EXHIBIT 11
AGREEMENT REGARDING STOCK ISSUANCE
AGREEMENT made this 29th day of September, 1995 among AMAX
GOLD, INC., a Delaware corporation ("AGI"), and CYPRUS AMAX MINERALS
COMPANY, a Delaware corporation ("Cyprus"). AGI and Cyprus are
referred to herein as the "Parties."
WHEREAS, the Parties have entered into a number of
transactions, including, among others, transactions relating to
(i) borrowing of money by AGI from Cyprus; (ii) joint venture
exploration for gold prospects; (iii) provision of management and
other services; (iv) the granting to AGI of options to purchase
interests in Cyprus properties; (v) the transfer of allocation of
responsibility for employee benefits between Cyprus and AGI to
facilitate transfer of employees between the companies; (vi) put and
call agreements relating to AGI Common Stock; and (vii) sharing by AGI
of its net operating losses with Cyprus; and
WHEREAS, Cyprus is, as of the date hereof, the beneficial
owner of 40,914,842 shares of AGI Common Stock, representing 46.5%
thereof; and
WHEREAS, subject to the limitations set forth below, Cyprus
desires to continue to invest in AGI Common Stock, and AGI desires to
have the ability to fund its obligations to Cyprus with respect to
existing and future transactions through the issuance of up to 879,500
shares of AGI Common Stock (less than 1% of the shares of AGI Common
Stock outstanding on the date hereof); and
WHEREAS, the Parties desire to increase their flexibility
with respect to existing and future transactions by providing that,
upon mutual written agreement, amounts owing by AGI to Cyprus relating
to transactions between the Parties may be paid in shares of AGI
Common Stock.
NOW, THEREFORE, in consideration of the premises and of
mutual covenants and agreements, and subject to the terms and
conditions hereinafter set forth, the Parties agree as follows:
1. Agreement Regarding Stock Issuance.
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a. Upon Request of AGI. If, in connection with
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existing or future transactions between the Parties, AGI desires that
amounts owing by it to Cyprus are to be paid in shares of AGI Common
Stock rather than cash, it shall make such offer to Cyprus in writing
five business days prior to the date such payment is due, which
writing shall set forth (i) the obligation proposed to be satisfied in
shares of AGI Common Stock, (ii) the cash amount owing or proposed to
be paid, (iii) the number of shares of AGI Common Stock to be issued
and the method of calculation thereof, as provided in Xxxxxxxxx 0
xxxxx, (xx) the date of the proposed issuance, (v) a statement that
the AGI Audit Committee has reviewed the proposed issuance and
determined that its terms are fair to and in the best interests of all
AGI stockholders, (vi) a statement that no approvals are required in
connection with such
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issuance by Delaware General Corporation Law or the regulations of the
Securities and Exchange Commission, the New York Stock Exchange or
otherwise, or that such approvals have been obtained and (vii) a
statement that such issuance will not conflict with the terms of any
existing agreement to which AGI is a party, or that effective waivers
have been received with respect to any conflicts.
b. Upon Request of Cyprus. If in connection with an
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existing or future transaction between the Parties, Cyprus desires
that amounts owing to it by AGI be paid in shares of AGI Common Stock
rather than cash, it shall make such offer to AGI in writing five
business days prior to the date such payment is due, which writing
shall set forth (i) the obligation proposed to be paid in shares of
AGI Common Stock, (ii) the cash amount to be paid, (iii) the date the
payment is due, (iv) the number of shares of AGI Common Stock to be
issued and the method of calculation hereof, as provided in Paragraph
2 below, and (v) a statement affirming at the date of such notice, the
representations and warranties set forth in Paragraph 5.b. and 5.c.
c. Procedure by Cyprus in Response to AGI Request.
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Cyprus shall notify AGI in writing within three business days of
receipt of the AGI request (and in any event within three days of the
date the payment is due or proposed to be made) whether it will accept
the shares of AGI Common Stock as full or partial payment for amounts
owing in respect of the specified obligation. Failure of Cyprus to
notify AGI within the time period set forth above that it is willing
to accept payment of the specified obligation in shares of AGI Common
Stock shall constitute a rejection of AGI's offer.
d. Procedure by AGI in Response to Cyprus Request.
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Upon receipt of the offer by Cyprus, AGI shall inform the members of
its Audit Committee of the requested issuance, and such Committee
shall determine if issuance of the AGI Common Stock on the terms set
forth in the Cyprus notice is fair to and in the best interests of all
AGI stockholders. If such determination is forthcoming, AGI shall
notify Cyprus in writing, within three business days of receipt of the
Cyprus request, whether AGI agrees to issue shares of AGI Common Stock
in lieu of payment of cash or other obligations owing to Cyprus.
Failure of AGI to notify Cyprus within the time period set forth above
that it is willing to satisfy such obligation through issuance of AGI
Common Stock, whether by reason of determination of the Audit
Committee or otherwise, shall constitute rejection of Cyprus' offer.
2. Determination of Offering Price. The AGI Common Stock
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to be issued hereunder shall be valued based on the 30-day average of
closing prices of the AGI Common Stock on the New York Stock Exchange
for the 30 trading days immediately preceding the notice delivered by
AGI or Cyprus.
3. Limit on Number of Shares of AGI Common Stock to be
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Issued. The number of shares of AGI Common Stock to be issued
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hereunder shall be limited to 879,500, which is less than 1% of the
number of shares of AGI Common Stock issued and outstanding at the
date hereof.
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4. Representations and Warranties of AGI. AGI represents
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and warrants that:
a. AGI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
This Agreement has been duly authorized, executed and delivered by AGI
and is a valid and binding obligation of AGI, enforceable against AGI
in accordance with its terms subject only to the approvals that may be
required by the New York Stock Exchange for the listing of the shares
of AGI Common Stock issuable hereunder.
b. When certificates evidencing the shares issuable
hereunder have been delivered in payment of the obligations specified
in the applicable notice as provided herein, such shares will be duly
authorized, validly issued, fully paid and nonassessable.
5. Purchase for Investment; Representations and Warranties
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of Cyprus. Cyprus represents and warrants that:
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a. This Agreement has been duly authorized, executed
and delivered by Cyprus and is a valid and binding obligation of
Cyprus, enforceable against Cyprus in accordance with its terms.
b. Cyprus acknowledges that the offering and sale of
the shares issuable hereunder are intended to be exempt from
registration under the Securities Act of 1933, as amended (the
"Securities Act"). In furtherance thereof, Cyprus represents and
warrants to AGI that: (i) Cyprus is an accredited investor within the
meaning of Regulation D promulgated under the Securities Act
("Regulation D") and, if there should be any change in such status
prior to any applicable date of issuance, Cyprus will immediately
inform AGI of such change; (ii) Cyprus is aware of the merits and
risks of an investment in the shares to be purchased pursuant hereto
by Cyprus and, due to its knowledge and experience in financial and
business matters, is capable of evaluating, and has evaluated, the
merits and risks of such investment; and (iii) Cyprus has been given
the opportunity to ask questions of, and receive answers from, AGI
concerning the terms and conditions of the offering of the shares to
be purchased by Cyprus hereunder and other matters pertaining to an
investment in the shares, and has been given the opportunity to obtain
such additional information necessary to evaluate the merits and risks
of an investment in such shares to the extent AGI possesses such
information or can acquire it without unreasonable effort or expense,
and has not been furnished any offering material in connection with
the offering and purchase of the shares issuable hereunder. Cyprus
has been advised that the shares issuable hereunder have not been
registered under the Securities Act, or any state securities or blue
sky laws and, therefore, cannot be resold unless they are registered
under such laws or unless an exemption from registration thereunder is
available. Cyprus will purchase any shares issued hereunder for its
own account for investment, and not with a view to, or for resale in
connection with, the distribution thereof, and has no present
intention of distributing or reselling any of the shares so
purchased. In making the foregoing representation, Cyprus is aware
that it must bear, and Cyprus is able to bear, the economic risk of
such investment for an indefinite period of time. Cyprus acknowledges
that AGI is entering into this
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Agreement in reliance upon Cyprus' representations and warranties in
this Agreement, including, without limitation, those set forth in this
Paragraph 5.
6. Registration Rights. Cyprus shall be entitled to
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include the shares of AGI Common Stock issued hereunder in a
registration statement filed by AGI upon the demand of Cyprus made
pursuant to any of (i) Section 7.06 of the Revolving Credit Agreement
dated as of Xxxxx 00, 0000, (xx) Section 7.06 of the Revolving Credit
Agreement dated as of March 10, 1995 and (iii) Section 5 of the Stock
Purchase Agreement dated as of April 15, 1995, in each case between
the Company and Cyprus (collectively, the "Demand Registrations").
The number of shares issued hereunder to be included shall be
specified in the written request made pursuant to such Demand
Registration, but the shares issued hereunder shall not be included in
calculation of the minimum number of shares of AGI Common Stock
required to be included in any Demand Registration. Payment of
Registration Expenses (as defined in the Demand Registrations) shall
be paid by the party responsible for payment thereof pursuant to the
terms of the Demand Registration.
7. New York Stock Exchange Listing. AGI shall be
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responsible prior to issuance of any AGI Common Stock hereunder for
filing a listing application with the New York Stock Exchange and for
obtaining approval from the New York Stock Exchange of such issuance.
8. Survival; Successors and Assigns. All agreements,
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representations and warranties made herein shall survive the execution
and delivery of this Agreement, the delivery to Cyprus of the shares
issuable hereunder and, notwithstanding any investigation heretofore
or hereafter made by or on behalf of a party hereto, shall continue in
full force and effect. The rights and obligations of Cyprus under
this Agreement shall not be assignable by Cyprus without the prior
written consent of AGI. Nothing herein expressed or implied is
intended to confer upon any person, other than the Parties hereto or
their respective permitted assignees, successors, heirs and legal
representatives, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
9. Amendment and Modification. Subject to applicable law,
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this Agreement may be amended, modified or supplemented only by
written agreement of AGI and Cyprus.
10. Waiver of Compliance; Consents. The failure of any of
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the Parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the Party entitled to the benefits
thereof only by a written instrument signed by the party granting such
waiver. Any such waiver or failure to insist upon strict compliance
with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
11. Notices. Any notice, request or other document to be
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given hereunder to any party shall be effective upon receipt and shall
be in writing and delivered personally or sent by telecopy or
certified mail, addressed to such address as shall from time to time
be
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designated in writing to the other by AGI or Cyprus, or until an
address is so furnished, addressed to the address for notices set
forth on the signature pages hereof.
12. Construction. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Colorado. The
section headings contained in this Agreement are for reference
purposes and shall not affect in any way the meaning or interpretation
of this Agreement.
13. Execution in Counterparts. This Agreement may be
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executed in counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement or caused it to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
AMAX GOLD INC.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
By /s/ XXXXXXX X. XXXXXXXX
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Name:
Title:
CYPRUS AMAX MINERALS COMPANY
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
By /s/ XXXXX X. XXXX
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Name:
Title:
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