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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 26, 1997
ECHO BAY MINES LTD.
(Exact name of registrant as specified in its charter)
Incorporated under the
laws of Canada 1-8542 NONE
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6400 SOUTH FIDDLER'S GREEN CIRCLE, SUITE 1000
ENGLEWOOD, COLORADO 80111-4957
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 714-8600
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
1.1 Underwriting Agreement dated March 24, 1997 between
Echo Bay Mines Ltd. and Goldman, Sachs & Co.
1.2 Pricing Agreement dated March 24, 1997 between
Echo Bay Mines Ltd. and Goldman, Sachs & Co.
23.1 Consent of Ernst & Young, independent chartered accountants,
dated March 24, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 26, 1997 ECHO BAY MINES LTD.
(Registrant)
By: /s/ Peter H. Cheesbrough
Peter H. Cheesbrough
Senior Vice President, Finance
and Chief Financial Officer
-2-
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EXHIBIT INDEX
Exhibit
Number Exhibit Description
- ------- -------------------
1.1 Underwriting Agreement dated March 24, 1997 between
Echo Bay Mines Ltd. and Goldman, Sachs & Co.
1.2 Pricing Agreement dated March 24, 1997 between
Echo Bay Mines Ltd. and Goldman, Sachs & Co.
23.1 Consent of Ernst & Young, independent chartered accountants,
dated March 24, 1997.
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Exhibit 1.1
Echo Bay Mines Ltd.
Capital Securities
Underwriting Agreement
March 24, 1997
New York, New York
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Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Dear Sirs:
From time to time Echo Bay Mines Ltd., a Canadian corporation ("Echo
Bay") proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firm named in Schedule I to
the applicable Pricing Agreement (such firm constituting the "Underwriter" with
respect to such Pricing Agreement and the securities specified therein) the
principal amount of Capital Securities of Echo Bay (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Firm Securities"). If specified in such Pricing Agreement,
Echo Bay may grant to the Underwriter the right to purchase at its election an
additional aggregate principal amount of Securities specified in such Pricing
Agreement as provided in Section 3 hereof (the "Optional Securities"). The
Firm Securities and the Optional Securities, if any, which the Underwriter may
elect to purchase pursuant to Section 3 hereof are herein collectively called
the "Designated Securities."
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. This Underwriting Agreement shall not be construed as an
obligation of Echo Bay to sell any of the Securities or as an obligation of the
Underwriter to purchase any of the Securities. The obligation of Echo Bay to
issue and sell any of the Securities and the obligation of the Underwriter to
purchase any of the Securities shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each Pricing Agreement
shall specify the aggregate principal amount of Firm Securities, the maximum
number of Optional Securities, if any, the initial public offering price of
such Firm and Optional Securities, if any, or the manner of determining such
price, the purchase price to the Underwriter of such Designated Securities, the
name of the Underwriter of such Designated Securities, the number of such
Designated Securities to be purchased by the Underwriter and the commission, if
any, payable to the Underwriter with respect thereto and shall set forth the
date, time and manner of delivery of such Firm and Optional Securities, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the Indenture and the registration statement and prospectus
with respect thereto) the terms of such Designated Securities. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted.
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2. Echo Bay represents and warrants to, and agrees with,
the Underwriter that:
(a) A registration statement on Form S-3 (File No.
33-77738)(including Amendment No. 1 thereto) (the "Initial Registration
Statement") in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to the Underwriter, excluding exhibits to the Initial
Registration Statement, and excluding all documents incorporated by reference
in the Prospectus included therein have been or will be declared effective by
the Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with respect to
the Initial Registration Statement or any document incorporated by reference
therein has heretofore been filed, or transmitted for filing, with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus supplement included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424 of the rules and regulations of the
Commission under the Act being hereinafter called a "preliminary prospectus";
the various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and all
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the time such part
of the Initial Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes effective,
being hereinafter called the "Registration Statement"; the prospectus,
including any prospectus supplement relating to the Securities, in the form in
which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter called
the "Prospectus", any reference herein to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to the applicable form under the Act, as of the
date of such preliminary prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
the date of such preliminary prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such preliminary prospectus or Prospectus, as the
case may be; any reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report on form 10-K of Echo Bay
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by reference
in the Registration Statement; and any reference to the Prospectus as amended
or
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supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to Echo Bay by the Underwriter
of the Designated Securities expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects, to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act")
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to Echo Bay by the Underwriter of the Designated Securities expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) Neither Echo Bay nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
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material change in the share capital or an increase in excess of $20 million of
long-term debt of Echo Bay and its subsidiaries or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, common
shareholders' equity or results of operations of Echo Bay and its subsidiaries
otherwise than as set forth or contemplated in the Prospectus;
(e) Echo Bay has been duly continued under the Canada
Business Corporation Act and is validly existing as a corporation under the
laws of Canada. Each subsidiary of Echo Bay has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Echo Bay and each material subsidiary thereof
has the power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus and has been duly qualified
under the laws of each jurisdiction which requires such qualification in which
it owns or leases any material properties or conducts any material amount of
business, or neither Echo Bay and its subsidiaries taken as a whole, is subject
to any material liability or disability by reason of the failure of any such
corporation to be so qualified in any such jurisdiction;
(f) Echo Bay has an authorized and outstanding capitalization
as set forth in the Prospectus, and all of the issued shares of equity capital
of Echo Bay have been duly authorized and validly issued, are fully paid and
non-assessable and are free of any preemptive or similar rights; the equity
capital of Echo Bay conforms to the description thereof contained in the
Prospectus; and, other than as disclosed in the Prospectus, all of the issued
shares of equity capital of each subsidiary of Echo Bay have been duly and
validly authorized and issued, are fully paid and nonassessable and, except for
directors qualifying shares, and are owned directly or indirectly by Echo Bay,
free and clear of all liens, encumbrances, equities or claims;
(g) The Securities have been duly authorized by Echo Bay and,
when issued and delivered pursuant to this Agreement and the Indenture, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of Echo Bay entitled to the
benefits provided by the Indenture under which they are to be issued; the
Indenture has been duly authorized and duly qualified under the Trust Indenture
Act and, at the Time of Delivery (as defined in Section 4 hereof), will
constitute a valid and legally binding instrument enforceable in accordance
with its terms subject, as to enforcement, to bankruptcy, insolvency,
fraudulent conveyances, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equitable
principles); and the Securities and the Indenture conform in all material
respects to the descriptions thereof in the Prospectus;
(h) The issue and sale of the Securities, and the compliance
by Echo Bay with all of the provisions of the Indenture, the Securities, this
Agreement and any Pricing Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
constitute a default under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Echo Bay or
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any of its subsidiaries is a party or by which Echo Bay or any of its
subsidiaries is bound or to which any of the material property or assets of
Echo Bay or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the charter or by-laws of Echo Bay or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Echo Bay or any of its subsidiaries or any of
their properties; and (assuming the accuracy of the representations and
warranties of the Underwriter contained herein) no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the issue and sale of the
Securities or the consummation of the transactions by Echo Bay contemplated by
this Agreement or the Indenture and except for such consents, approvals,
authorizations, registrations, filings or qualifications as may be required
under state or foreign securities laws in connection with the purchase and
distribution of the Securities by the Underwriter;
(i) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which Echo Bay or any of its
subsidiaries is a party or of which any property of Echo Bay or any of its
subsidiaries is the subject which, if determined adversely to Echo Bay or any
of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders' equity or
results of operations of Echo Bay and its subsidiaries, taken as a whole; and,
to the best of Echo Bay's knowledge, no such proceedings are threatened by
governmental authorities or threatened by others;
(j) Echo Bay is not an open-end investment company, unit
investment trust, closed-end investment company or face- amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(k) Ernst & Young, who have certified certain financial
statements of Echo Bay and its subsidiaries, are independent public accountants
with respect to Echo Bay and its subsidiaries as required by the Act and the
rules and regulations of the Commission thereunder; and
(l) Except as set forth in the Prospectus, (i) Echo Bay has
sufficient title to its Lupin, Round Mountain, McCoy/Cove and Kettle River
properties to conduct its business as presently conducted and as contemplated
to be conducted as described in the Prospectus, (ii) such properties are held
by it free and clear of all liens, charges, encumbrances and restrictions which
would be materially significant to the business of Echo Bay and its
subsidiaries, taken as a whole, and (iii) Echo Bay has received no notice of
any claim threatening its continued possession of such properties under any
material leases, subleases, licenses, claims or arrangements which, if
adversely determined, would be materially significant in relation to the
business of Echo Bay and its subsidiaries, taken as a whole.
3. Upon the execution of the Pricing Agreement applicable to
any Designated Securities and authorization by the Underwriter of the release
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of the Firm Securities, the Underwriter proposes to offer the Firm Securities
for sale upon the terms and conditions set forth in the Prospectus as amended
or supplemented.
Echo Bay may specify in the Pricing Agreement applicable to
any Designated Securities that Echo Bay thereby grants to the Underwriter the
right (an "Over-allotment Option") to purchase at its election up to the number
of Optional Securities, if any, set forth in such Pricing Agreement, at the
terms set forth in the paragraph above, for the sole purpose of covering over-
allotments in the sale of the Firm Securities. Any such election to purchase
optional Securities may be exercised by written notice from the Underwriter to
Echo Bay, given within a period specified in the Pricing Agreement, setting
forth the aggregate principal amount of Optional Securities to be purchased and
the date on which such Optional Securities are to be delivered, as determined
by the Underwriter but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Underwriter and Echo Bay otherwise
agree in writing, earlier than or later than the respective number of business
days after the date of such notice set forth in such Pricing Agreement.
The number of Optional Securities, if any, to be added to the
number of Firm Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the principal amount of Optional Securities if any
which Echo Bay has been advised by the Underwriter has been attributed to such
Underwriter, provided that, if Echo Bay has not been so advised, the principal
amount of Optional Securities, if any, to be so added shall be, in each case,
that proportion of Optional Securities which the principal amount of Firm
Securities to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate principal amount of Firm Securities. The total
principal amount of Designated Securities to be purchased by the Underwriter
pursuant to such Pricing Agreement shall be the aggregate principal amount of
Firm Securities set forth in Schedule I to such Pricing Agreement plus the
aggregate principal amount of the Optional Securities, if any, which the
Underwriter elect to purchase.
4. Certificates for the Firm Securities and Optional
Securities, if any, to be purchased by the Underwriter pursuant to the Pricing
Agreement relating thereto, in definitive form and in such authorized
denominations and registered in such names as the Underwriter may request upon
at least twenty-four hours prior notice to Echo Bay, shall be delivered by or
on behalf of Echo Bay to the Underwriter for the account of such Underwriter,
against payment by such Underwriter of the purchase price therefore by wire
transfer of Federal (same day) Funds, payable to the order of Echo Bay, (i)
with respect to the Firm Securities, all at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Underwriter and Echo Bay may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Securities, if any, on the time and date specified by the Underwriter
in written notice given by the Underwriter to purchase such Optional
Securities, or at such other time and date as the Underwriter and Echo Bay
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may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery." Each such time and date
for delivery is herein called a "Time of Delivery."
At each Time of Delivery, Echo Bay will pay or cause to be
paid, the commission payable at such Time of Delivery to the Underwriter under
Section 1 hereof by wire transfer of Federal (same day) Funds, payable to the
order of Goldman, Sachs & Co.
5. Echo Bay agrees with the Underwriter of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Securities and prior to any Time of
Delivery for such Securities which shall be disapproved by the Underwriter for
such Securities acting reasonably promptly after reasonable notice thereof; to
advise the Underwriter promptly of any such amendment or supplement after any
Time of Delivery for such Securities and furnish the Underwriter with copies
thereof; to file promptly all reports and any definitive proxy or information
statements required to be filed by Echo Bay with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or sale of
such Securities, and during such same period to advise the Underwriter,
promptly after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with the
Commission, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the Securities,
of the suspension of the qualification of such Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Underwriter may reasonably request to qualify such Securities for offering and
sale under the securities laws of such jurisdictions as the Underwriter may
reasonably request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Securities provided
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that in connection therewith Echo Bay shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of the Pricing Agreement for such
Designated Securities and from time to time, to furnish the Underwriter with
copies of the Prospectus in New York City as amended or supplemented in such
quantities as the Underwriter may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act or
the Exchange Act, to notify the Underwriter and upon its request to file such
document and to prepare and furnish without charge to the Underwriter and to
any dealer in securities as many copies as the Underwriter may reasonably
request of an amended Prospectus or a supplement to the Prospectus, if any, or
such other document which will correct such statement or omission or effect
such compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)), an
earning statement of Echo Bay and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission relating thereunder (including, at the option of Echo Bay, Rule
158);
(e) During the period beginning from the date of the Pricing
Agreement and continuing to and including the date specified in the Pricing
Agreement, Echo Bay will not offer, sell, contract to sell or otherwise dispose
of any Designated Securities, any capital securities or any other securities of
Echo Bay which are substantially similar to such Designated Securities,
including any guarantee of such securities, or any securities convertible into
or exchangeable for or representing the right to receive Designated Securities,
capital securities or any such substantially similar securities of Echo Bay,
without the prior written consent of the Underwriter, except for the Designated
Securities offered in connection with this offering;
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date
of this Agreement, and the Company shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement
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or give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. Echo Bay covenants and agrees with the Underwriter that
Echo Bay will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of Echo Bay's counsel and accountants in connection
with the registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any preliminary prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriter and dealers; (ii) the cost of printing or producing this Agreement,
any Pricing Agreement, any Blue Sky Memoranda and any other documents in
connection with the offering, purchase, sale and delivery of the Securities,
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriter in
connection with such qualification and in connection with the Blue Sky
Memorandum; (iv) any fees charged by securities rating services for rating the
Securities; (v) any filing fees incident to any required reviews by the
National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; (vi) the cost of preparing certificates for the Securities;
(vii) the cost and charges of any transfer agent or registrar or dividend
disbursing agent; (viii) the fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel for the Trustee and any
such agent in connection with the Indenture and the Securities; and (ix) all
other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriter will pay all of its own costs and expenses, including the fees of
its counsel, transfer taxes on resale of any of the Securities by it, and any
advertising expenses connected with any offers it may make.
7. The obligations of the Underwriter hereunder, as to the
Securities to be delivered at each Time of Delivery, shall be subject, in its
discretion, to the condition that all representations and warranties and other
statements of Echo Bay herein are, at and as of such Time of Delivery, true and
correct, the condition that Echo Bay shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in
accordance with Section 5(a) of this Agreement; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m. Washington, D.C.
time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have
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been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Underwriter;
(b) Cravath, Swaine & Moore, counsel for the Underwriter,
shall have furnished to the Underwriter such opinion or opinions,
dated such Time of Delivery, with respect to the validity of the
Securities being issued at such Time of Delivery, the Registration
Statement, the Prospectus, and other related matters as the
Underwriter may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Milner Fenerty, Canadian counsel for Echo Bay, shall have
furnished to the Underwriter their written opinion, dated such Time of
Delivery, in form and substance satisfactory to the Underwriter, to
the effect that:
(i) Echo Bay has been duly continued under the Canada
Business Corporations Act and is validly existing as a
corporation under the laws of Canada, with full corporate
power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified
to do business under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material
properties or conducts material business;
(ii) Echo Bay is the recorded holder of the mineral
claims and mining leases (the "Claims and Leases") pertaining
to the Lupin mine located in the Northwest Territories,
Canada; the Claims and Leases are in good standing under
Mining Regulations pursuant to the Territorial Lands Act;
there are no other interests recorded in the Office of the
Mining Recorder, North Mining District, Yellowknife, Northwest
Territories as of the date of the opinion granting to any
other person, firm or corporation any right in or right to
acquire the Claims and Leases or any of them; such counsel is
not aware of any substantial or comprehensive defect in or
encumbrances upon Echo Bay's interest in the Claims and Leases
which would be materially and adversely significant to the
present conduct of the overall business of Echo Bay and its
subsidiaries taken as a whole, except as described in the
prospectus;
(iii) Echo Bay has no material subsidiaries other
than: Echo Bay Inc., Echo Bay Management Corporation, Round
Mountain Gold Corporation, Sunnyside Gold Corporation, Echo
Bay Minerals Company, White Pine Gold Corporation, and Echo
Bay Alaska Inc., each a Delaware corporation; 346074 Alberta
Ltd., an Alberta corporation; Echo Bay Nederlands B.V., a
Netherlands corporation; Echo Bay Sales Corporation, a
Barbados corporation (each individually a "Subsidiary" and
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collectively the "Subsidiaries"); and all outstanding shares
of capital stock of 346074 Alberta Ltd. have been duly and
validly authorized and issued and are fully paid and
non-assessable, and are owned by Echo Bay directly, free and
clear of any perfected security interest and, to the knowledge
of such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances (except with respect
to security interests described in the Prospectus);
(iv) Echo Bay's authorized equity capitalization is
as set forth or incorporated by reference in the Prospectus as
amended or supplemented, the Designated Securities and the
equity capital of Echo Bay conform to the descriptions thereof
included or incorporated by reference in the Prospectus; and
all of the outstanding Common Shares have been duly and
validly authorized and are fully paid and non-assessable;
(v) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
Canadian court or governmental agency, authority or body or
any arbitrator involving Echo Bay or any of its subsidiaries
of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and the statements in
the Prospectus constituting legal conclusions under the
headings "Description of Securities", "Validity of Securities"
and in Echo Bay's December 31, 1996, Annual Report on Form
10-K under the headings "Business and Properties", "Government
Regulation", "Legal Proceedings" and "Certain Tax Matters",
fairly summarize the legal matters therein described;
(vi) while such counsel does not, except as indicated
above, assume responsibility for the accuracy or completeness
of the statements made in the Registration Statement and the
Prospectus, as amended or supplemented, based upon such
counsel's participation in the preparation of the Registration
Statement and the Prospectus, nothing came to such counsel's
attention which caused them to believe that the Registration
Statement or any amendment thereof at the time it became
effective contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus, as amended or supplemented,
as of such Time of Delivery, contains any untrue statement of
a material fact or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading;
<PAGE> 13
12
(vii) this Agreement, the Securities and the
Indenture, have been duly authorized, executed and delivered
by Echo Bay;
(viii) no consent, approval, authorization or order
of any Canadian court or governmental agency or body is
required for the consummation of the transactions contemplated
herein, except such as have been obtained under the applicable
securities laws of the provinces of Canada;
(ix) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof or of the
Indenture will conflict with, result in a breach of, or
constitute a default under the charter or by-laws of Echo Bay
or the terms of any indenture or other agreement or instrument
known to such counsel and to which Echo Bay or any of its
subsidiaries is a party or bound (other than certain
indentures, agreements or indenture specifically referenced in
the opinion of Davis, Graham & Stubbs referred to below, on
which such counsel does not need to opine), or any Canadian
order or regulation known to such counsel to be applicable to
Echo Bay or any of its subsidiaries of any Canadian court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over Echo Bay or any of its
subsidiaries;
(x) to the best knowledge of such counsel, no holders
of securities of Echo Bay have contractual rights to the
registration of such securities under the registration
statement; and
(xi) no withholding tax imposed under the federal
laws of Canada will be payable in respect of any commission or
fee to be paid by Echo Bay pursuant to this Agreement to the
Underwriter who is a non-resident of Canada.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any other jurisdiction except Canada and the
Province of Alberta, to the extent they deem proper and specify in such
opinion, upon the opinion of other counsel of good standing whom they believe
to be reliable and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of Echo Bay and public officials.
(d) Davis, Graham & Stubbs LLP, United States counsel for Echo
Bay shall have furnished to the Underwriter their written opinion,
dated such Time of Delivery, in form and substance satisfactory to the
Underwriter, to the effect that:
(i) each of Echo Bay's U.S. Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as
described in
<PAGE> 14
13
the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material
business and where failure to qualify would have a material
adverse impact on Echo Bay;
(ii) all the outstanding shares of equity capital of
each U.S. Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable, and, all
outstanding shares of equity capital of each U.S. Subsidiary
are owned by Echo Bay either directly or through wholly owned
subsidiaries, free and clear of any perfected security
interest and to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or
encumbrances (except with respect to security interests
described in the Prospectus (specifying the same));
(iii) Echo Bay is not, and, after giving effect to
the issuance and sale of the Designated Securities, will not
be considered an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(iv) the Registration Statement has become effective
under the Act; to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose
have been instituted or threatened, and the Registration
Statement, the Prospectus and each amendment thereof or
supplement thereto (other than the financial statements and
other financial, statistical, ore reserve and other
mineralization information contained therein as to which such
counsel need express no opinion) appear on their face to
comply as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the rules
thereunder; and, while such counsel does not, except as
indicated above, assume responsibility for the accuracy or
completeness of the statements made in the Registration
Statement and the Prospectus, as amended or supplemented,
based upon such counsel's participation in the preparation of
the Registration Statement and the Prospectus, nothing has
come to such counsel's attention which caused them to believe
that the Registration Statement or any amendment thereof
(other than the financial statements and other financial,
statistical, ore reserve and other mineralization information
contained therein as to which such counsel need express no
opinion) at the time it became effective contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as
amended or supplemented, as of such Time of Delivery, contains
any untrue
<PAGE> 15
14
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) no consent, approval, authorization or order of
any United States court or governmental agency or body is
required for the consummation of the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any state
of United States in connection with the purchase and
distribution of the Securities by the Underwriter and such
other approvals (specified in such opinion) as have been
obtained;
(vi) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof or of the
Indenture will conflict with, result in a breach of, or
constitute a default under the terms of any indenture or other
agreement or instrument known to such counsel and to which any
U.S. subsidiary of Echo Bay is a party or bound (other than
certain agreements, indentures or instruments specifically
referenced in the opinion of Milner Fenerty referred to above,
on which such counsel does not need to opine), or any order or
regulation known to such counsel to be applicable to any U.S.
subsidiary of Echo Bay of any U.S. court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over any U.S. subsidiaries of Echo Bay; and
(vii) the Securities, when executed and authenticated
as specified in the Indenture, and delivered and paid for by
the Underwriters in accordance with this Agreement and the
Pricing Agreement will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms, subject to (1) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium
and other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally, and (2) general
principles of equity (regardless of whether considered in a
proceeding at law or in equity);
(viii) the Indenture pursuant to which the Securities
are being issued, assuming the due authorization, execution
and delivery thereof by the Trustee, constitutes a legal,
valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to
(1) applicable bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, and (2) general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity); and the
<PAGE> 16
15
Indenture has been duly qualified under the Trust Indenture
Act of 1939;
(ix) the disclosure expressed in the Prospectus with
respect to U.S. taxation is a correct statement of the
applicable law.
In rendering such opinion, such counsel may rely (A) as to matters involving
the federal laws of Canada or the laws of the Province of Alberta upon the
opinion of Milner Fenerty, furnished pursuant to paragraph (c), (B) as to
matters involving any laws other than the Federal laws of the United States of
America, the laws of the State of Colorado and the General Corporation Law of
the State of Delaware, to the extent they deem proper and specify in such
opinion, upon the opinion of local counsel of good standing whom they believe
to be reliable and (C) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of Echo Bay and public officials;
(e) Terry N. Fiske, Vice President and General Counsel, U.S.
Operations of Echo Bay, shall have furnished to the Underwriter his
written opinion, dated the Time of Delivery, in form and substance
satisfactory to the Underwriter, to the effect that:
(i) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving Echo Bay or any of its subsidiaries of a
character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and
(ii) on the basis of such counsel's limited review of
Echo Bay's operating properties in the United States, such
counsel is not aware of any substantial or comprehensive
defect in or encumbrances upon title to those properties which
would be materially and adversely significant to the present
conduct of the overall business of Echo Bay and its
subsidiaries taken as a whole, except as described in the
Prospectus;
(g) Echo Bay shall have furnished to the Underwriter at such
Time of Delivery a certificate signed by the Chairman of the Board or
the President and the principal financial or accounting officer of
Echo Bay, dated such Time of Delivery, to the effect that the signers
of such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that:
(i) the representations and warranties of Echo Bay in
this Agreement are true and correct in all material respects
at and as of such Time of Delivery with the same effect as if
made at
<PAGE> 17
16
such Time of Delivery and Echo Bay has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Time of Delivery;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to Echo Bay's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, there has been no material adverse change or any
development involving a prospective material adverse change in
the condition (financial or other), earnings, business or
properties of Echo Bay and its subsidiaries, whether or nor
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus;
(h) On the date of the Pricing Agreement and at such Time of
Delivery, Ernst & Young shall have furnished to the Underwriter a
letter or letters, dated the respective date of delivery thereof, in
form and substance satisfactory to the Underwriter, confirming that
they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Registration Statement and the Prospectus and reported on
by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the amounts
included in the Registration Statement and the Prospectus in
response to Item 301 of Regulation S-K and of the latest
unaudited financial statements made available by Echo Bay and
its subsidiaries, carrying out certain specified procedures
(but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter, a reading of the minutes of the meetings of the
shareholders, directors (including committees of directors) of
Echo Bay and its subsidiaries; and inquiries of certain
officials of Echo Bay who have responsibility for financial
and accounting matters of Echo Bay and its subsidiaries as to
transactions and events subsequent to December 31, 1994,
nothing came to their attention which caused them to believe
that:
(1) the unaudited financial statements
included or incorporated in the Registration
Statement and the
<PAGE> 18
17
Prospectus do not comply in form in all material
respects with applicable accounting requirements and
with the published rules and regulations of the
Commission with respect to financial statements
included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principals applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
in the Registration Statement and the Prospectus; or
(2) with respect to the period subsequent to
December 31, 1996, there were any changes at a
specified date not more than five business days prior
to the date of the letter, in the long-term debt,
deferred revenue or share capital of Echo Bay and its
subsidiaries or decreases in common shareholders'
equity of Echo Bay and its subsidiaries as compared
with the amounts shown on the December 31, 1995,
balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the
period from January 1, 1996, to such specified date
there were any decreases as compared with the
corresponding period in the preceding year, in
revenue, or in total or per share amounts of earnings
(loss) before income taxes or of net earnings (loss),
of Echo Bay and its subsidiaries, except in all
instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied
by an explanation by Echo Bay as to the significance
thereof unless said explanation is deemed not
necessary by the Underwriter; or
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information determined from the general accounting records of
Echo Bay) set forth in the Registration Statement and the
Prospectus, including the information set forth under the
headings "The Company", "Mine Operations", "Capitalization"
and "Selected Financial Data" in the Prospectus, and the
information included or incorporated in items 1, 2, 6, 7 and
11 of Echo Bay's December 31, 1996, Annual Report on Form
10-K, incorporated in the Registration Statement and the
Prospectus, agrees with the accounting records of Echo Bay and
its subsidiaries excluding any questions of legal
interpretation.
References to the Registration Statement and the Prospectus in
this paragraph (h) are to such documents as amended and
supplemented at the date of the letter.
<PAGE> 19
18
The Underwriter shall have also received from Ernst & Young a
letter stating that, based on their review in connection with
their audit of Echo Bay's financial statements, they are not
aware of any material weakness in Echo Bay's system of
internal accounting controls taken as a whole.
(i) FSS Canada Consultants Inc. and H.A. Simons Ltd.,
consulting geological engineers, shall have each furnished to you a
letter or letters, dated the date of the Pricing Agreement and such
Time of Delivery, in form and substance satisfactory to you, to the
effect that the statements set forth or incorporated in the
Registration Statement and the Prospectus purporting to summarize
their reports with respect to ore reserves and related matters
constitute fair summaries of the reports of such consulting geological
engineers which are referred to therein and to the further effect as
reasonably requested by you.
(j) (A) neither Echo Bay nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (B) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the share capital or an
increase in long-term debt of Echo Bay or any of its other
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, common shareholders' equity or results of operations of Echo
Bay and its subsidiaries otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
Clause (A) or (B), is in the judgment of the Underwriter so material
and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities being issued at
such Time of Delivery on the terms and in the manner contemplated in
the Prospectus.
(k) On or after the date of the Pricing Agreement relating to
the Designated Securities, there shall not have occurred any of the
following: (i) trading in Echo Bay's Common Shares shall have been
suspended or materially limited; (ii) there shall have been a
suspension or material limitation in trading in securities generally
on the New York, Toronto, Montreal or American Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by
Canadian or United States Federal or New York State authorities; or
(iv) outbreak or escalation of hostilities involving the United States
or Canada or the declaration by the United States or Canada of a
national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgement of the Underwriter makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities being
<PAGE> 20
19
issued at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus.
(l) On or after the date of the Pricing Agreement relating to
the Designated Securities, (i) no downgrading shall have occurred in
the rating accorded Echo Bay's debt securities by any "nationally
recognized statistical rating organization" as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of Echo Bay's debt securities.
(m) Echo Bay shall have compiled with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Pricing
Agreement relating to the Designated Securities.
(n) Prior to such Time of Delivery, Echo Bay shall have
furnished to the Underwriter such further information, certificates
and documents as the Underwriter may reasonably request.
8. (a) Echo Bay will indemnify and hold harmless the
Underwriter against any losses, claims, damages or liabilities, to which such
Underwriter may become subject insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading, and will reimburse the Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim; provided, however, that
(i) Echo Bay shall 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 an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus, the Registration Statement, the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to Echo Bay by the Underwriter expressly for use therein
and (ii) such indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting such
loss, claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the prospectus (or the
Prospectus as amended or supplements), excluding documents incorporated therein
by reference, at or prior to the confirmation of the sale of such Securities to
such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented). This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
<PAGE> 21
20
(b) The Underwriter will indemnify and hold harmless Echo Bay
against any losses, claims, damages or liabilities to which Echo Bay may become
subject insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus,
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
preliminary prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to Echo Bay by such Underwriter expressly for use
therein, and will reimburse Echo Bay for any legal or other expenses reasonably
incurred by Echo Bay in connection with investigating or defending any such
action or claim.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
which consent will not be unreasonably withheld effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder(whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgement (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include any statement as to, or of admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
<PAGE> 22
21
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to 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
the relative benefits received by Echo Bay on the one hand and the Underwriter
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of Echo Bay on the one hand and the Underwriter on the other hand in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
Echo Bay on the one hand and the Underwriter on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by Echo Bay bear to the total underwriting
discounts and commissions received by the Underwriter. The relative fault
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 Echo Bay on the one
hand or the Underwriter on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Echo Bay and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to purchasers were so offered
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of Echo Bay under this Section 8 shall be
in addition to any liability which Echo Bay may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriter under this Section 8 shall be in addition to any liability
which the Underwriter may otherwise have and shall extend, upon the same
<PAGE> 23
22
terms and conditions, to each officer and director of Echo Bay and to each
person, if any, who controls Echo Bay within the meaning of the Act.
9. (Intentionally Omitted)
10. The respective indemnities, agreements, representations,
warranties and other statements of Echo Bay and the Underwriter, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of the Underwriter, or Echo Bay or
any officer or director or controlling person of Echo Bay, and shall survive
delivery of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option shall
be terminated or the Securities are not delivered by or on behalf of Echo Bay
as provided herein for any reason other than a default by the Underwriter, Echo
Bay agrees to reimburse the Underwriter for all out-of-pocket expenses approved
in writing by the Underwriter, including fees, disbursements and expenses of
counsel, reasonably incurred by the Underwriter in making preparations for the
purchase, sale and delivery of the Securities, but Echo Bay shall then be under
no further liability to any Underwriter except as provided in Section 6 and
Section 8 hereof.
All statements, requests, notices and agreements hereunder
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Underwriter set forth in the Pricing Agreement; and if to Echo
Bay shall be delivered or sent by mail, telex or facsimile transmission to the
address of Echo Bay set forth in the Registration Statement, Attention:
Secretary. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
12. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriter, Echo Bay
and, to the extent provided in Section 8 and Section 10 hereof, the officers
and directors of Echo Bay and each person who controls Echo Bay or the
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence of each Pricing Agreement.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
UNITED STATES OF AMERICA.
<PAGE> 24
23
15. This Agreement and each Pricing 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.
If the foregoing is in accordance with your understanding,
please sign and return to us 4 counterparts hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement between the Underwriter and Echo Bay.
Very truly yours,
ECHO BAY MINES LTD.,
by /s/ Raymond W. Jenner
----------------------
Name: Raymond W. Jenner
Title: Vice President and Treasurer
ACCEPTED AS OF THE DATE HEREOF:
GOLDMAN, SACHS & CO.,
by /s/ Goldman, Sachs & Co.
--------------------------
Goldman, Sachs & Co.
<PAGE> 1
Exhibit 1.2
Pricing Agreement
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
March 24, 1997
Dear Sirs:
Echo Bay Mines Ltd., a Canadian corporation ("Echo Bay"),
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated March 24, 1997 (the "Underwriting Agreement"), between Echo
Bay on the one hand and Goldman, Sachs & Co. on the other hand, to issue and
sell to the Underwriter named in Schedule I hereto (the "Underwriter") the
Securities specified in Schedule II hereto (the "Designated Securities"
consisting of Firm Securities and any Optional Securities, if any, the
Underwriter may elect to purchase). Each of the provisions of the Underwriting
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein; and each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented relating to the
Designated Securities which are the subject of this Pricing Agreement. Unless
otherwise defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, Echo Bay agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
Echo Bay, at the time and place and at the purchase price to the Underwriter
set forth in Schedule II hereto, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto
If the foregoing is in accordance with your understanding,
please sign and return to us 4 counterparts hereof, and upon acceptance
<PAGE> 2
2
hereof by you, this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference, shall
constitute a binding agreement between the Underwriter and Echo Bay.
Very truly yours,
ECHO BAY MINES LTD.,
by /s/ Raymond W. Jenner
------------------------------------
Name: Raymond W. Jenner
Title: Vice President and Treasurer
ACCEPTED AS OF THE DATE HEREOF:
GOLDMAN, SACHS & CO.,
by /s/ Goldman, Sachs & Co.
----------------------------
(Goldman, Sachs & Co.)
<PAGE> 3
SCHEDULE I
Underwriter
<TABLE>
<CAPTION>
Aggregate Principal
Amount of Firm
Name of Underwriter Securities Purchased
- ------------------- --------------------
<S> <C>
Goldman, Sachs & Co. U.S.$100,000,000
TOTAL U.S.$100,000,000
</TABLE>
<PAGE> 4
SCHEDULE II
Title of Firm Securities:
11% Capital Securities Due 2027
Aggregate Principal Amount of Firm Securities:
U.S. $100,000,000
Initial Offering Price to Public:
100% per Firm Security
Purchase Price by the Underwriter:
100% per Firm Security
Commission Payable to the Underwriter:
$28.75 per $1,000 in principal amount of Firm Security
Special Funds for Payment of Purchase Price:
Wire transfer of Federal (Same Day) Funds
Time of Delivery:
March 27, 1997
Closing Location for Delivery of Securities:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Special Provision(s):
Paragraph (e) of Section 5 of the Underwriting Agreement shall be in
effect from the date of this Agreement to the date of original
issuance.
Interest Payment Dates:
April 1, October 1
Redemption Prices:
The Firm Securities shall be subject to the redemption provisions
contained in the Indenture and the Prospectus.
<PAGE> 5
2
Interest Rate:
11% per annum, or 12% per annum during any Extension Period.
Default Interest Rate:
12%
Record Date for non-DTC security:
March 15, September 15
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated January 27, 1997, in the Prospectus Supplement
dated March 24, 1997 to the Prospectus of Echo Bay Mines Ltd. dated July 15,
1994 contained in its Registration Statement (Form S-3 No. 33-77738).
/s/ Ernst & Young
Chartered Accountants
Edmonton, Canada
March 24, 1997
