EXHIBIT 10.13
SERVICES AGREEMENT
THIS AGREEMENT is made as of the 1st day of January, 1994, by and
between Cyprus Amax Minerals Company, a Delaware corporation
("Cyprus"), and Amax Gold, Inc., a Delaware corporation ("AGI").
RECITALS
WHEREAS, Cyprus is presently the owner of approximately forty
percent (40%) of the outstanding shares of common stock of AGI; and
WHEREAS, Cyprus and its affiliates except AGI ("Cyprus Group")
and AGI and its affiliates except Cyprus ("AGI Group"), to promote the
cost effective and efficient provision of services, intend to provide
to each other various management and other services ("Services"), that
extend to each Group's business; and
WHEREAS, the parties hereto desire that such Services shall be
provided in good faith on a fair and equitable basis to each party.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements herein contained, Cyprus and AGI agree as
follows:
1. Services. Until terminated in accordance with Section 4,
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either Group may furnish the other Group with certain Services which
may include, but are not limited to, the following:
(a) General executive services, including without
limitation periodic advice and consultation with respect to business
affairs;
(b) Business planning and development services, including
without limitation assistance and consultation with respect to
business affairs;
(c) Accounting and financial services, including without
limitation: i) general accounting (payroll, invoicing, accounts
payable, maintenance of general and subsidiary ledgers and journals,
and preparation of related reports); ii) government accounting
(preparation of federal, state and/or local government reports);
iii) coordination of external audits; iv) performance of internal
audits; v) performance of treasury functions (cash management and
debt/equity financing); and vi) financial planning and budgeting;
(d) Sales and marketing services, including without
limitation: i) negotiation of refining agreements and sales
agreements; ii) administration of commercial agreements, including
without limitation shipping, invoicing, and settlements; and iii) the
development and implementation of pricing and hedging strategies;
(e) Legal or tax services, including without limitation:
i) regular and periodic advice and consultation with respect to legal
and tax matters; ii) the preparation of filing of, and assistance with
respect to, tax returns and reports to the Securities and Exchange
Commission and other governmental agencies or instrumentalities;
iii) preparation of contracts, leases and other legal instruments; and
iv) management of the defense or prosecution of litigation and of
other legal services furnished by independent counsel, and making
recommendations with respect thereto;
(f) Environmental services, including without limitation
such services as are necessary or desirable to assist either Group in
complying with all applicable environmental laws and regulations,
including without limitation the preparation and submission to
regulatory agencies of all necessary and desirable reports;
(g) Technical services, including without limitation mine
engineering and design, project design and supervision, metallurgical
sampling, testing and analysis, and equipment maintenance;
(h) Information services, including without limitation
access to and use of computer hardware and software, and the
operations of computer programs;
(i) Insurance services, including without limitation the
inclusion, to the extent agreed upon by AGI and Cyprus, of either
Group as a loss payee under insurance policies maintained by the other
Group, and the processing and administration of insurance claims;
(j) Property management services, including without
limitation the maintenance of unpatented mining claims and other
interests in or titles to minerals or any interest therein, and filing
of notices or other documents required under local, state, and federal
laws and regulations, in each case for those properties designated by
either Group;
(k) Human resources services, including without limitation
advisory and administrative services relating to employee relations,
safety and health, compensation programs, employee benefit programs,
and other personnel matters;
(l) Services related to public affairs, including without
limitation contacts with various news and trade publication media;
(m) General services with respect to government relations
concerning various levels of local, state, regional and national
governments;
(n) Corporate Secretary services, including without
limitation maintenance of corporate stock records, assistance in
convening meetings of directors and shareholders and preparing the
minutes of such meetings, preparing periodic reports to the
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Securities and Exchange Commission and applicable stock exchanges, and
other services normally associated with this function; and
(o) Such other services as are customarily provided by
Cyprus' or AGI's affiliate, division or corporate staff, or as may be
mutually agreed to by the parties.
2. Compensation for Services.
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(a) For Services rendered by either Group to the other
Group under this Agreement, the Group receiving the Services will pay
to the group providing the Services a fee in accordance with a budget
based upon a reasonable estimate of the costs, including overhead, of
the Services provided, or if no budget is otherwise agreed, on terms
as may be mutually agreed by AGI and Cyprus.
(b) The parties recognize that one party may perform
Services for the other Group which are in excess of those which were
anticipated by the parties when the fee was calculated for the
Services provided. Either party may, at its sole option, propose to
the other party an increase in the fee for such Services, which
increase shall be based on a reasonable estimate of the cost,
including overhead, of the Services provided. Any increase so
proposed shall be negotiated between the parties in good faith, and if
mutually approved by the parties,shall be paid on terms as may be
mutually agreed by the parties.
3. Third Party Services. In order to perform agreed upon
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Services herein, either Group may, on behalf of the other and with
their consent, contract for Services customarily performed by third
parties, such as law firms, engineering firms, consultants and
independent accountants; provided, however, that the fees and expense
of any such third party Services shall be the expense of the Group for
whom the Services are performed.
4. Termination. This Agreement shall have an initial term of
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three (3) years from the date of this Agreement, and shall continue so
long thereafter unless terminated sooner under the following
conditions:
(a) If AGI elects to terminate this Agreement and has given
at least one hundred eighty (180) days' prior written notice of such
termination; or
(b) If Cyprus elects to terminate this Agreement and has
given at least one hundred eighty (180) days' prior written notice of
such termination; or
(c) If Cyprus' ownership of the outstanding shares of AGI
common stock is reduced to less than twenty-five percent (25%);
provided that i) Cyprus or AGI has given at least one hundred eighty
(180) days' prior written notice of such termination, and ii) the
percentage of Cyprus ownership is not increased to twenty-five percent
(25%) or more prior to such termination.
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(d) By mutual agreement of the parties.
5. Notices. Any notice, consent or other document to be
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conveyed pursuant to this Agreement shall be in writing and shall be
sufficiently conveyed if it is:
(a) delivered personally to such party or officer as set
froth below;
(b) sent by telex, telegram, telecopier, facsimile or other
telecommunications device, confirmation requested to the party or
officer set forth below; or
(c) sent to the party entitled to receive it by registered
or certified mail, postage prepaid, and addressed to such party as
follows:
Cyprus or any of the Cyprus Group:
---------------------------------
Cyprus Amax Minerals Company
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
with a copy to:
Cyprus Amax Minerals Company
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
AGI or any of the AGI Group:
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Amax Gold Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
with a copy to:
Amax Gold Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
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or to such other address as the party entitled to or receiving such
notice or other document shall have given, by written notice, to the
party giving or sending or delivering such notice or other document.
6. Standard of Care. Both parties shall conduct the Services
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in a good, workmanlike and efficient manner, in accordance with sound
mining and other applicable industry standards and practices.
7. Indemnity. Neither Group shall be liable to the other Group
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for, and each Group hereby indemnifies and holds harmless the other
Group and its officers, directors, employees and agents from and
against any loss, claim, expense, damage or liability of whatever kind
or nature, whether pending or threatened, by reason of any action
taken or omitted to be taken by the other Group or its officers,
directors, employees or agents hereunder or in connection herewith,
except for such damages that have been finally judicially determined
to result from the other Group's gross negligence, bad faith, wrongful
misconduct, or wanton disregard of its express obligations under this
Agreement.
8. Force Majeure. If either party is unable, in whole or in
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part, by reason of any occurrence beyond the reasonable control of the
party, to carry out any obligation under this Agreement (other than
the payment of money), the performance of such obligation, to the
extent and during the time that it is so affected, shall be suspended;
provided that the party providing the Services has notified the other
party promptly of such circumstances and has exercised due diligence
in attempting to perform its obligations. Fees under this Agreement
shall be reduced proportionately to reflect the nonperformance of
those Services suspended under this provision.
9. Confidentiality. Each party shall treat any confidential
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information relating to the other party with the same degree of care
and confidentiality that it uses with respect to its own information
of like nature and shall not disclose same to any third party without
the prior written consent of the other party; provided, however, that
the foregoing restrictions on disclosure do not apply to:
(a) Information disclosed in response to requirements of
any governmental agency or other authority;
(b) Information disclosed as necessary for financing
purposes or pursuant to the rules of a stock exchange;
(c) Information disclosed to party subsidiaries,
affiliates, consultants and other third parties as necessary in
connection with normal operations, acquisition or development, or to
carry out the purposes of this Agreement;
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(d) Information which is or, through no fault of disclosing
party, or any of its employees, contractors or consultants, later
becomes part of the public domain;
(e) Information which is already in the disclosing party's
possession and which has not been acquired directly or indirectly from
the non-disclosing party; or
(f) Information which is received from a third party who
did not acquire such information directly or indirectly form the non-
disclosing party under an obligation or confidence, but only to the
extent that such information is held by the disclosing party free of
any obligation of confidentiality to such third party.
10. Amendment. This Agreement may not be amended except by a
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written assignment signed by both parties.
11. Governing Law. This Agreement shall be deemed to have been
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made in, and shall be governed by, and be construed in accordance with
the laws of the State of Colorado.
12. Other Agreements. Where the provisions of this agreement
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are inconsistent with the terms of other agreements between the
parties, the terms of those other agreements shall supersede and
control. This Agreement shall be interpreted and construed to
effectuate the mutually beneficial purposes set forth in said
agreements regarding good faith relations and the efficient
accomplishment of work between and on behalf of the parties.
13. Waiver. Any delay or omission or failure to exercise any
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right or remedy provided for herein shall not constitute a waiver of
any provision of this Agreement or any other right, duty or obligation
either party may have to the other outside the scope of this
Agreement, and shall not limit any party's right thereafter to enforce
any provision or exercise any right.
14. Assignment. This Agreement shall not be assigned by AGI or
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Cyprus except to a successor by merger, consolidation or the transfer
of substantially all of the assets and business of AGI or Cyprus, as
the case may be.
15. Further Assurances. The parties hereto covenant and agree
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to in good faith take all reasonable steps and do all things
reasonably within their power as may be reasonably required to give
effect to the terms of this Agreement.
16. Severability. The invalidity or unenforceability of any one
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or more of the provisions of this agreement shall not effect the
validity or unenforceability of any of the other provisions hereof so
long as the parties hereto retain the fundamental benefits of this
Agreement absent the invalid or unenforceable provisions.
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17. Disputes. Except as otherwise provided in this Agreement,
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in the event the parties have a dispute hereunder, they shall meet,
within thirty (30) days from the receipt of a written request for a
meeting from any party, for the purpose of resolving in good faith
such dispute. If such dispute is not resolved within thirty (30) days
after such meeting, the parties shall appoint a mutually agreed
mediator and attempt to resolve such dispute through mediation for at
least sixty (60) days from such appointment. If the dispute remains
unresolved beyond such sixty (60) days, the parties shall hereby
consent to the jurisdiction and venue of the State or Federal Courts
in Denver, Colorado for the resolution of such dispute. A party
seeking to enforce the terms of this Agreement may use and pursue all
legal and equitable remedies available to it consistent with this
paragraph. A party prevailing in a court action to enforce the terms
of this Agreement shall be entitled to collect its reasonable costs
and attorneys fees.
EXECUTED as of the day first above written.
CYPRUS AMAX MINERALS COMPANY
By: /s/ Xxxxxx X. Xxxx
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Title: President and Chief Executive
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Officer
AMAX GOLD, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Title: President and Chief Operating
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Officer
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