EXHIBIT 3.1
UNDERWRITING AGREEMENT
Dated as of October 31, 2002
Agnico-Eagle Mines Limited
000 Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx
Vice President, Finance and Chief Financial Officer
Dear Sirs:
TD Securities Inc., Xxxxxxx Xxxxx Canada Inc., Scotia Capital Inc.,
Yorkton Securities Inc., CIBC World Markets Inc., Xxxxxxx Xxxxx Barney Canada
Inc., Dundee Securities Corporation and Sprott Securities Inc. (collectively the
"Underwriters" and individually an "Underwriter") understand that Agnico-Eagle
Mines Limited (hereinafter referred to as the "Company") proposes to issue and
sell 12,000,000 units (the "Firm Units") and, at the election of the
Underwriters, up to 1,800,000 units (the Units in respect of which such option
is exercised are called the "Optional Units"). The Firm Units and the Optional
Units are referred to collectively herein as the "Units". Each Unit shall
consist of one common share in the capital of the Company (a "Share") and
one-half of a common share purchase warrant (a "Warrant"). Each whole Warrant
shall entitle the holder thereof to purchase one Common Share for a price of US$
19.00 per Common Share or, at the election of such holder, the Canadian dollar
equivalent of such exercise price per Common Share calculated as specified in
the Warrant Indenture (as hereinafter defined) at any time on or prior to five
years from the Closing Date (as hereinafter defined). The Warrants shall be
issued pursuant to, and the exercise thereof shall be governed by, the
provisions of a warrant indenture (the "Warrant Indenture") to be entered into
between the Company and Computershare Trust Company of Canada (the "Warrant
Trustee"), in the form and on terms satisfactory to the Company and the
Underwriters acting reasonably and in accordance with the description in the
Canadian Preliminary Prospectus and U.S. Preliminary Prospectus (as hereinafter
defined). The Units shall be separated at the Closing Time into Shares and
Warrants.
The Underwriters understand that the Company has prepared and filed
with the provincial
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securities regulatory authorities (the "Qualifying Authorities") in each
Canadian province (the "Qualifying Provinces") a preliminary short form
prospectus (including the documents incorporated by reference therein, the
"Canadian Preliminary Prospectus") relating to the Units (in the English and
French languages, as applicable). The Company has identified the Ontario
Securities Commission (the "Reviewing Authority") as its principal regulator in
respect of the offering of the Units and the Canadian Preliminary Prospectus has
been filed with the Qualifying Authorities pursuant to National Policy 43-201.
The Company has also prepared and filed with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form F-10
(File No. 333-100850) covering the registration of the Shares and Warrants
comprising the Units under the United States Securities Act of 1933, as amended
(the "1933 Act") and the rules and regulations of the Commission thereunder (the
"1933 Act Regulations"), including the Canadian Preliminary Prospectus (with
such deletions therefrom and additions thereto as are permitted or required by
Form F-10 and the applicable rules and regulations of the Commission) (including
the documents incorporated by reference therein, the "U.S. Preliminary
Prospectus"). The Company has also prepared and filed with the Commission an
appointment of agent for service of process upon the Company on Form F-X (the
"Form F-X") in conjunction with the filing of the Registration Statement (as
hereinafter defined).
The Company, as and to the extent indicated above, hereby grants to the
Underwriters the right to purchase at their election up to 1,800,000 Optional
Units, at the purchase price per Unit set forth in the paragraph below, for the
sole purpose of covering over-allotments in the sale of the Firm Units. Any such
election to purchase Optional Units may be exercised only by written notice from
the Representatives (as hereinafter defined) on behalf of the Underwriters, to
the Company. Such notice shall set forth (i) the aggregate number of Optional
Units to be purchased and (ii) the Closing Date for the Optional Units, provided
that such Closing Date shall not be less than 3 Business Days and no more than 7
Business Days following the date of such notice and in no event later than the
30th day following the date of the Final Prospectus.
On the basis of the representations, warranties, covenants and
agreements contained herein, but subject to the terms and conditions herein set
forth, (i) the Company agrees to sell to each of the Underwriters and each of
the Underwriters agrees, severally and not jointly, to purchase from the Company
the respective percentage of the Firm Units set forth opposite the respective
names of the Underwriters in Section 11, at a purchase price of $21.79 per Unit
for Firm Units initially offered for sale in Canada or US$13.90 per Unit (being
the equivalent of the corresponding Canadian dollar amount based on the inverse
of the noon buying rate of the Federal Reserve Bank of New York on the Business
Day prior to the date of this agreement (the "Noon Buying Rate")) for Firm Units
initially offered for sale in the United States, and (ii) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Units (the "Over-allotment Option") as provided herein, the Company
agrees to sell to each of the Underwriters and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company the percentage set forth
opposite the name of such Underwriter in Section 11 of the number of Optional
Units as to which election shall have been exercised at a purchase price of
$21.79 per Unit for Optional Units initially offered for sale in Canada or
US$13.90 per Unit (being the equivalent of the corresponding Canadian dollar
amount based on the inverse of the Noon Buying Rate) for Optional Units
initially offered for sale in the United States.
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In this agreement:
(a) "Business Day" means a day which is not a Saturday, a Sunday or a statutory
or civic holiday in the City of Toronto or The City of New York;
(b) "Canadian Preliminary Prospectus" has the meaning ascribed thereto in the
second paragraph of this agreement;
(c) "Canadian Preliminary Warrant Prospectus" has the meaning ascribed thereto
in paragraph 1(b) of this agreement;
(d) "Canadian Prospectus" means the Final Prospectus for which a Decision
Document has been obtained from the Reviewing Authority, including the
documents incorporated by reference therein;
(e) "Canadian Warrant Prospectus" means the final base shelf prospectus for
which a Warrant Decision Document has been obtained from the Reviewing
Authority, including the documents incorporated by reference therein and,
if a prospectus supplement has been filed to qualify the distribution of
the Underlying Shares, "Canadian Warrant Prospectus" shall mean the final
base shelf prospectus for which a Warrant Decision Document has been
obtained from the Reviewing Authority, the documents incorporated therein
by reference and such prospectus supplement;
(f) "Canadian Securities Laws" means all applicable securities laws in each of
the Qualifying Provinces and the respective rules or regulations made
thereunder together with applicable published policy statements of the
securities regulatory authorities in such provinces;
(g) "CIA" has the meaning ascribed thereto in section 2(c) of this agreement;
(h) "Closing" means the completion of the issue and sale by the Company of the
Units and the purchase by the Underwriters of the Units pursuant to this
agreement;
(i) "Closing Date" means November 14, 2002 or such later date as the Company
and the Underwriters may agree upon in writing, provided that in no event
shall the Closing Date be later than November 27, 2002 and in the event the
Over-allotment Option is exercised, "Closing Date" shall mean each date on
which the Underwriters have agreed to purchase the Optional Units in
accordance with the terms of this agreement;
(j) "Closing Time" means 8:30 a.m. (Toronto time) on any Closing Date or such
other time on the Closing Date as the Company and the Underwriters may
agree;
(k) "Commission" has the meaning ascribed thereto in the second paragraph of
this agreement;
(l) "Common Shares" means the common shares in the capital of the Company;
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(m) "Decision Document" means the final MRRS Decision Document issued by the
Reviewing Authority (in accordance with National Policy 43-201) evidencing
that final receipts have been issued for the Final Prospectus by each
Qualifying Authority;
(n) "Distribution" means "distribution" of the Units or "distribution to the
public" of the Units as those terms are defined in applicable securities
legislation;
(o) "Exchanges" means the Toronto Stock Exchange (referred to herein as the
"TSX"), the New York Stock Exchange (referred to herein as the "NYSE") and
the Nasdaq National Market (referred to herein as the "NASDAQ");
(p) "Final Filing Time" has the meaning ascribed thereto in section 1(a) of
this agreement;
(q) "Final Prospectus" has the meaning ascribed thereto in section 1(a) of this
agreement;
(r) "Final Warrant Prospectus" has the meaning ascribed thereto in section 1(c)
of this agreement;
(s) "Financial Information" means (1) the consolidated comparative financial
statements of the Company for (i) the year ended December 31, 2001, the
notes thereto and the auditors' report thereon, (ii) the nine months ended
September 30, 2002 and the notes thereto, (2) the Company's Management
Discussion and Analysis of Financial Conditions and Results of Operations
(i) for the 2001 fiscal year, (ii) for the nine months ended September 30,
2002, (3) the information set forth under the caption "Summarized Quarterly
Data" in the Company's annual report for the year ended December 31, 2001,
(4) any other financial statements, incorporated or deemed to be
incorporated by reference in the Canadian Prospectus or the U.S. Prospectus
and (5) any financial data derived from the foregoing;
(t) "Firm Units" has the meaning ascribed thereto in the first paragraph of
this agreement;
(u) "Form 20-F" means the Annual Report of the Company for the year ended
December 31, 2001 under Form 20-F pursuant to the 1934 Act (including the
documents incorporated by reference therein);
(v) "Form F-X" has the meaning ascribed thereto in the second paragraph of this
agreement;
(w) "Indemnified Party" means a person or company who has the benefit of the
indemnity provisions of Section 7 of this agreement;
(x) "Indemnifying Party" means a party to this agreement which is under an
obligation to indemnify an Indemnified Party under the indemnity provisions
of Section 7 of this agreement;
(y) "Material Adverse Effect" has the meaning ascribed thereto in paragraph
2(g) of the agreement.
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(z) "misrepresentation", "material fact" and "material change" have the
respective meanings ascribed thereto in the SECURITIES ACT (Ontario);
(aa) "Noon Buying Rate" has the meaning ascribed thereto in the fourth paragraph
of this agreement;
(bb) "Optional Units" has the meaning ascribed thereto in the first paragraph of
this agreement;
(cc) "Over-allotment Option" has the meaning ascribed thereto in the fourth
paragraph of this agreement;
(dd) "Preliminary Prospectus" means each prospectus relating to the Units (1)
used in the United States before the time the Registration Statement
becomes effective or (2) used in Canada before the Decision Document has
been obtained from the Reviewing Authority;
(ee) "Qualifying Authorities" has the meaning ascribed thereto in the second
paragraph of this agreement;
(ff) "Qualifying Provinces" has the meaning ascribed thereto in the second
paragraph of this agreement;
(gg) "Registration Statement" means the registration statement on Form F-10
(file no. 333-100850) providing for the registration of the Shares and the
Warrants under the 1933 Act and the 1933 Act Regulations, including the
exhibits thereto, the U.S. Prospectus and the documents incorporated by
reference therein, as amended at the time it becomes effective;
(hh) "Representatives" means TD Securities Inc. and Xxxxxxx Xxxxx Canada Inc.;
(ii) "Reviewing Authority" means the Ontario Securities Commission;
(jj) "Shares" has the meaning ascribed thereto in the first paragraph of this
agreement;
(kk) "subsidiaries" means the subsidiaries of the Company within the meaning
ascribed thereto under the BUSINESS CORPORATIONS ACT (Ontario);
(ll) "Supplementary Material" means collectively any amendment to the Canadian
Prospectus or Registration Statement, any amended or supplemented
prospectus or auxiliary material, information, evidence, return, report,
application, statement or document that may be filed by or on behalf of the
Company under Canadian Securities Laws, the 1933 Act or the 1934 Act prior
to the Closing Time or, where such documents are deemed to be incorporated
by reference into the Canadian Prospectus, Registration Statement or U.S.
Prospectus, prior to the expiry of the period of distribution of the Units;
(mm) "this agreement" or "the agreement" means the agreement resulting from the
acceptance by the Company of the offer made by the Underwriters by this
letter;
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(nn) "Underlying Shares" means the Common Shares issuable on exercise of the
Warrants;
(oo) "Units" has the meaning ascribed thereto in the first paragraph of this
agreement;
(pp) "U.S. Preliminary Prospectus" has the meaning ascribed thereto in the
second paragraph of this agreement;
(qq) "U.S. Prospectus" means the prospectus included in the Registration
Statement at the time it becomes effective, including the documents
incorporated by reference therein;
(rr) "U.S. Warrant Base Prospectus" has the meaning ascribed thereto in
paragraph 1(e) of this agreement;
(ss) "U.S. Warrant Prospectus" has the meaning ascribed thereto in paragraph
1(e) of this agreement;
(tt) "United States" means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia;
(uu) "Warrant Form F-X" has the meaning ascribed thereto in paragraph 1(d) of
this agreement;
(vv) "Warrants" has the meaning ascribed thereto in the first paragraph of this
agreement;
(ww) "Warrant Decision Document" means, if the Final Warrant Prospectus was
filed with more than one Qualifying Authority, the final MRRS Decision
Document issued by the Reviewing Authority (in accordance with National
Policy 43-201) evidencing that final receipts have been issued in respect
of the Final Warrant Prospectus by each such Qualifying Authority or, if
the Final Warrant Prospectus was filed solely with the Reviewing Authority,
the receipt issued by the Reviewing Authority in respect of the Final
Warrant Prospectus;
(xx) "Warrant Indenture" has the meaning ascribed thereto in the first paragraph
of this agreement;
(yy) "Warrant Registration Statement" has the meaning ascribed thereto in
paragraph 1(e) of this agreement;
(zz) "Warrant Trustee" has the meaning ascribed thereto in the first paragraph
of this agreement;
(aaa) "1933 Act" has the meaning ascribed in the second paragraph of this
agreement;
(bbb) "1933 Act Regulations" has the meaning ascribed thereto in the second
paragraph of this agreement; and
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(ccc) "1934 Act" means the United States Securities Exchange Act of 1934, as
amended.
TERMS AND CONDITIONS
SECTION 1. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) FILING OF FINAL PROSPECTUS. The Company will, as soon as possible and
in any event no later than 5:00 p.m. (Toronto time) on November 6, 2002
(the "Final Filing Time"), prepare and file (1) with each Qualifying
Authority, a final short form prospectus relating to the Units (in the
English and French languages, as applicable, the "Final Prospectus")
and will obtain a Decision Document in respect thereof; and (2) with
the Commission, an amendment to the registration statement on form F-10
(file no. 333-100850) providing for the registration of the Shares and
the Warrants, including the Final Prospectus (with such deletions
therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable rules and regulations of the Commission) and
cause such amended registration statement to become effective under the
0000 Xxx.
(b) FILING OF PRELIMINARY WARRANT PROSPECTUS. The Company will, as soon as
possible and in any event no later than the Business Day following the
date of this agreement, prepare and file with the Reviewing Authority,
a preliminary base shelf prospectus in accordance with the procedures
set out in National Instrument 44-102 (the "Canadian Preliminary
Warrant Prospectus") relating to the Underlying Shares and such other
securities as the Company determines.
(c) FILING OF FINAL WARRANT PROSPECTUS. The Company will, as soon as
possible and in any event no later than 5:00 p.m. (Toronto time) on the
Business Day prior to the Closing Date, prepare and file with the
Reviewing Authority, a final base shelf prospectus prepared in
accordance with the procedures set out in National Instrument 44-102
and supplement thereto, relating to the Underlying Shares (the "Final
Warrant Prospectus") and will obtain a Warrant Decision Document in
respect thereof.
(d) FILING OF WARRANT REGISTRATION STATEMENT. The Company will, as soon as
possible and in any event no later than the Business Day following the
date of this agreement, prepare and file with the Commission (1) a
shelf registration statement on Form F-10 providing for the
registration of the Company's Underlying Shares and such other
securities as the Company determines, under the 1933 Act and the 1933
Act Regulations, including the Canadian Preliminary Warrant Prospectus
(with such deletions therefrom and additions thereto as are permitted
or required by Form F-10 and the applicable rules and regulations of
the Commission); and (2) an appointment of agent for service of process
upon the Company on Form F-X in conjunction with the filing of such
registration statement (the "Warrant Form F-X").
(e) FILING OF AMENDMENT TO THE WARRANT REGISTRATION STATEMENT AND
SUPPLEMENT TO THE U.S.
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WARRANT BASE PROSPECTUS. The Company will, as soon as possible and in
any event no later than the Business Day prior to the Closing Date,
file with the Commission an amendment to the registration statement on
Form F-10 providing for the registration of the Underlying Shares and
such other securities as the Company determines, including the Final
Warrant Prospectus (with such deletions therefrom and additions thereto
as are permitted or required by Form F-10 and the applicable rules and
regulations of the Commission), and the Company will cause such
registration statement to become effective pursuant to Rule 467 of the
1933 Act. Such registration statement, including any exhibits and all
documents incorporated therein by reference, as of the time it becomes
effective, and in the event of any post-effective amendments, as of the
date of the effectiveness of such amendment, is referred to herein as
the "Warrant Registration Statement". The Company will, as soon as
possible after the effectiveness of the Warrant Registration Statement,
and in any event no later than the Business Day prior to the Closing
Date, file with the Commission pursuant to General Instruction II.L of
Form F-10, a prospectus supplement to the Warrant Registration
Statement relating to the Underlying Shares. Such filing shall, in
accordance with General Instruction II.L of Form F-10 be filed with the
Commission within one Business Day after such supplement is filed with
the Reviewing Authority.
The prospectus included in the Warrant Registration Statement shall be
referred to herein as the "U.S. Warrant Base Prospectus", and the U.S.
Warrant Base Prospectus together with the prospectus supplement,
including all documents incorporated by reference, relating to the
offering of the Underlying Shares filed with the Commission pursuant to
General Instruction II.L of Form F-10 following the execution of this
agreement by the parties hereto is referred to herein as the "U.S.
Warrant Prospectus"; provided that, prior to the filing of such
supplement, the term "U.S. Warrant Prospectus" shall mean the U.S.
Warrant Base Prospectus, including all documents incorporated by
reference, together with any preliminary prospectus supplement relating
to the offering of the Underlying Shares.
(f) EFFECTIVENESS OF WARRANT REGISTRATION STATEMENT. The Company will use
its reasonable efforts to maintain the effectiveness of the Warrant
Registration Statement or another shelf registration statement
providing for the registration of the offering of the Underlying Shares
until the earlier of the expiration date of the Warrants and the date
upon which all such Warrants have been exercised.
(g) COMPLIANCE AND SECURITIES REGULATIONS AND COMMISSIONS REQUESTS. During
the period of the distribution of the Units, the Company will notify
the Underwriters promptly, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement or Warrant
Registration Statement shall have been filed with the Commission or
shall have become effective, and when any supplement to the U.S.
Warrant Prospectus or the Canadian Warrant Prospectus or any amended
U.S. Prospectus, U.S. Warrant Prospectus, Canadian Prospectus or
Canadian Warrant Prospectus or any Supplementary Material shall have
been filed; (ii) of any request by any Qualifying Authority to amend or
supplement the Canadian Preliminary Prospectus, the Canadian
Preliminary Warrant
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Prospectus, the Canadian Prospectus or the Canadian Warrant Prospectus
or for additional information or of any request by the Commission to
amend the Registration Statement or the Warrant Registration Statement
or to amend or supplement the U.S. Prospectus or the U.S. Warrant
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the Warrant Registration Statement or of any
order preventing or suspending the use of any of the U.S. Preliminary
Prospectus, Canadian Preliminary Prospectus, the U.S. Preliminary
Warrant Prospectus, the Canadian Preliminary Warrant Prospectus, the
U.S. Prospectus, Canadian Prospectus, the U.S. Warrant Prospectus or
the Canadian Warrant Prospectus, or of the suspension of the
qualification of the Units or Underlying Shares for offering or sale in
any jurisdiction, or of the institution or, to the knowledge of the
Company, threatening of any proceedings for any such purpose, and (iv)
of the issuance by any Qualifying Authority or any stock exchange of
any order having the effect of ceasing or suspending the distribution
of the Units or the Underlying Shares or the trading in the Common
Shares or Warrants, or of the institution or, to the knowledge of the
Company, threatening of any proceedings for any such purpose. The
Company will use every reasonable effort to prevent the issuance of any
such stop order or of any order preventing or suspending such use or
such order ceasing or suspending the distribution of the Units or the
Underlying Shares or the trading in the Common Shares or Warrants and,
if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
(h) FILING OF AMENDMENTS. The Company will not at any time file or make any
amendment or supplement to the Registration Statement, the U.S.
Prospectus or the Canadian Prospectus, or any Supplementary Material,
of which the Representatives shall not have previously been advised and
furnished a copy or to which the Representatives shall have objected
promptly after reasonable notice thereof.
(i) DELIVERY OF FILED DOCUMENTS. The Company has furnished or will deliver
to each of the Underwriters a copy of the Canadian Preliminary
Prospectus, the Canadian Prospectus, the Canadian Preliminary Warrant
Prospectus, the Final Warrant Prospectus, the Canadian Warrant
Prospectus and any Supplementary Material, approved, signed and
certified as required by Canadian Securities Laws and signed and
conformed copies of each of the Registration Statement and Warrant
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates
of experts.
(j) DELIVERY OF PROSPECTUSES. The Company has furnished or will deliver to
each Underwriter, without charge, as many copies of each U.S.
Preliminary Prospectus and Canadian Preliminary Prospectus as such
Underwriters have reasonably requested, and the Company hereby consents
to the use of such copies for the purposes permitted by the 1933 Act.
The Company will deliver to each Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under
the 1933 Act or the 1934 Act and during the period when the Canadian
Prospectus is required to be delivered under Canadian Securities Laws,
but no later than the second Business Day after the Final
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Filing Time, such number of copies of the U.S. Prospectus and Canadian
Prospectus, respectively (each as supplemented or amended) as such
Underwriter may reasonably request. The Company will deliver to the
Warrant Trustee as many copies of the U.S. Warrant Prospectus as the
Warrant Trustee requests to allow the Warrant Trustee to deliver a copy
of the U.S. Warrant Prospectus to each holder of Warrants who exercises
such Warrants.
(k) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply with
the 1933 Act, 1933 Act Regulations and Canadian Securities Laws so as
to permit the completion of the distribution of the Units and
Underlying Shares as contemplated in this agreement and in the U.S.
Prospectus and the Canadian Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection
with sales of the Units, any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the U.S. Prospectus or the Canadian Prospectus in
order that the U.S. Prospectus or the Canadian Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement the U.S. Prospectus or the Canadian Prospectus
in order to comply with the requirements of the 1933 Act, 1933 Act
Regulations or Canadian Securities Laws, the Company will promptly
prepare and file with the Commission and with the Qualifying
Authorities, subject to paragraph 1(h) of this agreement, such
amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the U.S.
Prospectus or the Canadian Prospectus, as the case may be, comply with
such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(l) RULE 158. The Company will file, on a timely basis, such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act and the
regulations thereunder.
(m) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Units in the manner specified in the U.S.
Prospectus and the Canadian Prospectus under "Use of Proceeds".
(n) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days from the
date of the U.S. Prospectus, the Company will not, without the prior
written consent of each of TD Securities Inc. and Xxxxxxx Xxxxx Canada
Inc. (i) directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any Common Shares or any securities
convertible into or exercisable or exchangeable for
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Common Shares or file any registration statement under the 1933 Act
with respect to any of the foregoing (ii) enter into any swap or any
other agreement or in respect of the foregoing, any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or
otherwise or (iii) publicly announce an intention to do any of the
foregoing. The foregoing sentence shall not apply to (A) the Warrants,
the Underlying Shares and the Shares to be sold hereunder, (B) any
Common Shares issued or options to purchase Common Shares granted
pursuant to existing employee plans of the Company referred to in the
U.S. Prospectus and the Canadian Prospectus, (C) any Common Shares
issued in connection with the rights described in the U.S. Prospectus
and the Canadian Prospectus, (D) any Common Shares issued pursuant to
any non-employee director stock plan or dividend reinvestment plan, (E)
Common Shares issuable upon the conversion of any of the Company's
outstanding Convertible Xxxxxxxxxx xxx 0000, (X) any Common Shares
issued in connection with "flow-through financings" by the Company in
an amount up to C$4 million, or (G) any securities issuable 30 days
after the date of the U.S. Prospectus pursuant to an acquisition,
merger, consolidation or amalgamation transaction involving the
Company.
(o) LISTING. The Company will use its best efforts to effect the listing of
the Shares and the Underlying Shares on the TSX and the NYSE and the
Warrants on the TSX and will use reasonable efforts to effect the
listing of the Warrants on the NASDAQ.
(p) REPORTING REQUIREMENTS. The Company, during the period when the U.S.
Prospectus or the U.S. Warrant Prospectus, as applicable, is required
to be delivered under the 1933 Act or the 1934 Act in respect of the
offer and sale of the Units or the Underlying Shares, will file all
documents required to be filed by the Company with the Commission
pursuant to the 1934 Act within the time periods required by the 1934
Act and the rules and regulations of the Commission thereunder.
(q) DELIVERY OF DOCUMENTS AT THE TIME OF FILING OF CANADIAN PROSPECTUS. The
Company shall deliver to the Underwriters contemporaneously with or
prior to the filing of the Canadian Prospectus with the Qualifying
Authorities:
(i) the comfort letter of its auditors, Ernst & Young LLP,
referred to in paragraph 5(h) of this agreement;
(ii) an opinion of its auditors, Ernst & Young LLP, addressed to
the Underwriters, in form and substance satisfactory to the
Underwriters and their counsel, to the effect that the French
language version of the Financial Information is, in all
material respects, a complete and accurate translation of the
English language version thereof;
(iii) an opinion of Quebec counsel to the Company addressed to the
Underwriters, in form and substance satisfactory to the
Underwriters and their counsel, to the effect
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that, except for the Financial Information, as to which they
express no opinion, the French language version of each of the
Canadian Preliminary Prospectus and the Canadian Prospectus,
is, in all material respects, a complete and accurate
translation of the English version of each of the Canadian
Preliminary Prospectus and the Canadian Prospectus,
respectively;
(iv) letters from the TSX advising the Company that approval of the
conditional listing of (A) the Shares issuable pursuant to the
Firm Units and the Optional Units, including the Underlying
Shares, and (B) the Warrants has been granted by the TSX;
(v) application to the NYSE with respect to the listing of the
Shares issuable pursuant to the Firm Units and the Optional
Units, including the Underlying Shares; and
(vi) application to NASDAQ with respect to the listing of the Warrants.
(r) SUPPLEMENTARY MATERIAL. The Company shall deliver to the Underwriters
contemporaneously with or prior to the filing of any Supplementary
Material with any Qualifying Authority or the Commission a comfort
letter from Ernst & Young LLP relating to the Supplementary Material in
the form and substance of the comfort letter described in subparagraph
1(q)(i) of this agreement. The Company shall deliver to the
Underwriters contemporaneously with or prior to the filing of any
Supplementary Material with the Commission des valeurs mobilieres du
Quebec opinions relating to the Supplementary Material in the form and
substance of the opinions described in subparagraphs 1(q)(ii) and (iii)
of this agreement.
(s) CHANGES. From the date of this agreement until the end of the period of
Distribution under the Canadian Prospectus and the U.S. Prospectus, the
Company shall promptly notify the Underwriters in writing of:
(i) any material change (actual, anticipated, contemplated or
threatened, financial or otherwise) in the condition,
financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise whether or not arising in the
ordinary course of business;
(ii) any change in any fact contained in the Registration
Statement, the Canadian Prospectus, the U.S. Prospectus or
Supplementary Material, which change is or may be of such a
nature as to render the Registration Statement, the Canadian
Prospectus, the U.S. Prospectus or Supplementary Material
misleading or untrue in any material respect or result in a
misrepresentation therein; or
(iii) any change in applicable laws, materially and adversely
affecting, or which may materially and adversely affect, the
earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, the
Common Shares or the Distribution under the Canadian
Prospectus or the U.S. Prospectus.
12
(t) WARRANT TRUSTEE. The Warrant Trustee will be duly appointed to act as
trustee under the Warrant Indenture.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriters as of the date hereof and as of each
Closing Time and agrees with each Underwriter as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
general eligibility requirements for use of a short form prospectus
under National Instrument 44-101, for use of a shelf prospectus under
National Instrument 44-102 and for use of Form F-10 under the 1933 Act.
At the time the Registration Statement becomes effective under the 1933
Act and at all times subsequent thereto up to any Closing Time: (A) the
Canadian Prospectus will comply in all material respects with Canadian
Securities Laws as interpreted and applied by the Qualifying
Authorities (B) the U.S. Prospectus will conform to the Canadian
Prospectus, except for such deletions therefrom and additions thereto
as are permitted or required by Form F-10 and the applicable rules and
regulations of the Commission; (C) the Registration Statement, and any
amendments or supplements thereto will comply in all material aspects
with the requirements of the 1933 Act and the 1933 Act Regulations; (D)
none of the Registration Statement, or any amendment or supplement
thereto will 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; and (E) each of the U.S.
Prospectus, the Canadian Prospectus, and any Supplementary Material or
any amendment or supplement thereto will constitute full, true and
plain disclosure of all material facts relating to the Company and its
subsidiaries, considered as one enterprise, and the Units, and will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in clauses (D)
and (E) above do not apply to statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by any Underwriter expressly for use in the Registration
Statement, the U.S. Prospectus, the Canadian Prospectus and any
Supplementary Material.
(b) At the time the Warrant Registration Statement becomes effective under
the 1933 Act: (A) the Canadian Warrant Prospectus will comply in all
material respects with Canadian Securities Laws as interpreted and
applied by the Qualifying Authorities (B) the U.S. Warrant Prospectus
will conform to the Canadian Warrant Prospectus, except for such
deletions therefrom and additions thereto as are permitted or required
by Form F-10 and the applicable rules and regulations of the
Commission; (C) the Warrant Registration Statement, and any amendments
or supplements thereto will comply in all material aspects with the
requirements of the 1933 Act and the 1933 Act Regulations; (D) none of
the Warrant Registration Statement, or any amendment or supplement
thereto will 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; and (E) each of the U.S.
Warrant Prospectus, the Canadian Warrant Prospectus, and any
Supplementary
13
Material or any amendment or supplement thereto will constitute full,
true and plain disclosure of all material facts relating to the Company
and its subsidiaries, considered as one enterprise, and the Underlying
Shares, and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(c) INDEPENDENT ACCOUNTANTS. The accountants who reported on and certified
the financial statements included or incorporated by reference in the
Registration Statement, the Warrant Registration Statement, the U.S.
Prospectus, the U.S. Warrant Prospectus, the Canadian Prospectus and
the Canadian Warrant Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations and are
independent with respect to the Company within the meaning of the
BUSINESS CORPORATIONS ACT (Ontario) and applicable Canadian Securities
Laws.
(d) GOOD STANDING OF THE COMPANY. The Company is a corporation duly
amalgamated, validly existing under the laws of the Province of Ontario
and has filed its annual return under the CORPORATIONS INFORMATION ACT
(Ontario) (the "CIA")) for the most recent year in which it was
required to file such return and has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Canadian Prospectus, and the U.S. Prospectus and to
enter into, deliver and perform its obligations under this agreement;
and the Company is duly qualified as an extra-provincial corporation to
transact business and is in good standing (in respect of the filing of
annual returns where required or other information filings under
applicable corporations information legislation) in each jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(e) GOOD STANDING BY SUBSIDIARIES. The Company's only consolidated
subsidiaries are Sudbury Contact Mines Limited and Telbel Mines
Limited. None of the Company's subsidiaries have assets in excess of 5%
of the consolidated assets of the Company and its subsidiaries as of
the date hereof or represented, for the 2001 fiscal year, revenues or
operating cash flow in excess of 5% of consolidated revenues or
consolidated operating cash flow of the Company and its subsidiaries
for such period. The other information with respect to the subsidiaries
set forth in Schedule A hereto is true and accurate in all material
respects. Each subsidiary is a corporation duly incorporated, validly
existing and has filed its annual return or other information filings
under applicable corporations information legislation for the most
recent year in which it was required to make such filing under the laws
of the jurisdiction of its incorporation, has the requisite power and
capacity to own, lease and operate its properties and to conduct its
business as described in the Canadian Prospectus, and the U.S.
Prospectus and is duly qualified as an extra-provincial or foreign
corporation to transact business and is in good standing (in respect of
the filing of annual returns where required or other information
filings under applicable corporations information legislation) in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of
14
business; all of the issued and outstanding shares of capital of each
subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and are owned by the Company directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any subsidiary were issued in violation of
the preemptive or similar rights of any security holder of such
subsidiary.
(f) COMPLIANCE WITH CANADIAN SECURITIES LAWS. All consents, approvals,
permits, authorizations or filings as may be required under Canadian
Securities Laws (including with respect to the filing of the Canadian
Prospectus and the Form 20-F) and the by-laws, rules and regulations of
the Exchanges necessary to the execution and delivery of and the
performance by the Company of its obligations under this agreement have
been made and obtained or will have been obtained by the Closing Time.
(g) FINANCIAL STATEMENTS. The financial statements included or incorporated
by reference in the Canadian Preliminary Prospectus and U.S.
Preliminary Prospectus and to be included or incorporated by reference
in the Registration Statement and the Canadian Prospectus and notes
thereto, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated; and the statements of
operations, retained earnings, cash flow from operations and changes in
financial information of the Company and its consolidated subsidiaries
for the periods specified in such financial statements have been
prepared in conformity with generally accepted accounting principles in
Canada ("Canadian GAAP") applied on a consistent basis throughout the
periods involved and have been either (A) reconciled to generally
accepted accounting principles in the United States of America ("U.S.
GAAP") in accordance with applicable U.S. securities laws or (B)
prepared and presented in conformity with U.S. GAAP. The selected
financial information to be included or incorporated by reference in
the Registration Statement and the Canadian Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement and the Canadian Prospectus.
(h) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the dates as of which
information is given in the Canadian Preliminary Prospectus and the
U.S. Preliminary Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) except for regular annual dividends on
the Common Shares in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its share
capital.
(i) ABSENCE OF RIGHTS. Except as disclosed in the Canadian Preliminary
Prospectus as at the
15
date thereof and as will be disclosed in the Canadian Prospectus and
the U.S. Prospectus, no person has any right, agreement or option,
present or future, contingent or absolute, or any right capable of
becoming a right, agreement or option, for the issue or allotment of
any unissued shares of the Company or any other agreement or option,
for the issue or allotment of any unissued shares of the Company or any
other security convertible into or exchangeable for any such shares or
to require the Company to purchase, redeem or otherwise acquire any of
the issued and outstanding shares of the Company.
(j) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency,
governmental instrumentality or body, domestic or foreign, now pending
or, to the knowledge of the Company, threatened, against or affecting
the Company or any subsidiary, which is required to be disclosed in the
Canadian Preliminary Prospectus the U.S. Preliminary Prospectus, the
Canadian Prospectus, the U.S. Prospectus or the Supplementary Material
and which is not so disclosed or will not be so disclosed, or which may
reasonably be expected to result in a Material Adverse Effect, or which
may reasonably be expected to materially and adversely affect the
properties or assets of the Company or any subsidiary or which may
materially and adversely affect the consummation of the transactions
contemplated in this agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Canadian Preliminary Prospectus,
the U.S. Preliminary Prospectus or the Supplementary Material including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(k) AUTHORIZATION. This agreement has been, and the Warrant Indenture, when
delivered will have been duly authorized, executed and delivered by the
Company and each of the foregoing constitutes or will constitute a
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting the rights of creditors generally
and except as limited by the application of equitable principles when
equitable remedies are sought, and by the fact that rights to
indemnity, contribution and waiver, and the ability to sever
unenforceable terms, may be limited by applicable law.
(l) AUTHORIZED CAPITAL. The authorized, issued and outstanding share
capital of the Company was, at October 29, 2002 and September 30, 2002,
as set forth in the Canadian Preliminary Prospectus and the U.S.
Preliminary Prospectus under the captions "Description of Share
Capital" and "Capitalization", respectively. All of the issued and
outstanding shares in the capital of the Company have been duly
authorized and validly issued and are fully paid and non-assessable.
None of the outstanding shares in the capital of the Company was issued
in violation of the pre-emptive rights of any securityholder of the
Company.
(m) REPORTING ISSUER STATUS. The Company is a reporting issuer not in
default for purposes of
16
the SECURITIES ACT (Ontario) and the corresponding provisions of the
other Canadian Securities Laws in jurisdictions which recognize the
concept of reporting issuer status.
(n) AUTHORIZATION AND DESCRIPTION OF SHARES, WARRANTS AND UNDERLYING
SHARES. The Shares and Warrants have been duly authorized for issuance
and sale to the Underwriters pursuant to this agreement. The Underlying
Shares have been duly authorized for issuance to holders of Warrants
upon the exercise of such Warrants in accordance with their terms. Each
of the Shares, Warrants and Underlying Shares, when issued and
delivered by the Company pursuant to this agreement against payment of
the consideration set forth herein, will be validly issued and fully
paid and non-assessable; the Common Shares and Warrants conform to all
statements relating thereto contained in the Canadian Prospectus and
the U.S. Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Shares,
Warrants or Underlying Shares will be subject to personal liability
solely by reason of being such a holder; the issuance of the Shares,
Underlying Shares or Warrants is not subject to the preemptive rights
of any shareholder of the Company; and all corporate action required to
be taken for the authorization, issuance, sale and delivery of the
Shares, Underlying Shares and the Warrants has been validly taken.
(o) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, license or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect. The execution,
delivery and performance of this agreement, the Warrant Indenture and
the consummation of the transactions contemplated herein and in the
Canadian Preliminary Prospectus and U.S. Preliminary Prospectus, and as
will be contemplated in the Canadian Prospectus and the U.S. Prospectus
(including the authorization, issuance, sale and delivery of the
Shares, Underlying Shares and Warrants and the use of the proceeds from
the sale of the Units as described in the Canadian Prospectus and the
U.S. Prospectus under the caption "Use of Proceeds") and compliance by
the Company with its obligations hereunder have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation or conflict with the provisions of the charter
or by-laws of the Company or any subsidiary or any existing applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or
17
operations except for such violations or conflicts that would not,
singly or in the aggregate, result in a Material Adverse Effect. As
used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to acquire the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any subsidiary.
(p) ABSENCE OF LABOUR DISPUTE. No labour dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent
labour disturbance by the employees of any of its or any subsidiary's
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to result in a Material Adverse
Effect.
(q) TITLE TO PROPERTY. The Company and its subsidiaries have good and
marketable title to all real property owned by the Company and its
subsidiaries and good title to all other property described in the
Canadian Preliminary Prospectus and U.S. Preliminary Prospectus in each
case as at the date thereof and as will be described in the Canadian
Prospectus and the U.S. Prospectus, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind (including mining, zoning, use or building
code restrictions that would prohibit or prevent the continued
effective ownership, leasing, licensing or use of such property in the
business of the Company and its subsidiaries) except such as (A) are
described in the Canadian Prospectus and the U.S. Prospectus or (B) do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries; and all of
the leases, subleases, claims, concessions and agreements material to
the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Canadian Prospectus and the U.S.
Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases, subleases, claims, concessions or
agreements mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
property under any such lease, sublease, claim, concession or
agreement. The Company, either directly or indirectly, is the owner of
the mining claims and mining leases necessary to carry on its current
and proposed mining operations and its current and proposed exploration
activities, all as set out or contemplated in the Canadian Prospectus
and the U.S. Prospectus. The mining claims and mining leases held by
the Company or its subsidiaries cover the properties required by the
Company for such purposes. The Company is entitled to extract minerals
from its mines as set forth in the Canadian Preliminary Prospectus and
U.S. Preliminary Prospectus in each case as at the date thereof and as
will be set forth in the Canadian Prospectus and the U.S. Prospectus
and to do all of the exploration contemplated in the Canadian
Prospectus and the U.S. Prospectus.
18
(r) ENVIRONMENTAL LAWS. Except as described in the Canadian Preliminary
Prospectus and U.S. Preliminary Prospectus in each case as at the date
thereof and as will be described in the U.S. Prospectus and the
Canadian Prospectus, and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, provincial,
state, local, municipal or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Laws against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(s) NO STABILIZATION OR MANIPULATION. The Company has not taken and will
not take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Common Shares or the Warrants.
(t) RESERVE INFORMATION. The information set forth in the Canadian
Preliminary Prospectus and the U.S. Preliminary Prospectus and as will
be set out in the Canadian Prospectus and the U.S. Prospectus relating
to the estimates by the Company of the proven and probable ore reserves
and mineral resources has been reviewed and verified by the Company
and, in all cases, the ore reserve information has been prepared in
accordance with Canadian industry standards set forth in National
Instrument 43-101 - Standards of Disclosure for Mineral Projects and
the method of estimating the ore reserves has been verified by mining
experience and the information upon which the estimates of reserves
were based, was, at the time of delivery thereof, complete and accurate
in all material respects and there have been no material changes to
such information since the date of delivery or preparation thereof.
(u) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations
19
hereunder, in connection with the offering, issuance or sale of the
Units hereunder or the consummation of the transactions contemplated by
this agreement, except (A) such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws and (B) such as have been obtained, or as may be
required, under Canadian Securities Laws.
(v) POSSESSION OF LICENSES AND PERMITS. The Company and its subsidiaries
possess such permits, certificates, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, provincial, state, local or foreign regulatory
agencies or bodies necessary to own, lease, stake or maintain claims
and other property interest and to conduct the business now operated by
them, except where the failure to possess such Governmental Licenses
would not singly or in the aggregate have a Material Adverse Effect;
the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavourable decision, ruling or finding, would result in a
Material Adverse Effect.
(w) INVESTMENT COMPANY ACT. The Company is not, and upon the issuance and
sale of the Units as herein contemplated and the application of the net
proceeds therefrom as will be described in the Canadian Prospectus and
the U.S. Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(x) REGISTRATION RIGHTS. Other than pursuant to the Registration Rights
Agreement dated as of February 15, 2002 between the Company and Scotia
Capital Inc. relating to the registration of Common Shares issuable on
the conversion of certain of the Company's convertible debentures due
2012, there are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration
Statement, the Warrant Registration Statement or otherwise registered
by the Company under the 1933 Act.
(y) OTHER REPORTS AND INFORMATION. There are no reports or information that
in accordance with the requirements of any Qualifying Authority must be
made publicly available in connection with the offering of the Units
that have not been made or will not be made publicly available during
the period of the distribution of the Units as required; there are no
documents required to be filed with any Qualifying Authority in
connection with the Canadian Prospectus or the Canadian Warrant
Prospectus that have not been filed or will not be filed as required;
during the period of the distribution of the Units there are no
contracts, documents or other materials required to be described or
referred to in the
20
Registration Statement, Warrant Registration Statement or the U.S.
Prospectus or U.S. Warrant Prospectus or to be filed as exhibits to the
Registration Statement or U.S. Warrant Registration Statement that are
not or will not be described, referred to or filed as required by U.S.
federal securities laws and the Canadian Securities Laws.
(z) NO BROKER. Other than as contemplated by this agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this agreement.
(aa) STAMP TAX. No stamp duty, registration or documentary taxes, duties or
similar charges are payable under the federal laws of Canada or the
laws of the Province of Ontario in connection with the creation,
issuance, sale and delivery to the Underwriters of the Units or the
authorization, execution, delivery and performance of this agreement or
the resale of Units by an Underwriter to U.S. residents.
SECTION 3. COMPENSATION OF UNDERWRITERS. In return for their
underwriting services in respect of the distribution of the Units, including (i)
acting as financial advisers to the Company, (ii) assisting in the preparation
of the Canadian Prospectus and the U.S. Prospectus (and Supplementary Material),
(iii) advising on the final terms and conditions of the offering, (iv) forming
and managing a selling group for the sale of the Units, (v) distributing the
Units to the public both directly and through other registered dealers and
brokers, and (vi) performing administrative work in connection with the
distribution of the Units, the Company agrees to pay to the Underwriters at the
Closing Time, an underwriting commission of $0.8716 per Firm Unit sold or
expected to be sold in Canada and US$0.5560 per Firm Unit (being the equivalent
of the corresponding Canadian dollar amount based on the inverse of the Noon
Buying Rate) sold or expected to be sold in the United States and, to the extent
the Over-allotment Option is exercised, an underwriting commission of $0.8716
per Optional Unit sold in Canada and US$0.5560 per Optional Unit (being the
equivalent of the corresponding Canadian dollar amount based on the inverse of
the Noon Buying Rate) sold in the United States.
SECTION 4. CLOSING.
(a) PAYMENT OF THE PURCHASE PRICE. Payment of the purchase price for,
and delivery of certificates for, the Shares and Warrants issuable in respect of
the Firm Units shall be made at the offices of Davies Xxxx Xxxxxxxx & Xxxxxxxx
LLP, 1 First Canadian Place, Suite 4400, Toronto, Ontario, or at such other
place as shall be agreed upon by the Representatives and the Company, at the
Closing Time.
In addition, in the event that any of the Optional Units are purchased
by the Underwriters, payment of the purchase price for, and delivery of
certificates for, the Shares and Warrants issuable in respect of such Optional
Units shall be made at the above-mentioned offices, or at such other place as
shall be agreed upon by the Representatives and the Company, on each Closing
Date as specified in the notice from the Representatives to the Company;
provided that the purchase price per Optional Unit shall be reduced by an amount
per share equal
21
to any dividends or distributions declared by the Company and
payable on the Firm Units but not payable on the Optional Units.
Payment in respect of the purchase price for Units sold in Canada shall
be denominated in Canadian dollars and in respect of the purchase price for
Units sold in the United States shall be denominated in United States dollars
and shall be made to the Company by separate wire transfers of immediately
available funds to a bank account designated by the Company not less than 24
hours prior to the Closing Time or by separate bank drafts or certified cheques,
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Shares and Warrants to be purchased by
them. It is understood that each Underwriter has authorized either of the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Firm Units and the Optional Units, if
any, which it has agreed to purchase.
(b) PAYMENT OF UNDERWRITING COMMISSION. At the Closing Time, the
Company shall contemporaneously pay to the Underwriters the underwriting
commission referred to in Section 3 of this agreement, which underwriting
commission shall be deducted from and set off against the purchase price payable
to the Company by the Underwriters for the Units. The Representatives shall at
the Closing Time provide the Company with a receipt acknowledging payment in
full of the applicable amount of the underwriting commission.
(c) DENOMINATIONS; REGISTRATION. Certificates for the Shares and
Warrants issuable in respect of the Firm Units and the Optional Units, if any,
shall be in such denominations and registered in such names as the
Representatives may request in writing at least two full business days before
any Closing Time. The Shares and Warrants comprising the Firm Units and the
Optional Units, if any, will be made available for examination and packaging by
the Representatives in The City of New York or the City of Toronto, as
determined by the Representatives, not later than 10:00 a.m. (Toronto time) on
the Business Day prior to the Closing Time.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase the Firm Units and, to the extent the
Over-allotment Option is exercised, the Optional Units, hereunder are subject to
the accuracy of the representations and warranties of the Company contained in
Section 2 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT AND WARRANT REGISTRATION
STATEMENT. (i) The Final Prospectus shall have been filed with the Qualifying
Authorities and the Decision Document in respect thereof shall have been
obtained under Canadian Securities Laws and the Registration Statement, and any
amendment thereto, shall have become effective in each case no later than the
Final Filing Time; (ii) the Final Warrant Prospectus shall have been filed with
the Reviewing Authority and the Warrant Decision Document in respect thereof
shall have been obtained under Canadian Securities Laws and the Warrant
Registration Statement shall have
22
been filed with the Commission and the Warrant Registration Statement, and any
amendment thereto, shall have become effective no later than the Business Day
prior to the Closing Date and a supplement in respect of the distribution of the
Underlying Shares shall have been filed with the Reviewing Authority and with
the Commission pursuant to General Instruction II.L of Form F-10 under the 1933
Act within the applicable time period prescribed for filing and no later than
the Business Day prior to the Closing Date; (iii) no stop order suspending the
effectiveness of the Registration Statement or the Warrant Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, no order having the effect of ceasing
or suspending the distribution of the Shares, Warrants or the Underlying Shares
or the trading in the Common Shares or Warrants of the Company or any other
securities of the Company shall have been issued or proceedings therefor
initiated or threatened by any securities commission, securities regulatory
authority or stock exchange in Canada or the United States, and any request on
the part of the Qualifying Authority or the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters.
(b) OPINION OF CANADIAN COUNSEL FOR COMPANY. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP, Canadian counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters, to the
effect set forth in Schedule B hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(c) OPINION OF QUEBEC COUNSEL FOR COMPANY. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Fraser Xxxxxx Casgrain LLP, Quebec counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect set forth
in Schedule C hereto and to such further effect as counsel to the Underwriters
may reasonably request, provided that for the purposes of the opinion in
paragraph 2 of Schedule C, the Mining Rights shall include all mining rights,
leases and concessions which are necessary for the Company to carry out its
current and proposed operations and exploration activities at the LaRonde
Division as described in the Canadian Prospectus and the U.S. Prospectus.
(d) OPINION OF U.S. COUNSEL FOR COMPANY. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Xxxxxxxx Xxxxxxx LLP, United States counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, to the effect set
forth in Schedule D hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(e) OPINION OF CANADIAN COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Lang Xxxxxxxx, Canadian counsel for the Underwriters, with respect to
paragraphs 1, 9 (other than enforceability of this agreement) 13, 14 and 15 and
the second to last paragraph included in Schedule B hereto. In giving such
opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the laws of the Province of Ontario and the federal
laws of Canada applicable therein upon the opinions of counsel satisfactory to
the Underwriters and as to
23
matters pertaining to the Company upon the opinion of Davies Xxxx Xxxxxxxx &
Xxxxxxxx LLP. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(f) OPINION OF U.S. COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received the favourable opinion, dated as of Closing
Time, of Shearman & Sterling, United States counsel for the Underwriters, with
respect to the matters set forth in clauses 1, 2 and 5 and the second to last
paragraph included in Schedule D hereto, except that such counsel need not
comment on matters with respect to the Warrant Registration Statement, the U.S.
Warrant Prospectus, the Underlying Shares or the Warrant Form F-X. In giving
such opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States upon the opinions of counsel satisfactory to the Underwriters.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.
(g) OFFICERS' CERTIFICATE. At Closing Time the Underwriters shall have
received a certificate of the President and Chief Executive Officer and the
Vice-President and Chief Financial Officer of the Company, dated as of Closing
Time, to the effect that (i) there has been no Material Adverse Effect, (ii) the
representations and warranties in Section 2 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, (iv) the Mining
Rights referred to in the opinion of Quebec counsel to the Company contemplated
by paragraph 5(c) of this agreement include all mining rights, leases and
concessions which are necessary for the Company to carry out its current and
proposed operations and exploration activities at the LaRonde Division as
described in the Canadian Prospectus and the U.S. Prospectus, (v) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission, and (vi) no order having the effect of ceasing
or suspending the distribution of the Shares or Warrants or the Underlying
Shares shall have been issued by any securities commission or securities
regulatory authority in Canada.
(h) ACCOUNTANTS' COMFORT LETTER. At the time of filing the Final
Canadian Prospectus, the Underwriters shall have received from Ernst & Young
LLP, a letter dated such date, in form and substance satisfactory to the
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement, the U.S. Prospectus and the Canadian Prospectus.
(i) BRINGDOWN COMFORT LETTER. At Closing Time, the Underwriters shall
have received from Ernst & Young LLP, a letter dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to paragraph (h) of this Section, except that the specified date referred to
shall be a date not more than four business days prior to
24
Closing Time.
(j) NO OBJECTION. The National Association of Securities Dealers, Inc.
shall have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements in
connection with the offering of the Units or the Underlying Shares.
(k) LOCK-UP AGREEMENTS. At the date of this agreement, the
Representatives, on behalf of the Underwriters, shall have received an agreement
substantially in the form set forth in Schedule F hereto, signed by the persons
listed on Schedule E hereto.
(l) WARRANT INDENTURE. The Representatives, on behalf of the
Underwriters, shall have received the Warrant Indenture duly executed by the
Company and the Warrant Trustee.
(m) APPROVAL OF LISTING. At Closing Time, (i) the Shares, Underlying
Shares and Warrants shall have been approved for listing on the TSX, subject to
the Company fulfilling the requirements of the TSX, and (ii) the Shares and
Underlying Shares shall have been approved for listing on the NYSE, subject to
official notice of issuance if required, subject also to the requirement in the
case of the Warrants that a minimum number of holders of Warrants is met.
(n) ADDITIONAL DOCUMENTS. At any Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and the
sale of the Units as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Units as herein contemplated shall
be satisfactory in form and substance to the Representatives and counsel for the
Underwriters, acting reasonably.
SECTION 6. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. In addition to the rights described in
paragraph 6(b) of the agreement, the Representatives may terminate this
agreement, by notice to the Company at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this agreement or since
the respective dates as of which information is given in the Canadian Prospectus
and the U.S. Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, the
Canadian or international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriters impracticable to market the Units or to
enforce contracts for the sale of the Units or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, any Qualifying Authority, any other securities commission or
securities regulatory
25
authority in Canada or the NYSE, the TSX or the Nasdaq National Market, or if
trading generally on the American Stock Exchange, NYSE, TSX, or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, any Qualifying Authority, any other securities commission or
securities regulatory authority in Canada, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or Canada, or (iv) if a banking
moratorium has been declared by United States federal, New York state or
Canadian federal authorities.
(b) TERMINATION OF AGREEMENT. If any condition specified in Section 5
shall not have been fulfilled when and as required to be fulfilled, this
agreement, or in the case of any condition to the purchase of Optional Units,
the obligations of the several Underwriters to purchase the relevant Optional
Units, may be terminated by the Representatives by written notice to the Company
at any time at or prior to the applicable Closing Time.
(c) LIABILITIES. If this agreement is terminated pursuant to this
Section 6, such termination shall be without liability of any party to any other
party except as provided in Section 10 hereof, and provided further that
Sections 2, 6, 7 and 8 shall survive such termination and remain full force and
effect.
SECTION 7. INDEMNITY.
(a) INDEMNITY OF THE UNDERWRITERS. The Company agrees to indemnify and
save harmless each of the Underwriters and their directors, officers, employees
and agents and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against all liabilities, claims, actions, suits, proceedings, losses (other than
loss of profits), costs, damages and expenses (including the reasonable fees and
expenses of the Underwriters' counsel that may be incurred with respect to or in
defending such claim) in any way caused by, or arising directly or indirectly
from or in consequence of:
(i) any information or statement contained in (A) the
Registration Statement or the Warrant Registration
Statement which contains or is alleged to contain a
misrepresentation, or (B) the Canadian Prospectus,
Canadian Warrant Prospectus or the U.S. Prospectus,
the U.S. Warrant Prospectus or any Supplementary
Material, or in a certificate of the Company or any
officer of the Company delivered hereunder or
pursuant hereto which at the time, and in the light
of the circumstances under which it was made,
contains or is alleged to contain a
misrepresentation;
(ii) any omission or alleged omission to state in (A) the
Registration Statement or the Warrant Registration
Statement, any material fact required to be stated
therein or necessary to make the statements therein
not misleading, or (B) the Canadian Prospectus, the
Canadian Warrant Prospectus or the
26
U.S. Prospectus, the U.S. Warrant Prospectus or any
Supplementary Material or any certificate of the
Company or any officer of the Company delivered
hereunder or pursuant hereto, any material fact,
required to be stated therein or necessary to make
the statements therein, in the light of the
circumstances under which they were made, not
misleading;
(iii) any order made or enquiry, investigation or
proceedings commenced or threatened by any securities
commission, stock exchange or other competent
authority based upon any untrue statement or omission
or alleged untrue statement or alleged omission or
any misrepresentation or alleged misrepresentation in
the Registration Statement, the Warrant Registration
Statement, the Canadian Prospectus, the Canadian
Warrant Prospectus, the U.S. Prospectus, the U.S.
Warrant Prospectus or any Supplementary Material or
based upon any failure to comply with Canadian
Securities Laws or securities laws of the United
States (other than any failure or alleged failure to
comply by the Underwriters or their banking or
selling group), preventing or restricting the trading
in or the sale or Distribution of the Shares and
Warrants in any of the Qualifying Provinces or the
United States;
(iv) the non-compliance or alleged non-compliance by the
Company with any requirement of Canadian Securities
Laws or applicable securities legislation of the
United States in connection with the transactions
herein contemplated including the Company's
non-compliance with any statutory requirement to make
any document available for inspection; and
(v) a breach of any term of this agreement;
provided, however, that this indemnity shall not apply to any
liability, claim, action, suit, proceeding, loss, cost, damage
and expense to the extent arising out of any untrue statement
or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for
use in the Registration Statement, the U.S. Preliminary
Prospectus, the Canadian Preliminary Prospectus, the U.S.
Prospectus, the Canadian Prospectus or any Supplementary
Material.
(b) INDEMNITY OF COMPANY, DIRECTORS AND OFFICERS. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against all
liabilities, claims, actions, suits, proceedings, losses (other than loss of
profits), costs, damages and expenses (including the reasonable fees and
expenses of the Company counsel that may be incurred with respect to or in
defending such claim) in any way caused by, or arising directly or indirectly
from, in or consequence of the matters described in the indemnity contained in
subparagraph 7(a)(i), (ii) and (iii) of this agreement as incurred, but only
with respect to untrue
27
information or statements or omissions, or alleged untrue information or
statements or omissions, made in the Registration Statement, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the U.S. Prospectus,
the Canadian Prospectus or any Supplementary Material in reliance upon and in
conformity with written information furnished to the Company by any
Representative expressly for use in the Registration Statement, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the U.S. Prospectus,
the Canadian Prospectus or any Supplementary Material.
(c) INDEMNITY INCLUSIONS. An Indemnifying Party's agreement to
indemnify an Indemnified Party under paragraphs 7(a) or (b) of this agreement
shall include, without limiting the generality thereof, the Company's agreement
to indemnify and save harmless an Indemnified Party in respect of:
(i) all liabilities, claims, losses, costs, damages and
expenses whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any matter
referred to in paragraph 7(a) or (b) of this
agreement, provided that (subject to paragraph 7(g)
of this agreement) any such settlement is effected
with the prior written consent of the Company; and
(ii) all expenses whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen
by the Representatives), reasonably incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any matter
referred to in paragraph 7(a) or (b) of this
agreement.
(d) RIGHTS HELD IN TRUST. To the extent that any Indemnified Party is
not a party to this agreement, the Underwriters (in the case of the indemnity in
paragraph 7(a)) of this agreement) and the Company (in the case of the indemnity
in paragraph 7(b)) of this agreement) shall obtain and hold the rights and
benefits of this Section 7 in trust for and on behalf of such Indemnified Party.
(e) CONSENT TO SETTLEMENT. None of the Company and any of the
Underwriters shall agree to any settlement of any claim, action, suit or
proceeding referred to in this Section 7 unless the Company and each of the
Underwriters has consented in writing thereto.
(f) NOTICE. Each Indemnified Party shall give notice as promptly as
reasonably practicable to each Indemnifying Party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an Indemnifying Party shall not relieve such Indemnifying Party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this Section 7. Counsel to the Indemnified
Parties shall be selected by the Representatives (in the case of the indemnity
in paragraph 7(a)) of this
28
agreement) and the Company (in the case of the indemnity in paragraph 7(b)) of
this agreement). An Indemnifying Party may participate at its own expense in the
defense of any such action, provided, however, that counsel to the Indemnifying
Party shall not (except with the consent of the Indemnified Party) also be
counsel to the Indemnified Party. In no event shall an Indemnifying Party be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for all Indemnified Parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(g) SETTLEMENT WITHOUT CONSENT. If at any time any Indemnified Party
shall have requested an Indemnifying Party to reimburse the Indemnified Party
for fees and expenses of counsel, such Indemnifying Party agrees that it shall
be liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such Indemnifying Party of the aforesaid request,
(ii) such Indemnifying Party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into, and
(iii) such Indemnifying Party shall not have reimbursed such Indemnified Party
in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Party shall have requested such Indemnifying Party to reimburse the
Indemnified Party for fees and expenses of counsel, such Indemnifying Party
shall not be liable for any settlement of the nature contemplated by this
Section 7 effected without its consent if such Indemnifying Party (i) reimburses
such Indemnified Party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice to the
Indemnified Party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 8. CONTRIBUTION. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
Indemnified Party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such Indemnified Party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Units
pursuant to this agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Units
pursuant to this agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Units pursuant to
this agreement (before deducting expenses) received by the Company and the total
underwriting commission received by the Underwriters, in each case as set forth
on the cover of the Canadian Prospectus and the U.S. Prospectus, bear to the
aggregate initial public offering price of the Units as set forth on such cover.
29
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
Indemnified Party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
In the event that the Company may be held to be entitled to
contribution from the Underwriters under the provisions of any statute or at
law, the Company shall be limited to contribution from each Underwriter
(severally and not jointly) in an amount not exceeding the lesser of:
(i) the portion of the full amount of the loss or liability giving
rise to such contribution for which such Underwriter is
responsible, as determined in accordance with the provisions
of this Section 8;
(ii) the amount of the aggregate underwriting commission actually
received by such Underwriter from the Company hereunder; and
(iii) the amount by which the total price at which the Units
underwritten by such Underwriter and distributed to the public
were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter and
each director of the Company, each officer of the Company who signed the
Registration Statement or the Canadian Prospectus, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20
30
of the 1934 Act shall have the same rights to contribution as the Company.
The Underwriters' respective obligations to contribute pursuant to this Section
8 are several in proportion to the number of Firm Units set forth opposite their
respective names in Section 11 of this agreement and not joint.
SECTION 9. SEVERABILITY. If any provision of Sections 7 and 8 is
determined to be void or unenforceable in whole or in part, it shall be deemed
not to affect or impair the validity of any other provision of this agreement
and such void or unenforceable provision shall be severable from this agreement.
SECTION 10. EXPENSES OF THE OFFERING. Whether or not the transactions
herein contemplated shall be completed, except as hereinafter specifically
provided, all expenses of or incidental to the authorization, allotment and
issue of the Units and Underlying Shares and all expenses of or incidental to
all other matters in connection with such transactions including, without
limitation, listing fees, expenses payable in connection with the qualification
of the Units and Underlying Shares for sale to the public, the fees and expenses
of counsel for the Company, all fees and expenses of local counsel, all fees and
expenses of the Company's auditors, all costs relating to information meetings
(including roadshow expenses), all filing and listing fees and all costs
incurred in connection with the preparation, printing and filing of the
Registration Statement, the Warrant Registration Statement (including financial
statements and exhibits and the Form F-X and Warrant Form F-X), Canadian
Preliminary Prospectus, Canadian Warrant Preliminary Prospectus, U.S. Warrant
Prospectus, U.S. Warrant Base Prospectus, Final Prospectus, Final Warrant
Prospectus, Canadian Prospectus, Canadian Warrant Prospectus, U.S. Prospectus,
U.S. Warrant Prospectus, Supplementary Material and share certificates
representing the Shares, certificates representing the Warrants, filing fees
incident to (including the reasonable fees and disbursements of counsel to the
Underwriters in connection with) the review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Units and the
Underlying Shares, fees and expenses of the transfer agent and registrar for the
Shares and Warrants and the Underlying Shares (but excluding the fees of the
Underwriters' and any out-of-pocket expenses of the Underwriters) shall be borne
by and be for the account of the Company, provided that if this agreement is
terminated in accordance with the provisions of subparagraph 6(a)(i) and
paragraph 6(b), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
31
SECTION 11. UNDERWRITING PERCENTAGES. The obligation of the
Underwriters to purchase the Units at the Closing Time shall be several and not
joint and several and shall be limited to the percentages of the aggregate
number of Units set out opposite the name of each of the Underwriters below:
TD Securities Inc. 27.5%
Xxxxxxx Xxxxx Canada Inc. 27.5%
Scotia Capital Inc. 12.5%
Yorkton Securities Inc. 12.5%
CIBC World Markets Inc. 6.0%
Xxxxxxx Xxxxx Barney Canada Inc. 6.0%
Dundee Securities Corporation 4.0%
Sprott Securities Inc. 4.0%
In the event that any Underwriter shall fail to purchase its applicable
percentage of the Units (the "Defaulted Securities") at the Closing Time, the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Underwriters shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number
of Units to be purchased hereunder, the non-defaulting Underwriters
shall be obligated, each severally and not jointly, to purchase the
full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligation
of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Units to be purchased on such date, this agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 11 shall relieve any
defaulting Underwriter from liability in respect of its default to the Company
or to any non-defaulting Underwriter.
In the event of any such default which does not result in a termination
of this agreement either the Underwriters or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement, the Canadian
Prospectus, the U.S. Prospectus or in any other documents or arrangements. As
used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 11.
32
SECTION 12. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF
IMMUNITIES. By the execution and delivery of this agreement, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed Xxxxx X. Xxxxxxxx (or any successor) (together with any successor,
the "Agent for Service"), as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this agreement or
the Common Shares and Warrants comprising the Units or the Underlying Shares,
that may be instituted in any federal or state court in the State of New York,
or brought under federal or state securities laws, and acknowledges that the
Agent for Service has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon the Agent for Service (or any successor) and
written notice of said service to the Company (mailed or delivered to its Chief
Financial Officer at its principal office in Xxxxxxx, Xxxxxxx, Xxxxxx), shall be
deemed in every respect effective service of process upon the Company in any
such suit or proceeding. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
the Agent for Service in full force and effect so long as any of the Underlying
Shares, Shares or Warrants shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from the jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 13. REMEDIES. The rights of termination contained in Section 6
are in addition to any other rights or remedies the Underwriters or any of them
may have in respect of any default, act or failure to act or non-compliance by
the Company in respect of any of the matters contemplated by this agreement.
SECTION 14. SURVIVAL. All warranties, representations, covenants and
agreements herein contained or contained in any documents submitted pursuant to
this agreement and in connection with the transaction herein contemplated shall
survive the purchase and sale of the Units and continue in full force and effect
for the benefit of the Underwriters and shall not be limited or prejudiced by
any investigation made by or on behalf of the Underwriters in connection with
the purchase and sale of the Units or the preparation of the Registration
Statement, the Warrant Registration Statement, the Canadian Prospectus, the
Canadian Warrant Prospectus the U.S. Prospectus the U.S. Warrant Prospectus or
otherwise. This agreement shall constitute the entire agreement with respect to
the purchase of the Units among the parties.
SECTION 15. TIME IS OF THE ESSENCE AND GOVERNING LAWS. Time shall be of
the essence of the agreement arising from this offer and its acceptance by the
Company and such agreement shall be governed and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
33
SECTION 16. NOTICES.
(a) Unless herein otherwise expressly provided, any notice, request,
direction, consent, waiver, extension, agreement or other communication (a
"Communication") that is or may be given or made hereunder shall be in writing
addressed as follows:
If to the Company, at:
Agnico-Eagle Mines Limited
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx
Fax No.: (000) 000-0000
If to the Representatives or any or all of the Underwriters, addressed
and sent to:
TD Securities Inc.
00 Xxxxxxxxxx Xxxxxx X.
0xx Xxxxx, X.X. Xxx 0
TD Tower
Toronto, Ontario
M5X 1A2
Attention: Xxxxx X. Xxxxxxxxx
Fax No.: (000) 000-0000
And to:
Xxxxxxx Xxxxx Canada Inc.
BCE Place
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxxxxx
Fax No.: (000) 000-0000
or to such other address as any of the parties may designate by notice
given to the others in accordance with this subparagraph.
(b) Each Communication shall be personally delivered to the addressee
34
or sent by facsimile transmission to the addressee and (a) a Communication which
is personally delivered shall, if delivered before 5:00 p.m. on a Business Day,
be deemed to be given and received on that day and, in any other case, be deemed
to be given and received on the first Business Day following the day on which it
is delivered; and (b) a Communication which is sent by telex, telegraph or
facsimile transmission shall, if sent on a Business Day and the machine on which
it is sent receives the answer back code of the party to whom it is sent before
5:00 p.m., be deemed to be given and received on that day and, in any other
case, be deemed to be given and received on the first Business Day following the
day on which it is sent.
(c) Each Underwriter hereby agrees and acknowledges that the Company
shall be entitled to and shall act on any Communication given or agreement
entered into by or on behalf of the Underwriters by the Representatives and that
the Representatives have irrevocable authority to bind the Underwriters, except
in respect of any consent to a settlement of any claim, action, suit or
proceeding referred to in Section 7, which consent shall be given by the
Indemnifying Party.
(d) Any certificate signed by any officer of the Company or any of its
subsidiaries delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
35
If the foregoing is in accordance with your understanding and is agreed to by
you, please signify your acceptance on the accompanying counterparts of this
letter, return the same to us whereupon this letter as so accepted shall
constitute an agreement between us in accordance with the foregoing.
TD SECURITIES INC. XXXXXXX XXXXX CANADA INC.
per: (signed) Xxxxx X. Xxxxxxxxx per: (signed) Xxxxxxx Xxxxxxxx
--------------------------------- ---------------------------------
Xxxxx X. Xxxxxxxxx Xxxxxxx Xxxxxxxx
SCOTIA CAPITAL INC. YORKTON SECURITIES INC..
per: (signed) J. Xxxx Xxxxxxxxx per: (signed) Xxxxxxx Xxxxxx
--------------------------------- ---------------------------------
J. Xxxx Xxxxxxxxx Xxxxxxx Xxxxxx
CIBC WORLD MARKETS INC. XXXXXXX XXXXX BARNEY CANADA INC.
per: (signed) Xxxxx Xxxxxx per: (signed) Xxxxxxx Xxxxxxx
--------------------------------- ---------------------------------
Xxxxx Xxxxxx Xxxxxxx Xxxxxxx
DUNDEE SECURITIES CORPORATION SPROTT SECURITIES INC.
per: (signed) Xxxxxxx X. Xxxxx per: (signed) W. Xxxxxxx Xxxxxxx
--------------------------------- ---------------------------------
Xxxxxxx X. Xxxxx W. Xxxxxxx Xxxxxxx
36
The foregoing offer is accepted and agreed to as of the date first
above written.
AGNICO-EAGLE MINES LIMITED
per: (signed) Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx
37
SCHEDULE A
Legal Name of Statutes Business Number of Number of Per Cent of Issued Operating
Subsidiary Jurisdiction Issued and Voting Shares and Outstanding Status
Outstanding Beneficially Voting Shares
Voting Shares Owned by Beneficially
Agnico Owned by Agnico
Telbel Mines Limited Quebec Ontario, 2,200,003 2,200,003 100% Holding
Quebec Company
Sudbury Contact Ontario Ontario, 20,494,660 13,813,778 67.4% Mineral
Mines Limited Quebec Exploration
SCHEDULE B
DAVIES XXXX XXXXXXXX & XXXXXXXX LLP OPINION
1. The Company is a corporation existing under the laws of the Province of
Ontario and has filed its annual return under the CORPORATIONS
INFORMATION ACT (Ontario) (the "CIA") for the most recent year in which
it was required to file such a return.
2. The Company has the corporate power and capacity under the laws of the
Province of Ontario to own, lease and operate its properties and to
conduct its business as described in the Canadian Prospectus and the
U.S. Prospectus.
3. The Company is a reporting issuer under the securities laws of each
Canadian Province which recognizes the concept of reporting issuer and
is not on the list of defaulting reporting issuers maintained by the
Qualifying Authority in each of such province(s) that maintains such a
list.
4. The Company is extra-provincially registered or otherwise qualified as
an extra-provincial or a foreign corporation to transact business under
the laws of the Province of Quebec, being the only jurisdiction in
which the nature of the Company's business or the location of its
assets makes such registration or qualification necessary.
5. The authorized, issued and outstanding share capital of the Company was
as set forth in the U.S. Prospectus and the Canadian Prospectus under
the headings "Description of Share Capital" and "Capitalization" and no
holder of outstanding shares in the capital of the Company is or will
be subject to personal liability for any act, default, obligation or
liability of the Company solely by reason of being such a holder.
6. Sudbury Contact Mines Limited ("Sudbury Contact") is a corporation
existing under the laws of the Province of Ontario and has filed its
annual return under the CIA for the most recent year in which it was
required to file such a return. Sudbury Contact has the corporate power
and capacity under the laws of the province of Ontario to own, lease
and operate its properties and conduct its business as described in the
U.S. Prospectus and the Canadian Prospectus.
7. Sudbury Contact is extra-provincially registered or otherwise qualified
as extra-provincial or foreign corporation to transact business under
the laws of the Province of Quebec, being the only jurisdiction in
which the nature of Sudbury Contact's business or the location of its
assets makes such registration or qualification necessary.
8. To such counsel's knowledge, the Company beneficially owns directly
that number of shares in each subsidiary set forth opposite the
subsidiary's name in Exhibit 1 hereto, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any
kind.
9. The Company has the corporate power and capacity to execute, deliver
and perform its obligations under each of the
Underwriting Agreement
and the Warrant Indenture and each of the
Underwriting Agreement and
the Warrant Indenture has been duly authorized, executed and delivered
by the Company and is enforceable against the Company in accordance
with its terms (except for the provisions of Section 7 - Indemnity,
Section 8 - Contribution and Section 9 - Severability of the
Underwriting Agreement and Section 1.6 - Severability in respect of
which such counsel shall not be required to opine).
10. The Shares and Warrants have been and the Underlying Shares will be,
when issued in accordance with the terms of the Warrants duly
authorized and validly issued and are outstanding as fully paid and
non-assessable and no holder of the Shares, Warrants or Underlying
Shares is or will be subject to personal liability for any act,
default, obligation or liability of the Company solely by reason of
being such a holder.
11. All corporate action required to be taken for the authorization,
issuance, sale and delivery of the Shares, Underlying Shares and
Warrants has been validly taken.
12. Based solely on a review of the Company's constating documents and a
certificate of the Company, the issuance of the Shares, Underlying
Shares and Warrants is not subject to the pre-emptive rights of any
shareholder of the Company.
13. A Decision Document has been obtained for the Final Prospectus from the
Reviewing Authority evidencing that receipts have been issued by each
Qualifying Authority for the Final Prospectus and a Warrant Decision
Document has been issued by the Reviewing Authority for the Canadian
Warrant Prospectus and all necessary documents have been filed, all
necessary proceedings have been taken and all necessary authorizations,
approvals, permits, consents and orders have been obtained under the
securities laws of the Qualifying Provinces to permit the Shares and
Warrants comprising the Units to be offered, sold and delivered in the
Qualifying Provinces by or through persons registered under such laws
and no other authorization, approval, permit or license of any
government, governmental instrumentality or court of any Qualifying
Province or of Canada is required for the issuance, sale and delivery
of the Shares and Warrants.
14. The issue, sale and delivery by the Company of the Underlying Shares is
exempt from the prospectus and registration requirements of the
securities laws of the Qualifying Provinces provided that no commission
or other remuneration is paid or given to others in respect of such
issuance and delivery, except for ministerial, administrative or
professional services, or for services performed by a registered
dealer, subject to the receipt of necessary exemptive orders under the
laws of New Brunswick and subject to customary qualifications.
15. The first trade of the Warrant Shares following their issue, sale and
delivery by the Company is not subject to the prospectus requirements
of the securities laws of the
2
Qualifying Provinces subject to customary qualifications and
restrictions under applicable securities legislation;
16. All descriptions in the U.S. Prospectus and the Canadian Prospectus of
contracts and other documents to which the Company or its subsidiaries
are a party are accurate in all material respects; to such counsel's
knowledge, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments that in accordance with
the requirements of the Qualifying Authorities must be made publicly
available in connection with the offering of the Units that have not
been made publicly available as required; and, to such counsel's
knowledge, there are no documents required to be filed with the
Qualifying Authorities in connection with the Canadian Preliminary
Prospectus or the Canadian Prospectus that have not been filed as
required.
17. The statements made in the Registration Statement under Part II -
Information Not Required To Be Delivered To Offerees or Purchasers -
Indemnification, the statement made in the Canadian Prospectus and the
U.S. Prospectus under the headings "Share Capital" and "Canadian
Federal Income Tax Considerations" and the statements made in the
Canadian Prospectus under the heading "Eligibility for Investment", to
the extent that they constitute matters of law or legal conclusions,
have been reviewed by us and fairly present the information disclosed
therein in all material respects.
18. The attributes of the Common Shares and the Warrants conform in all
material respects to the description thereof contained in the U.S
Prospectus and the Canadian Prospectus.
19. The form of definitive certificate representing the Shares has been
duly approved and adopted by the Company and complies with the
provisions of the OBCA relating thereto and with the applicable
requirements of the TSX.
20. The form of definitive certificate representing the Warrants has been
duly approved and adopted by the Company.
21. To such counsel's knowledge, based solely on a certificate of an
officer of the Company, no default exists in the performance or
observance of any material obligation, agreement, covenant or condition
in any contract, indenture, loan agreement, note, lease or other
agreement or instrument to which the Company or any subsidiary is a
party that is described or referred to in the U.S. Prospectus and the
Canadian Prospectus or filed as an exhibit to the Registration
Statement (collectively referred to as "Contracts") that is referred to
in Exhibit A to this Schedule B (the "Contracts Exhibit"). For greater
certainty, the aforementioned certificate of officer shall include
confirmation that none of the Contracts which are not also referred to
in the Contract Exhibit are material to the business or operations of
the Company.
3
22. The Shares, Warrants and Underlying Shares have been approved for
listing on the TSX, subject to the Company fulfilling the requirements
of such exchange set forth in the conditional approval letter on or
before the date referred to in such letter, and in the case of the
Warrants, subject also to meeting the requirements of the TSX that a
minimum number of holders hold such Warrants.
23. To such counsel's knowledge, based solely on a certificate of an
officer of the Company, there is not pending or threatened any action,
suit, proceeding, inquiry, or investigation, to which the Company or
any subsidiary is a party, or to which the property of the Company or
any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets of the Company or any subsidiary or the
consummation of the transactions contemplated in the
Underwriting
Agreement or the performance by the Company of its obligations
thereunder.
24. To such counsel's knowledge, no order having the effect of ceasing or
suspending the distribution of the Shares, Underlying Shares and
Warrants or the trading in the Common Shares has been issued by any
securities commission or securities regulatory authority in Canada and
no proceedings for that purpose have been instituted or are pending or
contemplated.
25. The execution, delivery and performance of the
Underwriting Agreement,
the Warrant Indenture and the consummation by the Company of the
transactions contemplated in the
Underwriting Agreement, the Warrant
Indenture, the Registration Statement, the U.S. Prospectus, and the
Canadian Prospectus and compliance by the Company with its obligations
under each of the
Underwriting Agreement and the Warrant Indenture do
not and will not result in any violation of the constating documents of
the Company or Sudbury, and do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
result in a breach of, a default under, or Repayment Event (as defined
in the
Underwriting Agreement) or result in the creation or imposition
of any lien, charge or encumbrance upon any properties or assets of the
Company or any subsidiary under (a) any indenture, mortgage, loan
agreement or other agreement or instrument referred to in the Contracts
Exhibit (provided that such counsel is not required to express an
opinion with respect to real property, mining leases and subleases,
mining licenses, claims, rights and concessions) except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect; (b) any existing applicable
Canadian federal statute or regulation or statute or regulation of the
Province of Ontario; or (c) to such counsel's knowledge, any judgment,
order or decree of any government, governmental, regulatory or
administrative agency, authority, commission or instrumentality or
court having jurisdiction over the Company or Sudbury or any of their
properties, assets or operations.
4
26. The Common Shares and Warrants comprising the Units are qualified
investments under the INCOME TAX ACT (Canada) for trusts governed by
registered retirement savings plans, registered retirement income
funds, registered education savings plans and deferred profit sharing
plans, and are not "foreign property" for the purposes of the tax
imposed under Part XI of the INCOME TAX ACT (Canada).
27. Each of the Canadian Prospectus, the Canadian Warrant Prospectus and
the Supplementary Material in connection with the offering of the Units
(excluding the financial statements and other financial data included
or incorporated therein or omitted therefrom, as to which such counsel
need express no opinion) comply as to form with the requirements of the
securities laws, rules and regulations of the Province of Ontario as
interpreted and applied by the Reviewing Authority.
28. The provisions of the Quebec Securities Act relating to the use of the
French language and of the Charter of the French Language, R.S.Q.c.
C-11 (other than those relating to verbal communications, as to which
we express no opinion) will have been complied with in respect of the
Prospectus and forms of order and confirmation (the "Offering
Documents") to be delivered to purchasers in the Province of Quebec in
connection with the sale of the Units, when issued, to the extent such
purchasers receive a copy of the Offering Documents in the French
language (on the assumption that the Offering Documents constitute the
entire contract for the Units), provided that the Offering Documents in
the English language may be delivered without delivery of the French
language versions thereof to those physical persons in the Province of
Quebec who have expressly requested in writing to receive such Offering
Documents in the English language only.
29. The Company is eligible to file a short form prospectus with the
Reviewing Authority.
30. The filing of the Final Prospectus and the Final Warrant Prospectus
with the Reviewing Authority and the Qualifying Authorities, in each
case, have been duly authorized by and on behalf of the Company.
31. The filing of the Registration Statement and the Warrant Registration
Statement with the Commission has been duly authorized by and on behalf
of the Company.
Such opinion shall additionally state that such counsel have
participated in the preparation of the Registration Statement, the U.S.
Prospectus, the Canadian Prospectus, and the Supplementary Material in
connection with the offering of the Units, if any, and in conferences with
officers and other representatives of the Company, representatives of the
independent chartered accountants for the Company, and representatives of the
Underwriters, at which the contents of the Registration Statement, the U.S.
Prospectus and the Canadian Prospectus and related matters were discussed and
are familiar with or have participated in the preparation of the documents
incorporated by reference in the U.S. Prospectus and the Canadian Prospectus
and,
5
although such counsel are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Canadian Prospectus, except as set forth in paragraphs 5 and 15 above, on the
basis of the foregoing, no facts have come to such counsel's attention which
gave such counsel reason to believe that the Canadian Prospectus and such
Supplementary Material (except for the financial statements and other financial
data included or incorporated therein or omitted therefrom, as to which such
counsel need not comment), at the time the Canadian Prospectus was filed with
the Qualifying Authorities, at the time any such Supplementary Material filed
before the Closing Time was filed with the Qualifying Authorities, or at the
Closing Time, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the laws of the Province of
Ontario and the federal laws of Canada applicable therein, upon opinions of
local counsel, who shall be counsel satisfactory to counsel for the
Underwriters, in which case the opinion shall state that they believe the
Underwriters and they are entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
certificates of public officials; provided that such certificates have been
delivered to the Underwriters. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions.
6
EXHIBIT A TO SCHEDULE B
CONTRACTS EXHIBIT
1. Credit Agreement dated November 13, 2001 among Agnico-Eagle Mines
Limited and a syndicate of lenders led by The Bank of Nova Scotia;
2. Indenture dated as of February 15, 2002 among Agnico-Eagle Mines
Limited and Computershare Trust Company of Canada, as trustee relating
to the issuance of 4.50% convertible subordinated debentures due 2012;
3. Net Profits Royalty Agreement dated June 21, 1999 among Xxxxxxx Gold
Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;
4. Net Smelter Royalty Agreement dated June 21, 1999 among Xxxxxxx Gold
Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;
5. Employment Agreement between Agnico-Eagle Mines Limited and Xxxxx
Xxxxxxx dated March 1, 2002;
6. Employment Agreement between Agnico-Eagle Mines Limited and Xxxx Xxxx
dated June 12, 1998;
7. Employment Agreement between Agnico-Eagle Mines Limited and Xxxxx
Xxxxxxxx dated June 8, 1998;
8. Employment Agreement between Agnico-Eagle Mines Limited and Xxxxx
Xxxxxx dated March 1, 2002; and
9. Employment Agreement between Agnico-Eagle Mines Limited and Eberhard
Scherkus dated June 12, 1998.
7
EXHIBIT 1 TO
SCHEDULE B
AGNICO-EAGLE MINES LIMITED
SUBSIDIARIES
NUMBER OF VOTING SHARES BENEFICIALLY
LEGAL NAME OF SUBSIDIARY OWNED BY AGNICO-EAGLE MINES LIMITED
------------------------ -----------------------------------
Sudbury Contact Mines Limited 13,813,778
Telbel Mines Limited 2,200,003
8
SCHEDULE C
QUEBEC COUNSEL OPINION
1. The Company is the registered owner of the mining rights, leases
("Leases") and concessions (collectively, "Mining Rights") referred to
in a schedule (the "Schedule") to such opinion and has title thereto,
subject to the provisions of the MINING ACT (Quebec) and there are no
registered liens or encumbrances against such Mining Rights except as
set forth in the Schedule to such opinion and the Leases are valid and
enforceable in accordance with their respective terms.
2. Such counsel has been informed by letter received from the Minister of
Energy and Resources (Quebec) and addressed to such counsel, that the
Company, as holders of the Leases, have complied with their obligations
with respect to the Leases pursuant to the MINING ACT (Quebec).
3. The execution and delivery of each of the
Underwriting Agreement and
the Warrant Indenture by the Company, the authorization, issuance and
delivery of the Shares, Underlying Shares and Warrants, the
consummation by the Company of the transactions contemplated in the
Underwriting Agreement, the Warrant Indenture, the Registration
Statement, the U.S. Prospectus and the Canadian Prospectus, and
compliance by the Company with the terms of the Underwriting Agreement
do not and will not result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (a) the Leases; or (b) any existing
applicable law, rule or regulation of the Province of Quebec.
SCHEDULE D
FORM OF OPINION OF COMPANY'S U.S. COUNSEL
1. Each of the Registration Statement and the Warrant Registration
Statement filed in connection with the offering and sale of the Common
Shares and Warrants issuable in respect of the Units and the Underlying
Shares in the United States, respectively, is effective under the
Securities Act of 1933 (the "1933 Act"), the Company is eligible to
file the Registration Statement and Warrant Registration Statement on
Form F-10 and the Form F-X and Warrant Form F-X were filed with the
Commission prior to the effectiveness of the Registration Statement and
Warrant Registration Statement; and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement or Warrant Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the 0000 Xxx. The required filing of the
supplement to the Warrant Registration Statement pursuant to General
Instruction II.L of Form F-10 has been made in the manner and in the
time period required by such General Instruction.
2. The Registration Statement, Warrant Registration Statement, the U.S.
Prospectus and the U.S. Warrant Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement
thereto (except for the financial statements and other financial data
included therein or omitted therefrom as to which such counsel need
express no opinion), as of their respective effective or issue dates,
comply as to form with the requirements of the 1933 Act and the
Regulations under the 1933 Act; the Form F-X and Warrant Form F-X
comply as to form with the requirements of the 1933 Act and the
Regulations under the 1933 Act.
3. No consent, approval, authorization, license, order, registration,
qualification or decree of or with any court or governmental authority,
agency or body, domestic or foreign, other than as have been obtained
under the 1933 Act is necessary or required in connection with the due
authorization, execution and delivery of the Underwriting Agreement,
the Warrant Indenture or for the offering, issuance, sale or delivery
of the Shares, the Underlying Shares and the Warrants under the federal
securities laws of the United States of America.
4. To such counsel's knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry, or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign.
5. The statements in the U.S. Prospectus under the caption "United States
Federal Income Tax Considerations", to the extent they constitute legal
matters with respect to United States taxation, have been reviewed by
such counsel and fairly present the information stated therein in all
material respects.
6. All descriptions in the Registration Statement of (i) U.S. statutes,
regulations, legal or governmental proceedings are fairly summarized in
all material respects and to the best of
such counsel's knowledge, there are no U.S. statutes or regulations,
pending or threatened legal or governmental proceedings, franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto, and
the summaries thereof or references thereto are correct in all material
respects.
7. To such counsel's knowledge, based solely on a certificate of an
officer of the Company, no default exists in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement, the U.S. Prospectus or the Canadian Prospectus
or filed as an exhibit to the Registration Statement (collectively
referred to as "Contracts") that is referred to in Exhibit A to this
Schedule C (the "Contracts Exhibit"). For greater certainty, the
aforementioned certificate of officer shall include confirmation that
none of the Contracts which are not also referred to in the Contracts
Exhibit are material to the business or operations of the Company.
8. The forms of certificate used to evidence the Common Shares comply in
all material respects with the requirements of the NYSE and the
Warrants comply in all material respects with the requirements of
NASDAQ.
9. The Shares and Underlying Shares have been approved for listing on the
NYSE, subject to notice of issuance of the Shares and Underlying Shares
and the Warrants have been approved for listing on NASDAQ.
The Company is not, and upon the issuance and sale of the Units and the
application of the net proceeds therefrom as described in the Canadian
Prospectus and the U.S. Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
Such opinion shall additionally state that such counsel have
participated in the preparation of the Registration Statement and the U.S.
Prospectus and in conferences with officers and other representatives of the
Company, representatives of the independent chartered accountants for the
Company, and representatives of the Underwriters, at which the contents of the
Registration Statement and the U.S. Prospectus and related matters were
discussed and, although such counsel are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the U.S. Prospectus except as set
forth in paragraphs (5) and (6) above, on the basis of the foregoing no fact has
come to such counsel's attention which gave such counsel reason to believe that,
as of its effective date, (A) the Registration Statement or any amendment
thereto made prior to the Closing Time (except for the financial statements and
other financial data included or incorporated therein or omitted therefrom, as
to which such counsel need not comment), at the time the Registration Statement
or any such amendment became effective, contained an untrue
2
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 or (B)
the U.S. Prospectus or any amendment or supplement thereto made prior to the
Closing Time (except for the financial statements and other financial data
included or incorporated therein or omitted therefrom, as to which such counsel
need not comment), at the time the U.S. Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the Commonwealth of
Virginia and the federal law of the United States, upon opinions of local
counsel, in which case the opinion shall state that they believe the
Underwriters and they are entitled to so rely. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
certificates of public officials; provided that such certificates have been
delivered to the Underwriters. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
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EXHIBIT A TO SCHEDULE D
CONTRACTS EXHIBIT
1. Credit Agreement dated November 13, 2001 among Agnico-Eagle Mines
Limited and a syndicate of lenders led by The Bank of Nova Scotia;
2. Indenture dated as of February 15, 2002 among Agnico-Eagle Mines
Limited and Computershare Trust Company of Canada, as trustee relating
to the issuance of 4.50% convertible subordinated debentures due 2012;
3. Net Profits Royalty Agreement dated June 21, 1999 among Xxxxxxx Gold
Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;
4. Net Smelter Royalty Agreement dated June 21, 1999 among Xxxxxxx Gold
Corporation, Lac Exploration Inc., and Agnico-Eagle Mines Limited;
5. Employment Agreement between Agnico-Eagle Mines Limited and Xxxxx
Xxxxxxx dated March 1, 2002;
6. Employment Agreement between Agnico-Eagle Mines Limited and Xxxx Xxxx
dated June 12, 1998;
7. Employment Agreement between Agnico-Eagle Mines Limited and Xxxxx
Xxxxxxxx dated June 8, 1998;
8. Employment Agreement between Agnico-Eagle Mines Limited and Xxxxx
Xxxxxx dated March 1, 2002; and
9. Employment Agreement between Agnico-Eagle Mines Limited and Eberhard
Scherkus dated June 12, 1998.
SCHEDULE E
FORM OF LOCK-UP AGREEMENT
October 31, 2002
TD SECURITIES INC.
XXXXXXX XXXXX CANADA INC.
on behalf of the several Underwriters
named in the within-mentioned
Underwriting Agreement
c/o TD Securities Inc.
00 Xxxxxxxxxx Xxxxxx Xxxx
0xx Xxxxx, X.X. Xxx 0
TD Tower
Toronto, Ontario
M5X 1A2
Ladies and Gentlemen:
The undersigned director or senior officer of Agnico-Eagle Mines
Limited, an Ontario company (the "Company"), understands that an Underwriting
Agreement (the "Underwriting Agreement") will be executed by the Company and TD
Securities Inc. and Xxxxxxx Xxxxx Canada Inc. (the "Underwriters"), providing
for the public offering (the "Offering") of 12,000,000 units of the Company
("Units") in the United States pursuant to the Company's registration statement
on Form F-10 (File No. 333-100850), as amended or supplemented, and in all
provinces of Canada pursuant to a short form prospectus to be filed by the
Company, as amended or supplemented.
This Lock-up Letter Agreement is being entered into in accordance with
paragraph 5(k) of the Underwriting Agreement at the request of the Underwriters.
For good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned agrees that without the prior written consent of
each of TD Securities Inc. and Xxxxxxx Xxxxx Canada Inc., on behalf of the
Underwriters, the undersigned will not, directly or indirectly, sell (including
any sale pursuant to Rule 144 under the Securities Act of 1933, as amended),
offer to sell, pledge, file a registration statement or prospectus, announce any
intention to sell or grant any option for the sale of any Common Shares
(including, without limitation, Common Shares which may be deemed to be
beneficially owned by such shareholder in accordance with the rules and
regulations of the Securities and Exchange Commission or the securities
legislation of any province or territory of Canada and shares of Common Stock
which may be issued upon exercise of any option or warrant) or any securities
convertible into or exchangeable or exercisable for Common Shares for a period
(the "Lock-up Period") commencing the date of the Underwriting Agreement and
ending 90 days thereafter; provided
that during the Lock-up Period, the undersigned may make gifts of Common Shares
or securities convertible into Common Shares, or may transfer to its affiliates
shares of Common Shares convertible into Common Shares, upon the condition that
such donees or transferees agree to be bound by the foregoing restriction in the
same manner as it applies to the undersigned.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the successors and assigns of the undersigned.
This Lock-up Letter Agreement has been entered into on the date first
written above.
Yours very truly,
------------------------------------
Name of Director or Senior Officer
Names of Directors and
Senior Officers:
Xxxxx Xxxxxxx, P. Eng.
Xxxxxx Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxxx
Xxxx Xxxx, C.A.
Xxxx X. Xxxxxxx, Q.C.
Xxxxxx Xxxxx
Xxxxx Xxxxxxxx
Dr. Xxxx Xxxxx
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, C.A.
Xxxxx Xxxxxx
Xxxxx X. Xxxxx
Xxxxxxxx Scherkus, P. Eng.
Xxxxxx Xxxxxxx
2
