Exhibit 3.1
NovaGold Resources Inc.
Underwriting Agreement
New York, New York
February o, 2006
Citigroup Global Markets Inc.
Bear, Xxxxxxx & Co. Inc.
RBC Dominion Securities Inc.
Citigroup Global Markets Canada Inc.
As Sub-Underwriter
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NovaGold Resources Inc., a corporation organized under the laws of Nova
Scotia (the "Company"), proposes to sell to the several underwriters named in
Schedule II hereto (the "Underwriters") 12,000,000 common shares, no par value
("Common Shares"), of the Company (said shares to be issued and sold by the
Company being hereinafter called the "Underwritten Securities"). The Company
also proposes to grant to the Underwriters an option to purchase up to 1,800,000
additional Common Shares to cover over-allotments (the "Option Securities"; the
Option Securities, together with the Underwritten Securities, being hereinafter
called the "Securities"). Citigroup Global Markets Inc. ("Citigroup"), Bear,
Xxxxxxx & Co. Inc. and RBC Dominion Securities Inc. are acting as
representatives of the Underwriters under this Agreement (in such capacity, the
"Representatives"). To the extent there are no additional Underwriters listed on
Schedule II other than the Representatives, the term Representatives as used
herein shall mean the Underwriters listed on Schedule II, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, any
Preliminary Prospectuses, the Preliminary Final Prospectuses or the Final
Prospectuses shall be deemed to refer to and include the documents incorporated
by reference therein; and any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement, any Preliminary
Prospectuses, any Preliminary Final Prospectuses or the Final Prospectuses shall
be deemed to refer to and include the filing of any document incorporated or
deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 22 hereof.
The Company understands that the Underwriters propose to make a public
offering of the Securities in the United States and in each of the provinces of
Canada either directly or through their respective U.S. or Canadian
broker-dealer affiliates upon the terms set
forth in the Disclosure Package and the Prospectuses as soon as the Underwriters
deem advisable after this Agreement has been executed and delivered.
1. Representations and Warranties. The Company represents and warrants to, and
agrees with, each Underwriter and the Sub-Underwriter as set forth below in this
Section 1.
(a) The Company is eligible under Canadian Securities Laws to
file a short form prospectus with the applicable securities regulatory
authority in each of the Canadian Jurisdictions (collectively, the
"Canadian Authorities") under National Instrument 44-101 - Short Form
Prospectus Distributions and is eligible to use 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 Securities 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
Canadian Authorities under the MRRS and in conformity in all material
respects with applicable Canadian Securities Laws, the Canadian
Preliminary Prospectus and the Canadian Base PREP Prospectus and a MRRS
Decision Document for each of the Canadian Preliminary Prospectus and
the Canadian Base PREP Prospectus has been obtained and no order
suspending the distribution of the Securities 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 Authorities for additional information has been complied
with. The Company will file with each of the Canadian Authorities in
accordance with the PREP Procedures 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 or to the extent the Representatives shall agree
in writing to a modification, shall be in all respects in the form of
the Canadian Base PREP Prospectus.
(b) The Company meets the general eligibility requirements for
the use of Form F-10 under the Act and has prepared and filed with the
Commission a registration statement (file number 333-131241) on Form
F-10, 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 of the Commission) (the "U.S.
Preliminary Prospectus"), for registration under the Act of the
offering and sale of the Securities. The Company has filed with the
Commission an amendment to such registration statement including the
U.S. preliminary final 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 of the Commission) (the "U.S. Preliminary Final
Prospectus"). The Company has included in such filing, as amended at
the Effective Date, all information required by the Act and the rules
thereunder to be included in such Registration Statement. The
Registration Statement has become effective under the Act and no stop
order suspending the effectiveness of the Registration Statement has
been issued under the 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
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has been complied with. 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 of the
Commission) (the "U.S. Prospectus"). As filed, such U.S. Prospectus
shall contain all information required by the Act and the rules
thereunder and, except for the inclusion of the PREP Information or to
the extent the Representatives shall agree in writing to a
modification, shall be in all respects in the form of the U.S.
Preliminary Final Prospectus.
(c) On its filing date, each of the Canadian Preliminary
Prospectus and the Canadian Base PREP Prospectus did, and when the
Canadian Prospectus is first filed in accordance with the PREP
Procedures and on the Closing Date and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Canadian Prospectus (and any 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 when the Canadian Prospectus is
first filed in accordance with the PREP Procedures and on the Closing
Date, and on any settlement date, the Canadian Prospectus 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, at
the time of filing thereof, the Closing Date and on any settlement date
will constitute, full, true and plain disclosure of all material facts
relating to the Securities and to the Company; provided, however, that
the Company makes no representations or warranties as to the
information contained in or omitted from the Canadian Preliminary
Prospectus, the Canadian Base PREP Prospectus or the Canadian
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter or the Sub-Underwriter through the
Representatives specifically for inclusion in the Canadian Preliminary
Prospectus, the Canadian Base PREP Prospectus or the Canadian
Prospectus (or any supplement thereto), it being understood and agreed
that the only such information furnished by or on behalf of any
Underwriter or the Sub-Underwriter consists of the information
described as such in Section 8(b) hereof.
(d) On the Effective Date, the Registration Statement did, and
when the U.S. Prospectus is first filed in accordance with General
Instruction II.L of Form F-10 and on the Closing Date and on any
settlement date, the U.S. Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements
of the Act and the rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and on the date of any filing
pursuant to General Instruction II.L of Form F-10 and on the Closing
Date and any settlement date, the U.S. Prospectus (together with any
supplement thereto) will not, include any untrue statement
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of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the U.S.
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter or the Sub-Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the U.S. Prospectus (or any supplement thereto), it being
understood and agreed that the only such information furnished by or on
behalf of any Underwriter or the Sub-Underwriter consists of the
information described as such in Section 8(b) hereof.
(e) As of the Execution Time, the Disclosure Package and the
price to the public, the number of Underwritten Securities, the number
of Option Securities and the underwriting commission to be included on
the cover page of the U.S. Prospectus, when taken together as a whole,
do not and on the Closing Date and any settlement date, will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with written
information furnished to the Company by any Underwriter or the
Sub-Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter or the Sub-Underwriter
consists of the information described as such in Section 8(b) hereof.
(f) Each document filed or to be filed with the Reviewing
Authority and the other Canadian Authorities and incorporated, or
deemed to be incorporated, by reference in the Canadian Preliminary
Prospectus, Canadian Base PREP Prospectus and the Canadian Prospectus
complied or will comply when so filed in all material respects with
applicable 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 misleading.
(g) (i) At the time of filing the Registration Statement and
(ii) as of the Execution Time (with such date being used as the
determination date for purposes of this clause (ii)), the Company was
not and is not an Ineligible Issuer (as defined in Rule 405 under the
Act), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be
considered an Ineligible Issuer.
(h) Each Issuer Free Writing Prospectus does not include any
information that conflicts with the information contained in the
Registration Statement or the Canadian Prospectus, including any
document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded or
modified. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free
4
Writing Prospectus based upon and in conformity with written
information furnished to the Company by any Underwriter or the
Sub-Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter or the Sub-Underwriter
consists of the information described as such in Section 8(b) hereof.
(i) Each of the Company and its Material Subsidiaries has been
duly incorporated, continued or amalgamated and is validly existing as
a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Disclosure
Package and the Prospectuses (exclusive of any supplement thereto), and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification.
(j) All the outstanding shares of capital stock of each
Material Subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Disclosure Package and the Prospectuses
(exclusive of any supplement thereto), all outstanding shares of
capital stock of the Material Subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and clear of
any perfected security interest or any other security interests,
claims, liens or encumbrances.
(k) The Company's authorized equity capitalization is as set
forth in the Disclosure Package and the Prospectuses; the share capital
of the Company conforms in all material respects to the description
thereof contained in the Disclosure Package and the Prospectuses; the
outstanding Common Shares have been duly and validly authorized and
issued and are fully paid and non-assessable; the Securities have been
duly and validly authorized and allotted, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and non-assessable; the Securities are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance, on the American Stock Exchange and have
been conditionally approved for listing on the Toronto Stock Exchange;
the certificates for the Securities comply with all applicable
provisions of the Companies Act (Nova Scotia) and the Toronto Stock
Exchange; the Securities conform to all statements relating thereto in
the Disclosure Package and the Prospectuses and such description
conforms to the rights set forth in the instruments defining the same;
the holders of outstanding Common Shares are not entitled to preemptive
or other rights to subscribe for the Securities; and, except as set
forth in the Disclosure Package and the Prospectuses, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, any shares in the capital of the Company or ownership
interests in the Company are outstanding.
(l) There is no franchise, contract or other document of a
character required to be described in the Registration Statement, the
Disclosure Package or the Prospectuses, or to be filed as an exhibit
thereto, which is not described or filed as required; and the
statements in the Preliminary Final Prospectuses and the Prospectuses
under the headings
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"Certain Income Tax Considerations for U.S. Holders", "Certain Income
Tax Considerations for Canadian Holders", "Description of Share
Capital" and "Risk Factors-NovaGold may be a "passive foreign
investment company".....", in 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 and fair summaries of such legal matters,
agreements, documents or proceedings.
(m) This Agreement has been duly authorized, executed and
delivered by the Company.
(n) 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 Securities
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 Canadian Preliminary Prospectus, the Canadian
Base PREP Prospectus or the Canadian Prospectus that have not been
filed as required.
(o) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Disclosure Package and the Prospectuses,
will not be an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(p) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
made or obtained under the Act, Canadian Securities Laws, the filing of
the Prospectuses as contemplated in this Agreement, and such as may be
required under the securities or blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Disclosure
Package and the Prospectuses.
(q) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, (i) the constating documents of the Company
or any of its subsidiaries, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties.
6
(r) No holders of securities of the Company have rights to the
registration or qualification of such securities under the Registration
Statement or the Canadian Prospectus.
(s) The comparative consolidated historical financial
statements of the Company and its consolidated subsidiaries included in
the Preliminary Final Prospectuses, the Prospectuses and the
Registration Statement present fairly the financial condition, results
of operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act, the Exchange Act and applicable Canadian laws
and have been prepared in conformity with generally accepted accounting
principles in Canada applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The consolidated
financial statements, including the notes thereto, included and
incorporated by reference in the Registration Statement, the Disclosure
Package and the Prospectuses have been reconciled to generally accepted
accounting principles in the United States in accordance with Item 18
of Form 20-F under the Exchange Act. The selected financial data set
forth under the caption "Selected Summary of Quarterly Financial Data"
in the Preliminary Final Prospectuses, the Prospectuses and the
Registration Statement fairly present, on the basis stated in the
Preliminary Final Prospectuses, the Prospectuses and the Registration
Statement, the information included therein.
(t) There has not been any reportable disagreement (within the
meaning of National Instrument 51-102 of the Canadian Securities
Administrators) with the auditors of the Company.
(u) Except as disclosed in the Disclosure Package and the
Prospectuses (exclusive of any supplement thereto) there has not been
any material adverse change with respect to the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(v) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a Material Adverse Effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business ("Material Adverse
Effect"), except as set forth in the Disclosure Package and the
Prospectuses (exclusive of any supplement thereto).
(w) The Company and each of its Material Subsidiaries owns or
leases all such properties and assets as are necessary to the conduct
of its operations as presently conducted.
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(x) To the knowledge of the Company, the Company has good and
marketable title to its properties and assets, free and clear of all
liens, charges, encumbrances and security interests of any nature or
kind, other than as disclosed in the Disclosure Package and the
Prospectuses (exclusive of any supplement thereto);
(y) The Company is not aware of any defects, failures or
impairments in the title of the Company or any of its subsidiaries to
its properties or assets or those of its subsidiaries whether or not an
action, suit, proceeding or inquiry is pending or threatened or whether
or not discovered by any third party, which in aggregate could
reasonably be expected to have a Material Adverse Effect;
(z) All interests in mining claims, concessions, exploitation
or extraction rights or similar rights ("Mining Claims") relating to
the Galore Creek, Xxxxxx Creek, Nome and Ambler projects that are held
by the Company or any of its 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 Disclosure Package and the Prospectuses
(exclusive of any supplement thereto). Except as disclosed in the
Disclosure Package and the Prospectuses (exclusive of any supplement
thereto), no other property rights are necessary for the conduct of the
Company's business as presently conducted, and there are no material
restrictions on the ability of the Company and its subsidiaries to use,
transfer or otherwise exploit any such property rights except as
required by applicable law or the provisions of the Material
Agreements. Except as disclosed in the Disclosure Package and the
Prospectuses, the Company has no reason to believe that it will not be
able to obtain or acquire such property rights as may be necessary to
develop and operate the Galore Creek, Xxxxxx Creek, Nome and Ambler
projects. Except as disclosed in the Disclosure Package and the
Prospectuses (exclusive of any supplement thereto), mining claims held
by the Company or its subsidiaries cover the properties required by the
Company for such purposes.
(aa) Except as disclosed in the Disclosure Package and the
Prospectuses (exclusive of any supplement thereto), the information
relating to estimates by the Company of the measured, indicated and
inferred resources at the Galore Creek, Xxxxxx Creek and Nome projects
contained in the Disclosure Package 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 resource
estimates are reasonable and appropriate, and that the projected
production and operating results relating to its projects and
summarized in the Disclosure Package and the Prospectuses are
achievable by the Company.
(bb) Neither the Company nor any Material Subsidiary is in
violation or default of (i) any provision of its constating documents,
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such subsidiary or any of its
8
properties, as applicable, except with respect to (ii) and (iii), where
such violation or default would not have a Material Adverse Effect.
(cc) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited comparative
consolidated financial statements and schedules included and
incorporated by reference in the Prospectuses, are independent public
accountants with respect to the Company within the meaning of the Act
and the applicable published rules and regulations thereunder and are
independent with respect to the Company within the meaning of the Rules
of Professional Conduct of the Institute of Chartered Accountants of
British Columbia and the applicable published rules and regulations
thereunder.
(dd) 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 Securities.
(ee) 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 Securities or the
authorization, execution, delivery and performance of this Agreement or
the resale of Securities by an Underwriter to U.S. residents.
(ff) No dispute between the Company and any native group or
joint venture partner exists or, to the knowledge of the Company, is
threatened or imminent that could reasonably be expected to have a
Material Adverse Effect, except as set forth or contemplated in the
Disclosure Package and the Prospectuses (exclusive of any supplement
thereto).
(gg) The Company and each of its subsidiaries has filed all
Canadian, U.S., foreign, state, provincial and local tax returns that
are required to be filed or has requested extensions thereof (except in
any case in which the failure so to file would not have a Material
Adverse Effect, except as set forth in or contemplated in the
Disclosure Package and the Prospectuses (exclusive of any supplement
thereto) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Disclosure Package and the Prospectuses (exclusive
of any supplement thereto).
(hh) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, that could reasonably be
expected to have a Material Adverse Effect, except as set forth in or
contemplated in the Disclosure Package and the Prospectuses (exclusive
of any supplement thereto).
9
(ii) The Company and each of its Material Subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its Material
Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its Material Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no
claims by the Company or any of its Material Subsidiaries under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither
the Company nor any such Material Subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor
any such Material Subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have
a Material Adverse Effect, except as set forth in or contemplated in
the Disclosure Package and the Prospectuses (exclusive of any
supplement thereto).
(jj) No Material Subsidiary of the Company 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.
(kk) The Company and its Material Subsidiaries possess all
licenses, certificates, permits and other authorizations ("Permits")
issued by the appropriate federal, provincial, state or foreign
regulatory authorities necessary to conduct their respective businesses
as presently conducted, and neither the Company nor any such subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such Permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect.
(ll) The status of the Permits relating to the Company's
projects at Galore Creek, Xxxxxx Creek, Nome and Ambler as set forth in
the Disclosure Package and the Prospectuses is correctly described in
all material respects. Except as disclosed in the Disclosure Package
and the Prospectuses (exclusive of any supplement thereto), neither the
Company nor any of its subsidiaries has received notice of, or is aware
of, any threatened or actual proceedings relating to the modification
of any such Permits or has received notice that any Permit required for
the development of the aforementioned properties will not be issued.
(mm) The statistical, industry and market-related data
included in the Disclosure Package and the Prospectuses are based on or
derived from sources that the Company believes to be reliable and
accurate.
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(nn) The Company and each of its Material Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance 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 in Canada
and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Company believes that its and its Material Subsidiaries' internal
controls over financial reporting are effective and the Company and its
subsidiaries are not aware of any material weakness in their internal
controls over financial reporting.
(oo) The Company and its subsidiaries maintain "disclosure
controls and procedures" (as such term is defined in Rule 13a-15(e)
under the Exchange Act); such disclosure controls and procedures are
effective.
(pp) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act, Canadian
Securities Laws or otherwise, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(qq) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state, provincial and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses as presently conducted and (iii) have not
received notice of any actual or potential liability under any
Environmental Laws, except where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals,
or liability could not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect, except as set forth in
the Disclosure Package and the Prospectuses (exclusive of any
supplement thereto). Except as set forth in the Disclosure Package and
the Prospectuses (exclusive of any supplement thereto), neither the
Company nor any of the subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(rr) 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 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
11
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect,
except as set forth in the Disclosure Package and the Prospectuses
(exclusive of any supplement thereto).
(ss) The minimum funding standard under Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has
been satisfied by each "pension plan" (as defined in Section 3(2) of
ERISA) which has been established or maintained by the Company and/or
one or more of its subsidiaries, and the trust forming part of each
such plan which is intended to be qualified under Section 401 of the
Code is so qualified; each of the Company and its subsidiaries has
fulfilled its obligations, if any, under Section 515 of ERISA; neither
the Company nor any of its subsidiaries maintains or is required to
contribute to a "welfare plan" (as defined in Section 3(1) of ERISA)
which provides retiree or other post-employment welfare benefits or
insurance coverage (other than "continuation coverage" (as defined in
Section 602 of ERISA)); each pension plan and welfare plan established
or maintained by the Company and/or one or more of its subsidiaries is
in compliance in all material respects with the currently applicable
provisions of ERISA; and neither the Company nor any of its
subsidiaries has incurred or could reasonably be expected to incur any
withdrawal liability under Section 4201 of ERISA, any liability under
Section 4062, 4063, or 4064 of ERISA, or any other liability under
Title IV of ERISA.
(tt) There is and has been no failure on the part of the
Company or any of the Company's 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 (the "Sarbanes Oxley Act"), including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(uu) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a
violation by such Persons of the FCPA, including, without limitation,
making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay
or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to
any "foreign official" (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and the Company,
its subsidiaries and, to the knowledge of the Company, its affiliates
have conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued
compliance therewith. "FCPA" means Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder.
(vv) The operations of the Company and its subsidiaries are
and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970,
12
as amended, the money laundering statutes of all 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 of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.
(ww) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries 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.
(xx) The Material Subsidiaries are the only significant
subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X.
All other subsidiaries of the Company are inactive.
(yy) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know how and other intellectual property necessary
for the conduct of the Company's business as now conducted or as
proposed in the Disclosure Package and the Prospectuses to be
conducted, except where such failure could not reasonably be expected
to have a Material Adverse Effect.
(zz) Except as disclosed in the Registration Statement, the
Disclosure Package 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)
does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any
affiliate of any of the Underwriters.
(aaa) The Company expects that it will not be a Passive
Foreign Investment Company ("PFIC") within the meaning of Section 1297
of the United States Internal Revenue Code of 1986, as amended, for the
taxable year ended November 30, 2006.
(bbb) 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.
(ccc) The Company has prepared and filed with the Commission
an appointment of agent for service of process upon the Company on Form
F-X in conjunction with the filing of the Registration Statement.
13
(ddd) Computershare Investor Services Inc. at its principal
offices in the cities of Xxxxxxxxx, Xxxxxxx and Halifax is the duly
appointed registrar and transfer agent of the Company with respect to
the 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 the Common Shares.
(eee) The minute books and corporate records of the Company
and its Material Subsidiaries are true and correct 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;
(fff) The Company is, and upon completion of the transactions
described herein, and assuming the anticipated use of the proceeds
thereof as described in the Disclosure Package and the Prospectuses,
will be, a "foreign private issuer" within the meaning of Rule 3b-4
under the U.S. Securities Exchange Act of 1934, as amended.
(ggg) The French language version of the Canadian Preliminary
Prospectus and the Canadian Base PREP Prospectus is, and the French
language version of the Canadian Prospectus will be (including in each
case the documents incorporated by reference therein), in all material
respects a complete and proper translation of the English language
versions thereof.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters and the Sub-Underwriter in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Underwriter
and the Sub-Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the applicable U.S. or Canadian
purchase price set forth in Schedule I hereto, the number of Underwritten
Securities set forth opposite such Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally and
not jointly, up to 1,800,000 Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Securities by the Underwriters. Said
option may be exercised in whole or in part at any time on or before
the 30th day after the Closing Date upon written or telegraphic notice
by the Representatives to the Company setting forth the number of
Option Securities as to which the several Underwriters are exercising
the option and the settlement date. The number of Option Securities to
be purchased by each Underwriter shall be the same percentage of the
total number of Option Securities to be
14
purchased by the several Underwriters as such Underwriter is purchasing
of the Underwritten Securities, subject to such adjustments as the
Representatives in their absolute discretion shall make to eliminate
any fractional shares.
(c) The Company understands that a portion of the Securities
may be offered and sold in the Canadian Jurisdictions by Citigroup
Global Markets Canada Inc. (the "Sub-Underwriter"), the Canadian
broker-dealer affiliate of Citigroup, pursuant to the Canadian
Prospectus. Any Securities sold by the Sub-Underwriter will be
purchased by the Sub-Underwriter from Citigroup at the Closing Date at
a price equal to the price set forth in Section 2(a) above or such
purchase price less an amount to be mutually agreed upon by the
Sub-Underwriter and Citigroup, which amount shall not be greater than
the underwriting commission set forth in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Underwritten Securities
and the Option Securities (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third Business Day prior to the
Closing Date) shall be made at 8:30 AM (New York City time) on February o, 2006
or at such time on such later date as the Representatives and the Company may
agree or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to Citigroup on behalf of
the Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the Representatives on not less than one day prior written notice
to the Company (which shall be within three Business Days after exercise of said
option) for the respective accounts of the several Underwriters, against payment
by the several Underwriters through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to an account specified by the Company. If settlement for the Option
Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
The purchase price per share and the underwriting commission
for the Securities sold or expected to be sold in Canada shall be payable in
Canadian dollars. The purchase price per share and the underwriting commission
for the Securities sold or expected to be sold in the United States or in other
countries shall be payable in U.S. dollars.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the
Prospectuses.
15
5. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will comply with the PREP Procedures and
General Instruction II.L of Form F-10 under the Act. Prior to the
termination of the offering of the Securities, 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 Representatives for their review prior to filing and will not
file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company will cause the Final
Prospectuses, properly completed, and any supplement thereto to be
filed, each in a form approved by the Representatives 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 Representatives of such timely filings. The Company
will promptly advise the Representatives (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 Securities, 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 Commission or its
staff for any amendment of the Registration Statement, or for any
supplement to the U.S. Prospectus or for any additional information,
(5) of any request by a Canadian Authority or any other regulatory
authority in Canada for any amendment or supplement to the Canadian
Prospectus or for any additional information, (6) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any notice that would prevent its use, or
the issuance by a Canadian Authority or any other regulatory authority
in Canada of any cease trading or similar order relating to the
Securities, or the institution or threatening of any proceeding for
those purposes, (7) of the receipt by the Company of any communication
from a Canadian Authority or any other regulatory authority in Canada
relating to the Canadian Prospectus, the offering of the Securities, or
the listing of the Securities on the Toronto Stock Exchange, (8) of the
receipt by the Company of any communication relating to the listing of
the Securities on the American Stock Exchange, and (9) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the occurrence of any such suspension or objection and,
upon such issuance, occurrence or objection, to obtain as soon as
possible the withdrawal of such stop order or relief from such
occurrence or prevention, including, if necessary, by filing an
amendment to the Registration Statement or Canadian Prospectus or a new
registration statement or Canadian Prospectus and using its best
efforts to have such amendment or new registration statement or
Canadian prospectus declared effective or qualified as soon as
practicable.
(b) The Company will prepare and file with the Canadian
Authorities, promptly after the Execution Time, and in any event no
later than 5:00 p.m. (New York
16
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 Execution Time, 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 prior to the filing of the U.S. Prospectus
pursuant to General Instruction II.L of Form F-10, any event occurs as
a result of which the Disclosure Package would include any untrue
statement of a material fact or would omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made at such time, not misleading,
the Company will (1) notify promptly the Representatives so that any
use of the Disclosure Package may cease until it is amended or
supplemented; (2) amend or supplement the Disclosure Package to correct
such statement or omission; and (3) supply any amendment or supplement
to the Representatives in such quantities as they may reasonably
request.
(e) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule
172 under the Act or the Canadian Securities Laws), any event occurs as
a result of which the Final Prospectuses as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made at such time not
misleading, or if it shall be necessary to amend the Registration
Statement, file a new registration statement or Canadian prospectus or
amend or supplement the Final Prospectuses to comply with the Act, the
Exchange Act, Canadian Securities Laws or the respective rules
thereunder, including in connection with use or delivery of the Final
Prospectuses, the Company promptly will (1) notify the Representatives
of such event; (2) prepare and file with the Commission, or the
Canadian Authorities, as applicable, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement or new
registration statement which will correct such statement or omission or
effect such compliance; (3) use its best efforts to have any amendment
to the Registration Statement or new registration statement declared
effective as soon as practicable in order to avoid any disruption in
use of the Prospectuses; and (4) supply any supplemented Prospectuses
to the Representatives in such quantities as the Representatives may
reasonably request.
(f) As soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act), the Company will make
generally available to its security holders and to the Representatives
an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(g) The Company will furnish to the Representatives and
counsel for the Underwriters and the Sub-Underwriter signed copies of
the Registration Statement (including exhibits thereto) and copies of
the Form F-X required to be filed with the
17
Commission pursuant to Form F-10, and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter, Sub-Underwriter or
dealer may be required by the Act or Canadian Securities Laws
(including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Act or the Canadian Securities Laws), as
many copies of each of the Preliminary Prospectuses, Prospectuses and
each Issuer Free Writing Prospectus and any supplement thereto (in the
English and French languages, as required) as the Representatives may
reasonably request.
(h) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as reasonably required for the
distribution of the Securities; provided that in no event shall the
Company be obligated 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 Securities, in any jurisdiction where it
is not now so subject or require registration of the Securities 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 not, without the prior written consent of
the Representatives, offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement or a
prospectus with the Commission or any Canadian Authority in respect of,
or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act, any other shares of Common Shares or any securities
convertible into, or exercisable, or exchangeable for, shares of Common
Shares; or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of this Agreement,
provided, however, that the Company may (i) grant options or interests,
or issue and sell Common Shares, pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company
in effect at the Execution Time, (ii) issue Common Shares in accordance
with its obligations under the Copper Canyon option agreement,
effective October 1, 2003, between Eagle Plains Resources Inc. and
SpectrumGold Inc., and (iii) issue Common Shares issuable upon the
conversion of securities or the exercise of options or warrants
outstanding at the Execution Time.
(j) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act, Canadian
Securities Laws or otherwise, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
18
(k) The Company agrees to pay all costs and expenses relating
to the offering of the Securities as contemplated by this Agreement,
the Preliminary Final Prospectuses and the Prospectuses, including,
without limitation: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), the Form F-X required to be
filed with the Commission pursuant to Form F-10, the U.S. Preliminary
Prospectus, the U.S. Preliminary Final Prospectus, the U.S. Prospectus,
and any Issuer Free Writing Prospectus and each amendment or supplement
to any of them; the preparation, printing or reproduction and filing
with the Canadian Authorities of the Canadian Preliminary Prospectus,
the Canadian Base PREP Prospectus and the Canadian Prospectus, and each
amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, the U.S. Preliminary Prospectus, the U.S. Prospectus, any
Issuer Free Writing Prospectus, the Canadian Preliminary Prospectus,
the Canadian Base PREP Prospectus and the Canadian Prospectus, and each
amendment or supplement to any of them as may, in each case, be
reasonably requested for use in connection with the offering and sale
of the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any
stamp or transfer taxes in connection with the original issuance and
sale of the Securities; (iv) the printing (or reproduction) and
delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the listing of the
Securities on the American Stock Exchange and the Toronto Stock
Exchange; (vi) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters and the Sub-Underwriter relating to such
registration and qualification); (vii) any filings required to be made
with the NASD (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such filings);
(viii) all marketing, transportation and other expenses incurred by or
on behalf of Company representatives in connection with presentations
to prospective purchasers of the Securities, including the cost of any
marketing consultants engaged by the Company or the Underwriters in
connection therewith; (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including U.S.,
Canadian, local and special counsel) for the Company; all fees and
expenses of the Company in connection with the translation of the
Canadian Preliminary Prospectus, the Canadian Base PREP Prospectus and
the Canadian Prospectus into the French language; and (xii) all other
costs and expenses incidental to the performance by the Company of its
obligations hereunder. Except as provided in this Section 5(k) and
Section 7, the Underwriters and the Sub-Underwriter shall pay all costs
and expenses incidental to the performance by the Underwriters and the
Sub-Underwriter of their obligations hereunder, including the fees and
expenses of counsel (including U.S., Canadian, local and special
counsel) and any experts or consultants, including Micon International
Limited, retained by the Representatives or the Sub-Underwriter in
connection with the offering of the Securities, and the Underwriters'
out-of-pocket expenses in connection with the offering of the
Securities.
19
(l) The Company agrees that, unless it obtains the prior
written consent of the Representatives, and each Underwriter and the
Sub-Underwriter, severally and not jointly, agrees with the Company
that, unless it has obtained or will obtain, as the case may be, the
prior written consent of the Company, it has not made and will not make
any offer relating to the Securities that would constitute an Issuer
Free Writing Prospectus or that would otherwise constitute a "free
writing prospectus" (as defined in Rule 405 under the Act) required to
be filed by the Company with the Commission or retained by the Company
under Rule 433 under the Act; provided that the prior written consent
of the parties hereto shall be deemed to have been given in respect of
the Free Writing Prospectuses included in Schedule III hereto. Any such
free writing prospectus consented to by the Representatives or the
Company is hereinafter referred to as a "Permitted Free Writing
Prospectus." The Company agrees that (x) it has treated and will treat,
as the case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus and (y) it has complied and will comply, as the
case may be, with the requirements of Rules 164 and 433 under the Act
applicable to any Permitted Free Writing Prospectus, including in
respect of timely filing with the Commission, legending and record
keeping.
(m) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Disclosure
Package and the Prospectuses under "Use of Proceeds".
(n) The Company shall cause Blake, Xxxxxxx & Xxxxxxx LLP to
deliver to the Underwriters and the Sub-Underwriter opinions, dated the
date of the filing of the French language versions of each of the
Canadian Preliminary Prospectus, the Canadian Base PREP Prospectus and
the Canadian Prospectus, to the effect that the French language version
of each such prospectus, together with each document incorporated by
reference therein (other than the financial statements and other
financial data contained therein or omitted therefrom), is in all
material respects a complete and proper translation of the English
language versions thereof. The Company shall cause
PricewaterhouseCoopers LLP to deliver to the Underwriters and the
Sub-Underwriter opinions, dated the date of the filing of the French
language versions of each of the Canadian Preliminary Prospectus, the
Canadian Base PREP Prospectus and the Canadian Prospectus, to the
effect that the financial statements and other financial data contained
or incorporated by reference in the French language version of each
such prospectus, is in all material respects a complete and proper
translation of the English versions thereof.
(o) The Company shall provide the Representatives with a draft
of any press release to be issued in connection with the offering of
the Securities, and will provide the Representatives and their counsel
sufficient time to comment thereon and will accept all reasonable
comments of the Representatives and their counsel on such press
releases.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Underwritten Securities and the Option Securities,
as the case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the Execution Time,
the Closing Date and any settlement date pursuant to Section 3 hereof, to the
accuracy of the statements of the Company made in any certificates
20
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Canadian Prospectus shall have been filed with the
Canadian Authorities within the applicable time period prescribed by
and in accordance with the PREP Procedures, all other steps or
proceedings shall have been taken that may be necessary in order to
qualify the Securities for distribution to the public in each of the
Canadian Jurisdictions; and no order suspending the distribution of the
Securities has been issued by any of the Canadian Authorities and no
proceedings for that purpose shall have been instituted or threatened.
(b) The U.S. Prospectus, or any supplement thereto will be
filed in the manner and within the time period thereby required by
General Instruction II.L. of Form F-10; any material required to be
filed by the Company pursuant to Rule 433(d) under the Act shall have
been filed with the Commission within the applicable time periods
prescribed for such filings by Rule 433 under the Act; and no stop
order suspending the effectiveness of the Registration Statement or any
notice that would prevent its use shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(c) The Company shall have requested and caused Xxxxxx &
Whitney LLP, United States counsel for the Company, to have furnished
to the Representatives their opinion, dated the Closing Date and
addressed to the Underwriters and the Sub-Underwriter, to the effect
that:
(i) each of Alaska Gold Company and NovaGold Resources
Alaska, Inc. (each a "U.S. Subsidiary" and collectively the
"U.S. Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, with
full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business
as described in the Disclosure Package and the U.S. Prospectus,
and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction
which requires such qualification:
(ii) all the outstanding shares of capital stock of
each U.S. Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable, and NovaGold
(Bermuda) Alaska Limited is the sole registered holder of the
capital stock of each U.S. Subsidiary and, to the knowledge of
such counsel, such capital stock is held by NovaGold (Bermuda)
Alaska Limited free and clear of any security interest, claim,
lien or encumbrance;
(iii) the Securities are duly listed, and admitted and
authorized for trading, subject to official notice of issuance,
on the American Stock Exchange;
(iv) to the knowledge of such counsel, there is no
franchise, contract or other document of a character required
to be filed as an exhibit to the Registration Statement which
is not filed as required;
(v) the statements included or incorporated by
reference in the Preliminary Final Prospectuses and Final
Prospectuses under the heading "Certain
21
Income Tax Considerations for U.S. Holders-Certain United
States Federal Income Tax Considerations" and "Risk
Factors-NovaGold may be a "passive foreign investment
company"..." insofar as such statements summarize legal
matters discussed therein, are accurate and fair summaries of
such legal matters in all material respects;
(vi) the Registration Statement has become effective
under the Act and the Form F-X was filed with the Commission
prior to the effectiveness of the Registration Statement; the
filing of the U.S. Prospectus, and any supplements thereto, has
been made in the manner and within the time periods required by
Form F-10 and the applicable rules and regulations of the
Commission; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or
any notice that would prevent its use has been issued, no
proceedings for that purpose have been instituted or
threatened, and the Registration Statement, and the U.S.
Prospectus (other than the financial statements and other
financial and statistical information contained therein as to
which such counsel need express no opinion) and the Form F-X
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder;
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Disclosure Package and the
U.S. Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940, as amended;
(viii) assuming the due authorization, execution and
delivery of this Agreement under the laws of the Province of
British Columbia and the federal laws of Canada applicable
therein, this Agreement (to the extent that execution and
delivery are governed by the laws of the State of New York) has
been duly executed and delivered by the Company;
(ix) under the laws of the State of New York relating
to submission of personal jurisdiction, the Company has,
pursuant to Section 17 of this Agreement, validly (i) submitted
to the non-exclusive jurisdiction of any federal or state court
in the City, County and State of New York, in any action based
on or under this Agreement, and (ii) appointed CT Corporation
as its authorized agent for the purposes described in Section
17 of this Agreement;
(x) no consent, approval, authorization, filing with
or order of any U.S. court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the U.S. Preliminary
Final Prospectus and the U.S. Prospectus and such other
approvals (specified in such opinion) as have been obtained;
22
(xi) neither the issue and sale of the Securities, nor
the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or its subsidiaries pursuant to any
U.S. statute, law, rule, regulation, judgment, order or decree
applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its or their properties;
and
(xii) to the knowledge of such counsel, no holders of
securities of the Company have rights to the registration of
such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
States of New York and Alaska or the Federal laws of the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials. In addition to rendering the opinions set forth above, such
counsel shall also include a statement to the effect that such counsel
has participated in the preparation of the Registration Statement, the
Disclosure Package and the U.S. Prospectus and in conferences with
officers and other representatives of the Company, Canadian counsel for
the Company, representatives of the independent accountants for the
Company, counsel for the Underwriters and representatives of the
Underwriters at which the contents of the Registration Statement, the
Disclosure Package and U.S. Prospectus and related matters were
discussed and although such counsel has not independently verified, and
(except as to those matters and to the extent set forth in the opinions
referred to in subsection (v) of this Section 6(c)) is not passing
upon and does not assume any responsibility for, the factual accuracy,
completeness or fairness of the statements contained in the
Registration Statement, the Disclosure Package and U.S. Prospectus, on
the basis of such participation, no facts have come to such counsel's
attention which have caused such counsel to believe that (i) on the
Effective Date, the Registration Statement contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) the documents specified in a schedule to
such counsel's letter, consisting of those included in the Disclosure
Package, and the price to the public, the number of Underwritten
Securities, the number of Option Securities and the underwriting
commission set forth on the cover of the U.S. Prospectus, when taken as
a whole, as of the Execution Time, contained any untrue statement of a
material fact or omitted to state any 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) as of the date of the
U.S. Prospectus and as of the Closing Date, the U.S. Prospectus
included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading
(in each case, other than the financial statements and other financial
and
23
statistical information, and the information derived from the reports
of or attributed to persons named in the U.S. Preliminary Final
Prospectus and the U.S. Prospectus under the heading "Interest of
Experts", included or incorporated by reference therein, as to which
such counsel need express no belief).
References to the U.S. Prospectus in this paragraph (c) shall also
include any supplements thereto at the Closing Date.
(d) The Company shall have requested and caused Blake, Xxxxxxx
& Xxxxxxx LLP, Canadian counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed
to the Underwriters and the Sub-Underwriter, to the effect that:
(i) each of the Company and NovaGold Canada Inc. (the
"Canadian Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing with respect
to the filing of returns under the laws of the jurisdiction in
which it is chartered or organized, with all necessary
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as
described in the Preliminary Final Prospectuses and the
Prospectuses, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification;
(ii) all the outstanding shares of capital stock of
the Canadian Subsidiary as reflected in the securities register
of the Canadian Subsidiary are registered in the name of the
Company;
(iii) the Company's authorized equity capitalization is
as set forth in the Preliminary Final Prospectuses and the
Prospectuses; the share capital of the Company conforms in all
material respects to the description thereof contained in the
Canadian Prospectus; the Securities have been duly and validly
authorized and allotted, and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will
be fully paid and nonassessable; the Securities have been
conditionally approved for listing on the Toronto Stock
Exchange; the certificates for the Common Shares comply with
all applicable statutory requirements, with any applicable
requirements of the memorandum of association and articles of
association of the Company, with the provisions of the
Companies Act (Nova Scotia) relating thereto and the
requirements of the Toronto Stock Exchange; the holders of
outstanding share capital of the Company are not entitled to
preemptive or other rights to subscribe for the Securities
under the constating documents of the Company or the Material
Agreements;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property, except as disclosed in the Preliminary
Final Prospectuses and the Prospectuses;
24
(v) the statements included in the Preliminary Final
Prospectuses and the Prospectuses under the headings "Certain
Income Tax Considerations for U.S. Holders-Certain Canadian
Federal Income Tax Considerations", "Certain Income Tax
Considerations for Canadian Holders" and "Description of Share
Capital", and 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 or documents
discussed therein, are accurate and fair summaries of such
legal matters or documents in all material respects;
(vi) 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 under Canadian
Securities Laws to permit the Securities to be offered, sold
and delivered, as contemplated by this Agreement in the
Canadian Jurisdictions; to the knowledge of such counsel, no
order suspending the distribution of the Securities has been
issued, no proceedings for that purpose have been instituted or
threatened by any of the Canadian Authorities;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) neither the issue and sale of the Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or its subsidiaries pursuant to, (i)
the charter or by-laws of the Company or its subsidiaries, (ii)
the terms of any Material Agreement, or (iii) any Canadian
statute, law, rule, regulation, judgment, order or decree
applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its or their properties;
(ix) 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;
(x) The Company is a "reporting issuer" under the
securities legislation of the Canadian Jurisdictions and is
not on the list of defaulting issuers maintained thereunder;
(xi) 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 this Agreement,
provided that such choice of law is bona fide (in the sense
that it was
25
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;
(xii) 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 this Agreement and to the provisions in this Agreement
whereby the Company submits to the non-exclusive jurisdiction
of a New York Court;
(xiii) If this 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 xi 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
this Agreement (and in particular, but without limitation, not
with respect to matters of procedure), provided that none of
the provisions of this 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;
(xiv) 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 this 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
26
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;
(xv) All laws of the Province of Quebec relating to the
use of the French language have been complied with in
connection with the offering and sale of the Securities to
purchasers in the Province of Quebec if such purchasers receive
copies of the French and English language versions of the
Canadian Prospectus and forms of order and confirmation in the
French language or a bilingual form or copies of the French
language version of the Canadian Prospectus and forms of order
and confirmation in the French language only or, in the case of
individuals so requesting in writing, copies of the English
language version of the Canadian Prospectus and forms of order
and confirmation in the English language or in a bilingual
form; and
(xvi) 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
Securities 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 Securities in the manner contemplated
in this Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Province of British Columbia or the Federal laws of Canada, to the
extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. In addition
to rendering the opinions set forth above, such counsel shall also
include a statement to the effect that such counsel has participated in
the preparation of the Disclosure Package (except that the reference to
"U.S. Preliminary Final Prospectus" in the definition of "Disclosure
Package" herein shall be replaced with "Canadian Base PREP Prospectus"
for the purpose of such counsel's opinion), and the Canadian Prospectus
and in conferences with officers and other representatives of the
Company, U.S. counsel for the Company, representatives of the
independent accountants for the Company, counsel for the Underwriters
and representatives of the Underwriters at which the contents of the
Disclosure Package and Canadian Prospectus and related matters were
discussed and although such counsel has not independently verified, and
(except as to those matters and to the extent set forth in the opinions
referred to in subsections (v) of this Section 6(d)) is not passing
upon and does not assume any responsibility for, the factual accuracy,
completeness or fairness of the statements
27
contained in the Disclosure Package and Canadian Prospectus, on the
basis of such participation, no facts have come to such counsel's
attention which have caused such counsel to believe that (i) the
documents specified in a schedule to such counsel's letter, consisting
of those included in the Disclosure Package, and the price to the
public, the number of Underwritten Securities, the number of Option
Securities and the underwriting commission set forth on the cover of
the Canadian Prospectus, when taken as a whole, as of the Execution
Time, contained any untrue statement of a material fact or omitted to
state any 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) as of the date of the Canadian Prospectus and
as of the Closing Date, the Canadian Prospectus included an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (in each case,
other than the financial statements and other financial and statistical
information, and the information derived from the reports of or
attributed to persons named in the Canadian Base PREP Prospectus and
the Canadian Prospectus under the heading "Interest of Experts",
included or incorporated by reference therein, as to which such counsel
need express no belief).
References to the Final Prospectuses in this paragraph (d) shall also
include any supplements thereto at the Closing Date.
(e) The Representatives shall have received at the Closing
Date an opinion of local Bermuda counsel with respect to NovaGold
Resources (Bermuda) Limited and NovaGold (Bermuda) Alaska Limited
(together, the "Bermuda Subsidiaries"), stating in effect that each
Bermuda Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Bermuda; all of the
issued and outstanding capital stock of each Bermuda Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and, is owned by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and, to the knowledge of such counsel, the capital stock of the
U.S. Subsidiaries owned by NovaGold (Bermuda) Alaska Limited are held
free and clear of any security interest, claim, lien or encumbrance.
(f) The Representatives shall have received from Blake,
Xxxxxxx & Xxxxxxx LLP, Guess & Xxxx, P.C. and Xxxxxx & Xxxxxxx LLP,
such title opinions, dated the Closing Date and addressed to the
Underwriters and the Sub-Underwriter, with respect to the ownership of
the Mining Claims in respect of the Galore Creek, Xxxxxx, Nome and
Ambler properties as the Representatives may accept, acting reasonably.
(g) The Representatives shall have received from Xxxxxx Xxxxxx
Gervais LLP, Canadian counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Underwriters and
the Sub-Underwriter, with respect to the issuance and sale of the
Securities, the Disclosure Package (except that the reference to "U.S.
Preliminary Final Prospectus" in the definition of "Disclosure Package"
herein shall be replaced with "Canadian Base PREP Prospectus" for the
purpose of such counsel's opinion), the Prospectuses (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have
28
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received from Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, United States counsel for the
Underwriters, such opinion or opinions, dated the Closing Date and
addressed to the Underwriters and the Sub-Underwriter, with respect to
the issuance and sale of the Securities, the Registration Statement,
the Disclosure Package, the U.S. Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(i) The Company shall have furnished to the Representatives
and the Sub-Underwriter a certificate of the Company, signed by the
Chairman of the Board or the President and the Chief Financial Officer
of the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Registration Statement,
the Preliminary Final Prospectuses, the Disclosure Package, the Final
Prospectuses and any supplements or amendments thereto and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any notice that would prevent its use
has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened;
(iii) no order suspending the distribution of the
Securities has been issued by any of the Canadian Authorities
and no proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
(iv) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectuses (exclusive of any supplement thereto), there has
been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Disclosure
Package and the Prospectuses (exclusive of any supplement
thereto).
(j) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives and
the Sub-Underwriter, at the Execution Time and at the Closing Date,
comfort letters (which may refer to letters previously delivered to one
or more of the Representatives), dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the
29
Representatives. Such comfort letters should be in addition to any
other comfort letters or consents required to be filed with the
Canadian Authorities.
(k) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and in the Prospectuses (exclusive
of any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(i) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in the
Disclosure Package and the Prospectuses (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated
by the Registration Statement (exclusive of any amendment thereof), the
Disclosure Package and the Prospectuses (exclusive of any supplement
thereto).
(l) Prior to the Closing Date, the Company shall have
furnished to the Representatives 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 17 hereof,
and satisfactory evidence from CT Corporation accepting its appointment
as such agent.
(m) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(n) The Securities shall have been listed and admitted and
authorized for trading on the American Stock Exchange and shall have
been conditionally approved for listing on the Toronto Stock Exchange,
and satisfactory evidence of such actions shall have been provided to
the Representatives.
(o) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each person set forth on Schedule IV hereto addressed to
the Representatives.
(p) The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
30
The documents required to be delivered by this Section 6 shall
be delivered at the office of Blake, Xxxxxxx & Xxxxxxx LLP, Canadian counsel for
the Company, at Suite 2600, Three Bentall Centre, 000 Xxxxxxx Xxxxxx, XX Xxx
00000, Xxxxxxxxx, XX, X0X 0X0, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof 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 other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally through
Citigroup on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and the Sub-Underwriter, the directors, officers,
employees and agents of each Underwriter and the Sub-Underwriter and each person
who controls any Underwriter and the Sub-Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act, the Canadian Securities Laws or other
Federal, state or provincial statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for
the registration of the Securities as originally filed or in any amendment
thereof, or in the Preliminary Prospectuses, the Preliminary Final Prospectuses,
the Final Prospectuses, any Issuer Free Writing Prospectus, or in any amendment
thereof or supplement thereto, 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, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon 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 the Sub-Underwriter through
the Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter and the Sub-Underwriter severally and not
jointly agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Registration Statement or
the Canadian Prospectus, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to written information relating to such
Underwriter or the Sub-Underwriter furnished to the Company by or on
behalf of such Underwriter or the Sub-Underwriter through the
Representatives specifically for inclusion in the
31
documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the statements set
forth in the last paragraph of the cover page regarding delivery of the
Securities and, under the heading "Underwriting", (i) the list of
Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances
and (iii) the paragraphs related to stabilization, syndicate covering
transactions and penalty bids in the Preliminary Final Prospectuses and
the Final Prospectuses constitute the only information furnished in
writing by or on behalf of the several Underwriters or the
Sub-Underwriter for inclusion in the Preliminary Final Prospectuses or
the Final Prospectuses.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party acting
reasonably. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
32
(d) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the
Underwriters and the Sub-Underwriter severally agree to contribute to
the aggregate losses, claims, damages and liabilities (including legal
or other expenses reasonably incurred in connection with investigating
or defending same) (collectively "Losses") to which the Company and one
or more of the Underwriters and the Sub-Underwriter may be subject in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Underwriters and the
Sub-Underwriter on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter or the
Sub-Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter or the
Sub-Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company, the Underwriters and the Sub-Underwriter severally shall
contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on
the one hand and of the Underwriters and the Sub-Underwriter on the
other in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters and the
Sub-Underwriter shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page
of the Prospectuses. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information provided by the Company on
the one hand or the Underwriters and the Sub-Underwriter on the other,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The Company, the Underwriters and the Sub-Underwriter
agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 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 who controls an Underwriter or the
Sub-Underwriter within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of an Underwriter or
the Sub-Underwriter shall have the same rights to contribution as such
Underwriter or Sub-Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement
and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their
33
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Securities set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectuses or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Shares shall have been suspended by the
Commission, the Canadian Authorities, the American Stock Exchange or the Toronto
Stock Exchange or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on any of such Exchanges, (ii) any inquiry, investigation or other
proceeding is commenced or any order or ruling is issued (other than an inquiry,
investigation or proceeding, or an order or ruling based upon the activities or
alleged activities of the Underwriters), or there is any change of law or the
interpretation or administration thereof, which operates to prevent or restrict
the trading in the Common Shares or the offering of the Securities as
contemplated by this Agreement and the Prospectuses; (iii) a banking moratorium
shall have been declared either by U.S. federal, New York State or Canadian
federal authorities, (iv) there shall have occurred any outbreak or escalation
of hostilities, act of terrorism, declaration by the United States or Canada of
a national emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Preliminary Final Prospectuses
or the Prospectuses (exclusive of any supplement thereto), or (v) there shall
have occurred any change, or any development involving a prospective change, in
or affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in the Disclosure Package and the Prospectuses (exclusive of any
supplement thereto), the effect of which is, in the sole judgment of the
Representatives, is such as to make it inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Preliminary Final
Prospectuses or the Prospectuses (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the
34
Underwriters and the Sub-Underwriter set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, Sub-Underwriter or the Company or any
of the officers, directors, employees, agents or controlling persons referred to
in Section 8 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Representatives, will be mailed, delivered or
telefaxed to the Citigroup Global Markets Inc. General Counsel (fax no.: (212)
000-0000) and confirmed to the General Counsel, Citigroup Global Markets Inc.,
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel;
or, if sent to the Company, will be mailed, delivered or telefaxed to (604)
669-6272 and confirmed to it at 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx X0X 154, attention of X.X. (Don) MacDonald.
13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers, directors,
employees, agents and controlling persons referred to in Section 8 hereof, and
no other person will have any right or obligation hereunder.
14. No fiduciary duty. The Company hereby acknowledges that (a) the purchase and
sale of the Securities pursuant to this Agreement is an arm's-length commercial
transaction between the Company, on the one hand, and the Underwriters and any
affiliate through which it may be acting, on the other, (b) the Underwriters are
acting as principal and not as an agent or fiduciary of the Company and (c) the
Company's engagement of the Underwriters in connection with the offering and the
process leading up to the offering is as independent contractors and not in any
other capacity. Furthermore, the Company agrees that it is solely responsible
for making its own judgments in connection with the offering (irrespective of
whether any of the Underwriters has advised or is currently advising the Company
on related or other matters). The Company agrees that it will not claim that the
Underwriters have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Company, in connection with such
transaction or the process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.
16. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
17. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By the
execution and delivery of this Agreement, the Company (i) acknowledges that it
has, by separate written instrument, irrevocably designated and appointed CT
Corporation System (or any successor) (together with any successor, the "Agent
for Service"), as its authorized agent upon which process may be served in any
suit or proceeding arising out of or relating to this Agreement or the
Securities, that may be instituted in any federal or state court in the State of
New York, or
35
brought under federal or state securities laws, and acknowledges that the Agent
for Service has accepted such designation, (ii) submits to the jurisdiction of
any such court in any such suit or proceeding, and (iii) agrees that service of
process upon the Agent for Service (or any successor) and written notice of said
service to the Company (mailed or delivered to its Chief Financial Officer at
its principal office in Vancouver, Canada), shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
The Company further agrees to take any and all action, including the execution
and filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment of the Agent for Service in full force
and effect so long as any of the Securities shall be outstanding.
18. Judgment Currency. In respect of any judgment or order given or made for any
amount due hereunder that is expressed and paid in a currency (the "Judgment
Currency") other than United States dollars, the Company will indemnify each
Underwriter against any loss incurred by such Underwriter as a result of any
variation as between (i) the rate of exchange at which the United States dollar
amount is converted into the judgment currency for the purpose of such judgment
or order and (ii) the rate of exchange at which an Underwriter is able to
purchase United States dollars with the amount of judgment currency actually
received by such Underwriter. The foregoing indemnity shall constitute a
separate and independent obligation of the Company and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "rate of exchange" shall include any premiums and costs of exchange payable
in connection with the purchase of or conversion into United States dollars.
19. WAIVER OF TRIAL BY JURY. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, THE
PARTIES HERETO CONSENT TO TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER OR THEIR SUCCESSORS
IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
REGARDLESS OF THE FORM OF ACTION OR PROCEEDING.
20. Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same agreement.
21. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
22. Definitions. The terms which follow, when used in this Agreement, shall have
the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or Vancouver, British Columbia.
"Canadian Authorities" has the meaning set forth in Section
1(a) hereof.
36
"Canadian Base PREP Prospectus" shall mean the final short
form base PREP prospectus, dated February 2, 2006, of the Company (in
both the English and French languages unless the context indicates
otherwise) omitting the PREP Information filed with the Canadian
Authorities for which a MRRS Decision Document has been obtained from
the Reviewing Authority.
"Canadian Jurisdictions" shall mean, collectively, each of the
provinces of Canada.
"Canadian Preliminary Prospectus" shall mean the preliminary
short form base PREP prospectus, dated January 24, 2006, of the Company
(in both the English and French languages unless the context indicates
otherwise) filed with the Canadian Authorities.
"Canadian Prospectus" shall mean the short form supplemented
PREP prospectus consisting of the Canadian Base PREP Prospectus (in
both the English and French languages unless the context indicates
otherwise) incorporating the PREP Information filed with the Canadian
Authorities.
"Canadian Securities Laws" shall mean the applicable
securities legislation of the Canadian Jurisdictions and the respective
rules, regulations and written and published policies thereunder.
"Closing Date" has the meaning set forth in Section 3 hereof.
"Commission" shall mean the Securities and Exchange
Commission.
"Disclosure Package" shall mean (i) the U.S. Preliminary Final
Prospectus, (ii) the Issuer Free Writing Prospectuses, if any,
identified in Schedule III hereto, and (iii) any other Free Writing
Prospectus that the parties hereto shall hereafter expressly agree in
writing to treat as part of the Disclosure Package.
"Effective Date" shall mean each date and time that the
Registration Statement and any post-effective amendment or amendments
became or become effective or any prospectus supplement is filed
pursuant to General Instruction II.L of Form F-10.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Free Writing Prospectus" shall mean a free writing
prospectus, as defined in Rule 405.
"Issuer Free Writing Prospectus" shall mean an issuer free
writing prospectus, as defined in Rule 433.
37
"Material Adverse Effect" shall have the meaning set forth in
Section 1(v) hereof.
"Material Agreements" means, collectively: the exploration and
lode mining lease, effective May 1, 1995, between Calista Corporation
and Placer Dome U.S. Inc.; the surface use agreement, effective June 5,
1995, between The Kuskokwim Corporation and Placer Dome U.S. Inc.; the
mining venture agreement, effective November 13, 2002, between Placer
Dome U.S. Inc. and NovaGold Resources Alaska, Inc.; the exploration and
option agreement, dated March 13, 2002, between Golden Glacier, Inc.
and NovaGold Resources Alaska, Inc. and the underlying mining leases
between Bering Straits Native Corporation and Golden Glacier, Inc.
referenced therein; the option agreement, dated July 31, 2003, as
amended, among QIT-Fer et Titane Inc., Xxxxxx Bay Mining and Smelting
Co., Limited, SpectrumGold Inc. (now NovaGold Canada Inc.) and Stikine
Copper Limited; the Copper Canyon option agreement, effective October
1, 2003, between Eagle Plains Resources Inc. and SpectrumGold Inc. (now
NovaGold Canada Inc.); the option agreement, dated March 26, 2004,
between Pioneer Metals Corporation and SpectrumGold Inc. (now NovaGold
Canada Inc.); the exploration and option to earn LLC membership
interest, dated March 22, 2004, as amended, among Alaska Gold Company,
Kennecott Exploration Company and Kennecott Arctic Company; and such
other agreements as may be identified on or before two Business Days
prior to the Closing Date by: (i) the Company to the Underwriters as
being a material agreement; and (ii) the Underwriters, acting
reasonably, to the Company;
"Material Subsidiaries" means Alaska Gold Company, NovaGold
Resources Alaska, Inc., NovaGold Canada Inc., NovaGold Resources
(Bermuda) Limited and NovaGold (Bermuda) Alaska Limited.
"MRRS" shall have the meaning set forth in Section 1(a)
hereof.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Option Securities" has the meaning set forth in the preamble
hereof.
"Preliminary Final Prospectuses" means collectively, the
Canadian Base PREP Prospectus and the U.S. Final Preliminary
Prospectus.
"Preliminary Prospectuses" means collectively, the Canadian
Preliminary Prospectus and the U.S. Preliminary Prospectus.
"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.
"PREP Procedures" means the rules and procedures established
pursuant to the Canadian Securities Laws by the Canadian Authorities in
National Instrument 44-103 - Post-Receipt Pricing for the pricing of
securities after the final receipt for a prospectus has been obtained.
38
"Prospectuses" means collectively, the U.S. Prospectus and the Canadian
Prospectus.
"Registration Statement" shall mean the registration statement referred
to in paragraph 1(b) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time in the
form in which it shall become effective) and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date, shall also mean
such registration statement as so amended, as the case may be.
"Representatives" has the meaning set forth in the preamble hereof.
"Reviewing Authority" has the meaning set forth in Section 1(a) hereof.
"Securities" has the meaning set forth in the preamble hereof.
"settlement date" has the meaning set forth in Section 1(c) hereof.
"Sub-Underwriter" has the meaning set forth in Section 2(c) hereof.
"U.S. Preliminary Final Prospectus" has the meaning set forth in
Section 1(b) hereof.
"U.S. Preliminary Prospectus" has the meaning set forth in Section 1(b)
hereof.
"U.S. Prospectus" has the meaning set forth in Section 1(b) hereof.
"Underwriters" has the meaning set forth in the preamble hereof.
"Underwritten Securities" has the meaning set forth in the preamble
hereof.
39
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
NovaGold Resources Inc.
By:
--------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first written above.
Citigroup Global Markets Inc.
Bear, Xxxxxxx & Co. Inc.
RBC Dominion Securities Inc.
By: Citigroup Global Markets Inc.
By:
-------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
Citigroup Global Markets Canada Inc.
By:
-------------------------------
Name:
Title:
As Sub-Underwriter
40
SCHEDULE I
Pricing Information
1. The public offering per share for the Securities shall be Cdn$o per share for
Securities initially offered in Canada or US$o per share for Securities
initially offered in the United States or in other countries.
2. The purchase price per share for the Securities sold or expected to be sold
in Canada to be paid by the several underwriters shall be Cdn$o, being an amount
equal to the public offering price set forth above less Cdn$o per share,
representing the underwriting commission as set forth in paragraph 3 below; the
purchase price per share for the Securities sold or expected to be sold in the
United States or in other countries to be paid by the several underwriters shall
be US$o, being an amount equal to the public offering price set forth above less
US$o, representing the underwriting commission as set forth in paragraph 3
below.
3. The underwriting commission per share payable for the Securities to be paid
by the Company shall be Cdn$o per share for Securities sold or expected to be
sold in Canada or US$o per share for Securities sold or expected to be sold in
the United States or other countries.
SCHEDULE II
NUMBER OF
UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
----------------------------------------------------- ----------------
Citigroup Global Markets Inc.........................
Bear, Xxxxxxx & Co. Inc..............................
RBC Dominion Securities Inc..........................
----------------
Total....................................... 12,000,000
================
SCHEDULE III
Schedule of Free Writing Prospectuses included in the Disclosure Package
None
SCHEDULE IV
Lock-up Letters
Xxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. (Don) XxxXxxxxx
Xxxxxx X. XxXxxxxxx
Xxxx XxXxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxx Xxx Xxxxxxxxxxxx
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF OFFICER OR DIRECTOR
OF NOVAGOLD RESOURCES INC.]
NovaGold Resources Inc.
Public Offering of Common Shares
, 2006
Citigroup Global Markets Inc.
Bear, Xxxxxxx & Co. Inc.
RBC Capital Markets
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between NovaGold
Resources Inc., a Nova Scotia corporation (the "Company"), and [each of] you,
relating to an underwritten public offering of Common Shares, $ par value
(the "Common Shares"), of the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned will not, without the prior written consent of Citigroup Global
Markets Inc., offer, sell, contract to sell, pledge or otherwise dispose of, (or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the undersigned or
any affiliate of the undersigned or any person in privity with the undersigned
or any affiliate of the undersigned), directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any share capital of the Company or any
securities convertible into or exercisable or exchangeable for such share
capital, or publicly announce an intention to effect any such transaction, for a
period of 90 days after the date of the Underwriting Agreement, other than
shares of Common Shares disposed of as bona fide gifts approved by Citigroup
Global Markets Inc.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
[SIGNATURE OF OFFICER OR DIRECTOR]
[NAME AND ADDRESS OF OFFICER OR DIRECTOR]
