EXHIBIT 3.1
COMMON SHARES
SILVER STANDARD RESOURCES INC.
UNDERWRITING AGREEMENT
May [__], 2006
BEAR, XXXXXXX & CO. INC.
DEUTSCHE BANK SECURITIES INC.
BLACKMONT CAPITAL INC.
CITIGROUP GLOBAL MARKETS INC.
NATIONAL BANK FINANCIAL INC.
SALMAN PARTNERS INC.
DEUTSCHE BANK SECURITIES LIMITED
CITIGROUP GLOBAL MARKETS CANADA INC.
As Sub-Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies/Gentlemen:
Silver Standard Resources Inc., a corporation organized and existing
under the laws of British Columbia (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
6,000,000 common shares (the "Firm Shares"), without par value, and, for the
sole purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional 900,000 common
shares (the "Additional Shares"). The Firm Shares and any Additional Shares
purchased by the Underwriters are referred to herein as the "Shares". Bear,
Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") and Deutsche Bank Securities Inc.
("Deutsche") are acting as lead managers (the "Lead Managers") in connection
with the offering and sale of the Shares contemplated herein (the "Offering").
The Company understands that the Underwriters propose to make a public
offering of the Shares in the United States and each of the provinces of Canada,
except Quebec,
either directly or through their respective U.S. or Canadian broker-dealer
affiliates upon the terms set forth in the Prospectuses (as defined below) as
soon as the Underwriters deem advisable after this Agreement has been executed
and delivered.
The Company understands that a portion of the Shares may be offered
and sold in the Canadian Jurisdictions (as defined below) by Deutsche Bank
Securities Limited ("Deutsche Canada"), the Canadian broker-dealer affiliate of
Deutsche, and by Citigroup Global Markets Canada Inc. ("Citigroup Canada" and,
together with Deutsche Canada, the "Sub-Underwriters"), the Canadian
broker-dealer affiliate of Citigroup Global Markets Inc., pursuant to the
Canadian Prospectus (as defined below). The Sub-Underwriters, subject to the
terms and conditions set forth herein, agree to use reasonable efforts to sell
such Shares in the Canadian Jurisdictions. Any Shares sold by a Sub-Underwriter
will be purchased by the Sub-Underwriter from its respective U.S. broker-dealer
affiliate at the Closing Date (as defined below) at a price equal to the price
set forth in Section 2(a) below or such purchase price less an amount to be
mutually agreed upon by the Sub-Underwriter and its respective U.S.
broker-dealer affiliate, which amount shall not be greater than the underwriting
commission set forth in Annex IV hereto.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters and the
Sub-Underwriters that:
(a) The Company is eligible to file a short form prospectus with the
applicable securities regulatory authority in each of the provinces of Canada
under National Instrument 44-101 - Short Form Prospectus Distributions and is
eligible to use the rules and procedures established pursuant to the Canadian
Securities Laws in National Instrument 44-103 - Post-Receipt Pricing for the
pricing of securities after the final receipt for a prospectus has been obtained
(the "PREP Procedures"); the Company has identified the British Columbia
Securities Commission (the "Reviewing Authority") as its principal regulator in
respect of the offering of the Shares pursuant to National Policy 43-201 -
Mutual Reliance Review System for Prospectuses and Annual Information Forms (the
"MRRS"); the Company has prepared and filed with the applicable securities
regulatory authority (collectively, the "Canadian Authorities") in each of the
provinces of Canada, except Quebec (collectively, the "Canadian Jurisdictions"),
under the MRRS and in conformity in all material respects with the applicable
securities legislation of the Canadian Jurisdictions and the respective rules,
regulations and written and published policies thereunder (the "Canadian
Securities Laws"), a preliminary short form base PREP prospectus, dated April
28, 2006 (the "Canadian Preliminary Prospectus") and a final short form base
PREP prospectus, dated [__], 2006 (the "Canadian Base PREP Prospectus"),
omitting the PREP Information (as defined below), and a MRRS Decision Document
for each of the Canadian Preliminary Prospectus and the Canadian Base PREP
Prospectus has been obtained. The Company will file with each of the Canadian
Authorities in accordance with the PREP Procedures a short form supplemented
PREP prospectus consisting of the Canadian Base PREP Prospectus incorporating
the PREP Information (as defined below) (the "Canadian Prospectus"). As filed,
such Canadian Prospectus shall contain all information required by applicable
Canadian Securities Laws and, except for the inclusion of the PREP Information
(as defined below) or to the extent the Lead Managers shall agree in writing to
a modification, shall be in all respects in the form of the Canadian Base PREP
Prospectus. No order suspending the distribution of the Shares has been issued
by any of the Canadian Authorities and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Canadian Authorities and any request on the part of the Canadian
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Authorities for additional information has been complied with. The term "PREP
Information" means the information, if any, included in the Canadian Prospectus
that is omitted from the Canadian Base PREP Prospectus in accordance with the
PREP Procedures but that is deemed under the PREP Procedures incorporated by
reference into the Canadian Base PREP Prospectus as of the date of the Canadian
Prospectus. Any reference herein to the Canadian Preliminary Prospectus, the
Canadian Base PREP Prospectus and the Canadian Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein as of the
date of filing thereof; and any reference herein to any "amendment" or
"supplement" with respect to any of the Canadian Preliminary Prospectus, the
Canadian Base PREP Prospectus and the Canadian Prospectus shall be deemed to
refer to and include (i) the filing of any document with the Canadian
Authorities incorporated or deemed to be incorporated therein by reference after
the date of filing of such Canadian Preliminary Prospectus, Canadian Base PREP
Prospectus or Canadian Prospectus and (ii) any such document so filed.
All references in this Agreement to the Canadian Preliminary Prospectus, the
Canadian Base PREP Prospectus and the Canadian Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any copy thereof
filed with the Canadian Authorities pursuant to the System for Electronic
Document Analysis and Retrieval (SEDAR).
(b) The Company meets the general eligibility requirements for the use of
Form F-10 under the Securities Act of 1933, as amended (the "Securities Act")
and has prepared and filed with the Securities and Exchange Commission (the
"Commission") a registration statement under the Securities Act and the rules
and regulations of the Commission (the "Rules and Regulations") on Form F-10
(No. 333-133670), including a related preliminary prospectus (which consists of
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) (the "U.S. Preliminary Prospectus"), for registration under the
Securities Act of the offering and sale of the Shares. The Company has filed
with the Commission an amendment to such registration statement including the
U.S. pricing prospectus (which consists of the Canadian Base PREP Prospectus
with such deletions therefrom and additions thereto as are permitted or required
by Form F-10 and the applicable Rules and Regulations) (the "U.S. Pricing
Prospectus"). The Company has included in such filing, as amended at the
effective date, all information required by the Securities Act and the Rules and
Regulations to be included in such registration statement. The registration
statement, in the form previously delivered to you, has become effective under
the Securities Act pursuant to Rule 467(a) under the Securities Act. Such
registration statement, as amended, including any exhibits and all documents
incorporated therein by reference, as of the time it became effective, is
referred to herein as the "Registration Statement." In connection with the
filing of the Registration Statement, the Company has filed with the Commission
as of May 1, 2006 an appointment of agent for service of process upon the
Company on Form F-X under the Securities Act. The Company will file with the
Commission a U.S. supplemented prospectus in accordance with General Instruction
II.L of Form F-10 (which shall consist of the Canadian Prospectus with such
deletions therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable Rules and Regulations) (the "U.S. Prospectus"). As
filed, such U.S. Prospectus shall contain all information required by the
Securities Act and the Rules and Regulations and, except for the inclusion of
the PREP Information or to the extent the Lead Managers shall agree in writing
to a modification, shall be in all respects in the form of the U.S. Pricing
Prospectus. No stop order suspending the
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effectiveness of the Registration Statement has been issued under the Securities
Act and no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission and any
request on the part of the Commission for additional information has been
complied with.
Any "issuer free writing prospectus" (as defined in Rule 433 under the
Securities Act) relating to the Shares is hereafter referred to as an "Issuer
Free Writing Prospectus"; and the U.S. Pricing Prospectus, as supplemented by
the Issuer Free Writing Prospectuses, if any, and the information listed in
Annex IV hereto, taken together, are hereafter referred to collectively as the
"Pricing Disclosure Package". Any reference herein to the U.S. Preliminary
Prospectus, the U.S. Pricing Prospectus and the U.S. Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein as of
the date of filing thereof; and any reference herein to any "amendment" or
"supplement" with respect to any of the U.S. Preliminary Prospectus, the U.S.
Pricing Prospectus and the U.S. Prospectus shall be deemed to refer to and
include (i) the filing of any document with the Canadian Authorities or the
Commission incorporated or deemed to be incorporated therein by reference after
the date of filing of such U.S. Preliminary Prospectus, U.S. Pricing Prospectus
or U.S. Prospectus and (ii) any such document so filed. As used herein,
"Preliminary Prospectuses" shall mean, collectively, the Canadian Preliminary
Prospectus and the U.S. Preliminary Prospectus; "Pricing Prospectuses" shall
mean, collectively, the Canadian Base PREP Prospectus and the U.S. Pricing
Prospectus; and "Prospectuses" shall mean, collectively, the Canadian Prospectus
and the U.S. Prospectus.
The Company was not an "ineligible issuer" (as defined in Rule 405
under the Securities Act) as of the eligibility determination date for purposes
of Rules 164 and 433 under the Securities Act with respect to the Offering
contemplated hereby.
All references in this Agreement to the Registration Statement, the
U.S. Preliminary Prospectus, the U.S. Pricing Prospectus or the U.S. Prospectus,
or any Issuer Free Writing Prospectus, or any amendments or supplements to any
of the foregoing, shall be deemed to include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (XXXXX).
(c) The Canadian Preliminary Prospectus and the Canadian Base PREP
Prospectus did, and the Canadian Prospectus (and any further amendments or
supplements thereto) will, comply in all material respects with the applicable
requirements of Canadian Securities Laws; each of the Canadian Preliminary
Prospectus and the Canadian Base PREP Prospectus, as of the time of filing
thereof, did not, and the Canadian Prospectus (and any further amendments or
supplements thereto) will not, include any untrue statement of a material fact
or omit to state a material fact that is required to be stated or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not false or misleading, and each of the Canadian Preliminary
Prospectus and the Canadian Base PREP Prospectus, as of the time of filing
thereof, constituted, and the Canadian Prospectus (and any further amendments or
supplements thereto) will, constitute, full, true and plain disclosure of all
material facts relating to the Shares and to the Company; provided, however,
that this representation and warranty shall not apply to any information
contained in or omitted from the Canadian Preliminary Prospectus, the Canadian
Base PREP Prospectus or the Canadian Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity
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with information furnished in writing to the Company by or on behalf of any
Underwriter or Sub-Underwriter through the Lead Managers specifically for use
therein. The parties hereto agree that such information provided by or on behalf
of any Underwriter or Sub-Underwriter through the Lead Managers consists solely
of the material referred to in Section 16 hereof.
(d) The Registration Statement complies, and the U.S. Prospectus and any
further amendments or supplements to the Registration Statement or the U.S.
Prospectus will comply, in all material respects with the applicable provisions
of the Securities Act and the Rules and Regulations, and do not and will not, as
of the applicable effective date as to each part of the Registration Statement
and as of the applicable filing date as to the U.S. Prospectus and any amendment
thereof or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein (in light of the circumstances under which
they were made, in the case of the U.S. Prospectus) not misleading; provided,
however, that this representation and warranty shall not apply to any
information contained in or omitted from the Registration Statement or the U.S.
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter or Sub-Underwriter through the Lead Managers
specifically for use therein. The parties hereto agree that such information
provided by or on behalf of any Underwriter or Sub-Underwriter through the Lead
Managers consists solely of the material referred to in Section 16 hereof.
(e) No order preventing or suspending the use of the U.S. Preliminary
Prospectus, the U.S. Pricing Prospectus or any Issuer Free Writing Prospectus
has been issued by the Commission, and each of the U.S. Preliminary Prospectus
and the U.S. Pricing Prospectus, at the time of filing thereof, complied in all
material respects with the applicable provisions of the Securities Act and the
Rules and Regulations, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any information contained in or omitted from any
U.S. Preliminary Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter or
Sub-Underwriter through the Lead Managers specifically for use therein. The
parties hereto agree that such information provided by or on behalf of any
Underwriter or Sub-Underwriter through the Lead Managers consists solely of the
material referred to in Section 16 hereof.
(f) For purposes of this Agreement, the "Applicable Time" is 5:00 p.m.
(Eastern) on the date of this Agreement. The Pricing Disclosure Package, as of
the Applicable Time, did not, and as of the Closing Date and the Additional
Closing Date, if any (each as defined below), will not, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each Issuer Free
Writing Prospectus complies in all material respects with the applicable
provisions of the Securities Act and the Rules and Regulations, and does not
include information that conflicts with the information contained in the
Registration Statement, the Prospectuses, and any Issuer Free Writing
Prospectus, as supplemented by and taken together with the Pricing Disclosure
Package as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
5
circumstances under which they were made, not misleading. No representation and
warranty is made in this Section 1(f) with respect to any information contained
in or omitted from the Pricing Disclosure Package or any Issuer Free Writing
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter or Sub-Underwriter
through the Lead Managers specifically for use therein. The parties hereto agree
that such information provided by or on behalf of any Underwriter or
Sub-Underwriter through the Lead Managers consists solely of the material
referred to in Section 16 hereof.
(g) Each document to be filed with the Canadian Authorities and
incorporated, or deemed to be incorporated, by reference in the Canadian
Preliminary Prospectus, the Canadian Base PREP Prospectus and the Canadian
Prospectus complied, or will comply, when so filed in all material respects with
the requirements of Canadian Securities Laws, and none of such documents
contained, or will contain, at the time of its filing any untrue statement of a
material fact or omitted or will omit at the time of its filing to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were or are made, not
false or misleading.
(h) PricewaterhouseCoopers LLP, who have audited the consolidated financial
statements of the Company and its subsidiaries that are included or incorporated
by reference in the Registration Statement, the Pricing Prospectuses and the
Prospectuses, and whose reports appear or are incorporated by reference in the
Registration Statement, the Pricing Prospectuses and the Prospectuses are
independent with respect to the Company as required by Canadian Securities Laws
and are independent public accountants as required by the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Rules
and Regulations.
(i) Subsequent to the respective dates as of which information is given in
the Registration Statement, the Pricing Prospectuses and the Prospectuses,
except as disclosed in the Pricing Prospectuses and the Prospectuses, (i) the
Company has not declared or paid any dividends, or made any other distribution
of any kind, on or in respect of its share capital, (ii) there has not been any
material change in the share capital or long-term or short-term debt of the
Company or any of its subsidiaries (each, a "Subsidiary" and, collectively, the
"Subsidiaries"), (iii) neither the Company nor any Subsidiary has sustained any
material loss or interference with its business or properties from fire,
explosion, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental proceeding,
and (iv) there has not been any material adverse change or any development
involving a prospective material adverse change, whether or not arising from
transactions in the ordinary course of business, in or affecting the business,
general affairs, management, condition (financial or otherwise), results of
operations, shareholders' equity, properties or prospects of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Change"). Since the date of
the latest balance sheet included, or incorporated by reference, in the
Registration Statement, the Pricing Prospectuses and the Prospectuses, neither
the Company nor any Subsidiary has incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transactions, including any acquisition or
disposition of any business or asset, which are material to the Company and the
Subsidiaries,
6
taken as a whole, except for liabilities, obligations and transactions which are
disclosed in the Pricing Prospectuses and the Prospectuses.
(j) No Subsidiary listed in Exhibit A hereto (each, a "Material Subsidiary"
and, collectively, the "Material Subsidiaries") is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Material Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Material Subsidiary from
the Company or from transferring any of such Material Subsidiary's property or
assets to the Company or any other Subsidiary of the Company.
(k) The Company has an authorized capitalization as set forth in the
Pricing Prospectuses and the Prospectuses, and all of the issued and outstanding
share capital of the Company are fully paid and non-assessable and have been
duly and validly authorized and issued, in compliance with all applicable
Canadian, U.S. and other securities laws and not in violation of or subject to
any preemptive or similar right that entitles any person to acquire from the
Company or any Subsidiary any common shares of the Company or other security of
the Company or any security convertible into, or exercisable or exchangeable
for, common shares of the Company or any other such security (any "Relevant
Security"), except for such rights as may have been fully satisfied or waived
prior to the effectiveness of the Registration Statement. All of the issued
share capital of or other ownership interests in each Material Subsidiary have
been duly and validly authorized and issued and are fully paid and
non-assessable and (except as otherwise set forth in the Pricing Prospectuses
and the Prospectuses) are owned directly or indirectly by the Company free and
clear of any lien, charge, mortgage, pledge, security interest, claim, or other
encumbrance of any kind whatsoever (any "Lien").
(l) The Company has full power and authority (corporate or otherwise) to
issue the Shares and to perform its obligations hereunder. The Shares to be
delivered on the Closing Date and the Additional Closing Date, if any (as
defined below), have been duly and validly authorized and, when issued and
delivered in accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable, will have been issued in compliance with all
applicable Canadian, United States and other securities laws and will not have
been issued in violation of or subject to any preemptive or similar right that
entitles any person to acquire any Relevant Security from the Company. The
common shares of the Company and the Shares conform to the descriptions thereof
contained in the Registration Statement, the Pricing Prospectuses and the
Prospectuses. Except as disclosed in the Pricing Prospectuses and the
Prospectuses, the Company has no outstanding warrants, options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, or any
contracts or commitments to issue or sell, any Relevant Security. Except as
disclosed in the Pricing Prospectuses and the Prospectuses, no holder of any
Relevant Security has any rights to require registration or qualification under
the Securities Act or the Canadian Securities Laws of any Relevant Security in
connection with the offer and sale of the Shares contemplated hereby, and any
such rights so disclosed have either been fully complied with by the Company or
effectively waived by the holders thereof.
(m) The Material Subsidiaries are the only Subsidiaries that are
"significant subsidiaries" of the Company (within the meaning of Rule 1-02 of
Regulation S-X under the Securities Act) or are otherwise material to the
Company. The Company and each Material
7
Subsidiary has been duly organized and validly exists as a corporation,
partnership or limited liability company in good standing under the laws of its
jurisdiction of organization. The Company and each Material Subsidiary is duly
qualified to do business and is in good standing as a foreign corporation,
partnership or limited liability company in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which (individually and in
the aggregate) could not reasonably be expected to have a material adverse
effect on (i) the business, general affairs, management, condition (financial or
otherwise), results of operations, shareholders' equity, properties or prospects
of the Company and the Subsidiaries, taken as a whole; or (ii) the ability of
the Company to consummate the Offering or any other transaction contemplated by
this Agreement, the Pricing Prospectuses or the Prospectuses (a "Material
Adverse Effect").
(n) The Company and each Material Subsidiary has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses, filings and permits of, with and from
all judicial, regulatory and other legal or governmental agencies and bodies and
all third parties, Canadian, U.S. or foreign (collectively, the "Consents"), to
own, lease and operate its properties and conduct its business as it is now
being conducted, in each case as disclosed in the Registration Statement, the
Pricing Prospectuses and the Prospectuses, and each such Consent is valid and in
full force and effect, except in each case as could not reasonably be expected
to have a Material Adverse Effect. Neither the Company nor any Material
Subsidiary has received notice of any investigation or proceedings which, if
decided adversely to the Company or any such Material Subsidiary, could
reasonably be expected to result in, the revocation of, or imposition of a
materially burdensome restriction on, any such Consent.
(o) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(p) There are no reports or information that in accordance with the
requirements of the Canadian Securities Laws must be made publicly available in
connection with the Offering of the Shares that have not been made publicly
available as required; there are no documents required to be filed as of the
date hereof with the Canadian Authorities or with any other Canadian securities
regulatory authority in connection with the Offering of the Shares that have not
been filed as required.
(q) The issue and sale of the Shares, the compliance by the Company with
this Agreement and the consummation of the transactions herein contemplated do
not and will not (i) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) under, or result
in the creation or imposition of any Lien upon any property or assets of the
Company or any Material Subsidiary pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement, instrument, franchise, license or
permit to which the Company or any Material Subsidiary is a party or by which
the Company or any Material Subsidiary or their respective properties,
operations or assets may be bound or (ii) violate or conflict with any provision
of the certificate or articles of incorporation, by-laws, certificate of
formation, limited liability company agreement, partnership agreement or other
organizational documents of the
8
Company or any Material Subsidiary, or (iii) violate or conflict with any
statute, law, rule, regulation, ordinance, directive, judgment, decree or order
of any judicial, regulatory or other legal or governmental agency or body,
Canadian, U.S. or other, except (in the case of clauses (i) and (iii) above) as
could not reasonably be expected to have a Material Adverse Effect.
(r) No Consent of, with or from any judicial, regulatory or other legal or
governmental agency or body or any third party, Canadian, U.S. or foreign, is
required for the execution, delivery and performance of this Agreement or
consummation of the transactions contemplated by this Agreement, except the
registration under the Securities Act of the Shares, the qualification of the
Shares for distribution in the Canadian Jurisdictions as contemplated by this
Agreement, necessary approvals of the Toronto Stock Exchange (the "TSX"), the
filing of a Notification Form: Listing of Additional Shares with the Nasdaq
Stock Market ("Nasdaq") and any consents as may be required under state or
foreign securities or blue sky laws, or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution of the Shares by the Underwriters or the
Sub-Underwriters, each of which has been obtained and is in full force and
effect (on a conditional basis, in the case of the Consent of the TSX).
(s) Except as disclosed in the Registration Statement, the Pricing
Prospectuses and the Prospectuses, there is no judicial, regulatory, arbitral or
other legal or governmental proceeding or other litigation or arbitration,
Canadian, United States or foreign, pending to which the Company or any
Subsidiary is a party or of which any property, operations or assets of the
Company or any Subsidiary is the subject which, individually or in the
aggregate, if determined adversely to the Company or any Subsidiary, could
reasonably be expected to have a Material Adverse Effect; to the Company's
knowledge, no such proceeding, litigation or arbitration is threatened or
contemplated; and the defense of all such proceedings, litigation and
arbitration against or involving the Company or any Subsidiary could not
reasonably be expected to have a Material Adverse Effect.
(t) The consolidated financial statements, including the notes thereto,
included or incorporated by reference in the Registration Statement, the Pricing
Prospectuses and the Prospectuses present fairly, in all material respects, the
financial position as of the dates indicated and the cash flows and results of
operations for the periods specified of the Company and its consolidated
Subsidiaries; except as otherwise stated in the Registration Statement, the
Pricing Prospectuses and the Prospectuses, said consolidated financial
statements have been prepared in conformity with Canadian generally accepted
accounting principles applied on a consistent basis throughout the periods
involved and have been reconciled to United States generally accepted accounting
principles in accordance with Item 18 of Form 20-F under the Exchange Act. No
other financial statements or supporting schedules are required to be included
in the Registration Statement, the Pricing Prospectuses and the Prospectuses by
Canadian Securities Laws, the Securities Act, the Exchange Act or the Rules and
Regulations. The other financial and statistical information included or
incorporated by reference in the Registration Statement, the Pricing
Prospectuses and the Prospectuses, including the selected consolidated financial
data set forth under the captions "Selected Consolidated Financial Data" and
"Capitalization" in the Pricing Prospectuses and the Prospectuses, present
fairly the information included therein and have been prepared on a basis
consistent with that of the financial
9
statements that are included or incorporated by reference in the Registration
Statement, the Pricing Prospectuses and the Prospectuses and the books and
records of the Company.
(u) There has not been any reportable disagreement (within the meaning of
National Instrument 51-102 of the Canadian Securities Administrators) between
the Company and its auditors.
(v) The statistical, industry-related and market-related data included in
the Registration Statement, the Pricing Prospectuses and the Prospectuses are
based on or derived from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from
which they are derived.
(w) The common shares of the Company have been registered pursuant to
Section 12(g) of the Exchange Act. The common shares of the Company are listed
on the TSX and are quoted on the Nasdaq National Market System, and the Company
has taken no action designed to, or likely to have the effect of, terminating
the registration of the common shares of the Company under the Exchange Act or
de-listing the common shares of the Company from the TSX or Nasdaq, nor has the
Company received any notification that the Commission, the Canadian Authorities,
the TSX or Nasdaq is contemplating terminating such registration or listing.
(x) The Company and its Material Subsidiaries maintain a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company believes that the Company's and its
Material Subsidiaries' internal control over financial reporting is effective
and the Company and its Material Subsidiaries are not aware of any material
weakness in their internal control over financial reporting.
(y) Since the date of the latest audited consolidated financial statements
included or incorporated by reference in the Pricing Prospectuses and the
Prospectuses there has been no change in the Company's internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
(z) The Company and its Subsidiaries maintain disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act and
Canadian Securities Laws) that comply with the requirements of the Exchange Act
and Canadian Securities Laws; such disclosure controls and procedures have been
designed to ensure that material information relating to the Company and its
Subsidiaries is made known to the Company's principal executive officer and
principal financial officer by others within those entities. Such disclosure
controls and procedures are effective.
10
(aa) There is and has been no failure on the part of the Company or any of
its directors or officers, in their capacities as such, to comply with any
provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith, including, without limitation, Section 402
related to loans and Sections 302 and 906 related to certifications.
(bb) Neither the Company nor, to the Company's knowledge, any of its
affiliates (within the meaning of Rule 144 under the Securities Act) has taken,
directly or indirectly, any action which constitutes or is designed to cause or
result in, or which could reasonably be expected to constitute, cause or result
in, the stabilization or manipulation of the price of any security to facilitate
the sale or resale of the Shares.
(cc) Neither the Company nor, to the Company's knowledge, any of its
affiliates (within the meaning of Rule 144 under the Securities Act) has, prior
to the date hereof, made any offer or sale of any securities which could be
"integrated" (within the meaning of the Securities Act and the Rules and
Regulations) with the offer and sale of the Shares pursuant to the Registration
Statement.
(dd) The statements set forth in the Pricing Prospectuses and the
Prospectuses under the headings "Certain Income Tax Considerations for U.S.
Holders", "Certain Income Tax Considerations for Canadian Holders", "Description
of Share Capital", "Enforceability of Civil Liabilities", "Risk Factors - We may
be a passive foreign investment company...." and "Risk Factors - Enforceability
of judgments or bringing actions outside the United States....", in the Canadian
Base PREP Prospectus and the Canadian Prospectus under "Eligibility for
Investment" and "Statutory Rights of Withdrawal and Rescission" and in the
Registration Statement under "Part II - Indemnification", insofar as such
statements summarize legal matters, agreements, documents or proceedings
discussed therein, are, in all material respects, accurate, complete and fair
summaries of such legal matters, agreements, documents or proceedings.
(ee) There is no franchise, contract or other document of a character
required to be described in the Pricing Prospectuses or the Prospectuses, or to
be filed as an exhibit thereto, which is not described or filed as required;
insofar as such descriptions summarize legal matters, agreements, documents or
proceedings discussed therein, such descriptions are accurate and fair summaries
of such legal matters, agreements, documents or proceedings.
(ff) The Company is subject to the reporting requirements of Section 13 of
the Exchange Act and files periodic reports with the Commission. All conditions
for use of Form F-10 to register the Shares under the Securities Act have been
satisfied. The documents incorporated or deemed to be incorporated by reference
in the Pricing Prospectuses and the Prospectuses, at the time they were or
hereafter are filed with the Commission or the Canadian Authorities, complied
and will comply in all material respects with the requirements of the Securities
Act, the Exchange Act, the Rules and Regulations and Canadian Securities Laws
and, when read together with the other information in the Pricing Prospectuses
and the Prospectuses, as applicable, do not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
11
(gg) The Company is not and, at all times up to and including consummation
of the transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering as described in the Pricing
Prospectuses and the Prospectuses, will not be, required to register as an
"investment company" under the Investment Company Act of 1940, as amended, and
is not and will not be an entity "controlled" by an "investment company" within
the meaning of such act.
(hh) Except as disclosed in the Pricing Prospectuses and the Prospectuses,
there are no contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter or Sub-Underwriter for a brokerage commission, finder's fee or other
like payment in connection with the transactions contemplated by this Agreement
or, to the Company's knowledge, any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, Subsidiaries or affiliates that
may affect the Underwriters' compensation as determined by the NASD.
(ii) Except as disclosed in the Pricing Prospectuses and the Prospectuses,
neither the Company nor any of its Subsidiaries (i) has any material lending or
other relationship with any bank or lending affiliate of any of the Underwriters
and (ii) intends to use any of the proceeds from the sale of the Shares
hereunder to repay any outstanding debt owed to any affiliate of any of the
Underwriters.
(jj) Except as disclosed in the Pricing Prospectuses and the Prospectuses,
(i) the Company and each Material Subsidiary owns or leases all such properties
as are necessary to the conduct of its business as presently operated and as
proposed to be operated as described in the Pricing Prospectuses and the
Prospectuses; (ii) to the knowledge of the Company, it and the Material
Subsidiaries have good and marketable title to all real property and good and
marketable title to all personal property owned by them, in each case free and
clear of any and all Liens except such as are described in the Pricing
Prospectuses and the Prospectuses or such as do not (individually or in the
aggregate) materially affect the value of such property or materially interfere
with the use made or proposed to be made of such property by the Company and the
Material Subsidiaries; and any real property and buildings held under lease or
sublease by the Company and the Material Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material to, and do not materially interfere with, the use made and proposed to
be made of such property and buildings by the Company and the Material
Subsidiaries; and (iii) neither the Company nor any Material Subsidiary has
received any notice of any claim adverse to its ownership of any real or
personal property or of any claim against the continued possession of any real
property, whether owned or held under lease or sublease by the Company or any
Material Subsidiary, except as could not reasonably be expected to have a
Material Adverse Effect.
(kk) All interests in material mining claims, concessions, exploitation or
extraction rights or similar rights ("Mining Claims") that are held by the
Company or any of its Material Subsidiaries are in good standing, are valid and
enforceable, are free and clear of any material liens or charges, and no
material royalty is payable in respect of any of them, except as disclosed in
the Pricing Prospectuses and the Prospectuses. Except as disclosed in the
Pricing Prospectuses and the Prospectuses, no other material property rights are
necessary for the
12
conduct of the Company's business as described therein, and there are no
material restrictions on the ability of the Company and its Material
Subsidiaries to use, transfer or otherwise exploit any such property rights
except as required by applicable law or as set forth in the agreements listed in
Exhibit B hereto (collectively, the "Material Agreements"). Except as disclosed
in the Pricing Prospectuses and the Prospectuses, the Mining Claims held by the
Company or its Material Subsidiaries cover the properties required by the
Company for the purposes described therein.
(ll) Except as disclosed in the Pricing Prospectuses and the Prospectuses,
the information relating to estimates by the Company of the proven and probable
reserves and the measured, indicated and inferred resources associated with its
mineral property projects contained in the Pricing Prospectuses and the
Prospectuses has been prepared in all material respects in accordance with
National Instrument 43-101- "Standards of Disclosure for Mineral Projects." The
Company believes that all of the assumptions underlying such reserve and
resource estimates are reasonable and appropriate, and that the projected
production and operating results relating to its projects and summarized in the
Pricing Prospectuses and the Prospectuses are achievable by the Company.
(mm) The Company and the Material Subsidiaries maintain insurance in such
amounts and covering such risks as the Company reasonably considers adequate for
the conduct of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries, all of which
insurance is in full force and effect, except where the failure to maintain such
insurance could not reasonably be expected to have a Material Adverse Effect.
There are no material claims by the Company or any Material Subsidiary under any
such policy or instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause. The Company reasonably
believes that it will be able to renew its existing insurance as and when such
coverage expires or will be able to obtain replacement insurance adequate for
the conduct of the business and the value of its properties at a cost that would
not have a Material Adverse Effect.
(nn) The Company and each Subsidiary has accurately prepared and timely
filed all U.S., Canadian and foreign tax returns that are required to be filed
by it and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all sales
and use taxes and all taxes which the Company or any Subsidiary is obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return), except in any such case as could not
reasonably be expected to have a Material Adverse Effect. No deficiency
assessment with respect to a proposed adjustment of the Company's or any
Subsidiary's Canadian federal and provincial, U.S. federal and state, local or
foreign taxes is pending or, to the best of the Company's knowledge, threatened.
The accruals and reserves on the books and records of the Company and the
Subsidiaries in respect of tax liabilities for any taxable period not finally
determined are adequate to meet any assessments and related liabilities for any
such period and, since the date of the most recent audited consolidated
financial statements, the Company and the Subsidiaries have not incurred any
liability for taxes other than in the ordinary course of its business. There is
no tax lien, whether imposed by any U.S., Canadian or other taxing authority,
outstanding against the assets, properties or business of the Company or any
Subsidiary.
13
(oo) There are no transfer taxes or other similar fees or charges under
Canadian or U.S. federal law or the laws of any state, province or any political
subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale by the Company
of the Shares.
(pp) No stamp duty, registration or documentary taxes, duties or similar
charges are payable under the federal laws of Canada or the laws of any province
in connection with the creation, issuance, sale and delivery to the Underwriters
of the Shares or the authorization, execution, delivery and performance of this
Agreement or the resale of Shares by an Underwriter to U.S. residents.
(qq) No dispute between the Company and any local, native or indigenous
group exists or is threatened or imminent with respect to any of the Company's
properties or exploration activities that could reasonably be expected to have a
Material Adverse Effect.
(rr) No labor disturbance by the employees of the Company or any Material
Subsidiary exists or, to the best of the Company's knowledge, is imminent and
the Company is not aware of any existing or imminent labor disturbances by the
employees of any of its or any Material Subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case (individually or
in the aggregate), could reasonably be expected to have a Material Adverse
Effect.
(ss) There has been no storage, generation, transportation, handling, use,
treatment, disposal, discharge, emission, contamination, release or other
activity involving any kind of hazardous, toxic or other wastes, pollutants,
contaminants, petroleum products or other hazardous or toxic substances,
chemicals or materials ("Hazardous Substances") by, due to, on behalf of, or
caused by the Company or any Subsidiary (or, to the Company's knowledge, any
other entity for whose acts or omissions the Company is or may be liable) upon
any property now or previously owned, operated, used or leased by the Company or
any Subsidiary, or upon any other property, which would be a violation of or
give rise to any liability under any applicable law, rule, regulation, order,
judgment, decree or permit, common law provision or other legally binding
standard relating to pollution or protection of human health and the environment
("Environmental Law"), except for violations and liabilities which, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. There has been no disposal, discharge, emission contamination or other
release of any kind at, onto or from any such property or into the environment
surrounding any such property of any Hazardous Substances with respect to which
the Company or any Subsidiary has knowledge, except as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
There is no pending or, to the best of the Company's knowledge, threatened
administrative, regulatory or judicial action, claim or notice of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company or any Subsidiary. No property of the Company or any
Subsidiary is subject to any Lien under any Environmental Law. Except as
disclosed in the Pricing Prospectuses and the Prospectuses, neither the Company
nor any Subsidiary is subject to any order, decree, agreement or other
individualized legal requirement related to any Environmental Law, which, in any
case (individually or in the aggregate), could reasonably be expected to have a
Material Adverse Effect.
14
(tt) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
or remediation of properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, have a Material Adverse Effect.
(uu) None of the Company, any Subsidiary or, to the Company's knowledge,
any of its employees or agents, has at any time during the last five years (i)
made any unlawful contribution to any candidate for non-United States office, or
failed to disclose fully any such contribution in violation of law, or (ii) made
any payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof. The operations of the Company and each Subsidiary are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the "Money Laundering Laws") and no action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any Subsidiary with respect to
the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened. Neither the Company nor any Subsidiary nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or
any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and
the Company will not directly or indirectly use the proceeds of the Offering, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(vv) Neither the Company nor any Material Subsidiary (i) is in violation of
its certificate or articles of incorporation, by-laws, certificate of formation,
limited liability company agreement, partnership agreement or other
organizational documents, (ii) is in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under or
result in the creation or imposition of any Lien upon any property or assets of
the Company or any Material Subsidiary pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is
subject, or (iii) is in violation of any statute, law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial, regulatory or
other legal or governmental agency or body, Canadian, U.S. or foreign, except in
any such case for violations or defaults that could not (individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect.
(ww) The Company has complied with the requirements of Rule 433 under the
Securities Act with respect to each Issuer Free Writing Prospectus including,
without limitation,
15
all prospectus delivery, filing, record retention and legending requirements
applicable to any such Issuer Free Writing Prospectus. The Company has not (i)
distributed any offering material in connection with the Offering other than the
Preliminary Prospectuses, the Pricing Prospectuses, the Prospectuses and any
Issuer Free Writing Prospectus set forth on Annex IV hereto, or (ii) filed,
referred to, approved, used or authorized the use of any "free writing
prospectus" as defined in Rule 405 under the Securities Act with respect to the
Offering or the Shares, except for any Issuer Free Writing Prospectus set forth
in Annex IV hereto and any electronic road show previously approved by the Lead
Managers.
(xx) The Company is a reporting issuer under the securities laws of each
Canadian Jurisdiction that recognizes the concept of reporting issuer and is not
on the list of defaulting reporting issuers maintained by the Canadian Authority
in each such Canadian Jurisdiction that maintains such a list.
(yy) Computershare Investor Services Inc. at its principal offices in the
cities of Vancouver, British Columbia and Toronto, Ontario is the duly appointed
registrar and transfer agent of the Company with respect to its common shares,
and Computershare Trust Company, Inc. at its principal office in Denver,
Colorado is the duly appointed U.S. co-transfer agent of the Company with
respect to its common shares.
(zz) The minute books and corporate records of the Company and its Material
Subsidiaries are true and correct in all material respects and contain all
minutes of all meetings and all resolutions of the directors (and any committees
of such directors) and shareholders of the Company and its Material Subsidiaries
as at the date hereof and at the Closing Date will contain the minutes of all
meetings and all resolutions of the directors (and any committees of such
directors) and shareholders of the Company and its Material Subsidiaries.
(aaa) The Company is, and upon completion of the transactions described
herein, will be, a "foreign private issuer" within the meaning of Rule 3b-4
under the Exchange Act.
Any certificate signed by or on behalf of the Company and delivered to
the Lead Managers or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter and
Sub-Underwriter as to the matters covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the
applicable U.S. or Canadian purchase price set forth in Annex IV hereto, the
number of Firm Shares set forth opposite their respective names on Schedule I
hereto together with any additional number of Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 9 hereof. As
compensation for the services rendered to the Company by the Underwriters in
respect of the Offering, the Company will pay to the Underwriters a commission
for Shares sold to the Underwriters under this Agreement, in U.S. or Canadian
currency, as applicable, as set forth in Annex IV hereto, payable on the Closing
16
Date (as defined below), which may be netted against payment from the
Underwriters to the Company for the Firm Shares.
(b) Payment of the purchase price for, and delivery of certificates
representing, the Firm Shares shall be made at the offices of Xxxxxx Xxxxxxx LLP
or at such other place as shall be agreed upon by the Lead Managers and the
Company, at 5:45 A.M., Vancouver time, on May [__], 2006, or such other time and
date as the Lead Managers and the Company may agree upon in writing (such time
and date of payment and delivery being herein called the "Closing Date").
Delivery of certificates for the Firm Shares shall be made to the Lead Managers
through the facilities of The Depository Trust Company for the respective
accounts of the several Underwriters against payment of the purchase price for
the Firm Shares by wire transfer in same day funds to or as directed in writing
by the Company. Certificates for the Firm Shares shall be registered in such
name or names and shall be in such denominations as the Lead Managers may
request. The Company will permit the Lead Managers to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, on the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants to the Underwriters, acting severally and
not jointly, the option to purchase up to 900,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters for the Firm Shares and
at the same commission per share to be received by the Underwriters as set forth
in Section 2(a) above, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part on one or more occasions, on or
before the thirtieth day following the Closing Date, by written notice from the
Lead Managers to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the option is being exercised and the date and
time, as reasonably determined by the Lead Managers, when the Additional Shares
are to be delivered (any such date and time being herein sometimes referred to
as the "Additional Closing Date"); provided, however, that no Additional Closing
Date shall occur earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the eighth full business day after the date on which the option shall
have been exercised. Upon any exercise of the option as to all or any portion of
the Additional Shares, each Underwriter, acting severally and not jointly,
agrees to purchase from the Company the number of Additional Shares that bears
the same proportion of the total number of Additional Shares then being
purchased as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the total number of Firm Shares that the Underwriters
have agreed to purchase hereunder, subject, however, to such adjustments to
eliminate fractional shares as the Lead Managers in their sole discretion shall
make.
(d) Payment of the purchase price for, and delivery of certificates
representing, the Additional Shares shall be made at the office of Xxxxxx
Xxxxxxx LLP, or at such other place as shall be agreed upon by the Lead Managers
and the Company, at 5:45 A.M., Vancouver time, on the Additional Closing Date,
or such other time as shall be agreed upon by the Lead Managers and the Company.
Delivery of certificates for the Additional Shares shall be made to the Lead
Managers through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters against payment of the purchase
price for the Additional Shares by wire
17
transfer in same day funds to or as directed in writing by the Company.
Certificates for the Additional Shares shall be registered in such name or names
and shall be in such denominations as the Lead Managers may request. The Company
will permit the Lead Managers to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
(e) The Company acknowledges and agrees that (i) the terms of this
Agreement and the Offering (including the price of the Shares and commission
with respect to the Shares) were negotiated at arm's length between
sophisticated parties represented by counsel; (ii) no fiduciary, advisory or
agency relationship between the Company and the Underwriters or the
Sub-Underwriters has been created as a result of any of the transactions
contemplated by this Agreement or the process leading to such transactions,
irrespective of whether any Underwriter or Sub-Underwriter has advised or is
advising any such party on other matters, (iii) the Underwriters' obligations to
the Company in respect of the Offering are set forth in this Agreement in their
entirety and (iv) it has obtained such legal, tax, accounting and other advice
as it deems appropriate with respect to this Agreement and the transactions
contemplated hereby and any other activities undertaken in connection therewith,
and it is not relying on the Underwriters or the Sub-Underwriters with respect
to any such matters.
3. Offering. Upon authorization of the release of the Firm Shares by
the Lead Managers, the Underwriters and the Sub-Underwriters propose to offer
the Shares for sale to the public upon the terms and conditions set forth in the
Prospectuses.
4. Covenants of the Company. In addition to the other covenants and
agreements of the Company contained herein, the Company further covenants and
agrees with each of the Underwriters and the Sub-Underwriters that:
(a) The Company will comply with the PREP Procedures and General
Instruction II.L of Form F-10 under the Securities Act. Prior to the later of
the last date on which an Additional Closing Date, if any, may occur, and the
termination of the Offering of the Shares, the Company will not file any
amendment of the Registration Statement or supplement or amendment to the
Prospectuses unless the Company has furnished a copy to the Lead Managers and
their legal counsel for their review prior to filing and will not file any such
proposed amendment or supplement to which the Lead Managers reasonably object.
The Company will cause the Prospectuses, properly completed, and any supplement
thereto to be filed, each in a form approved by the Lead Managers with the
Canadian Authorities in accordance with the PREP Procedures (in the case of the
Canadian Prospectus) and with the Commission pursuant to General Instruction
II.L of Form F-10 (in the case of the U.S. Prospectus) within the time period
prescribed and will provide evidence satisfactory to the Lead Managers of such
timely filings. The Company will promptly advise the Lead Managers (1) when the
U.S. Prospectus and any supplement thereto shall have been filed with the
Commission pursuant to General Instruction II.L of Form F-10, (2) when the
Canadian Prospectus shall have been filed with the Canadian Authorities pursuant
to the PREP Procedures, (3) when, prior to termination of the Offering of the
Shares, any amendment to the Registration Statement or the Canadian Prospectus
shall have been filed or become effective or a MRRS Decision Document in respect
of any such amendment has been issued, as the case may be, (4) of any request by
the Canadian Authorities or the Commission for any amendment of or supplement to
the Canadian Prospectus, the
18
Registration Statement or the U.S. Prospectus, as applicable, or for any
additional information, (5) of the Company's intention to file, or prepare any
supplement or amendment to, the Registration Statement, the Prospectuses or any
Issuer Free Writing Prospectus, (6) of the time when any amendment to the
Canadian Prospectus has been filed with or receipted by the Reviewing Authority,
or of the filing with or mailing or the delivery to the Commission for filing of
any amendment of or supplement to the Registration Statement or the U.S.
Prospectus, (7) of the issuance by the Canadian Authorities or the Commission of
any stop order suspending the effectiveness of the Canadian Prospectus or the
Registration Statement, as applicable, or any post-effective amendment thereto,
or suspending the use of any Prospectuses or any Issuer Free Writing Prospectus
or, in each case, of the initiation or threatening of any proceedings therefor,
(8) of the receipt of any comments or communications from the Canadian
Authorities, the Commission or any other regulatory authority relating to the
Prospectuses, the Registration Statement, or the listing of the Shares on the
TSX or the quotation of the Shares on Nasdaq, and (9) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for that purpose. If the Canadian Authorities or the Commission
shall propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if issued,
to obtain the lifting of such order as soon as possible.
(b) The Company will prepare and file with the Canadian Authorities,
promptly after the date of this Agreement, and in any event no later than 5:00
p.m. (New York City time) on the second business day following the date of this
Agreement, and in conformity in all material respects with applicable Canadian
Securities Laws, the Canadian Prospectus setting forth the PREP Information.
(c) The Company will prepare and file with the Commission, promptly after
the date of this Agreement, and in any event no later than 5:00 p.m. (New York
City time) on the second business day following the date of this Agreement, the
U.S. Prospectus.
(d) If at any time when a prospectus relating to the Shares (or, in lieu
thereof, the notice referred to in Rule 173(a) under the Securities Act) is
required to be delivered under the Securities Act, any event shall have occurred
as a result of which the Pricing Disclosure Package (prior to the availability
of the U.S. Prospectus) or the U.S. Prospectus as then amended or supplemented
would, in the judgment of the Underwriters or the Company, include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances existing at the time of delivery of such Pricing Disclosure
Package or U.S. Prospectus (or, in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act) to the purchaser, not misleading, or if to
comply with the Securities Act, the Exchange Act or the Rules and Regulations it
shall be necessary at any time to amend or supplement the Pricing Disclosure
Package, the U.S. Prospectus or the Registration Statement, or to file any
document incorporated by reference in the Registration Statement or the U.S.
Prospectus or in any amendment thereof or supplement thereto, the Company will
notify the Lead Managers promptly and prepare and file with the Canadian
Authorities and/or the Commission an appropriate amendment, supplement or
document (in form and substance satisfactory to the Lead Managers) that will
correct such
19
statement or omission or effect such compliance, and will use its best efforts
to have any amendment to the Registration Statement declared effective as soon
as possible.
(e) The Company will not, without the prior consent of the Lead Managers,
(i) make any offer relating to the Shares that would constitute a "free writing
prospectus" as defined in Rule 405 under the Securities Act, except for any
Issuer Free Writing Prospectus set forth in Annex IV hereto and any electronic
road show previously approved by the Lead Managers, or (ii) file, refer to,
approve, use or authorize the use of any "free writing prospectus" as defined in
Rule 405 under the Securities Act with respect to the Offering or the Shares. If
at any time any event shall have occurred as a result of which any Issuer Free
Writing Prospectus as then amended or supplemented would, in the judgment of the
Underwriters or the Company, conflict with the information in the Registration
Statement, the Pricing Prospectuses or the Prospectuses as then amended or
supplemented or would, in the judgment of the Underwriters or the Company,
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances existing at the time of delivery to the purchaser,
not misleading, or if to comply with the Securities Act or the Rules and
Regulations it shall be necessary at any time to amend or supplement any Issuer
Free Writing Prospectus, the Company will notify the Lead Managers promptly and,
if requested by the Lead Managers, prepare and furnish without charge to each
Underwriter and Sub-Underwriter an appropriate amendment or supplement (in form
and substance satisfactory to the Lead Managers) that will correct such
statement, omission or conflict or effect such compliance.
(f) The Company has complied and will comply in all material respects with
the requirements of Rule 433 with respect to each Issuer Free Writing Prospectus
including, without limitation, all prospectus delivery, filing, record retention
and legending requirements applicable to each such Issuer Free Writing
Prospectus.
(g) The Company will promptly deliver to each of the Underwriters and the
Sub-Underwriters conformed copies of the Canadian Preliminary Prospectus, the
Canadian Base PREP Prospectus and the Canadian Prospectus, including all
documents incorporated by reference therein, signed and certified as required by
Canadian Securities Laws in the Canadian Jurisdictions, a copy of any other
document required to be filed by the Company in compliance with Canadian
Securities Laws in connection with the Offering, a conformed copy of the
Registration Statement, as initially filed and all amendments thereto, including
all consents and exhibits filed therewith and a conformed copy of the Form F-X
with respect to the Registration Statement. The Company will promptly deliver to
each of the Underwriters and the Sub-Underwriters such number of copies of the
Preliminary Prospectuses, Prospectuses and the Registration Statement, all
amendments of and supplements to such documents, if any, and all documents
incorporated by reference in the Registration Statement and the Prospectuses or
any amendment thereof or supplement thereto, as the Underwriters or
Sub-Underwriters may reasonably request. Prior to 9:00 A.M., New York time, on
the second business day next succeeding the date of this Agreement and from time
to time thereafter, the Company will furnish the Underwriters and the
Sub-Underwriters with copies of the Final Prospectuses in Vancouver, Toronto and
New York City in such quantities as the Underwriters or Sub-Underwriters may
reasonably request.
20
(h) Promptly from time to time, the Company will use its commercially
reasonable efforts, in cooperation with the Lead Managers, to qualify the Shares
for offering and sale under the securities laws relating to the offering or sale
of the Shares of such jurisdictions, Canadian, U.S. or foreign, as the Lead
Managers may designate and to maintain such qualification in effect for so long
as required for the distribution thereof; except that in no event shall the
Company be obligated in connection therewith to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject or require registration of the Shares or require the Company to file a
prospectus in such jurisdiction or subject the Company to ongoing reporting
requirements in such jurisdiction.
(i) The Company will make generally available to its security holders as
soon as practicable an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Securities Act.
(j) During the period of 90 days from the date of the Prospectuses (the
"Lock-Up Period"), without the prior written consent of the Lead Managers, the
Company (i) will not, directly or indirectly, issue, offer, sell, agree to
issue, offer or sell, solicit offers to purchase, grant any call option, warrant
or other right to purchase, purchase any put option or other right to sell,
pledge, borrow or otherwise dispose of any Relevant Security, or make any public
announcement of any of the foregoing, (ii) will not establish or increase any
"put equivalent position" or liquidate or decrease any "call equivalent
position" (in each case within the meaning of Section 16 of the Exchange Act and
the Rules and Regulations) with respect to any Relevant Security, and (iii) will
not otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any economic
consequence of ownership of a Relevant Security, whether or not such transaction
is to be settled by delivery of Relevant Securities, other securities, cash or
other consideration; and the Company will obtain an undertaking in substantially
the form of Annex III hereto of each of its officers and directors listed on
Schedule II attached hereto, not to engage in any of the aforementioned
transactions on their own behalf, other than the sale of Shares as contemplated
by this Agreement and (i) the Company's issuance of its common shares upon the
conversion or exchange of convertible or exchangeable securities outstanding on
the date hereof; (ii) the Company's issuance of its common shares upon the
exercise of currently outstanding options; (iii) the Company's issuance of its
common shares upon the exercise of currently outstanding warrants; (iv) the
grant and exercise of options under, or the issuance and sale of shares pursuant
to, employee stock option plans in effect on the date hereof, each as described
in the Registration Statement, the Pricing Prospectuses and the Prospectuses,
(v) the issuance of up to 10,000 common shares in connection with the
acquisition of additional claims adjacent to the Company's Challacollo project,
and common shares issuable in satisfaction of the Company's obligation to pay
US$44,000 in connection with a potential acquisition of property interests
relating to the Capricho property, and (vi) the issuance of up to 11,000 common
shares in connection with charitable donations by the Company. The Company will
not qualify a prospectus under Canadian Securities Laws or file a registration
statement under the Securities Act in connection with any transaction by the
Company or any person that is prohibited pursuant to the foregoing, except for
registration statements on Form S-8 relating to employee benefit plans.
21
(k) During the period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of all reports or
other communications (financial or other) furnished to security holders or from
time to time published or publicly disseminated by the Company, and will deliver
to you (i) as soon as they are available, copies of any reports, financial
statements and proxy or information statements furnished to or filed with the
Canadian Authorities, the Commission, the TSX, Nasdaq, or any other securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as the Underwriters or Sub-Writers may from time to time reasonably
request (such financial information to be on a consolidated basis to the extent
the accounts of the Company and the Subsidiaries are consolidated in reports
furnished to its security holders generally or to the Reviewing Authority or the
Commission); provided, however that, notwithstanding the foregoing, the Company
shall have no obligation to provide under this Section 4(k): (x) any document or
information required to be delivered pursuant to this paragraph that is made
available on XXXXX or SEDAR; (y) any document or information that the Company
believes, acting reasonably, not to be material; or (z) any document or
information that the Company believes, acting reasonably, it is prohibited by
applicable law from disclosing under the circumstances.
(l) The Company will use its commercially reasonable efforts to effect and
maintain the listing of the Shares on the TSX and the quotation of the Shares on
Nasdaq for a period of at least three years from the date of this Agreement.
(m) The Company will apply the net proceeds from the sale of the Shares as
set forth under the caption "Use of Proceeds" in the Pricing Prospectuses and
the Prospectuses.
(n) The Company will not take, and will cause its affiliates (within the
meaning of Rule 144 under the Securities Act) not to take, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Shares.
(o) The Company shall provide the Lead Managers with a draft of any press
release to be issued in connection with the Offering of the Shares, and will
provide the Lead Managers and their counsel sufficient time to comment thereon
and will accept all reasonable comments of the Lead Managers and their counsel
on such press releases.
(p) Each Underwriter, severally and not jointly, covenants and agrees with
the Company that such Underwriter will not use or refer to any "free writing
prospectus" (as defined in Rule 405 under the Securities Act) without the prior
written consent of the Company, except for any Issuer Free Writing Prospectus
set forth in Annex IV hereto and any electronic road show previously approved by
the Lead Manager. The Company and each Underwriter, severally and not jointly,
agrees that any such free writing prospectus, the use of which has been
consented to by the Company and the Underwriters, is listed in Annex IV hereto.
5. Payment of Expenses. Whether or not the transactions contemplated
by this Agreement, the Registration Statement and the Prospectuses are
consummated or this Agreement is terminated, the Company hereby agrees to pay
all costs and expenses incident to the
22
performance of its obligations hereunder, including the following: (i) all
expenses in connection with the preparation, printing and filing of the
Registration Statement, the Preliminary Prospectuses, the Pricing Prospectuses,
the Prospectuses, any Issuer Free Writing Prospectus and any and all amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Underwriters, Sub-Underwriters and dealers; (ii) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
qualification of the Shares under Canadian Securities Laws, the registration of
the Shares under the Securities Act and the Offering; (iii) the cost of
producing this Agreement and any agreement among Underwriters, blue sky survey,
closing documents and other instruments, agreements or documents (including any
compilations thereof) in connection with the Offering; (iv) all expenses in
connection with the qualification of the Shares for offering and sale under
United States state securities, or "blue sky", laws as provided in Section 4(f)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with any
blue sky survey; (v) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the NASD of the terms of the Offering; (vi) all fees and
expenses in connection with listing the Shares on the TSX and the quotation of
the Shares on Nasdaq; (vii) all travel expenses of the Company's officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Shares; and
(viii) any transfer taxes incurred in connection with this Agreement or the
Offering. The Company also will pay or cause to be paid: (x) the cost of
preparing certificates representing the Shares; (y) the cost and charges of any
transfer agent or registrar for the Shares; and (z) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 5. It is understood, however, that
except as provided in Sections 7, 8 and 11 hereof, the Underwriters will pay all
of their own costs and expenses, including the fees of their counsel, and any
experts or consultants retained by them, and transfer taxes on resale of any of
the Shares by them, in connection with the transactions contemplated by this
Agreement.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6, "Closing
Date" shall refer to the Closing Date for the Firm Shares and any Additional
Closing Date, if different, for the Additional Shares), to the performance by
the Company of all of its obligations hereunder, and to each of the following
additional conditions:
(a) The Canadian Prospectus shall have been filed with the Canadian
Authorities and the U.S. Prospectus shall have been filed with the Commission in
a timely fashion in accordance with Section 4 hereof; no order of any securities
commission, securities regulatory authority or stock exchange in Canada to cease
distribution of the Shares under the Canadian Prospectus, as amended or
supplemented, shall have been issued, and no proceedings for such purpose shall
have been instituted or, to the knowledge of the Company, threatened; no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, and no stop order suspending or preventing the
use of the U.S. Preliminary Prospectus, the U.S. Pricing Prospectus, the U.S.
Prospectus or any Issuer Free Writing Prospectus, shall have been issued by the
Commission and no proceedings therefor shall have
23
been initiated or threatened by the Commission; all requests for additional
information on the part of the Canadian Authorities or the Commission shall have
been complied with to the Underwriters' reasonable satisfaction; and all
necessary regulatory or stock exchange approvals shall have been received.
(b) At the Closing Date you shall have received the written opinion of
Xxxxxx Xxxxxxx LLP, Canadian counsel for the Company, dated the Closing Date and
addressed to the Underwriters and the Sub-Underwriters, in form and substance
satisfactory to the Underwriters, to the effect set forth in Annex I hereto.
(c) At the Closing Date you shall have received the written opinion of
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP, United States counsel for the
Company, dated the Closing Date and addressed to the Underwriters and the
Sub-Underwriters, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto.
(d) At the Closing Date, you shall have received the written opinion of
Argentinian counsel to Company, Australian counsel to Company and Mexican
counsel to the Company dated the Closing Date and addressed to the Underwriters
and the Sub-Underwriters, in form and substance satisfactory to the
Underwriters, as to ownership by the Company and its Material Subsidiaries of
the Pirquitas Project, the Diablillos Project, the Bowdens Project and the
Pitarrilla Project, and with respect to such matters related to the transactions
contemplated hereby reasonably requested by the Underwriters.
(e) At the Closing Date, you shall have received the written opinion of
local counsel in the jurisdictions of incorporation of the Company's Material
Subsidiaries, dated the Closing Date and addressed to the Underwriters and the
Sub-Underwriters, in form and substance satisfactory to the Underwriters, as to
ownership of the Material Subsidiaries, due incorporation or organization, valid
existence and good standing (if such concept is recognized in such jurisdiction)
and such other matters as may reasonably be requested by the Underwriters.
(f) At the Closing Date, you shall have received the written opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, the Underwriters' United States
counsel, and Blake, Xxxxxxx & Xxxxxxx LLP, the Underwriters' Canadian counsel,
(together, "Underwriters' Counsel"), dated the Closing Date and addressed to the
Underwriters and the Sub-Underwriters, in form and substance satisfactory to the
Underwriters, with respect to the issuance and sale of the Shares, the Canadian
Prospectus, the Registration Statement, the Pricing Disclosure Package, the U.S.
Prospectus and such other matters as you may require, and the Company shall have
furnished to Underwriters' Counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(g) At the Closing Date the Underwriters and the Sub-Underwriters shall
have received a certificate of the Chief Executive Officer and Chief Financial
Officer of the Company, dated the Closing Date, in form and substance
satisfactory to the Underwriters, as to the accuracy of the representations and
warranties of the Company set forth in Section 1 hereof as of the date hereof
and as of the Closing Date, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Closing Date, and as to
the matters set forth in subsections (a) and (i) of this Section 6.
24
(h) At the time this Agreement is executed and at the Closing Date, you
shall have received comfort letters, from PricewaterhouseCoopers LLP,
independent chartered accountants for the Company, dated as of the date of this
Agreement and as of the Closing Date, respectively, and addressed to the
Underwriters and the Sub-Underwriters and their respective U.S. or Canadian
affiliates, and in form and substance satisfactory to the Underwriters and
Underwriters' Counsel.
(i) Neither the Company nor any Material Subsidiary shall have sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Pricing Prospectuses and the Prospectuses, any
material loss or interference with its business or properties from fire,
explosion, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental proceeding,
other than as set forth in the Pricing Prospectuses and the Prospectuses
(exclusive of any amendment or supplement thereto); and (ii) subsequent to the
dates as of which information is given in the Registration Statement, the
Pricing Prospectuses and the Prospectuses (exclusive of any amendment or
supplement thereto), there shall not have been any change in the share capital
or long-term or short-term debt of the Company or any Subsidiary or any change
or any development involving a change, whether or not arising from transactions
in the ordinary course of business, in the business, general affairs,
management, condition (financial or otherwise), results of operations,
shareholders' equity, properties or prospects of the Company and the
Subsidiaries, individually or taken as a whole, the effect of which, in any such
case described above, is, in the judgment of the Lead Managers, so material and
adverse as to make it impracticable or inadvisable to proceed with the Offering
on the terms and in the manner contemplated in the Pricing Prospectuses and the
Prospectuses (exclusive of any amendment or supplement thereto).
(j) The Underwriters shall have received a duly executed lock-up agreement
from each person who is a director or officer of the Company listed on Schedule
II hereto, in each case substantially in the form attached hereto as Annex III.
(k) At the Closing Date, the Shares shall have been conditionally approved
for listing on the TSX and shall be quoted on Nasdaq.
(l) At the Closing Date, the NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements for the Offering.
(m) Prior to the Closing Date, the Company shall have furnished to the Lead
Managers satisfactory evidence of its due and valid authorization of CT
Corporation System as its agent to receive service of process in the United
States pursuant to Section 14 hereof, and satisfactory evidence from CT
Corporation accepting its appointment as such agent.
(n) The Company shall have furnished the Underwriters and Underwriters'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
25
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Underwriters, Sub-Underwriters or to Underwriters' Counsel pursuant to this
Section 6 shall not be satisfactory in form and substance to the Lead Managers
and to Underwriters' Counsel, all obligations of the Underwriters and the
Sub-Underwriters hereunder may be cancelled by the Lead Managers at, or at any
time prior to, the Closing Date and the obligations of the Underwriters to
purchase the Additional Shares may be cancelled by the Lead Managers at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing or by telephone. Any such telephone
notice shall be confirmed promptly thereafter in writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and
Sub-Underwriter and each person, if any, who controls any Underwriter or
Sub-Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any and all losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under Canadian Securities Laws, the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, Pricing Prospectus or Prospectus, as originally filed or
in any supplement thereto or amendment thereof, in the Registration Statement,
as originally filed or any amendment thereof, or in any Issuer Free Writing
Prospectus, or in any "issuer information" (as defined in Rule 433(h)(2) under
the Securities Act) filed or required to be filed pursuant to Rule 433(d) under
the Securities Act, or (B) in any other materials or information provided to
investors by, or with the approval of, the Company in connection with the
Offering, including in any "road show" (as defined in Rule 433 under the
Securities Act) for the Offering ("Marketing Materials"), or (ii) the omission
or alleged omission to state in any Preliminary Prospectus, Pricing Prospectus
or Prospectus, as originally filed or in any supplement thereto or amendment
thereof, in the Registration Statement, as originally filed or any amendment
thereof, or in any Issuer Free Writing Prospectus, or in any "issuer
information" (as defined in Rule 433(h)(2) under the Securities Act) filed or
required to be filed pursuant to Rule 433(d) under the Securities Act, or in any
Marketing Materials, a 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 (in the case of any prospectus), not misleading; provided,
however, that the Company will not be liable in any such case to the extent but
only to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter or Sub-Underwriter through the Lead Managers expressly for use
therein. The parties agree that such information provided by or on behalf of any
Underwriter or Sub-Underwriter through the Lead Managers consists solely of the
material referred to in Section 16 hereof. This indemnity agreement will be in
addition to
26
any liability which the Company may otherwise have, including but not limited to
other liability under this Agreement.
(b) Each Underwriter and Sub-Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of the officers and directors of
the Company, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under Canadian Securities Laws, the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, Pricing Prospectus or
Prospectus, as originally filed or any amendment thereof or amendment thereto,
or in the Registration Statement, as originally filed or any amendment thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter or Sub-Underwriter through the Lead Managers specifically for use
therein; provided, however, that in no case shall any Underwriter or
Sub-Underwriter be liable or responsible for any amount in excess of the
underwriting commission applicable to the Shares to be purchased by such
Underwriter or Sub-Underwriter hereunder. The parties agree that such
information provided by or on behalf of any Underwriter or Sub-Underwriter
through the Lead Managers consists solely of the material referred to in Section
16 hereof.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section
7, unless and to the extent such failure results in the forfeiture by the
indemnifying party of substantial right and defenses). In case any such claim or
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate, at its own expense in the defense of such action, and to the extent
it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party acting
reasonably; provided however, that counsel to the indemnifying party shall not
(except with the written consent of the indemnified party) also be counsel to
the indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such case
(including one local counsel in each relevant jurisdiction), but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been
27
authorized in writing by one of the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have employed
counsel to have charge of the defense of such action within a reasonable time
after notice of commencement of the action, (iii) the indemnifying party does
not diligently defend the action after assumption of the defense, or (iv) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. No
indemnifying party shall, without the prior written consent of the indemnified
parties, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened claim, investigation, action
or proceeding in respect of which indemnity or contribution may be or could have
been sought by an indemnified party under this Section 7 or Section 8 hereof
(whether or not the indemnified party is an actual or potential party thereto),
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such claim,
investigation, action or proceeding and (ii) does not include a statement as to
or an admission of fault, culpability or any failure to act, by or on behalf of
the indemnified party.
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters and
Sub-Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Underwriters
and Sub-Underwriters, who may also be liable for contribution, including persons
who control the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, officers of the Company who signed the
Canadian Prospectuses and the Registration Statement and each director of the
Company) as incurred to which the Company and one or more of the Underwriters or
Sub-Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters and
Sub-Underwriters from the Offering or, if such allocation is not permitted by
applicable law, in such proportions as are appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Underwriters and Sub-Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters and Sub-Underwriters shall
be deemed to be in the same proportion as (x) the total proceeds from the
Offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company bears to (y) the underwriting discount or
commissions received by the Underwriters and Sub-Underwriters, in each case as
set forth in the table on the cover page of the U.S. Prospectus. The relative
fault of each of the Company and of the Underwriters and Sub-Underwriters shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material
28
fact relates to information supplied by the Company or the Underwriters and
Sub-Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters and Sub-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 and Sub-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 judicial, regulatory or
other legal or 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. Notwithstanding the provisions of this Section 8,
(i) no Underwriter or Sub-Underwriter shall be required to contribute any amount
in excess of the amount by which the discounts and commissions applicable to the
Shares underwritten by it and distributed to the public exceeds the amount of
any damages which such Underwriter or Sub-Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) 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 or Sub-Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such Underwriter or Sub-Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and each officer and director of the Company
shall have the same rights to contribution as the Company subject in each case
to clauses (i) and (ii) of the immediately preceding sentence. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties, notify each party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 8 or otherwise. The obligations of the Underwriters and Sub-Underwriters
to contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares to be purchased by each of the Underwriters and
Sub-Underwriters hereunder and not joint.
9. Underwriter Default.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates (the
"Default Shares") do not (after giving effect to arrangements, if any, made by
the Lead Managers pursuant to subsection (b) below) exceed in the aggregate 10%
of the number of Firm Shares or Additional Shares, each non-defaulting
Underwriter, acting severally and not jointly, agrees to purchase from the
Company that number of Default Shares that bears the same proportion of the
total number of Default Shares then being purchased as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite
29
the names of the non-defaulting Underwriters, subject, however, to such
adjustments to eliminate fractional shares as the Lead Managers in their sole
discretion shall make.
(b) In the event that the aggregate number of Default Shares exceeds 10% of
the number of Firm Shares or Additional Shares, as the case may be, the Lead
Managers may in their discretion arrange for themselves or for another party or
parties (including any non-defaulting Underwriter or Underwriters who so agree)
to purchase the Default Shares on the terms contained herein. In the event that
within five calendar days after such a default the Lead Managers do not arrange
for the purchase of the Default Shares as provided in this Section 9, this
Agreement or, in the case of a default with respect to the Additional Shares,
the obligations of the Underwriters to purchase and of the Company to sell the
Additional Shares shall thereupon terminate, without liability on the part of
the Company with respect thereto (except in each case as provided in Sections 5,
7, 8, 10 and 11(d)) or the non-defaulting Underwriters, but nothing in this
Agreement shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that any Default Shares are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties
as aforesaid, the Lead Managers or the Company shall have the right to postpone
the Closing Date or Additional Closing Date, as the case may be for a period,
not exceeding five business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectuses or
in any other documents and arrangements, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the Prospectuses
which, in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares and Additional
Shares.
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters, the
Sub-Underwriters and the Company contained in this Agreement or in certificates
of officers of the Company or any Subsidiary submitted pursuant hereto,
including the agreements contained in Section 5, the indemnity agreements
contained in Section 7 and the contribution agreements contained in Section 8,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, Sub-Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8, 10 and 11 hereof shall survive any termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective when the parties hereto have
executed and delivered this Agreement.
30
(b) The Lead Managers shall have the right to terminate this Agreement at
any time prior to the Closing Date or to terminate the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if, at or after the Applicable
Time, (i) any domestic or international event or act or occurrence has
materially disrupted, or in the opinion of the Lead Managers will in the
immediate future materially disrupt, the market for the Company's securities or
securities in general; or (ii) trading in the Company's common shares shall have
been suspended by the Commission, the Canadian Authorities, the TSX or Nasdaq,
or trading in securities generally on the New York Stock Exchange ("NYSE"),
Nasdaq or on the TSX shall have been suspended or been made subject to material
limitations, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the NYSE,
Nasdaq or TSX or by order of the Commission or any other governmental authority
having jurisdiction; or (iii) a banking moratorium has been declared by any U.S.
state or U.S. or Canadian federal authority or any material disruption in
commercial banking or securities settlement or clearance services shall have
occurred; or (iv) any downgrading shall have occurred in the Company's corporate
credit rating or the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act) or any such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities; or
(v) (A) there shall have occurred any outbreak or escalation of hostilities or
acts of terrorism involving the United States or there is a declaration of a
national emergency or war by the United States or (B) there shall have been any
other calamity or crisis or any change in political, financial or economic
conditions if the effect of any such event in (A) or (B), in the judgment of the
Lead Managers, makes it impracticable or inadvisable to proceed with the
offering, sale and delivery of the Firm Shares or the Additional Shares, as the
case may be, on the terms and in the manner contemplated by the Prospectuses.
(c) Any notice of termination pursuant to this Section 11 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the provisions
hereof (other than pursuant to Section 9(b) hereof), or if the sale of the
Shares provided for herein is not consummated because any condition to the
obligations of the Underwriters or the Sub-Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by the Lead Managers, reimburse the Underwriters
for all reasonable out-of-pocket expenses (including the reasonable fees and
expenses of their counsel), incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter or Sub-Underwriter, shall be delivered, or
faxed and confirmed in writing, to such Underwriter or Sub-Underwriter c/o Bear,
Xxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx Parish, Senior Managing Director, Equity Transactions Group, and
Deutsche Bank Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: Equity Capital Markets (Fax: 000-000-0000) with a copy to the General
Counsel (Fax: 000-000-0000), with a copy to Skadden, Arps, Slate,
31
Xxxxxxx & Xxxx LLP at 000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx, X0X 0X0,
Attention: Xxxxxxxx X. Xxxxxxxx, and to Blake, Xxxxxxx & Xxxxxxx LLP, 2600,
Three Bentall Centre, 000 Xxxxxxx Xxxxxx, X.X. Xxx 00000, Xxxxxxxxx, XX X0X 0X0,
Attention: Xxx Xxxxxx;
(b) if sent to the Company, shall be delivered, or faxed and confirmed in
writing to the Company and its counsel at the addresses set forth in the
Registration Statement;
provided, however, that any notice to an Underwriter or Sub-Underwriter pursuant
to Section 7 shall be delivered or sent by facsimile transmission to such
Underwriter or Sub-Underwriter at its address set forth in its acceptance
facsimile to Bear Xxxxxxx, which address will be supplied to any other party
hereto by Bear Xxxxxxx upon request. Any such notices and other communications
shall take effect at the time of receipt thereof.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Sub-Underwriters and the Company
and the controlling persons, directors, officers, employees and agents referred
to in Sections 7 and 8 hereof, and their respective successors and assigns, and
no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and said controlling persons and their respective successors, officers,
directors, heirs and legal representatives, and it is not for the benefit of any
other person, firm or corporation. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Shares from any of the
Underwriters or the Sub-Underwriters.
14. Governing Law and Jurisdiction; Waiver of Jury Trial. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Company irrevocably (a) submits to the jurisdiction of
any court of the State of New York or the United States District Court for the
Southern District of the State of New York (each a "New York Court") for the
purpose of any suit, action, or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated by this Agreement, the
Registration Statement and the Prospectuses (each, a "Proceeding"), (b) agrees
that all claims in respect of any Proceeding may be heard and determined in any
New York Court, (c) waives, to the fullest extent permitted by law, any immunity
from jurisdiction of any New York Court or from any legal process therein, (d)
agrees not to commence any Proceeding other than in a New York Court, and (e)
waives, to the fullest extent permitted by law, any claim that such Proceeding
is brought in an inconvenient forum. The Company hereby irrevocably designates
CT Corporation System, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as agent upon whom process against the Company may be served. THE COMPANY (ON
BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS
RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, THE REGISTRATION STATEMENT AND THE XXXXXXXXXX.
00
00. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder into any currency other
than U.S. dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Underwriters could purchase U.S.
dollars with such other currency in The City of New York on the business day
preceding that on which final judgment is given. The obligations of the Company
in respect of any sum due from it to any Underwriter shall, notwithstanding any
judgment in any currency other than U.S. dollars, not be discharged until the
first business day, following receipt by such Underwriter of any sum adjudged to
be so due in such other currency, on which (and only to the extent that) such
Underwriter may in accordance with normal banking procedures purchase U.S.
dollars with such other currency; if the U.S. dollars so purchased are less than
the sum originally due to such Underwriter hereunder, the Company agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Underwriter against such loss. If the U.S. dollars so purchased are greater than
the sum originally due to such Underwriter hereunder, such Underwriter agrees to
pay to the Company an amount equal to the excess of the U.S. dollars so
purchased over the sum originally due to such Underwriter hereunder.
16. The parties acknowledge and agree that, for purposes of Sections
1(c), 1(d), 1(e), 1(f) and 7 hereof, the information provided by or on behalf of
any Underwriter or Sub-Underwriter consists solely of the material included in
the table following paragraph one, the first sentence of paragraph five, and in
paragraphs 11, 12, 13, and 15 in each case under the caption "Underwriting" in
the Prospectuses.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[SIGNATURE PAGE FOLLOWS]
33
If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
SILVER STANDARD RESOURCES INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of the date first above
written
BEAR, XXXXXXX & CO. INC. DEUTSCHE BANK SECURITIES INC.
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
On behalf of themselves and the other
Underwriters named in Schedule I
hereto.
DEUTSCHE BANK SECURITIES LIMITED CITIGROUP GLOBAL MARKETS CANADA INC.
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
As Sub-Underwriters
SCHEDULE I
Number of Additional Shares to
Total Number of Firm be Purchased if Option is
Underwriter Shares to be Purchased Fully Exercised
----------- ---------------------- ------------------------------
Bear, Xxxxxxx & Co. Inc..............
Deutsche Bank Securities Inc.........
Blackmont Capital Inc................
Citigroup Global Markets Inc.........
National Bank Financial Inc..........
Salman Partners Inc..................
Total............................. 6,000,000 900,000
========= =======
SCHEDULE II
1. Xxxxxx X. Xxxxxxxxxxx
2. Xxxxxx X. Xxxxxxx
3. Xxxx X. Xxxxxxxx
4. Xxxxxxx X. XxXxxxxxxx
5. Xxxx X. Xxxxxx FCA
6. R.E. Xxxxxx Xxxxx
7. Xxxxx X. Xxxxxxxx
8. Xxxxxxx Xxxxx
9. Xxxxxxxxx XxXxxx-Xxxxxxx
10. R. Xxxxxxx Xxxx
11. Xxxxx X. Xxx
EXHIBIT A
Material Subsidiaries
Name of Subsidiary Jurisdiction
------------------ -------------
Pacific Rim Mining Corporation Argentina S.A. Argentina
Rio Grande Mining Company Nevada
Silver Standard Durango S.A. de C.V. Mexico
Silver Standard Australia Pty Limited Australia
Sunshine Argentina, Inc. Delaware
Silver Standard Argentina (BVI) Inc. British Virgin Islands
Silver Standard (BVI) Inc. British Virgin Islands
Silver Standard Australia (BVI) Inc. British Virgin Islands
Silver Standard Ventures Inc. British Columbia
Silver Assets, Inc. California
EXHIBIT B
Material Agreements
1. Option agreement, dated March 31, 2004, among Sociedad Minera Berenguela
S.A., Fossores Ltd., Silver Standard Peru S.A. and the Company.
2. Funding agreement, dated March 31, 2004, among Fossores Ltd. and the Company.
3. Strategic alliance agreement, dated October 4, 2004, between Minco Mining &
Metals Corporation and the Company.
4. Purchase agreement, dated October 20, 2004, among Xxxxxxx International L.P.,
The Liverpool Limited Partnership, Highwood Partners, L.P. and the Company.
5. Mineral prospect evaluation agreement, dated March 22, 2005, between
Xxxxxxxxx Silver Corporation and the Company.
6. Joint venture agreement, dated September 6, 2005, between Xxxxxxxxx Silver
Corporation and the Company.
7. Purchase agreement, dated December 30, 2005, among Xxxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxxxxx, Xxxxxx Xxxx Xxxxxxxxxx and the Company.
8. Purchase agreement, dated March 21, 2006, between Pan American Silver Corp.
and the Company.
ANNEX I
Form of Opinion of Xxxxxx Xxxxxxx LLP
1. Each of the Company and Silver Standard Ventures Inc. (the "Canadian
Subsidiary") has been duly incorporated and validly exists as a corporation
in good standing with respect to the filing of returns under the laws of
its jurisdiction of incorporation, with all necessary corporate power and
capacity to own, lease or license, as the case may be, its properties and
conduct its business as described in the Prospectuses. Each of the Company
and the Canadian Subsidiary is duly qualified and in good standing as a
foreign corporation in each Canadian jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which do not have a
Material Adverse Effect.
2. The Company has an authorized capitalization as set forth in the
Prospectuses. The share capital of the Company conforms in all material
respects to the description thereof contained in the Prospectuses. The
Shares to be delivered on the Closing Date and the Additional Closing Date,
if any, have been duly and validly authorized and, when delivered in
accordance with the Underwriting Agreement, will be duly and validly
issued, fully paid and non-assessable. The holders of the outstanding
common shares of the Company are not entitled to subscribe for the Shares
pursuant to preemptive or similar rights under the Company's constating
documents or the Material Agreements. All of the issued shares in the share
capital of the Canadian Subsidiary as reflected in the securities register
of the Canadian Subsidiary are registered in the name of the Company.
The certificates for the common shares of the Company comply with British
Columbia statutory requirements, with any applicable requirements of the
constating documents of the Company, and with the requirements of the TSX.
3. To the knowledge of such counsel, no holders of securities of the Company
have rights to the qualification of such securities under the Canadian
Prospectus.
4. The outstanding common shares of the Company are listed on the TSX and the
Shares have been conditionally approved for listing on the TSX.
5. The Underwriting Agreement has been duly and validly authorized, executed
and delivered by the Company (to the extent that execution and delivery are
governed by the laws of British Columbia).
6. To such counsel's knowledge and other than as set forth in the
Prospectuses, there are no judicial, regulatory or other legal or
governmental proceedings pending by or before any court or governmental
agency, authority or body to which the Company or any of its Subsidiaries
is a party or of which any property of the Company or any of its
Subsidiaries is the subject which, if determined adversely to the
Company or any of its Subsidiaries, would individually or in the aggregate
have a Material Adverse Effect; and, to such counsel's knowledge, no such
proceedings are threatened.
7. The execution, delivery, and performance of the Underwriting Agreement and
consummation of the transactions contemplated by Underwriting Agreement and
the Prospectuses do not and will not (A) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would 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 or any of its
Subsidiaries pursuant to the Material Agreements, or (B) violate or
conflict with any provision of the constating documents of the Company or
the Canadian Subsidiary, or, to the knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any Canadian court
or judicial, regulatory or other legal or governmental agency or body.
8. The Company is a "reporting issuer" under the securities legislation of
each of the Canadian Jurisdictions which provide for such status and is not
on the list of defaulting issuers maintained thereunder.
9. The statements under the captions "Eligibility for Investment", "Certain
Income Tax Considerations for U.S. Holders - Certain Canadian Federal
Income Tax Considerations", "Certain Income Tax Considerations for Canadian
Holders" and "Statutory Rights of Withdrawal and Rescission" in the
Canadian Prospectus and Part II - Indemnification of the Registration
Statement, insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, are, in all material
respects, accurate summaries of such legal matters, documents and
proceedings.
10. A MRRS Decision Document has been obtained in respect of the Canadian
Preliminary Prospectus and the Canadian Base PREP Prospectus from the
Reviewing Authority and, subject to the filing of standard post-closing
notices of distribution, all necessary documents have been filed, all
necessary proceedings have been taken and all necessary consents,
approvals, and authorizations have been obtained, in each case by the
Company, under Canadian Securities Laws to permit the Shares to be offered,
sold and delivered, as contemplated by the Underwriting Agreement in the
Canadian Jurisdictions by or through investment dealers or brokers duly and
properly registered under Canadian Securities Laws who have complied with
the relevant provisions of such laws and the terms of such registration; to
the knowledge of such counsel, no order suspending the distribution of the
Shares has been issued, no proceedings for that purpose have been
instituted or threatened by any of the Canadian Authorities.
2
11. A court of competent jurisdiction in the Province of British Columbia (a
"B.C. Court") would give effect to the choice of the law of the State of
New York ("New York law") as the governing law of contract claims under the
Underwriting Agreement, provided that such choice of law is bona fide (in
the sense that it was not made with a view to avoiding the consequences of
the laws of any other jurisdiction) and provided that such choice of law is
not contrary to public policy, as that term as is understood under the laws
of the Province of British Columbia and the laws of Canada applicable
therein ("Public Policy"). Such counsel has no reason to believe that the
choice of New York law to govern this Agreement (except as to provisions in
this Agreement providing for indemnity or contribution, as to which such
counsel need express no opinion) is not bona fide or would be contrary to
Public Policy.
12. In an action on a final and conclusive judgment in personam of any federal
or state court in the State of New York (a "New York Court") that is not
impeachable as void or voidable under New York law, a B.C. Court would give
effect to the appointment by the Company of CT Corporation as its agent to
receive service of process in the United States of America under the
Underwriting Agreement and to the provisions in the Underwriting Agreement
whereby the Company submits to the non-exclusive jurisdiction of a New York
Court.
13. If the Underwriting Agreement is sought to be enforced in the Province of
British Columbia in accordance with the laws applicable thereto as chosen
by the parties, namely New York law, a B.C. Court would, subject to
paragraph 12 above, recognize the choice of New York law and, upon
appropriate evidence as to such law being adduced, apply such law with
respect to those matters which under the laws of the Province of British
Columbia are to be determined by the proper law of the Underwriting
Agreement (and in particular, but without limitation, not with respect to
matters of procedure), provided that none of the provisions of the
Underwriting Agreement, or of applicable New York law, is contrary to
Public Policy and that those laws are not foreign revenue, expropriatory or
penal laws; provided, however, that, in matters of procedure, the laws of
the Province of British Columbia will be applied, and a B.C. Court will
retain discretion to decline to hear such action if it is contrary to
Public Policy for it to do so, or if it is not the proper forum to hear
such an action, or if concurrent proceedings are being brought elsewhere
and a B.C. Court may not enforce an obligation enforceable under New York
law where performance of the obligation would be illegal by the law of the
place of performance.
3
14. The laws of the Province of British Columbia and the laws of Canada
applicable therein permit an action to be brought in a B.C. Court on a
final and conclusive judgment in personam of a New York Court that is
subsisting and unsatisfied respecting the enforcement of the Underwriting
Agreement that is not impeachable as void or voidable under New York law
for a sum certain if: (A) the court rendering such judgment had
jurisdiction, as determined under British Columbia Law, over the judgment
debtor and the subject matter of the action; (B) such judgment was not
obtained by fraud or in a manner contrary to natural justice and the
enforcement thereof would not be inconsistent with Public Policy or
contrary to any order made by the Attorney-General of Canada under the
Foreign Extraterritorial Measures Act (Canada) or the Competition Tribunal
under the Competition Act (Canada); (C) the enforcement of such judgment
does not constitute, directly or indirectly, the enforcement of foreign
revenue, expropriatory or penal laws; (D) the action to enforce such
judgment is commenced in compliance with the Limitations Act (British
Columbia); (E) in the case of a judgment obtained by default, there has
been no manifest error in the granting of such judgment; and (F) no new
admissible evidence, right or defence relevant to the action is discovered
prior to the rendering of judgment by a B.C. Court. Under the Currency Act
(Canada), a B.C. Court may only give judgment in Canadian dollars.
15. No stamp or other issuance or transfer taxes or duties or withholding taxes
are payable by or on behalf of the Underwriters to the Government of Canada
or the Government of British Columbia or any political subdivision thereof
or any authority or agency thereof or therein having power to tax in
connection with (A) the issue, sale and delivery of the Shares by the
Company to or for the respective accounts of the Underwriters or (B) the
sale and delivery outside Canada by the Underwriters of the Shares in the
manner contemplated in the Underwriting Agreement.
In addition, such counsel shall also state in a separate letter:
"The primary purpose of our professional engagement was not to establish
factual matters or financial, accounting or statistical information. In
addition, many determinations involved in the preparation of the Canadian Base
PREP Prospectus and the Canadian Prospectus and the documents incorporated by
reference therein are of a wholly or partially non-legal character or relate to
legal matters outside the scope of the Opinion. Furthermore, the limitations
inherent in the independent verification of factual matters and in the role of
outside counsel are such that we have not undertaken to independently verify,
and cannot and do not assume responsibility for the accuracy, completeness or
fairness of, the statements contained in the Canadian Base PREP Prospectus and
the Canadian Prospectus (other than as explicitly stated in paragraph 9 of the
Opinion).
In the course of acting as Canadian counsel to the Company in connection
with the offering of the Shares, we have participated in conferences and
telephone conversations with officers and other representatives of the Company,
the independent registered public accountants for the Company and the
Underwriters during which conferences and conversations the contents of the
Canadian Base PREP Prospectus and the Canadian Prospectus and related matters
were
4
discussed. Based upon such participation (and relying as to materiality with
respect to factual matters to the extent we deemed reasonable on officers,
employees and other representatives of the Company), we hereby advise you that
our work in connection with this matter did not disclose any information that
gave us reason to believe that (i) as of the Applicable Time, the Pricing
Disclosure Package (except for the financial statements, financial statement
schedules and other financial data included or incorporated by reference therein
or omitted therefrom or from those documents incorporated by reference and the
information derived from the reports of Xxxxx Xxxxx, Xxxxx Xxxxxxxxxxx, CPG,
Xxxx Xxxxx, Xxxxx X. XxXxxx, X.Xx., P. Geo, X. Xxxxxxx Xxxxxx, P. Xxx.,
Xxxxxxx Xxxxxx, X.Xx., CPG, and Xxxxxxx X. Xxxxxxxx, P. Geo., independent
qualified persons, in reliance on the authority of such persons as "experts", as
to which we express no such belief) included an untrue statement of a material
fact or omitted 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 or (ii) at the time the Canadian Prospectus was issued, at
the time any amended or supplemented prospectus was issued or at the Closing
Date, the Canadian Prospectus or any amendment or supplement thereto (except for
the financial statements, financial statement schedules and other financial data
included or incorporated by reference therein or omitted therefrom or from those
documents incorporated by reference and the information derived from the reports
of Xxxxx Xxxxx, Xxxxx Xxxxxxxxxxx, CPG, Xxxx Xxxxx, Xxxxx X. XxXxxx, X.Xx.,
P. Geo, X. Xxxxxxx Xxxxxx, P. Xxx., Xxxxxxx Xxxxxx, X.Xx., CPG, and Xxxxxxx X.
Xxxxxxxx, P. Geo., independent qualified persons, in reliance on the authority
of such persons as "experts", as to which we express no such belief) included
an untrue statement of a material fact or omitted 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. For purposes of this
letter, the term "Pricing Disclosure Package" means the Canadian Base PREP
Prospectus taken together with the information set forth in Annex IV to the
Underwriting Agreement, to the extent determined at the Applicable Time."
5
ANNEX II
Form of Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
1. Sunshine Argentina, Inc. has been duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware and has all
necessary corporate power and authority to own and hold its properties and
conduct its business as described in the Registration Statement and the
U.S. Prospectus.
2. All of the issued shares of capital stock of Sunshine Argentina, Inc. is
owned of record directly or indirectly by the Company.
3. To such counsel's knowledge, there are no persons with registration or
other similar rights to have any equity or debt securities registered for
sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement.
4. Assuming the due authorization, execution and delivery of the Underwriting
Agreement under the laws of the Province of British Columbia and the
federal laws of Canada applicable therein, the Underwriting Agreement (to
the extent that execution and delivery are governed by the laws of the
State of New York) has been duly authorized, executed and delivered by the
Company.
5. To such counsel's knowledge, there are no legal proceedings pending or
overtly threatened against the Company or any of its subsidiaries which
could reasonably be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
6. The issuance and sale of the Shares by the Company, the compliance by the
Company with all of the provisions of the Underwriting Agreement and the
performance by the Company of its obligations thereunder will not violate
Applicable Law or any judgment, order or decree of any court or arbitrator
known to such counsel. For purposes of this letter, the term "Applicable
Law" means the General Corporation Law of the State of Delaware and those
laws, rules and regulations of the United States of America and the State
of New York, in each case which in such counsel's experience are normally
applicable to the transactions of the type contemplated by the Underwriting
Agreement, except that, "Applicable Law" does not include the anti-fraud
provisions of the securities laws of any applicable jurisdiction or any
state securities or Blue Sky laws of the various states.
7. No consent, approval, authorization or order of, or filing, registration or
qualification with, any Governmental Authority, which has not been
obtained, taken or made is required by the Company under any Applicable Law
for the issuance or sale of the Shares or the performance by the Company of
its obligations under the Underwriting Agreement. For purposes of this
letter, the term "Governmental Authority" means any executive, legislative,
judicial, administrative or regulatory body of the State of New York, the
State of Delaware or the United States of America.
8. The Registration Statement and the U.S. Prospectus, as of their respective
effective or issue times, appear on their face to be appropriately
responsive in all material respects to the requirements of the Act and the
rules and regulations of the Commission under the Act (the "Rules and
Regulations"), except for the financial statements, financial statement
schedules and other financial data included or incorporated by reference in
or omitted from either of them, as to which such counsel expresses no
opinion.
9. The Company's Annual Report on Form 20-F for the fiscal year ended December
31, 2005, which is incorporated by reference in the Registration Statement
and U.S. Prospectus (except for financial statements, financial statement
schedules and other financial data included or incorporated by reference,
in or omitted from either of them, as to which such counsel expresses no
opinion) appeared on its face to be appropriately responsive in all
material respects when so filed to the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations thereunder.
10. The Form F-X appears on its face to be appropriately responsive in all
material respects to the requirements of the Act and the Rules and
Regulations.
11. The statements in the U.S. Prospectus under the headings "Certain Income
Tax Considerations for U.S. Holders--Certain U.S. Federal Income Tax
Considerations" and "Underwriting" to the extent that they constitute
summaries of United States federal law or regulation or legal conclusions
or documents, have been reviewed by such counsel and fairly summarize the
matters described under that heading in all material respects.
12. The Company is not and, after giving effect to the offering and sale of the
Shares, and the application of their proceeds as described in the U.S.
Prospectus under the heading "Use of Proceeds," will not be required to be
registered as an investment company under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
13. Under the laws of the State of New York relating to submission to
jurisdiction, the Corporation has, pursuant to Section 14 of the
Underwriting Agreement, validly and irrevocably submitted to the personal
jurisdiction of any state or federal court located in
2
the State of New York, in any action arising out of or relating to the
Underwriting Agreement or the transactions contemplated thereby, has
validly and irrevocably waived any objection to the venue of a proceeding
in any state court located in the State of New York, and has validly and
irrevocably appointed CT Corporation System as its authorized agent for the
purpose described in the Underwriting Agreement. This opinion 13 is subject
to the qualification that such counsel expresses no opinion as to the
enforceability of forum selection clauses in the federal courts.
In addition, such counsel shall also state in a separate letter:
"The Company has filed with the Commission a Registration Statement on
Form F-10 (File No. 333-133670) under the Securities Act. The Registration
Statement was filed on May 1, 2006 and was amended on May __, 2006. The
Registration Statement became effective under the Securities Act upon the
filing with the Commission of the amended Registration Statement on
May __, 2006. All filings required by Item II.L. of Form F-10 under the
Securities Act have been made in the manner and in the time period required
therein. The Form F-X of the Company dated April 28, 2006 (the "Form F-X")
was filed with the Commission prior to the effectiveness of the Registration
Statement.
We have been advised orally by the staff of the Commission that no stop
order suspending the effectiveness of the Registration Statement has been issued
and to our knowledge no proceedings for that purpose have been initiated or are
pending or are threatened by the Commission.
The primary purpose of our professional engagement was not to establish
factual matters or financial, accounting or statistical information. In
addition, many determinations involved in the preparation of the Registration
Statement, U.S. Pricing Prospectus and the U.S. Prospectus and the documents
incorporated by reference therein are of a wholly or partially non-legal
character or relate to legal matters outside the scope of the Opinion.
Furthermore, the limitations inherent in the independent verification of factual
matters and in the role of outside counsel are such that we have not undertaken
to independently verify, and cannot and do not assume responsibility for the
accuracy, completeness or fairness of, the statements contained in the
Registration Statement, the U.S. Pricing Prospectus or the U.S. Prospectus or
the documents incorporated by reference therein (other than as explicitly stated
in paragraph 11 of the Opinion).
In the course of acting as special U.S. counsel to the Company in
connection with the offering of the Shares, we have participated in conferences
and telephone conversations with officers and other representatives of the
Company, the independent registered public accountants for the Company and the
Underwriters during which conferences and conversations the contents of the
Registration Statement, the U.S. Pricing Prospectus, the U.S. Prospectus and
related matters were discussed. Based upon such participation (and relying as to
materiality with respect to factual matters to the extent we deemed reasonable
on officers, employees and other representatives of the Company), we hereby
advise you that our work in connection with this matter did not disclose any
information that gave us reason to believe that (i) at the time it became
effective, the Registration Statement or any amendment thereto prior to the
Closing Date (except for the financial statements, financial statement schedules
and other financial data included or incorporated by reference therein or
omitted therefrom or from those documents incorporated by reference and the
information derived from the reports of Xxxxx Xxxxx, Xxxxx Xxxxxxxxxxx, CPG,
Xxxx Xxxxx, Xxxxx X. XxXxxx, X.Xx., P. Geo, X. Xxxxxxx Xxxxxx, P. Xxx., Xxxxxxx
Xxxxxx, X.Xx., CPG, and Xxxxxxx X. Xxxxxxxx, P. Geo., independent qualified
persons, in reliance on the authority of such persons as "experts" within the
meaning of the Act, as to which we express no such belief), included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein not misleading; (ii) as of
3
the Applicable Time, the Pricing Disclosure Package (except for the financial
statements, financial statement schedules and other financial data included or
incorporated by reference therein or omitted therefrom or from those documents
incorporated by reference and the information derived from the reports of Xxxxx
Xxxxx, Xxxxx Xxxxxxxxxxx, CPG, Xxxx Xxxxx, Xxxxx X. XxXxxx, X.Xx., P. Geo, X.
Xxxxxxx Xxxxxx, P. Xxx., Xxxxxxx Xxxxxx, X.Xx., CPG, and Xxxxxxx X. Xxxxxxxx, P.
Geo., independent qualified persons, in reliance on the authority of such
persons as "experts" within the meaning of the Act, as to which we express no
such belief) included an untrue statement of a material fact or omitted 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 or (iii) at the
time the U.S. Prospectus was issued, at the time any amended or supplemented
prospectus was issued or at the Closing Date, the U.S. Prospectus or any
amendment or supplement thereto (except for the financial statements, financial
statement schedules and other financial data included or incorporated by
reference therein or omitted therefrom or from those documents incorporated by
reference and the information derived from the reports of Xxxxx Xxxxx, Xxxxx
Xxxxxxxxxxx, CPG, Xxxx Xxxxx, Xxxxx X. XxXxxx, X.Xx., P. Geo, X. Xxxxxxx Xxxxxx,
P. Xxx., Xxxxxxx Xxxxxx, X.Xx., CPG, and Xxxxxxx X. Xxxxxxxx, P. Geo.,
independent qualified persons, in reliance on the authority of such persons as
"experts" within the meaning of the Act, as to which we express no such belief)
included an untrue statement of a material fact or omitted 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. For purposes of this
letter, the term "Pricing Disclosure Package" means the U.S. Pricing Prospectus
taken together with the information set forth in Annex IV to the Underwriting
Agreement, to the extent determined at the Applicable Time."
4
ANNEX III
Form of Lock-Up Agreement
April __, 2006
Bear, Xxxxxxx & Co. Inc.
Deutsche Bank Securities Inc.
As Representatives of the several
Underwriters referred to below
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Transactions Group
Silver Standard Resources Inc. Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by Silver Standard Resources Inc., a British Columbia
corporation (the "Company"), of its common shares, without par value (the
"Shares").
In order to induce you and the other underwriters for which you act as
representatives (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Xxxxxxx & Co.
Inc. ("Bear Xxxxxxx") and Deutsche Bank Securities Inc. ("Deutsche", and
together with Bear Xxxxxxx, the "Lead Managers"), during the period from the
date hereof until ninety (90) days from the date of the final prospectus for the
Offering (the "Lock-Up Period"), the undersigned (a) will not, directly or
indirectly, offer, sell, agree to offer or sell, solicit offers to purchase,
grant any call option or purchase any put option with respect to, pledge, borrow
or otherwise dispose of any Relevant Security (as defined below), and (b) will
not establish or increase any "put equivalent position" or liquidate or decrease
any "call equivalent position" with respect to any Relevant Security (in each
case within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder), or otherwise
enter into any swap, derivative or other transaction or arrangement that
transfers to another, in whole or in part, any economic consequence of ownership
of a Relevant Security, whether or not such transaction is to be settled by
delivery of Relevant Securities, other securities, cash or other consideration.
As used herein "Relevant Security" means the Shares, any other equity security
of the Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Shares or other such equity security.
Notwithstanding the foregoing, (i) the undersigned may transfer Relevant
Securities by bona fide gift, will or intestate succession, and (ii) the
undersigned may transfer Relevant Securities to any corporate entity or
partnership controlled by the undersigned, provided as to (i) and (ii) above,
each resulting transferee of Relevant Securities executes and delivers to you an
agreement satisfactory to you certifying that such transferee is bound by the
terms of this Agreement and has been in compliance with the terms hereof since
the date first above written as if it had been an original party hereto.
This Agreement shall not apply to the exercise of an option to purchase any
shares of the Company's capital stock pursuant to existing stock option plans of
the Company. In addition, this Agreement shall not restrict the sale or other
disposition of Relevant Securities that are acquired by the undersigned in the
open market after the Offering is priced, provided that any such sale or other
disposition fully complies with, and is not required to be disclosed or reported
under, applicable law (including but not limited to Section 16 under the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder).
[This Agreement also shall not apply to the transfer by Xxxxxx Xxxxxxxxxxx
of up to 11,000 Common Shares to a transferee (the "Charity") as a charitable
donation or to any transfer (including by way of sale on the open market) by the
Charity of such shares.]
The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the share register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the share register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of the Lead Managers, during the Lock-up
Period the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
This Agreement shall terminate and be of no further force and effect in the
event the Company has not consummated the Offering by June 31, 2006.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
[SIGNATURE PAGE FOLLOWS]
Very truly yours,
By:
------------------------------------
Print Name:
----------------------------
ANNEX IV
Pricing Terms included in the Disclosure Package
Number of Firm Shares Offered: _____________________
Number of Additional Shares Offered: _____________________
Public Offering Price per Share (for Shares offered and sold in Canada):
_____________________
Public Offering Price per Share (for Shares offered and sold outside Canada):
_____________________
Underwriting Commission per Share (for Shares offered and sold in Canada):
_____________________
Underwriting Commission per Share (for Shares offered and sold outside Canada):
_____________________
Date of Delivery of Firm Shares: _____________________
Issuer Free Writing Prospectuses
None
