date of this Agreement, is hereinafter called the "Registration
Statement"; such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the "Basic Prospectus";
and such supplemented form of prospectus, in the form in which it
shall be filed with the Commission pursuant to Rule 424 (including the
Basic Prospectus as so supplemented) is hereinafter called the "Final
Prospectus." Any reference herein to the Registration Statement, the
Basic 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 Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the date of
this Agreement, or the issue date of the Basic 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, and the Final Prospectus shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of
the Basic Prospectus or the Final Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
(ii) As of each of the following dates or times: (1) the date
hereof, (2) when the Final Prospectus is first filed pursuant to Rule
424 of the Rules and Regulations, (3) when, prior to the Closing Date
(as hereinafter defined), the Registration Statement or any amendment
to the Registration Statement becomes effective (including the filing
of any document incorporated by reference in the Registration
Statement), (4) when any supplement to the Final Prospectus is filed
with the Commission, and (5) at the Closing Date, (i) the Registration
Statement as amended as of any such time, and the Final Prospectus, as
amended or supplemented as of any such time, will comply in all
material respects with the applicable requirements of the Act, the
Rules and Regulations, the Exchange Act and the rules and regulations
under the Exchange Act, (ii) the Registration Statement, as amended as
of any such time, 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 Final Prospectus, as amended or supplemented as of any
such time, 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, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration
Statement or the Final Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
relating to
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the Purchaser furnished in writing to the Company by or on behalf of
the Purchaser specifically for use in connection with the preparation
of the Registration Statement and/or the Final Prospectus.
(iii) The consolidated financial statements and schedules of
the Company and its Subsidiaries (as defined herein) incorporated by
reference into the Registration Statement and the Final Prospectus
fairly present the financial condition, results of operations,
stockholders' equity and cash flows of the Company and its
Subsidiaries as of the dates and periods therein specified (subject
to, in the case of interim financial statements, normal year end
adjustments). Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved. The
selected financial data set forth in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 and the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1997 fairly present, on the basis stated in such reports,
the information included therein (subject to, in the case of such Form
10-Q, normal year end adjustments). Coopers & Xxxxxxx L.L.P., who have
reported on those of such financial statements and schedules which are
audited, are independent accountants with respect to the Company and
its Subsidiaries, as required by the Act and the Rules and
Regulations.
(iv) The Company and its Subsidiaries maintain a system of
internal accounting control sufficient to provide reasonable assurance
that (w) transactions are executed in accordance with management's
general or specific authorization, (x) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets, (y) access to
assets is permitted only in accordance with management's general or
specific authorization, and (z) the recorded accountability for assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(v) The Company has an authorized capitalization as set forth
in the Final Prospectus. All of the issued shares of capital stock of
the Company have been duly authorized and validly issued and are fully
paid and nonassessable. The Shares have been duly authorized and, when
issued and delivered against payment therefor as provided in this
Agreement, will be validly issued, fully paid and nonassessable, and
are not and will not be subject to any preemptive or other rights to
subscribe for or purchase securities; the holders thereof will not be
subject to any liability solely as such holders; and the certificates
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representing the Shares will be in due and proper form as previously
authorized by the Company. The Warrant Shares have been validly
authorized and reserved for issuance upon exercise of the Warrants
and, when issued in accordance with the Warrant Agreement, will be
validly issued, fully paid and non-assessable and free of preemptive
rights. No person or entity is entitled to have any securities
registered under the Registration Statement. The shares of capital
stock of the Company conform to the description thereof in the Final
Prospectus.
(vi) The Company has full corporate power and authority to
enter into this Agreement and the Warrant Agreement and to consummate
the transactions provided for herein and therein. This Agreement and
the Warrant Agreement have been duly authorized, executed and
delivered by the Company and constitute valid and binding agreements
of the Company, enforceable against the Company in accordance with
their terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other similar laws affecting the rights of creditors now
or hereafter in effect, and to equitable principles that may limit the
right to specific enforcement of remedies, and except insofar as the
enforceability of the indemnity and contribution provisions contained
in this Agreement may be limited by federal or state securities laws
and the public policy underlying such laws).
(vii) The Shares have been approved for listing on the
American Stock Exchange, subject only to notice of issuance, and the
Company knows of no reason or set of facts which is likely to
adversely affect such approval.
(viii) The Company is a Delaware corporation in good standing
under the laws of the State of Delaware. The Company's subsidiaries
are listed in Exhibit 21 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1996 (the "Subsidiaries"). Each of the
Subsidiaries has been duly organized and is validly existing in good
standing under the laws of its jurisdiction of organization; and each
of the Company and its Subsidiaries is duly qualified to transact
business as a foreign organization and is in good standing under the
laws of all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not result in a
material liability or disability to the Company and its Subsidiaries,
taken as a whole.
(ix) The Company and each of its Subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as
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described in the Registration Statement and the Final Prospectus;
except as set forth on Schedule I hereto, all the outstanding shares
of capital stock of each of the Subsidiaries have been duly and
validly authorized and issued, are fully paid and nonassessable and
are owned, directly or indirectly, by the Company, free and clear of
any security interests, liens, encumbrances, equities or claims.
(x) No legal or governmental proceedings are pending to
which the Company or any of its Subsidiaries is a party or to which
the property of the Company or any of its Subsidiaries is subject that
are required to be described in the Registration Statement or the
Final Prospectus and are not described therein and, to the Company's
knowledge, no such proceedings have been threatened against the
Company or any of its Subsidiaries or with respect to any of their
respective properties; and no contract or other document is required
to be described in the Registration Statement or the Final Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, except
as otherwise stated therein, (A) there has been no material adverse
change in the condition (financial or other), earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, and (B)
there have been no transactions entered into by the Company or any of
its Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its Subsidiaries,
taken as a whole.
(xii) The issuance, offering and sale of the Shares, the
Warrants and the Warrant Shares by the Company pursuant to this
Agreement and the Warrant Agreement and the consummation of the
transactions contemplated hereby and thereby do not (i) require the
consent, approval, authorization, registration or qualification of or
with any governmental authority, except such as have been obtained and
such as may be required under state securities or blue sky laws or
(ii) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, lease or other material agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of
their respective properties are bound, or the charter documents or
by-laws of the Company or any of its Subsidiaries, or any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or
any of its Subsidiaries.
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(xiii) The Company is not an "investment company" or an
"affiliated person" or "promoter" of, or "principal underwriter" for,
an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), or subject to
regulation under the 1940 Act.
(xiv) Neither the Company nor, to its knowledge, any of its
directors, officers or controlling persons has taken, directly or
indirectly, any action intended, or which might reasonably be
expected, to cause or result in, under the Act or otherwise, or which
has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
(xv) 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
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries or any of their
respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the
Company and its Subsidiaries which would require disclosure in the
Registration Statement and the Final Prospectus and which has not been
disclosed therein.
(xvi) No statement, representation, warranty or covenant made
by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Purchaser
is or will be, when made, inaccurate, untrue or incorrect in any
material respect, unless such statement, representation, warranty or
covenant is qualified as to materiality, in which case it is not or
will not be, when made, inaccurate, untrue or incorrect.
(xvii) The Company and each of its Subsidiaries have a
generally satisfactory employer-employee relationship with their
respective employees and are in compliance with all federal, state,
local, and, where applicable, foreign, laws and regulations respecting
employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to so comply
would not have a material adverse effect on the condition, financial
or otherwise, or on the business affairs, position, prospects, value,
operation, properties, business or results of operation of the Company
and its Subsidiaries taken as a whole whether or not arising in the
ordinary course of business (a "Material Adverse Effect"). To the
Company's knowledge, there are no pending investigations involving the
Company or any of its Subsidiaries by the United States Department of
Labor or any other governmental agency
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responsible for the enforcement of such federal, state, local or
foreign laws and regulations. To the Company's knowledge, there is no
unfair labor practice charge or complaint against the Company or any
of its Subsidiaries pending before the National Labor Relations Board
or any strike, picketing, boycott, dispute, slowdown or stoppage
pending or threatened against or involving the Company or any of its
Subsidiaries, and no such strike, picketing, boycott, dispute,
slowdown or stoppage has ever occurred. No representation question
exists respecting the employees of the Company or any of its
Subsidiaries, and no collective bargaining agreement or modification
thereof is currently being negotiated by the Company or any of its
Subsidiaries. There are no expired or existing collective bargaining
agreements of the Company or any of its Subsidiaries.
(xviii) Neither the Company nor any of its Subsidiaries nor,
to the Company's knowledge, any employee or agent of the Company or
any Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds of the Company or any
Subsidiary in violation of any law, rule or regulation or of a
character required to be disclosed in the Registration Statement or
the Final Prospectus.
(xix) 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; and the Company has no reason to
believe that it and its Subsidiaries will not be able to renew their
existing insurance coverage as and when such coverage expires.
(xx) The business, operations and facilities of the Company
and its Subsidiaries have been and are being conducted in compliance
in all material respects with all applicable laws, ordinances, rules,
regulations, licenses, permits, approvals, plans, authorizations or
requirements relating to occupational safety and health, or pollution,
or protection of health or the environment (including, without
limitation, those relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic
substances, materials or wastes into ambient air, surface water,
groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, gaseous or liquid in
nature) of any governmental department, commission, board, bureau,
agency or instrumentality of the United States or any state or
political subdivision thereof, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and
orders relating thereto; and
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none of the Company or any of its Subsidiaries has received any notice
from any governmental instrumentality or any third party alleging any
violation thereof or liability thereunder (including, without
limitation, liability for costs of investigating or remediating sites
containing hazardous substances and/or damages to natural resources),
which violation would have, or could reasonably be expected to have, a
Material Adverse Effect. The intended use and occupancy of each of the
facilities owned or operated by the Company or any of its Subsidiaries
complies in all material respects with all applicable codes and zoning
laws and regulations and there is no pending or, to the knowledge of
the Company, threatened condemnation, zoning change, environmental or
other similar proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction
on, or access to such facilities except as described in the Final
Prospectus.
(xxi) The Company and each of its Subsidiaries have good and
marketable title to, or valid and enforceable leasehold estates in,
all items of personal property and fee real property stated in the
Registration Statement and the Final Prospectus (including the
financial statements included or incorporated by reference therein) to
be owned or leased by them, free and clear of all liens, charges,
claims, encumbrances, pledges, security interests, defects or other
restrictions on equity of any kind whatsoever, other than (i) those
referred to in the Registration Statement and the Final Prospectus
(including such financial statements), (ii) liens for taxes not yet
due and payable, (iii) mechanics, materialmen, warehouse and other
statutory liens arising in the ordinary course of business which,
either individually or in the aggregate, do not have a Material
Adverse Effect, and (iv) a lien in favor of Caterpillar Financial
Services on certain machinery and equipment owned by the Company or
one or more of its Subsidiaries.
(xxii) The Company and each of its Subsidiaries have record
possessory title to, or valid and enforceable leasehold estates in,
all unpatented mining claims and millsites stated in the Registration
Statement and the Final Prospectus (including the financial statements
included or incorporated by reference therein) to be owned or leased
by them, free and clear (subject to the paramount title of the United
States) of all liens, charges, encumbrances, pledges, security
interests, title defects of record or known to the Company and its
Subsidiaries, or conflicting prior unpatented mining claims except
where overlaps have occurred to preserve parallel endlines for lode
claims and to avoid gaps in claim patterns; location notices and
certificates for such claims were properly recorded and filed with
appropriate governmental agencies; all assessment work or annual
labor,
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location fees, mining claim rental and maintenance fees required to
hold the unpatented mining claims through the assessment year ending
September 1, 1997 have been properly and timely performed or paid; and
all assessment work and other filings required to maintain the claims
in good standing have been properly and timely recorded or filed with
appropriate governmental agencies; provided that, given the nature of
unpatented mining claims and millsites, the Company and its
Subsidiaries make no representation or warranty that, under standards
of adjudication which may be applied in evaluating locations under the
General Mining Law of 1872, as amended, the unpatented mining claims
contain a discovery of valuable mineral or that any of the unpatented
millsites are nonmineral in character or are being used and occupied
for mining and milling purposes.
(xxiii) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the
extent due and payable.
(xxiv) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any material
liability; the Company has not incurred and does not expect to incur
material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder
(the "Code"); and each "pension plan" for which the Company would have
any liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(xxv) The Company has dealt with no broker, finder,
commission agent or other person in connection with the sale of the
Shares and the transactions contemplated by this Agreement and the
Final Prospectus, other than the Purchaser, and the Company is under no
obligation to pay any broker's fee or commission in connection with
such transactions, other than the commission to the Purchaser
contemplated hereby.
(xxvi) With respect to the offer or sale of the Common Stock,
neither the Company nor any of its representatives (which, for
purposes of this clause (xxvi), shall not be deemed to include the
Purchaser) has engaged, or will engage,
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in any form of general solicitation or general advertising, including,
but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising (provided that any press release issued by the Company to
disclose the effectiveness of the Registration Statement or being
issued by the Company solely to disclose the transactions contemplated
herein shall not be deemed to constitute a general solicitation).
(b) (i) The Purchaser represents and agrees that (x) it
has not offered or sold and will not offer or sell in the United
Kingdom by means of any document, any Common Stock except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which will not result
in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995, (y) it has complied
and will comply with all applicable provisions of the Financial
Services Xxx 0000 with respect to anything done by it in relation to
the Common Stock in, from or otherwise involving the United Kingdom,
and (z) it has only issued or passed on and will only issue or pass on
in the United Kingdom any document received by it in connection with
the issue of the Common Stock to a person who is of a kind described
in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(ii) The Purchaser represents and agrees that, as
part of the distribution of the Shares, it will not offer or sell
through a general solicitation any Shares within the United States,
its territories or possessions or to persons who are citizens thereof
or residents therein, provided that the Shares may be offered to a
limited number of institutional investors, all of whom are "accredited
investors" as defined in the Act, through the intermediation of one or
more affiliates of the Purchaser acting on behalf of such investors.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
issue and sell the Shares to the Purchaser, and the Purchaser agrees to
purchase the Shares from the Company at a purchase price of $2.7450 per share.
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(b) As of the Closing Date, the Company will issue and
sell to the Purchaser or, at the Purchaser's direction, to its bona fide
officers, for a total purchase price of $100, warrants entitling the holders to
purchase 278,182 shares of Common Stock at $4.05 per share (the "Warrants") for
a period of two years commencing one year after the date of the Warrant
Agreement. The Warrants include the terms set forth in the Warrant Agreement.
The Purchaser may designate that the Warrants be issued to its bona fide
officers only if it determines that such issuances would not violate the
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") relating to the review of corporate financing arrangements. No sale,
transfer, assignment or hypothecation of the Warrants shall be made for a
period of one year from the date of the Warrant Agreement and thereafter only
to directors and bona fide officers of the Purchaser or its affiliates. The
holders of the Warrants will be entitled to the registration rights set forth
in the Warrant Agreement.
(c) The Company and the Purchaser agree that the
Purchaser will reoffer the Shares purchased by it hereunder solely to persons
whom it reasonably believes to be institutional "accredited investors", as such
term is defined in Rule 501(a)(1), (2), (3) or (7) under the Act.
3. Delivery and Payment. Delivery of and payment for the Shares
and the Warrants shall be made at the office of Stroock & Stroock & Xxxxx LLP,
counsel to the Purchaser, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx, xx June 11,
1997, which date and time may be postponed by agreement between the Purchaser
and the Company (such date and time of delivery and payment for the Shares
being herein called the "Closing Date"). Delivery of the Shares shall be made
to the Purchaser against payment by the Purchaser of the purchase price by wire
transfer or by certified or official bank checks payable in Clearing House
funds to the order of the Company.
Certificates evidencing the Shares shall be in definitive form,
registered in such names and in such denominations as the Purchaser may request
not less than three full business days in advance of the Closing Date.
The Company agrees to have the Shares available for inspection,
checking and packaging by the Purchaser in New York, New York, not later than
1:00 p.m. on the business day prior to the Closing Date.
4. Agreements. The Company covenants and agrees with the
Purchaser that:
(a) Prior to the termination of the offering of the
Shares, the Company will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus) to the Basic
Prospectus unless the Company has furnished the Purchaser with a copy
for its review prior to
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filing and will not file any such proposed amendment or supplement to
which the Purchaser reasonably objects. Subject to the foregoing
sentence, the Company will cause the Final Prospectus to be
transmitted to the Commission for filing pursuant to Rule 424 and will
cause the Final Prospectus to be filed with the Commission pursuant to
said Rule. During any time when a prospectus relating to the Shares is
required to be delivered under the Act, the Company will comply with
all requirements imposed upon it by the Act and the Exchange Act and
the respective rules and regulations promulgated by the Commission
thereunder to the extent necessary to permit the continuance of sales
of or dealings in the Shares in accordance with the provisions hereof
and of the Final Prospectus, provided, that the Purchaser shall be
obligated for any expenses thereof after nine months from the date
hereof. The Company will advise the Purchaser promptly when the Final
Prospectus shall have been transmitted to the Commission for filing
pursuant to Rule 424. If at any time prior to the termination of the
offering of the Shares contemplated hereby, the Company will advise
the Purchaser promptly (i) when any amendment to the Registration
Statement relating to the Shares shall have become effective, (ii) of
any request by the Commission for any amendment of the Registration
Statement or amendment of or supplement to the Final Prospectus or for
any additional information, (iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening (provided the Company has
actual knowledge of any such threat) of any proceeding for that
purpose and (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation or threatening (provided
the Company has actual knowledge of any such threat) of any proceeding
for such purpose. The Company will use its reasonable best efforts to
prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Act or the Rules and
Regulations, any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in light of the circumstances
under which they were made not misleading, or if it shall be necessary
to amend or supplement the Final Prospectus to comply with the Act,
the Rules and Regulations, the Exchange Act or the rules and
regulations of the Exchange Act, the Company promptly will prepare and
file with the Commission, subject to the first sentence of
subparagraph (a) of this Section 4, an amendment or supplement which
will correct such statement or omission or an amendment which will
effect such compliance.
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(c) The Company will make generally available to its
security holders and to the Purchaser as soon as practicable, but not
later than 60 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Rule 158
of the Rules and Regulations) covering a twelve month period beginning
not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(d) The Company will furnish to the Purchaser and counsel
for the Purchaser, without charge, copies of the Registration
Statement (including exhibits thereto) and each amendment thereto
which shall become effective on or prior to the Closing Date and, so
long as delivery of a prospectus by the Purchaser or dealer may be
required by the Act or the Rules and Regulations, as many copies of
the Final Prospectus and any amendments thereof and supplements
thereto as the Purchaser may reasonably request.
(e) The Company will use its reasonable efforts to
arrange for the qualification of the Shares for offer and sale under
the laws of such United States jurisdictions as the Purchaser may
reasonably designate and will maintain such qualifications in effect
so long as required for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service
of process or to taxation as a foreign corporation doing business in
such jurisdiction where it is not now so subject.
(f) The Company and its executive officers and directors
will not, directly or indirectly, without the prior written consent of
the Purchaser, offer, sell, distribute or otherwise dispose (or
announce any offer, sale, grant or any option to purchase or other
disposition) of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for, or any rights to
purchase or acquire, Common Stock, for a period of 90 days after the
date hereof, except for (i) the issuance of options pursuant to the
Company's Incentive Stock Option Plan and options pursuant to its
Non-Qualified Stock Option Plan, (ii) the Shares to be issued and sold
by the Company pursuant hereto, (iii) the issuance of up to 3,400,000
shares of Common Stock as consideration in connection with investments
in, acquisitions of, or mergers or combinations with other companies,
(iv) the sale by executive officers and directors of up to an
aggregate of 1,000,000 shares of Common Stock, and (v) the issuance of
shares of Common Stock pursuant to outstanding warrants and options.
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14
5. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase and pay for the Shares shall be
subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement filed prior to the
Closing Date (including the filing of any document incorporated by reference
therein) and as of the Closing Date, 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) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been instituted
or threatened; and the Final Prospectus shall have been filed or
mailed for filing with the Commission within the time period
prescribed by the Commission.
(b) The Company shall have furnished to the Purchaser the
opinion of Parcel, Mauro, Xxxxxx & Xxxxxxxxx, P.C., counsel for the
Company, dated the Closing Date, substantially to the effect of
subparagraphs (i) through (x) below:
(i) the Company has been duly incorporated and is
validly existing and in good standing under the laws of the
State of Delaware, has the corporate power and corporate
authority to own its properties and conduct its business as
described in the Prospectus and is duly qualified to transact
business as a foreign corporation and is in good standing
under the laws of all jurisdictions where the ownership or
leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not result in a material liability or
disability to the Company and its subsidiaries, taken as a
whole;
(ii) each of the domestic Subsidiaries has been duly
incorporated and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation, has
the corporate power and corporate authority to own its
properties and conduct its business and is duly qualified to
transact business as a foreign corporation and is in good
standing under the laws of all jurisdictions where the
ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure
to be so qualified would not result in a material liability or
disability to the Company and its Subsidiaries, taken as a
whole. All the outstanding shares of capital stock of each of
the domestic Subsidiaries have been duly and
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validly authorized and issued and are fully paid and
nonassessable, and, except as set forth on Schedule I hereto,
to such counsel's knowledge, all outstanding shares of capital
stock of each of the Subsidiaries are owned, directly or
indirectly, by the Company, free and clear of any perfected
security interest;
(iii) the capital stock of the Company conforms in
all material respects to the description thereof contained in
the Final Prospectus;
(iv) the authorization for the listing of the Shares
on the American Stock Exchange has been given, subject to
notice of issuance and evidence of satisfactory distribution;
(v) to the knowledge of such counsel, (a) there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus, and (b) 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, which is not described or filed as required;
(vi) the Registration Statement has been declared
effective under the Act; to the knowledge of such counsel
(based on telephonic confirmation with the Commission staff),
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted by the Commission or, to the knowledge of
such counsel (based on telephonic confirmation with the
Commission staff) threatened by the Commission; the
Registration Statement, the Final Prospectus and each
amendment thereof or supplement thereto (other than the
financial statements and other financial and statistical
information contained therein or incorporated by reference
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, the rules and regulations of the
Commission promulgated thereunder, the Exchange Act and the
rules and regulations of the Commission promulgated under the
Exchange Act;
(vii) this Agreement and the Warrant Agreement have
been duly authorized, executed and delivered by the Company;
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(viii) no consent, approval, authorization or order
of any Colorado, Delaware or federal court or governmental
agency or body is required for the execution and delivery of
this Agreement or the Warrant Agreement, the issuance and sale
of the Shares and the Warrants by the Company under this
Agreement and the issuance of the Warrant Shares under the
Warrant Agreement, 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 Shares by the Purchaser and such other approvals
(specified in such opinion) as have been obtained;
(ix) neither the issuance nor the sale of the Shares,
the Warrants or the Warrant Shares will conflict with, result
in a breach of, or constitute a default under the Certificate
of Incorporation or Bylaws, as amended, of the Company, or, to
the knowledge of such counsel, the terms of any indenture or
other material agreement or instrument known to such counsel
and to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries may be
bound, or any order or regulation known to such counsel to be
applicable to the Company or any of its Subsidiaries of any
court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company or any
of its Subsidiaries; and
(x) the Company has an authorized capitalization as
set forth in the Final Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. The
Shares have been duly authorized and, when issued and
delivered against payment therefor as provided in this
Agreement, will be validly issued, fully paid and
nonassessable, and are not and will not be subject to any
preemptive or other rights to subscribe for or purchase
securities; the holders thereof will not be subject to any
liability solely as such holders; and the certificates
representing the Shares will be in due and proper form as
previously authorized by the Company. The Warrant Shares have
been validly authorized and reserved for issuance upon
exercise of the Warrants and, when issued in accordance with
the Warrant Agreement, will be validly issued, fully paid and
non-assessable and free of preemptive rights. To such
counsel's knowledge, no person or entity is entitled to have
any securities registered under the Registration Statement.
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Such counsel shall also furnish to the Purchaser at the
Closing Date updated title opinions addressed to the Purchaser
(updated through June 8, 1997), updating such counsel's title opinions
addressed to Banque Paribas dated November 3, 1995, as previously
updated December 27, 1995.
In addition, such counsel shall state that in the course of
the preparation of the Registration Statement and the Final
Prospectus, such counsel has participated in conferences with officers
and representatives of the Company, with the Purchaser and its counsel
and with the Company's independent public accountants, at which
conferences the contents of the Registration Statement and the Final
Prospectus and related matters were discussed and (without taking any
further action to verify independently the statements made in the
Registration Statement and the Final Prospectus and, except as stated
in the foregoing opinion, without assuming responsibility for the
accuracy, completeness or fairness of such statements) nothing has
come to such counsel's attention that causes such counsel to believe
that either the Registration Statement as of the date it was declared
effective and as of the Closing Date or the Final Prospectus as of the
date thereof and as of the Closing Date contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading (it being understood that such counsel need not
express any opinion with respect to the financial statements,
schedules and other financial or statistical data included in the
Registration Statement or the Final Prospectus).
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, the State of Delaware, the State of New
York or the United States, to the extent deemed proper and specified
in such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are reasonably satisfactory to counsel
for the Purchaser; and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and its
Subsidiaries and public officials.
(c) The Purchaser shall have received from Stroock &
Stroock & Xxxxx LLP, counsel for the Purchaser, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Shares, the Registration Statement, the Final Prospectus
and other related matters as the Purchaser may reasonably require, and
the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon
such matters.
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(d) The Company shall have furnished to the Purchaser a
certificate of the Company, signed by the President or a Vice
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 and this Agreement and that to the best of their
knowledge:
(i) the representations and warranties of the Company
contained in Section 1 of 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 issued and no proceedings
for that purpose have been instituted or threatened;
(iii) none of the Registration Statement, the Final
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; and
(iv) subsequent to the respective dates of the
Registration Statement and the Final Prospectus: neither the
Company nor any of its Subsidiaries have incurred up to and
including the Closing Date, other than in the ordinary course
of their respective businesses, any material liabilities or
obligations, direct or contingent; the Company has not paid or
declared any dividends or other distributions on its capital
stock; neither the Company nor any of its Subsidiaries has
entered into any transactions not in the ordinary course of
business; and there has not been any material change in the
capital stock or long-term debt or any material increase in
the short-term borrowings of the Company or any of its
Subsidiaries; neither the Company nor any of its Subsidiaries
has sustained any material loss or damage to its property or
assets, whether or not insured; there is no litigation that is
pending or, to the knowledge of such officers, threatened
against the Company or any of its Subsidiaries that is
required to be set forth in an amended or supplemented
Prospectus that has not been set forth; and there has occurred
no event required to be set forth in an amended or
supplemented Prospectus that has not been set forth.
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(e) At the Closing Date, Coopers & Xxxxxxx L.L.P.
("Coopers") shall have furnished to the Purchaser a letter or letters
(which may refer to letters previously delivered to the Purchaser),
dated as of the Closing Date, in form and substance reasonably
satisfactory to the Purchaser, confirming that they are independent
accountants within the meaning of the Act and the Rules and
Regulations, and with respect to the financial and other statistical
and numerical information contained in the Registration Statement. In
addition, at the time this Agreement is executed, Coopers shall have
furnished to the Purchaser a letter or letters, dated the date of this
Agreement, in form and substance reasonably satisfactory to the
Purchaser, to the effect set forth in this subparagraph (e).
(f) Subsequent to the respective dates of the
Registration Statement and the Final Prospectus, there shall not have
been any material adverse change in the condition (financial or
other), 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.
(g) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request.
If any of the conditions specified in this Section 5 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 Purchaser and its counsel, this Agreement and all
obligations of the Purchaser hereunder may be canceled at, or at any time prior
to, the Closing Date by the Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
6. Expenses. (a) The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 9 hereof, including, without limitation, all
costs and expenses incident to (i) the printing or other production of all
documents with respect to the transactions, including any costs of printing the
Registration Statement, the Basic Prospectus and the Final Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda,
(ii) all arrangements relating to the delivery to the Purchaser of copies of
the foregoing documents, (iii) the fees and disbursements of the counsel,
accountants and any other experts or advisors retained by the Company, (iv)
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preparation, issuance and delivery to the Purchaser of any certificates
evidencing the Shares, including transfer agent's and registrar's fees, (v) the
qualification of the Shares under state securities and blue sky laws, including
filing fees and the reasonable fees and disbursements of counsel for the
Purchaser relating thereto, (vi) the filing fees of the Commission and the NASD
relating to the Shares, (vii) the listing of the Shares on the American Stock
Exchange and (viii) meetings with prospective investors in the Shares (other
than as shall have been specifically approved by the Purchaser to be paid for
by the Purchaser).
(b) Whether or not the transactions contemplated by this
Agreement are consummated or if this Agreement shall be terminated by the
Company (other than a breach by the Purchaser) pursuant to any of the
provisions hereof, the Company will reimburse the Purchaser for all of its
accountable out-of-pocket fees and expenses (including the reasonable fees,
disbursements and other charges of its counsel up to $100,000) incurred by it
in connection herewith.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Purchaser and each of its partners, directors, officers, associates,
affiliates, subsidiaries, employees, consultants, attorneys and agents, and
each person, if any, who controls the Purchaser or any of such affiliates
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several,
to which the Purchaser or any of such indemnified persons 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
(i) any untrue statement or alleged untrue statement of any material fact
contained in (A) the registration statement originally filed with respect to
the Shares or any amendment thereto, the Prospectus or any amendment or
supplement thereto or (B) any application or other document, or any amendment
or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities exchange
(each an "Application") or (ii) the omission or alleged omission to state in
such registration statement or any amendment thereto, the Prospectus or any
amendment or supplement thereto, or any Application a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse, as incurred, each such indemnified party 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,
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that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Purchaser specifically for use
in connection with the preparation thereof, (ii) such indemnity with respect to
the Basic Prospectus shall not inure to the benefit of the Purchaser (or any
such indemnified person) from whom the person asserting any such loss, claim,
damage or liability purchased the Shares which are the subject thereof if such
person did not receive a copy of the Final Prospectus (or the Final Prospectus
as amended or supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Shares 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 the Basic Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as amended or
supplemented), unless such failure was the result of noncompliance by the
Company with Section 4(b) hereof, and (iii) such indemnity shall not cover any
such loss, claim, damage or liability which is held in a final judgment of a
court to have arisen out of the gross negligence or willful misconduct of the
Purchaser. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity in subsections (i) and (ii) from the Company
to the Purchaser, but only with reference to written information relating to
the Purchaser furnished to the Company by or on behalf of the Purchaser
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 the Purchaser may otherwise have. The Company acknowledges that
for all purposes of this Agreement the statements set forth in the last
paragraph of the cover page and under the heading "Underwriting" or "Plan of
Distribution" in the Final Prospectus constitute the only information furnished
in writing by or on behalf of the Purchaser for inclusion in the documents
referred to in the foregoing indemnity, and the Purchaser confirms that such
statements are correct.
(c) Promptly after receipt by an indemnified party under
this Section 7 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 7, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any
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indemnified party otherwise than under this Section 7. 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
participate therein, and, to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; 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
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party under this Section 7 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 connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Purchaser in the case of subparagraph (a),
representing the indemnified parties under subparagraph (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 action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that if
clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii). After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party, unless
such indemnified party expressly waived its rights under this Section 7 in
which case the indemnified party may effect such a settlement without such
consent.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 7 is unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to
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the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Shares or (ii) if the allocation provided by
the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Company on the one hand and the
Purchaser on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (before deducting expenses) received by the
Company bear to the total commissions received by the Purchaser. The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Purchaser, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Company and the Purchaser agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of this
paragraph (d). Notwithstanding any other provision of this paragraph (d), the
Purchaser shall not be obligated to make contributions hereunder that in the
aggregate exceed the total commissions received by it with respect to the
Shares purchased under this Agreement, less the aggregate amount of any damages
that the Purchaser has otherwise been required to pay in respect of the same or
any substantially similar claim, and 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, if any,
who controls the Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
the Purchaser, and each director of the Company, each officer of the Company
who signed the Registration Statement, each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
8. [RESERVED]
9. Termination. This Agreement may be terminated with respect to
the Shares in the sole judgment of the Purchaser, by notice given to the
Company prior to delivery of and payment for
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the Shares and the Warrants, if prior to such time (i) trading in any of the
equity securities of the Company shall have been suspended by the Commission or
by an exchange that lists the securities or the Common Stock or trading in
securities generally on the American Stock Exchange or the International Stock
Exchange of the United Kingdom and the Republic of Ireland, Limited shall have
been suspended or limited or minimum or maximum prices shall have been
generally established on any such exchanges, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any of such exchanges
or by order of the Commission or any court on other governmental authority,
(ii) a banking moratorium shall have been declared by New York, United Kingdom
or United States authorities or (iii) there shall have occurred any material
adverse change in the financial or securities markets in the United States or
the United Kingdom or any outbreak or material escalation of hostilities or
declaration by the United States or the United Kingdom of a national emergency
or war or other calamity or crisis, the effect of any which is such as to make
it, in the judgment of the Purchaser, impracticable or inadvisable to market
the Shares on the terms and in the manner contemplated by the Final Prospectus.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers and of the Purchaser 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 Purchaser or the Company or any of
the partners, directors, officers, associates, affiliates, subsidiaries,
employees, consultants, attorneys, agents or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the Shares. The
provisions of Section 6 and 7 hereof and this Section 10 shall survive the
termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchaser, shall be mailed,
delivered or telecopied and confirmed in writing to NatWest Securities Limited,
000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, Attn: Xx. Xxxxxx Xxxx, with a copy
to: Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attn: Xxxxx X. Xxxxxxxxx, Esq.; or, if sent to the Company, will be
mailed, delivered or telecopied and confirmed in writing to it at Canyon
Resources Corporation, 14142 Denver Xxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000, attention of the Company's President, with a copy to: Parcel, Mauro,
Xxxxxx & Xxxxxxxxx, P.C., 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, Attn: Xxxxxx X. Speed, Esq.
12. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the Purchaser, the Company and their respective
successors and legal representatives, and nothing
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expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of the Company contained in Section 7 of
this Agreement shall also be for the benefit of any person or persons who
control the Purchaser within the meaning of Section 15 of the Act and (ii) the
indemnities of the Purchaser contained in Section 7 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons
who control the Company within the meaning of Section 15 of the Act. No
purchaser of Shares from the Purchaser shall be deemed a successor because of
such purchase.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflict of laws.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Purchaser.
Very truly yours,
CANYON RESOURCES CORPORATION
By:
-------------------------------
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above-mentioned.
NATWEST SECURITIES LIMITED
By:
---------------------------
Name:
Title:
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27
SCHEDULE I
Percent Owned by
Subsidiary the Company
---------- ----------------
Minera Hispaniola, S.A. . . . . . . . . . . . . . . 40
Canyon Resources Africa Ltd. . . . . . . . . . . . 90
Canyon Resources Venezuela, C.A. . . . . . . . . . 90
Canyon Resources Tanzania . . . . . . . . . . . . . 90
Security Interests, Etc.
The outstanding shares of capital stock of XX Xxxxxx Corporation owned by the
Company have been pledged as collateral under the Loan Agreement dated December
6, 1995, between XX Xxxxxx Corporation and Banque Paribas as Agent.
-I-
