EXHIBIT 1.3
PLACEMENT AGENCY AGREEMENT
November __, 1997
Apex Silver Mines Limited
Caledonian Houses, Ground Floor
Xxxx Street
Xxxxxx Town, Grand Cayman
Cayman Islands, British West Indies
Ladies and Gentlemen:
This placement agency agreement (the "AGREEMENT") outlines the terms upon
which Salomon Brothers Inc, PaineWebber Incorporated, Scotia Capital Markets
(USA) Inc. and Xxxxx Xxxxxx Inc. (collectively, the "PLACEMENT AGENTS") are
engaged by Apex Silver Mines Limited, a Cayman Islands corporation (the
"COMPANY"), to act as its financial advisors and exclusive placement agents in
connection with the offering by the Company (the "CONCURRENT OFFERING") of up to
an aggregate of ________ Shares (the "CONCURRENT SHARES") of Ordinary Shares,
par value $.01 per share (the "ORDINARY SHARES"), of the Company. The Concurrent
Offering of Concurrent Shares is registered on Registration Statement No.
333-34685 (as such Registration Statement may be amended from time to time, the
"REGISTRATION STATEMENT") under the Securities Act of 1993, as amended (the
"ACT"), filed by the Company with the Securities and Exchange Commission (the
"COMMISSION"). The Company will also enter into (i) an underwriting agreement
with the Placement Agents, as representatives of the several underwriters to be
named in Schedule I thereto and (ii) an underwriting agreement with certain
international underwriters as representatives of the several underwriters to be
named in Schedule I thereto (collectively, the "UNDERWRITERS"), relating to the
offering of Ordinary Shares by the Underwriters (the "INITIAL PUBLIC OFFERING"
and, together with the Concurrent Offering, the "OFFERINGS"). The Initial Public
Offering is also registered on the Registration Statement. To the extent
designated herein, portions of the underwriting agreements relating to the
Initial Public Offering, in the forms filed as Exhibit 1.1 and Exhibit 1.2 to
the Registration Statement and attached hereto as Annex A and Annex B (as such
Underwriting Agreements may be amended from time to time with the Placement
Agents' consent, the "UNDERWRITING AGREEMENTS"), shall be deemed to be
incorporated by reference herein and form a part hereof. Notwithstanding
anything else herein to the contrary, it is expressly understood and agreed that
the closing of the Concurrent Offering is conditioned on the occurrence of the
Closing Date. All capitalized terms not defined herein shall have the meanings
ascribed to them in the Underwriting Agreements.
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SERVICES
1. The Company hereby appoints the Placement Agents as the Company's
exclusive placement agents in connection with the Concurrent Offering and,
subject to the terms and conditions contained or incorporated by reference
herein, the Placement Agents hereby accept such appointment.
2. The Placement Agents agree to provide advisory services to the Company
as to the structure of the Concurrent Offering and to act as the Company's
placement agents in all states of the United States and in the District of
Columbia. Except as specifically set forth herein, the Placement Agents do not
assume any additional duties or responsibilities with respect to the Concurrent
Offering and no other duties shall be implied from this Agreement. The Company
acknowledges that purchasers of the Concurrent Offering are not, and will not be
treated as, "customers" of the Placement Agents for purposes of the rules of the
National Association of Securities Dealers, Inc. (the "NASD") and that the
Placement Agents shall have no responsibility for the performance or
non-performance of any purchaser in the Concurrent Offering or for the
performance or non-performance of the Company.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
3. The Company hereby makes to the Placement Agents the agreements,
representations and warranties set forth in Sections 1 and 5 of the Underwriting
Agreements.
4. The Company agrees with the Placement Agents:
(a) to provide the Placement Agents with such copies of the
Registration Statement, Prospectus, any preliminary prospectus and such other
documents and instruments as the Placement Agents may reasonably request;
(b) to prohibit directors, officers, employees and agents of the
Company from soliciting offers to purchase the Shares and to prevent the
distribution of any document, instrument or other materials relating to the
Concurrent Offering, in each case, without the prior approval of the Placement
Agents, which approval will not be unreasonably withheld; and
5. The Company further agrees with the Placement Agents that the Company
will pay all costs, expenses, fees and taxes incident to (i) the preparation,
printing, filing and distribution under the Act of the Registration Statement
(including financial statements and exhibits), of each preliminary prospectus
and all amendments
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and supplements to any of them prior to or during the period specified in
Section 5 of the Underwriting Agreements to the Placement Agents and the
Purchasers (including potential purchasers), (ii) the printing and delivery of
the Prospectus and all amendments or supplements to it during the period
specified in Section 5 of the Underwriting Agreements to the Placement Agents
and the Purchasers (including potential purchasers), (iii) the printing and
delivery of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda
and all other agreements, memoranda, correspondence and other documents printed
and delivered in connection with the offering of the Concurrent Shares
(including in each case any disbursements of counsel for the Placement Agents
relating to such printing and delivery), (iv) the registration or qualification
of the Concurrent Shares for offer and sale under the securities or Blue Sky
laws of the several states (including in each case the fees and disbursements of
counsel for the Placement Agents relating to such registration or qualification
and memoranda relating thereto), (v) filings and clearance with the National
Association of Securities Dealers, Inc. in connection with the Concurrent
Offering, (vi) the listing of the Concurrent Shares on the American Stock
Exchange, (vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be requested for
use in connection with the offering or sale of the Concurrent Shares by the
Company to the Purchasers, and (viii) all other costs and expenses incident to
the performance of its obligations hereunder and the Subscription Agreements
which are not otherwise specifically provided for in this Section.
6. The obligations of the Placement Agents hereunder and the closing of
the sale of the Concurrent Shares in the Concurrent Offering (the "CONCURRENT
TIME OF DELIVERY") shall be subject to the satisfaction of the conditions set
forth in Section 6 of the Underwriting Agreements. Furthermore, (i) the
Concurrent Time of Delivery shall be conditioned upon the occurrence of the
Closing Date and (ii) the obligations of the Placement Agents hereunder shall be
conditioned upon resolution to the reasonable satisfaction of the Placement
Agents of all legal and regulatory issues related to the Concurrent Offering.
For purposes of this Section 6, all references to "Underwriters" and
"Underwritten Securities" together with "Option Securities" in the introductory
paragraph of Section 6 of the Underwriting Agreements shall be deemed to refer
to the Placement Agents and Concurrent Shares, respectively. Also for purposes
of this Section 6, (a) the opinions of (i) Akin, Gump, Strauss, Xxxxx & Xxxx,
L.L.P., (ii) X.X. Xxxxxx & Company, (iii) Xxxxxxxxxxx & Xxxxx, (iv) Bufete
Xxxxxxxxx-Xxxxx, (v) Xxxxxxxxx-Xxxxxxxxxx & Xxxxx, and (vi) Winston & Xxxxxx,
(b) the letter or letters of Price Waterhouse LLP and (c) the certificates of
directors of the Company and officers of Apex Silver Mines Corporation (provided
for in Section 6(h) of the Underwriting Agreements), shall each also be
addressed and furnished to the Placement Agents at the Concurrent Time of
Delivery and all references in Section 6 of the Underwriting
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Agreements to "your reasonable satisfaction," "satisfactory to you," "judgment
of the Representatives" or similar language shall be deemed to refer to a
determination by the Placement Agents.
FEES
7. As compensation for their services under this Agreement, the Placement
Agents will receive at the Concurrent Time of Delivery a fee (the "PLACEMENT
FEE") from the Company equal to ____% of the Initial Public Offering Price
multiplied by the number of Ordinary Shares sold in the Concurrent Offering, by
wire transfer in immediately available funds to a bank account or accounts
designated by the Placement Agents. Payment of such Placement Fee shall be a
condition of the Concurrent Time of Delivery. In the event the Concurrent
Offering is terminated by the Placement Agents because of any failure or refusal
on the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the Placement
Agents for all out-of-pocket expenses (including the fees and disbursements of
counsel) reasonably incurred by them.
INDEMNIFICATION AND EXCULPATION
8. The Company (the "INDEMNIFYING PARTY") agrees to indemnify and hold
harmless the Placement Agents, their affiliates and their parents and their
affiliates, and the respective directors, officers, agents and employees of the
Placement Agents, their affiliates and their parents and their affiliates, and
each person, if any, who controls any of the Placement Agents within the
meaning of the Act or the Exchange Act from and against any losses, claims,
damages, judgments, assessments, costs and other liabilities (or actions or
proceedings in respect thereof) to which the Placement Agents or such entity or
person may become subject related to or arising out of (i) the Placement Agents'
engagement hereunder including, without limitation, the use or content of the
Registration Statement, any preliminary prospectus or the Prospectus, or any
amendment or supplement thereto, or (ii) the activities of the Company in
connection with the Offerings, and will reimburse the Placement Agents and each
such entity or person for all reasonable legal and other expenses as incurred in
connection with investigating, preparing, pursuing or defending any such loss,
claim, damage, judgment, assessment, cost, liability, action, investigation or
proceeding whether or not in connection with pending or threatened litigation
in which either the Placement Agents or any such entity or person is a party;
provided, however, that the Company shall not be liable in the case of clause
(i) for losses, claims, damages, judgments, assessments, costs, liabilities or
expenses that (x) a court of competent jurisdiction shall have found in a final
judgment which is no longer subject to appeal or
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further review to have arisen solely from the gross negligence or willful
misconduct of either of the Placement Agents or (y) are caused by any untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Placement Agents furnished in writing to the Company
by the Placement Agents specifically for use in the Registration Statement, any
preliminary prospectus or any Prospectus or any amendment or supplement thereto.
In case any proceeding shall be instituted involving any person in respect
to whom indemnity may be sought, such person (the "INDEMNIFIED PARTY") shall
promptly notify the indemnifying party in writing; provided, however, that
failure to so notify the indemnifying party shall not relieve the indemnifying
party from any liability the indemnifying party may have on account of this
indemnity or otherwise, except to the extent the indemnifying party shall have
been materially prejudiced by such failure. The indemnifying party, upon the
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may reasonably designate in such proceedings and shall pay as
incurred the fees and expenses of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall the right to retain its own
counsel at its own expense, except that the indemnifying party shall pay as
incurred the reasonable fees and expenses of counsel retained by the indemnified
party in the event that (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel, (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of all such
parties by the same counsel would constitute a real or perceived conflict of
interest in the reasonable opinion of the indemnified party, due to actual or
potential differing interests between them or (iii) the indemnifying party has
failed to assume the defense and employ counsel. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party to the extent set forth in this
Agreement. The indemnifying party will not, without the prior written consent
of the indemnified party, settle, compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or threatened action or
proceeding in respect of which indemnification or contribution may be sought
hereunder unless such settlement, compromise, consent or termination includes an
unconditional release of the indemnified party from any and all liability with
respect to such action or proceeding.
In the event a claim for indemnification as described herein is unavailable
or insufficient, then the Company shall contribute
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to the aggregate losses, claims, damages or liabilities to which the Placement
Agents, their affiliates and their parents and their affiliates, and the
respective directors, officers, agents, employees or controlling persons may be
subject in such amount as is appropriate to reflect the relative benefits
received by the Company on the one hand and the party seeking contribution on
the other and the relative fault of the Company on the one hand and the party
seeking contribution on the other, as well as any relevant equitable
contributions; provided, however, that in no event shall the Company contribute
less than the amount necessary to ensure that the Placement Agents and such
entities and persons, in the aggregate, are not liable for any losses, claims,
damages, judgments, assessments, costs and other liabilities in excess of the
amount of the Placement Fee actually received by the Placement Agents hereunder.
The relative benefits received by the Company and on the one hand and the
Placement Agents on the other shall be deemed to be in the same proportion as
the total net proceeds from the Concurrent Offering (before deducting expenses)
received by the Company bear to the Placement Fee paid to the Placement Agents
by the Company.
The provisions of this Agreement relating to reimbursement, indemnification
and contribution shall survive termination, modification or completion of the
engagement of the Placement Agents and shall be binding upon any successors or
assigns of the Company.
9. The Company also agrees that the Placement Agents, their affiliates and
their parents and their affiliates and the respective directors, officers,
agents, employees of the Placement Agents, their affiliates and their parents
and their affiliates, shall have no liability to the Company or its shareholders
for or in connection with any matter referred to in this Agreement, except in
the case of clause (i) of Section 8, to the extent that any losses, claims,
damages, judgments, assessments, costs, liabilities or expenses incurred by the
Company are determined by a court of competent jurisdiction in a final judgment
which is no longer subject to appeal or further review to have arisen solely
from the gross negligence or willful misconduct of the Placement Agents.
OTHER
10. The Company represents and warrants that no person or organization
other than the Placement Agents are, as a result of any action by the Company,
entitled to compensation for services as a finder, broker, placement agent or
investment banker in connection with the Concurrent Offering.
11. The Company agrees that to the extent any Concurrent Shares are not
sold in the Concurrent Offering, the Placement Agents shall have the right, in
its sole discretion, to cause such Concurrent Shares to be sold by the
Underwriters in the Initial
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Public Offering.
12. This Agreement shall be deemed to be effective as of the date hereof
and the term of this engagement shall be from the date hereof until the earlier
of (i) termination of the Concurrent Offering, and (ii) the completion of the
Offerings. Notwithstanding the foregoing, if at any time the Company violates
any of its covenants and agreements contained herein or if any of the conditions
set forth in Section 6 are not satisfied, the Placement Agents shall have the
right to terminate their obligations hereunder upon prior notice to the Company.
In the event of any termination of this Agreement or if for any reason the
Concurrent Offering is terminated, the Company shall be responsible for (i) the
reimbursement of all fees, disbursements, costs and expenses, as provided in
Section 5, and (ii) its obligations arising under Section 8.
13. The Company agrees that the Placement Agents shall have the right to
advertise their participation in the Concurrent Offering in "tombstone" or other
appropriate financial advertisements in newspapers, magazines, trade periodicals
or other publications. The Placement Agents agree that such tombstone or other
advertisements shall not be published without the prior approval of the Company,
provided that such approval is not unreasonably withheld or delayed.
14. The invalidity or unenforceability of any provison of this Agreement
shall in no way offset the validity or enforceability of any other provision.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the state of New York. The terms and provisions of this
Agreement are solely for the benefit of the Company and the Placement Agents and
the other indemnified parties and their respective successors, assigns, heirs
and personal representatives, and no other person shall acquire or have any
right by virtue of this letter.
15. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Placement Agents shall be delivered or sent by mail,
telex or facsimile transmission to in the case of the Placement Agents to:
Salomon Brothers Inc, Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and in
the case of the Company to the address of the Company set forth in the
Registration Statement, Attention: Chairman. Any such statements, requests,
notices or agreement shall take effect upon receipt thereof.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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Please confirm that the terms described here are in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
letter.
Very truly yours,
SALOMON BROTHERS INC
PAINEWEBBER INCORPORATED
SCOTIA CAPITAL MARKETS (USA) INC.
XXXXX XXXXXX INC.
By: Salomon Brothers Inc
By:
------------------------------
Vice President
AGREED AND CONFIRMED:
APEX SILVER MINES LIMITED
By:
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Title:
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ANNEX A
[Attach form of U.S. Underwriting Agreement]
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ANNEX B
[Attach form of International Underwriting Agreement]
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