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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of, April 2006
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Commission File Number 000-13727
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Pan American Silver Corp
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(Translation of registrant's name into English)
1500-625 Howe Street, Vancouver BC Canada V6C 2T6
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40F:
Form 20-F Form 40-F X
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Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained
in this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_______________
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DOCUMENTS INCLUDED AS PART OF THIS REPORT
1 Underwriting Agreement, dated April 11, 2006.
2 Expert Consents.
This Report on Form 6-K is incorporated by reference into the Registration
Statement on Form F-10 of the Registrant, which became effective upon filing of
Amendment No. 1 thereto with the Securities and Exchange Commission on February
10, 2005 (File No. 333-122152)
DOCUMENT 1
EXECUTION COPY
COMMON SHARES
PAN AMERICAN SILVER CORP.
UNDERWRITING AGREEMENT
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April 11, 2006
BEAR, STEARNS & CO. INC.
HARRIS NESBITT CORP.
As Representatives of the
several Underwriters named in
Schedule I attached hereto (the "Representatives")
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Ladies/Gentlemen:
Pan American Silver Corp., a corporation organized and existing
under the laws of British Columbia (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
5,750,000 of its common shares (the "Firm Shares"), without par value, and,
for the sole purpose of covering over-allotments in connection with the sale
of the Firm Shares, at the option of the Underwriters, up to an additional
531,407 of its common shares (the "Additional Shares"). The Firm Shares and
any Additional Shares purchased by the Underwriters are referred to herein as
the "Shares". Bear, Stearns & Co. Inc. ("Bear Stearns") and Harris Nesbitt
Corp. ("Harris Nesbitt") are acting as lead managers (the "Lead Managers") in
connection with the offering and sale of the Shares contemplated herein (the
"Offering").
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has prepared and filed a preliminary short form base
shelf prospectus dated January 18, 2005 (the "Preliminary Base Short
Prospectus") and a final short form base shelf prospectus dated February 9,
2005 (the "Final Base Shelf Prospectus") in respect of up to US$150,000,000 of
the Company's common shares, debt securities, warrants and subscription
receipts with the British Columbia Securities Commission (the "Reviewing
Authority") and the Canadian securities regulatory authorities (collectively,
the "Canadian Qualifying Authorities") in each of Alberta, British Columbia,
Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario,
Quebec Prince Edward Island and Saskatchewan (the "Qualifying Provinces"); and
the Reviewing Authority has issued an MRRS decision document under National
Policy 43-201: Mutual Reliance Review System for Prospectuses and AIFs (an
"MRRS Decision Document") on behalf of the Canadian Qualifying Authorities for
each of the Preliminary Base Shelf Prospectus and the Final Base Shelf
Prospectus. The term "Canadian Base Prospectus" means the Final Base Shelf
Prospectus, including documents incorporated therein by reference, at the time
the Reviewing Authority issued an MRRS Decision Document with respect thereto
in accordance with the rules and procedures established under all applicable
securities laws in each of the Qualifying Provinces and the respective
regulations and rules under such laws together with applicable published
policy statements and instruments of the securities regulatory authorities in
the Qualifying Provinces ("Canadian Securities Laws"), National Instrument
44-101: Short Form Prospectus Distributions and National Instrument 44-102:
Shelf Distributions (together, the "Shelf Procedures"). The term "Canadian
Preliminary Prospectus" means the prospectus supplement (the "Canadian
Preliminary Prospectus Supplement") relating to the Offering, which excluded
certain pricing information, filed with the Canadian Qualifying Authorities in
accordance with the Shelf Procedures on April 6, 2006, together with the
Canadian Base Prospectus, including all documents incorporated therein by
reference. The term "Canadian Prospectus" means the prospectus supplement (the
"Canadian Prospectus Supplement") relating to the Offering, which includes the
pricing information omitted from the Canadian Preliminary Prospectus, to be
dated the date hereof and filed with the Canadian Qualifying Authorities in
accordance with the Shelf Procedures, together with the Canadian Base
Prospectus, including all documents incorporated therein by reference.
(b) The Reviewing Authority has issued an MRRS Decision Document dated
February 11, 2005 with respect to the Canadian Base Prospectus, and no order
suspending the distribution of any of the securities of the Company has been
issued by the Reviewing Authority and no proceeding for that purpose has been
initiated or, to the best of the Company's knowledge, threatened by the
Reviewing Authority, and any request on the part of the Reviewing Authority
for additional information has been complied with.
(c) Each document filed or to be filed with the Canadian Qualifying
Authorities and incorporated by reference in the Canadian Prospectus complied,
as at the applicable filing date, or will comply when so filed, in all
material respects with the requirements of Canadian Securities Laws and the
Shelf Procedures and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading;
(d) Since the time that the Reviewing Authority issued an MRRS Decision
Document on behalf of the Canadian Qualifying Authorities for the Canadian
Base Prospectus, no document with respect to the Canadian Base Prospectus or
the Registration Statement (as defined below), any amendment thereto or any
document incorporated by reference therein, has been filed or transmitted for
filing with the Canadian Qualifying Authorities or the Commission (as defined
below) by or on behalf of the Company, except for the Canadian Prospectus
Supplement in the form previously delivered to the Underwriters and any other
document, of which copies have been provided to the Underwriters;
(e) As of the date of the execution of this Agreement and as of the
Closing Date (as defined below) the information and statements contained in
the Canadian Prospectus constitute, and will constitute, full, true and plain
disclosure of all material facts relating to the Company; provided, however,
that this representation and warranty shall not apply to any information
contained in or omitted from the Canadian Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Lead Managers specifically for use
therein. The parties hereto agree that such information provided by or on
behalf of any Underwriter through the Lead Managers consists solely of the
material referred to in Section 16 hereof.
(f) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement under the Securities Act of 1933,
as amended (the "Securities Act") and the rules and regulations of the
Commission (the "Rules and Regulations") on Form F-10 (Registration No.
333-122152) on January 19, 2005 and Amendment No. 1 thereto on February 10,
2005, providing for the registration of up to US$150,000,000 of the Company's
common shares, debt securities, warrants and subscription receipts. Such
registration statement, as amended, which includes the Canadian Base
Prospectus (with such deletions therefrom and additions thereto as are
permitted or required by Form F-10 and the applicable Rules and Regulations),
each in the form previously delivered to you, including exhibits to such
registration statement and all documents incorporated by reference in the
prospectus contained therein, became effective pursuant to Rule 467(a) under
the Securities Act. Such registration statement, as, amended, including any
exhibits and all documents incorporated therein by reference, as of the time
it became effective, is referred to herein as the "Registration Statement". In
connection with the filing of the Registration Statement, the Company has
filed with the Commission as of January 19, 2005 an appointment of agent for
service of process upon the Company on Form F-X under the Securities Act. The
prospectus included in the Registration Statement at the time it became
effective is referred to herein as the "U.S. Base Prospectus", and the U.S.
Base Prospectus together with the prospectus supplement relating to the
Shares, in the form first filed with the Commission pursuant to General
Instruction II.L. of Form F-10 (the "U.S. Prospectus Supplement") is referred
to herein as the "U.S. Prospectus". Any preliminary prospectus supplement
filed with the Commission pursuant to General Instruction II.L. of Form F-10
together with the U.S. Base Prospectus is hereafter referred to as a "U.S.
Preliminary Prospectus"; and the U.S. Preliminary Prospectus relating to the
Shares, as amended or supplemented immediately prior to the Applicable Time
(as defined below), is hereafter referred to as the "Pricing Prospectus". Any
"issuer free writing prospectus" (as defined in Rule 433 under the Securities
Act) relating to the Shares is hereafter referred to as an "Issuer Free
Writing Prospectus"; and the Pricing Prospectus, as supplemented by the
information listed in Annex IV hereto, taken together, are hereafter referred
to collectively as the "Pricing Disclosure Package". Any reference herein to
any U.S. Preliminary Prospectus or the U.S. Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant
to Form F-10 that were filed with the Reviewing Authority or the Commission on
or before the date of such U.S. Preliminary Prospectus or U.S. Prospectus, as
the case may be; and any reference herein to any "amendment" or "supplement"
to any U.S. Preliminary Prospectus or the U.S. Prospectus shall be deemed to
refer to and include (i) the filing of any document with the Reviewing
Authority or the Commission after the date of such U.S. Preliminary Prospectus
or U.S. Prospectus, as the case may be, which is incorporated therein by
reference and (ii) any such document so filed.
The Company was not an "ineligible issuer" (as defined in Rule 405
under the Securities Act) as of the eligibility determination date for
purposes of Rules 164 and 433 under the Securities Act with respect to the
Offering contemplated hereby.
All references in this Agreement to the Registration Statement, any
U.S. Preliminary Prospectus, Issuer Free Writing Prospectus or the U.S.
Prospectus, or any amendments or supplements to any of the foregoing, shall be
deemed to include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System.
(g) The Registration Statement complies and the U.S. Prospectus and any
further amendments or supplements to the Registration Statement or the U.S.
Prospectus will comply in all material respects with the applicable provisions
of the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Rules and Regulations, and do not and will not, as of
the applicable effective date as to each part of the Registration Statement
and as of the applicable filing date as to the U.S. Prospectus and any
amendment thereof or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
information contained in or omitted from the Registration Statement or the
U.S. Prospectus or any amendment thereof or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through the Lead Managers specifically for use
therein. The parties hereto agree that such information provided by or on
behalf of any Underwriter through the Lead Managers consists solely of the
material referred to in Section 16 hereof.
(h) No order preventing or suspending the use of any U.S. Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each U.S. Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the applicable provisions of
the Securities Act, the Exchange Act and the Rules and Regulations, and did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any information contained in or omitted from any U.S. Preliminary
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the Lead
Managers specifically for use therein. The parties hereto agree that such
information provided by or on behalf of any Underwriter through the Lead
Managers consists solely of the material referred to in Section 16 hereof.
(i) For purposes of this Agreement, the "Applicable Time" is 5:00 p.m.
(Eastern) on the date of this Agreement. The Pricing Disclosure Package, as of
the Applicable Time, did not, and as of the Closing Date and the Additional
Closing Date, if any (each as defined below), will not, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each Issuer Free
Writing Prospectus complies in all material respects with the applicable
provisions of the Securities Act and the Rules and Regulations, and does not
include information that conflicts with the information contained in the
Registration Statement, the Pricing Prospectus or the U.S. Prospectus, and
each Issuer Free Writing Prospectus not listed in Annex IV hereto, as
supplemented by and taken together with the Pricing Disclosure Package as of
the Applicable Time, did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. No representation and warranty is made in this
Section 1(i) with respect to any information contained in or omitted from the
Pricing Disclosure Package or any Issuer Free Writing Prospectus in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through the Lead Managers specifically for use
therein. The parties hereto agree that such information provided by or on
behalf of any Underwriter through the Lead Managers consists solely of the
material referred to in Section 16 hereof.
(j) Deloitte & Touche LLP, who have audited the financial statements of
the Company and its subsidiaries that are included or incorporated by
reference in the Canadian Prospectus, the Registration Statement, the Pricing
Prospectus or the U.S. Prospectus and whose reports appear or are incorporated
by reference in the Canadian Prospectus, the Registration Statement, the
Pricing Prospectus or the U.S. Prospectus are independent with respect to the
Company as required by Canadian Securities Laws and are independent as
required by the Securities Act, the Exchange Act and the Rules and
Regulations.
(k) PricewaterhouseCoopers LLP, who have audited the financial statements
of Corner Bay Silver Inc. and its subsidiaries ("Corner Bay Silver") that are
included or incorporated by reference in the Canadian Prospectus, the
Registration Statement, the Pricing Prospectus or the U.S. Prospectus and
whose reports appear or are incorporated by reference in the Canadian
Prospectus, the Registration Statement, the Pricing Prospectus or the U.S.
Prospectus were independent with respect to Corner Bay Silver as required by
Canadian Securities Laws and were independent as required by the Securities
Act, the Exchange Act and the Rules and Regulations.
(l) Subsequent to the respective dates as of which information is given
in the Canadian Preliminary Prospectus, the Registration Statement and the
Pricing Prospectus, except as disclosed in the Canadian Preliminary Prospectus
and the Pricing Prospectus, (i) the Company has not declared or paid any
dividends, or made any other distribution of any kind, on or in respect of its
share capital, (ii) there has not been any material change in the share
capital or long-term or short-term debt of the Company or any of its
subsidiaries listed in Exhibit A hereto (each, a "Subsidiary" and,
collectively, the "Subsidiaries"), (iii) neither the Company nor any
Subsidiary has sustained any material loss or interference with its business
or properties from fire, explosion, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding, and (iv) there has not been any material
adverse change or any development involving a prospective material adverse
change, whether or not arising from transactions in the ordinary course of
business, in or affecting the business, general affairs, management, condition
(financial or otherwise), results of operations, shareholders' equity or
properties of the Company and the Subsidiaries, individually or taken as a
whole (a "Material Adverse Change"). Since the date of the latest balance
sheet included, or incorporated by reference, in the Canadian Preliminary
Prospectus, the Registration Statement and the Pricing Prospectus, neither the
Company nor any Subsidiary has incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transactions, including any acquisition or
disposition of any business or asset, which are material to the Company and
the Subsidiaries, individually or taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Canadian Preliminary
Prospectus and the Pricing Prospectus.
(m) The Company has an authorized capitalization as set forth in the
Canadian Preliminary Prospectus and the Pricing Prospectus, and all of the
issued and outstanding share capital of the Company are fully paid and
non-assessable and have been duly and validly authorized and issued, in
compliance with all applicable Canadian, United States and other securities
laws and not in violation of or subject to any preemptive or similar right
that entitles any person to acquire from the Company or any subsidiary any
common shares of the Company or other security of the Company or any security
convertible into, or exercisable or exchangeable for, common shares of the
Company or any other such security (any "Relevant Security"), except for such
rights as may have been fully satisfied or waived prior to the effectiveness
of the Registration Statement. All of the issued share capital of or other
ownership interests in each Subsidiary have been duly and validly authorized
and issued and are fully paid and non-assessable and (except as otherwise set
forth in the Canadian Preliminary Prospectus and the Pricing Prospectus) are
owned directly or indirectly by the Company free and clear of any lien,
charge, mortgage, pledge, security interest, claim, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any kind
whatsoever (any "Lien").
(n) The Company has full power and authority (corporate or otherwise) to
issue the Shares and to perform its obligations hereunder. The Shares to be
delivered on the Closing Date and the Additional Closing Date, if any (as
defined below), have been duly and validly authorized and, when issued and
delivered in accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable, will have been issued in compliance with all
applicable Canadian, United States and other securities laws and will not have
been issued in violation of or subject to any preemptive or similar right that
entitles any person to acquire any Relevant Security from the Company. The
common shares of the Company and the Shares conform to the descriptions
thereof contained in the Canadian Preliminary Prospectus, the Registration
Statement, the Pricing Prospectus and the U.S. Prospectus. Except as disclosed
in the Canadian Preliminary Prospectus and the Pricing Prospectus, the Company
has no outstanding warrants, options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, or any contracts or commitments
to issue or sell, any Relevant Security. Except as disclosed in the Canadian
Preliminary Prospectus and the Pricing Prospectus, no holder of any Relevant
Security has any rights to require registration under the Securities Act of
any Relevant Security in connection with the offer and sale of the Shares
contemplated hereby, and any such rights so disclosed have either been fully
complied with by the Company or effectively waived by the holders thereof.
(o) The Subsidiaries are the only "significant subsidiaries" of the
Company (within the meaning of Rule 1-02 of Regulation S-X under the
Securities Act). Each of the Company and each Subsidiary has been duly
organized and validly exists as a corporation, partnership or limited
liability company in good standing as to its corporate existence, where such
concept is recognized, under the laws of its jurisdiction of organization. The
Company and each Subsidiary is duly qualified to do business and is in good
standing in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be
so qualified or in good standing which (individually and in the aggregate)
could not reasonably be expected to have a material adverse effect on (i) the
business, general affairs, management, condition (financial or otherwise),
results of operations, shareholders' equity, properties or prospects of the
Company and the Subsidiaries, taken as a whole; or (ii) the ability of the
Company to consummate the Offering or any other transaction contemplated by
this Agreement or the Canadian Preliminary Prospectus and the Pricing
Prospectus (a "Material Adverse Effect").
(p) Each of the Company and each Subsidiary has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses, filings and permits of, with and from
all judicial, regulatory and other legal or governmental agencies and bodies
and all third parties, Canadian, United States or other (collectively, the
"Consents"), to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Canadian Preliminary
Prospectus, the Registration Statement and the Pricing Prospectus, and each
such Consent is valid and in full force and effect, except with respect to the
ownership of surface rights at the Morococha mine, which are as described in
the Canadian Preliminary Prospectus, the Registration Statement and the
Pricing Prospectus, and except in each case as could not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received notice of any investigation or proceedings which, if
decided adversely to the Company or any such Subsidiary, could reasonably be
expected to result in, the revocation of, or imposition of a materially
burdensome restriction on, any such Consent, except in each case as could not
reasonably be expected to have a Material Adverse Effect..
(q) This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(r) The issue and sale of the Shares, the compliance by the Company with
this Agreement and the consummation of the transactions herein contemplated do
not and will not (i) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default) under, or
result in the creation or imposition of any Lien upon any property or assets
of the Company or any Subsidiary pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement, instrument, franchise, license or
permit to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or their respective properties, operations or assets
may be bound or (ii) violate or conflict with any provision of the certificate
or articles of incorporation, by-laws, certificate of formation, limited
liability company agreement, partnership agreement or other organizational
documents of the Company or any Subsidiary, or (iii) violate or conflict with
any statute, law, rule, regulation, ordinance, directive, judgment, decree or
order of any judicial, regulatory or other legal or governmental agency or
body, Canadian, United States or other, except (in the case of clauses (i) and
(iii) above) as could not reasonably be expected to have a Material Adverse
Effect.
(s) No Consent of, with or from any judicial, regulatory or other legal
or governmental agency or body or any third party, Canadian, United States or
other, is required for the execution, delivery and performance of this
Agreement or consummation of the transactions contemplated by this Agreement,
except the registration under the Securities Act of the Shares, acceptance of
notice of the Offering by the Toronto Stock Exchange and any consents as may
be required under state or foreign securities or blue sky laws, each of which
has been obtained and is in full force and effect.
(t) Except as disclosed in the Canadian Preliminary Prospectus, the
Registration Statement and the Pricing Prospectus, there is no judicial,
regulatory, arbitral or other legal or governmental proceeding or other
litigation or arbitration, Canadian, United States or other, pending to which
the Company or any Subsidiary is a party or of which any property, operations
or assets of the Company or any Subsidiary is the subject which, individually
or in the aggregate, if determined adversely to the Company or any Subsidiary,
could reasonably be expected to have a Material Adverse Effect; to the
Company's knowledge, no such proceeding, litigation or arbitration is
threatened or contemplated; and the defense of all such proceedings,
litigation and arbitration against or involving the Company or any Subsidiary
could not reasonably be expected to have a Material Adverse Effect.
(u) The financial statements and pro forma data, including the notes
thereto, included or incorporated by reference in the Canadian Preliminary
Prospectus, the Registration Statement and the Pricing Prospectus present
fairly, in all material respects, the financial position as of the dates
indicated and the cash flows and results of operations for the periods
specified of the Company and its consolidated subsidiaries and the other
entities for which financial statements are included or incorporated by
reference in the Canadian Preliminary Prospectus, the Registration Statement
and the Pricing Prospectus; except as otherwise stated in the Registration
Statement and the Pricing Prospectus, said financial statements have been
prepared in conformity with Canadian generally accepted accounting principles
applied on a consistent basis throughout the periods involved; the audited
financial statements of the Company have been reconciled to United States
generally accepted accounting principles in accordance with Item 18 of Form
20-F under the Exchange Act; and the audited financial statements of Corner
Bay Silver have been reconciled to United States generally accepted accounting
principles in accordance with Item 17 of Form 20-F under the Exchange Act. No
other financial statements or supporting schedules are required to be included
in the Canadian Preliminary Prospectus, the Registration Statement or the
Pricing Prospectus by Canadian Securities Laws, the Securities Act, the
Exchange Act or the Rules and Regulations. The other financial and statistical
information included or incorporated by reference in the Canadian Preliminary
Prospectus, the Registration Statement and the Pricing Prospectus present
fairly the information included therein and have been prepared on a basis
consistent with that of the financial statements that are included or
incorporated by reference in the Canadian Preliminary Prospectus, the
Registration Statement and the Pricing Prospectus and the books and records of
the Company.
(v) The pro forma financial statements included in the Registration
Statement and the Pricing Prospectus have been properly compiled and prepared
in accordance with the applicable requirements of the Canadian Securities Laws
and include all adjustments necessary to present fairly in accordance with
Canadian generally accepted accounting principles the pro forma financial
position of the respective entity or entities presented therein at the
respective dates indicated and their cash flows and the results of operations
for the respective periods specified.
(w) The statistical, industry-related and market-related data included in
the Canadian Preliminary Prospectus, the Registration Statement and the
Pricing Prospectus are based on or derived from sources which the Company
reasonably and in good faith believes are reliable and accurate, and such data
agree with the sources from which they are derived.
(x) The common shares of the Company have been registered pursuant to
Section 12(g) of the Exchange Act. The common shares of the Company are listed
on the Toronto Stock Exchange (the "TSX") and are quoted on the Nasdaq
National Market System ("Nasdaq"), and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the common shares of the Company under the Exchange Act or de-listing the
common shares of the Company from the TSX or Nasdaq, nor has the Company
received any notification that the Commission, the TSX or Nasdaq is
contemplating terminating such registration or listing.
(y) The Company and its Subsidiaries maintain a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accounting for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(z) Since the date of the latest audited financial statements included or
incorporated by reference in the Canadian Preliminary Prospectus and the
Pricing Prospectus, there has been no change in the Company's internal control
over financial reporting that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.
(aa) The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act and Canadian
Securities Laws) that comply with the requirements of the Exchange Act and
Canadian Securities Laws; such disclosure controls and procedures have been
designed to ensure that material information relating to the Company and its
subsidiaries is made known to the Company's principal executive officer and
principal financial officer by others within those entities; and such
disclosure controls and procedures are effective.
(bb) There is and has been no failure on the part of the Company or any
of its directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the "Sarbanes-Oxley Act"), including,
without limitation, Section 402 related to loans and Sections 302 and 906
related to certifications.
(cc) Neither the Company nor, to the Company's knowledge, any of its
affiliates (within the meaning of Rule 144 under the Securities Act) has
taken, directly or indirectly, any action which constitutes or is designed to
cause or result in, or which could reasonably be expected to constitute, cause
or result in, the stabilization or manipulation of the price of any security
to facilitate the sale or resale of the Shares.
(dd) Neither the Company nor, to the Company's knowledge, any of its
affiliates (within the meaning of Rule 144 under the Securities Act) has,
prior to the date hereof, made any offer or sale of any securities which could
be "integrated" (within the meaning of the Securities Act and the Rules and
Regulations) with the offer and sale of the Shares pursuant to the
Registration Statement.
(ee) The statements set forth in the Canadian Preliminary Prospectus, the
Pricing Prospectus and the U.S. Prospectus under the caption "Description of
Share Capital", insofar as it purports to constitute a summary of the terms of
the common shares of the Company, and under the captions "Taxation" and
"Underwriting," insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate, complete and fair in all
material respects.
(ff) The Company is subject to the reporting requirements of Section 13
of the Exchange Act and files periodic reports with the Commission, and the
conditions for use of Form F-10 to register the Shares under the Securities
Act have been satisfied. The documents incorporated or deemed to be
incorporated by reference in the Pricing Prospectus and the U.S. Prospectus,
at the time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the Securities
Act, the Exchange Act and the Rules and Regulations and, when read together
with the other information in the Pricing Prospectus or the U.S. Prospectus,
as applicable, do not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(gg) The Company is not and, at all times up to and including
consummation of the transactions contemplated by this Agreement, and after
giving effect to application of the net proceeds of the Offering as described
in the Pricing Prospectus, will not be, required to register as an "investment
company" under the Investment Company Act of 1940, as amended, and is not and
will not be an entity "controlled" by an "investment company" within the
meaning of such act.
(hh) Except as disclosed in the Canadian Preliminary Prospectus and the
Pricing Prospectus, there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid claim
against the Company or any Underwriter for a brokerage commission, finder's
fee or other like payment in connection with the transactions contemplated by
this Agreement or, to the Company's knowledge, any arrangements, agreements,
understandings, payments or issuance with respect to the Company or any of its
officers, directors, shareholders, partners, employees, Subsidiaries or
affiliates that may affect the Underwriters' compensation as determined by the
National Association of Securities Dealers ("NASD").
(ii) Except as disclosed in the Canadian Preliminary Prospectus, the
Registration Statement and the Pricing Prospectus, (i) the Company and each
Subsidiary owns or leases all such properties as are necessary to the conduct
of its business as presently operated and as proposed to be operated as
described in the Canadian Preliminary Prospectus and the Pricing Prospectus;
(ii) the Company and the Subsidiaries have good and marketable title to all
real property and good and marketable title to all personal property owned by
them, in each case free and clear of any and all Liens except such as are
described in the Canadian Preliminary Prospectus and the Pricing Prospectus or
such as do not (individually or in the aggregate) materially affect the value
of such property or materially interfere with the use made or proposed to be
made of such property by the Company and the Subsidiaries; and any real
property and buildings held under lease or sublease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material to, and do not materially interfere
with, the use made and proposed to be made of such property and buildings by
the Company and the Subsidiaries; and (iii) neither the Company nor any
Subsidiary has received any notice of any claim adverse to its ownership of
any real or personal property or of any claim against the continued possession
of any real property, whether owned or held under lease or sublease by the
Company or any Subsidiary, except as could not have a Material Adverse Effect.
(jj) The Company and the Subsidiaries maintain insurance in such amounts
and covering such risks as the Company reasonably considers adequate for the
conduct of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries, all of
which insurance is in full force and effect, except where the failure to
maintain such insurance could not reasonably be expected to have a Material
Adverse Effect. There are no material claims by the Company or any Subsidiary
under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause. The
Company reasonably believes that it will be able to renew its existing
insurance as and when such coverage expires or will be able to obtain
replacement insurance adequate for the conduct of the business and the value
of its properties at a cost that would not have a Material Adverse Effect.
(kk) Each of the Company and each Subsidiary has accurately prepared and
timely filed all U.S., Canadian and other tax returns that are required to be
filed by it and has paid or made provision for the payment of all taxes,
assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company or any
Subsidiary is obligated to withhold from amounts owing to employees, creditors
and third parties, with respect to the periods covered by such tax returns
(whether or not such amounts are shown as due on any tax return), except where
such failure to do so would not have a Material Adverse Effect. No deficiency
assessment with respect to a proposed adjustment of the Company's or any
Subsidiary's Canadian federal and provincial, U.S. federal and state, local or
other taxes is pending or, to the best of the Company's knowledge, threatened.
The accruals and reserves on the books and records of the Company and the
Subsidiaries in respect of tax liabilities for any taxable period not finally
determined are adequate to meet any assessments and related liabilities for
any such period and, since the date of the most recent audited financial
statements, the Company and the Subsidiaries have not incurred any liability
for taxes other than in the ordinary course of its business. There is no tax
lien, whether imposed by any U.S., Canadian or other taxing authority,
outstanding against the assets, properties or business of the Company or any
Subsidiary.
(ll) No labor disturbance by the employees of the Company or any
Subsidiary exists or, to the best of the Company's knowledge, is imminent and
the Company is not aware of any existing or imminent labor disturbances by the
employees of any of its or any Subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case (individually
or in the aggregate), could reasonably be expected to have a Material Adverse
Effect.
(mm) There has been no storage, generation, transportation, handling,
use, treatment, disposal, discharge, emission, contamination, release or other
activity involving any kind of hazardous, toxic or other wastes, pollutants,
contaminants, petroleum products or other hazardous or toxic substances,
chemicals or materials ("Hazardous Substances") by, due to, on behalf of, or
caused by the Company or any Subsidiary (or, to the Company's knowledge, any
other entity for whose acts or omissions the Company is or may be liable) upon
any property now or previously owned, operated, used or leased by the Company
or any Subsidiary, or upon any other property, which would be a violation of
or give rise to any liability under any applicable law, rule, regulation,
order, judgment, decree or permit, common law provision or other legally
binding standard relating to pollution or protection of human health and the
environment ("Environmental Law"), except for violations and liabilities
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. There has been no disposal, discharge,
emission contamination or other release of any kind at, onto or from any such
property or into the environment surrounding any such property of any
Hazardous Substances with respect to which the Company or any Subsidiary has
knowledge, except as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. There is no pending or, to the
best of the Company's knowledge, threatened administrative, regulatory or
judicial action, claim or notice of noncompliance or violation, investigation
or proceedings relating to any Environmental Law against the Company or any
Subsidiary. No property of the Company or any Subsidiary is subject to any
Lien under any Environmental Law. Except as disclosed in the Canadian
Preliminary Prospectus, the Registration Statement and the Pricing Prospectus,
neither the Company nor any Subsidiary is subject to any order, decree,
agreement or other individualized legal requirement related to any
Environmental Law, which, in any case (individually or in the aggregate),
could reasonably be expected to have a Material Adverse Effect .
(nn) None of the Company, any Subsidiary or, to the Company's knowledge,
any of its employees or agents, has at any time during the last five years (i)
made any unlawful contribution to any candidate for non-United States office,
or failed to disclose fully any such contribution in violation of law, or (ii)
made any payment to any federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States of any
jurisdiction thereof. The operations of the Company and each Subsidiary are
and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all applicable jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or
enforced by any governmental agency (collectively, the "Money Laundering
Laws") and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the best knowledge of the Company, threatened. Neither the Company nor any
Subsidiary nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the Offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(oo) Neither the Company nor any Subsidiary (i) is in violation of its
certificate or articles of incorporation, by-laws, certificate of formation,
limited liability company agreement, partnership agreement or other
organizational documents, (ii) is in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under
or result in the creation or imposition of any Lien upon any property or
assets of the Company or any Subsidiary pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it is
a party or by which it is bound or to which any of its property or assets is
subject, or (iii) is in violation of any statute, law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial, regulatory or
other legal or governmental agency or body, Canadian, United States or other,
except (in the case clauses (ii) and (iii) above) for violations or defaults
that could not (individually or in the aggregate) reasonably be expected to
have a Material Adverse Effect.
(pp) The Company has complied with the requirements of Rule 433 under the
Securities Act with respect to each Issuer Free Writing Prospectus including,
without limitation, all prospectus delivery, filing, record retention and
legending requirements applicable to any such Issuer Free Writing Prospectus.
The Company has not (i) distributed any offering material in connection with
the Offering other than any Preliminary Prospectus, the Pricing Prospectus,
the Canadian Preliminary Prospectus, the U.S. Prospectus, and any Issuer Free
Writing Prospectus set forth on Annex IV hereto, or (ii) filed, referred to,
approved, used or authorized the use of any "free writing prospectus" as
defined in Rule 405 under the Securities Act with respect to the Offering or
the Shares, except for any Issuer Free Writing Prospectus set forth in Annex
IV hereto and any electronic road show previously approved by the Lead
Managers.
Any certificate signed by or on behalf of the Company and delivered
to the Representatives or to counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter and each
Underwriter, severally and not jointly, agrees to purchase from the Company,
at a purchase price per share of $23.88, the number of Firm Shares set forth
opposite their respective names on Schedule I hereto together with any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof. As compensation for
the services rendered to the Company by the Underwriters in respect of the
Offering, the Company will pay to the Underwriters a commission of $1.1343 per
share sold to the Underwriters under this Agreement, payable on the Closing
Date (as defined below), which may be netted against payment from the
Underwriters to the Company for the Firm Shares.
(b) Payment of the purchase price for, and delivery of certificates
representing, the Firm Shares shall be made at the office of Borden Ladner
Gervais LLP or at such other place as shall be agreed upon by the Lead
Managers and the Company, at 5:45 A.M., Vancouver time, on April 18, 2006, or
such other time and date as the Lead Managers and the Company may agree upon
in writing (such time and date of payment and delivery being herein called the
"Closing Date"). Payment of the purchase price for the Firm Shares shall be
made by wire transfer in same day funds to or as directed in writing by the
Company upon delivery of certificates for the Firm Shares to the
Representatives through the facilities of The Depository Trust Company the
respective accounts of the several Underwriters. Certificates for the Firm
Shares shall be registered in such name or names and shall be in such
denominations as the Lead Managers may request. The Company will permit the
Lead Managers to examine and package such certificates for delivery at least
one full business day prior to the Closing Date.
(c) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the Underwriters,
acting severally and not jointly, the option to purchase up to 531,407
Additional Shares at the same purchase price per share to be paid by the
Underwriters for the Firm Shares and at the same commission per share to be
received by the Underwriters as set forth in Section 2(a) above, for the sole
purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised at any time and from time to time,
in whole or in part on one or more occasions, on or before the thirtieth day
following the date of the Canadian Prospectus and the U.S. Prospectus, by
written notice from the Lead Managers to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time, as reasonably determined by the Lead
Managers, when the Additional Shares are to be delivered (any such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that no Additional Closing Date shall occur earlier than
the Closing Date or earlier than the second full business day after the date
on which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised.
Upon any exercise of the option as to all or any portion of the Additional
Shares, each Underwriter, acting severally and not jointly, agrees to purchase
from the Company the number of Additional Shares that bears the same
proportion of the total number of Additional Shares then being purchased as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number increased as set forth in Section 10 hereof)
bears to the total number of Firm Shares that the Underwriters have agreed to
purchase hereunder, subject, however, to such adjustments to eliminate
fractional shares as the Lead Managers in their sole discretion shall make.
(d) Payment of the purchase price for, and delivery of certificates
representing, the Additional Shares shall be made at the office of Borden
Ladner Gervais LLP, or at such other place as shall be agreed upon by the Lead
Managers and the Company, at 5:45 A.M., Vancouver time, on the Additional
Closing Date, or such other time as shall be agreed upon by the Lead Managers
and the Company. Payment of the purchase price for the Additional Shares shall
be made by wire transfer in same day funds to or as directed in writing by the
Company upon delivery of certificates for the Additional Shares to the
Representatives through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters. Certificates for the
Additional Shares shall be registered in such name or names and shall be in
such denominations as the Lead Managers may request. The Company will permit
the Lead Managers to examine and package such certificates for delivery at
least one full business day prior to the Additional Closing Date.
(e) The Company acknowledges and agrees that (i) the terms of this
Agreement and the Offering (including the price of the Shares and commission
with respect to the Shares) were negotiated at arm's length between
sophisticated parties represented by counsel; (ii) no fiduciary, advisory or
agency relationship between the Company and the Underwriters has been created
as a result of any of the transactions contemplated by this Agreement or the
process leading to such transactions, irrespective of whether any Underwriter
has advised or is advising any such party on other matters, (iii) the
Underwriters' obligations to the Company in respect of the Offering are set
forth in this Agreement in their entirety and (iv) it has obtained such legal,
tax, accounting and other advice as it deems appropriate with respect to this
Agreement and the transactions contemplated hereby and any other activities
undertaken in connection therewith, and it is not relying on the Underwriters
with respect to any such matters.
3. Offering. Upon authorization of the release of the Firm Shares by
the Lead Managers, the Underwriters propose to offer the Shares for sale to
the public upon the terms and conditions set forth in the Prospectus.
4. Covenants of the Company. In addition to the other covenants and
agreements of the Company contained herein, the Company further covenants and
agrees with each of the Underwriters that:
(a) The Company shall prepare the Canadian Prospectus and the U.S.
Prospectus in a form approved by you and file such Canadian Prospectus with
the Canadian Qualifying Authorities promptly thereafter in accordance with
Canadian Securities Laws and the Shelf Procedures and such U.S. Prospectus
pursuant to, and within the time period specified in, General Instruction
II.L. of Form F-10; prior to the last date on which an Additional Closing
Date, if any, may occur, the Company shall file no further amendment to the
Registration Statement or amendment or supplement to the U.S. Prospectus to
which you shall object in writing after being furnished in advance a copy
thereof and given a reasonable opportunity to review and comment thereon; the
Company shall notify you promptly (and, if requested by Bear Stearns or Harris
Nesbitt, confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Canadian Qualifying Authorities or the Commission for any amendment of or
supplement to the Canadian Prospectus, the Registration Statement or the U.S.
Prospectus, as applicable, or for any additional information, (iii) of the
Company's intention to file, or prepare any supplement or amendment to, the
Canadian Prospectus, the Registration Statement, any Preliminary Prospectus,
the U.S. Prospectus or any Issuer Free Writing Prospectus, (iv) of the time
when any amendment to the Canadian Prospectus has been filed with or receipted
by the Reviewing Authority, or of the filing with or mailing or the delivery
to the Commission for filing of any amendment of or supplement to the
Registration Statement or the U.S. Prospectus, (v) of the issuance by the
Canadian Qualifying Authorities or the Commission of any stop order suspending
the effectiveness of the Canadian Prospectus or the Registration Statement, as
applicable, or any post-effective amendment thereto, or suspending the use of
any Preliminary Prospectus, the U.S. Prospectus or any Issuer Free Writing
Prospectus or, in each case, of the initiation or threatening of any
proceedings therefore, (vi) of the receipt of any comments from the Canadian
Qualifying Authorities or the Commission, and (vii) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Canadian Qualifying
Authorities or the Commission shall propose or enter a stop order at any time,
the Company will make every reasonable effort to prevent the issuance of any
such stop order and, if issued, to obtain the lifting of such order as soon as
possible.
(b) If at any time when a prospectus relating to the Shares (or, in lieu
thereof, the notice referred to in Rule 173(a) under the Securities Act) is
required to be delivered under the Securities Act, any event shall have
occurred as a result of which the Pricing Disclosure Package (prior to the
availability of the U.S. Prospectus) or the U.S. Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company,
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances existing at the time of delivery of
such Pricing Disclosure Package or U.S. Prospectus (or, in lieu thereof, the
notice referred to in Rule 173(a) under the Securities Act) to the purchaser,
not misleading, or if to comply with the Securities Act, the Exchange Act or
the Rules and Regulations it shall be necessary at any time to amend or
supplement the Pricing Disclosure Package, the U.S. Prospectus or the
Registration Statement, or to file any document incorporated by reference in
the Registration Statement or the U.S. Prospectus or in any amendment thereof
or supplement thereto, the Company will notify you promptly and prepare and
file with the Canadian Qualifying Authorities and/or the Commission an
appropriate amendment, supplement or document (in form and substance
satisfactory to the Lead Managers) that will correct such statement or
omission or effect such compliance, and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as
possible.
(c) The Company will not, without the prior consent of the Lead Managers,
(i) make any offer relating to the Shares that would constitute a "free
writing prospectus" as defined in Rule 405 under the Securities Act, except
for any Issuer Free Writing Prospectus set forth in Annex IV hereto and any
electronic road show previously approved by the Lead Managers, or (ii) file,
refer to, approve, use or authorize the use of any "free writing prospectus"
as defined in Rule 405 under the Securities Act with respect to the Offering
or the Shares. If at any time any event shall have occurred as a result of
which any Issuer Free Writing Prospectus as then amended or supplemented
would, in the judgment of the Underwriters or the Company, conflict with the
information in the Registration Statement, the Pricing Prospectus or the U.S.
Prospectus as then amended or supplemented or would, in the judgment of the
Underwriters or the Company, include an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances existing at the
time of delivery to the purchaser, not misleading, or if to comply with the
Securities Act or the Rules and Regulations it shall be necessary at any time
to amend or supplement any Issuer Free Writing Prospectus, the Company will
notify the Lead Managers promptly and, if requested by the Lead Managers,
prepare and furnish without charge to each Underwriter an appropriate
amendment or supplement (in form and substance satisfactory to the Lead
Managers) that will correct such statement, omission or conflict or effect
such compliance.
(d) The Company has complied and will comply in all material respects
with the requirements of Rule 433 with respect to each Issuer Free Writing
Prospectus including, without limitation, all prospectus delivery, filing,
record retention and legending requirements applicable to each such Issuer
Free Writing Prospectus; and the Company has caused there to be made available
at least one version of a "bona fide electronic road show" (as defined in Rule
433 under the Securities Act) in a manner that causes the Company not to be
required, pursuant to Rule 433(d) under the Securities Act, to file with the
Commission any road show.
(e) The Company will promptly deliver to each of the Underwriters a
conformed copy of the Canadian Preliminary Prospectus, including all documents
incorporated by reference therein, signed and certified as required by
Canadian Securities Laws in the Qualifying Provinces, a copy of any other
document required to be filed by the Company in compliance with Canadian
Securities Laws in connection with the Offering, a conformed copy of the
Registration Statement, as initially filed and all amendments thereto,
including all consents and exhibits filed therewith and a conformed copy of
the Form F-X with respect to the Registration Statement. The Company will
promptly deliver to each of the Underwriters such number of copies of any
Canadian Preliminary Prospectus, Canadian Prospectus, Preliminary Prospectus,
the U.S. Prospectus, the Registration Statement, all amendments of and
supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and U.S. Prospectus or any amendment
thereof or supplement thereto, as you may reasonably request. Prior to 9:00
A.M., New York time, on the second business day next succeeding the date of
this Agreement and from time to time thereafter, the Company will furnish the
Underwriters with copies of the Canadian Prospectus and the U.S. Prospectus in
Vancouver, Toronto and New York City in such quantities as you may reasonably
request.
(f) Promptly from time to time, the Company will use its commercially
reasonable efforts, in cooperation with the Lead Managers, to qualify the
Shares for offering and sale under the securities laws relating to the
offering or sale of the Shares of such jurisdictions, Canadian, United States
or other, as the Lead Managers may designate and to maintain such
qualification in effect for so long as required for the distribution thereof;
except that in no event shall the Company be obligated in connection therewith
to qualify in such jurisdiction or to execute a general consent to service of
process.
(g) The Company will make generally available to its security holders as
soon as practicable, an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Securities Act.
(h) During the period of (i) 90 days in the case of the Company and the
Company's Chairman and President and Chief Executive Officer, and (ii) 45 days
in the case of the Company's other directors and senior officers, in each case
from the date of the Canadian Prospectus and the U.S. Prospectus (the "Lock-Up
Period"), without the prior written consent of the Lead Managers, the Company
(i) will not, directly or indirectly, issue, offer, sell, agree to issue,
offer or sell, solicit offers to purchase, grant any call option, warrant or
other right to purchase, purchase any put option or other right to sell,
pledge, borrow or otherwise dispose of any Relevant Security, or make any
public announcement of any of the foregoing, (ii) will not establish or
increase any "put equivalent position" or liquidate or decrease any "call
equivalent position" (in each case within the meaning of Section 16 of the
Exchange Act and the Rules and Regulations) with respect to any Relevant
Security, and (iii) will not otherwise enter into any swap, derivative or
other transaction or arrangement that transfers to another, in whole or in
part, any economic consequence of ownership of a Relevant Security, whether or
not such transaction is to be settled by delivery of Relevant Securities,
other securities, cash or other consideration; and the Company will obtain an
undertaking in substantially the form of Annex III hereto of each of its
officers and directors listed on Schedule II attached hereto, not to engage in
any of the aforementioned transactions on their own behalf, other than the
sale of Shares as contemplated by this Agreement and (i) the Company's
issuance of its common shares upon the conversion or exchange of convertible
or exchangeable securities outstanding on the date hereof; (ii) the exercise
of currently outstanding options; (iii) the Company's issuance of its common
shares upon the exercise of currently outstanding warrants; (iv) the grant and
exercise of options under, or the issuance and sale of shares pursuant to,
stock option plans in effect on the date hereof, each as described in the
Canadian Preliminary Prospectus, the Registration Statement and the Pricing
Prospectus, and (v) the sale of shares issued upon the exercise of options or
pursuant to stock option plans in effect on the date hereof. The Company will
not qualify a prospectus under Canadian Securities Laws or file a registration
statement under the Securities Act in connection with any transaction by the
Company or any person that is prohibited pursuant to the foregoing, except for
registration statements on Form S-8 relating to employee benefit plans.
Notwithstanding the foregoing, if (1) during the last 17 days of the
Lock-Up Period the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration
of the Lock-Up Period the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Lock-Up
Period, the restrictions imposed by the immediately preceding paragraph shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event, as applicable, unless Bear Stearns waives, in writing, such
extension. The Company will provide the Lead Managers and any co-managers,
each senior officer and director of the Company listed on Schedule II attached
hereto with prior notice of any such announcement that gives rise to an
extension of the Lock-Up Period.
(i) During the period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of all reports
or other communications (financial or other) furnished to security holders or
from time to time published or publicly disseminated by the Company, and will
deliver to you (i) as soon as they are available, copies of any reports,
financial statements and proxy or information statements furnished to or filed
with the Reviewing Authority, the Commission, the TSX, or any securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
information to be on a consolidated basis to the extent the accounts of the
Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Reviewing Authority or the Commission);
provided, however, that any information required to be delivered pursuant to
this Representation which is made available on the Security and Exchange
Commission's electronic website need not be delivered.
(j) The Company will use its commercially reasonable efforts to effect
and maintain the listing of the Shares on the TSX and Nasdaq.
(k) The Company will apply the net proceeds from the sale of the Shares
as set forth under the caption "Use of Proceeds" in the Pricing Prospectus.
(l) The Company will not take, and will cause its affiliates (within the
meaning of Rule 144 under the Securities Act) not to take, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Shares.
(m) Each Underwriter, severally and not jointly, covenants and agrees
with the Company that such Underwriter will not use or refer to any "free
writing prospectus" (as defined in Rule 405 under the Securities Act) without
the prior written consent of the Company if such Underwriter's use of or
reference to such "free writing prospectus" would require the Company to file
with the Commission any "issuer information" (as defined in Rule 433 under the
Securities Act).
5. Payment of Expenses. Whether or not the transactions contemplated
by this Agreement, the Registration Statement and the U.S. Prospectus are
consummated or this Agreement is terminated, the Company hereby agrees to pay
all costs and expenses incident to the performance of its obligations
hereunder, including the following: (i) all expenses in connection with the
preparation, printing and filing of the Registration Statement, any Canadian
Preliminary Prospectus, any U.S. Preliminary Prospectus, any Issuer Free
Writing Prospectus, the Canadian Prospectus, the U.S. Prospectus, the Pricing
Prospectus and any and all amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers; (ii) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the Offering; (iii) the cost of producing this Agreement and
any agreement among Underwriters, blue sky survey, closing documents and other
instruments, agreements or documents (including any compilations thereof) in
connection with the Offering; (iv) all expenses in connection with the
qualification of the Shares for offering and sale under Canadian provincial,
United States state or other securities or blue sky laws as provided in
Section 4(f) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with any
blue sky survey; (v) all fees and expenses in connection with listing the
Shares on the TSX and Nasdaq; (vi) all travel expenses of the Company's
officers and employees and any other expense of the Company incurred in
connection with attending or hosting meetings with prospective purchasers of
the Shares; and (vii) any transfer taxes incurred in connection with this
Agreement or the Offering. The Company also will pay or cause to be paid: (x)
the cost of preparing certificates representing the Shares; (y) the cost and
charges of any transfer agent or registrar for the Shares; and (z) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 5. It is
understood, however, that except as provided in Sections 7, 8 and 11 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel and transfer taxes on resale of any of the Shares by
them.
6. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6, "Closing
Date" shall refer to the Closing Date for the Firm Shares and any Additional
Closing Date, if different, for the Additional Shares), to the performance by
the Company of all of its obligations hereunder, and to each of the following
additional conditions:
(a) The Canadian Prospectus Supplement shall have been filed with the
Reviewing Authority under the Shelf Procedures; the U.S. Prospectus Supplement
shall have been filed with the Commission in a timely fashion in accordance
with Section 4(a) hereof; no order of any securities commission, securities
regulatory authority or stock exchange in Canada to cease distribution of the
Shares under the Canadian Prospectus as amended or supplemented shall have
been issued, and no proceedings for such purpose shall have been instituted
or, to the knowledge of the Company, threatened; no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto, and no stop order suspending or preventing the use of any U.S.
Preliminary Prospectus, any Issuer Free Writing Prospectus or the U.S.
Prospectus, shall have been issued by the Commission and no proceedings
therefor shall have been initiated or threatened by the Commission; all
requests for additional information on the part of the Canadian Qualifying
Authorities or the Commission shall have been complied with to your reasonable
satisfaction; and all necessary regulatory or stock exchange approvals shall
have been received.
(b) At the time of filing each of the Canadian Preliminary Prospectus
Supplement and the Canadian Prospectus Supplement, a legal opinion (the
"French Language Prospectus Opinion") of the Company's counsel addressed to
the Underwriters and their legal counsel shall have been delivered to the
Underwriters and dated as of the respective filing date, such opinion to be in
form and content acceptable to the Underwriters, acting reasonably, to the
effect that the French language versions of each of the prospectuses, together
with each document incorporated for reference therein (other than financial
statements and other financial data contained therein or omitted therefrom),
is in all material respects a complete and proper translation of the English
version thereof;
(c) At the time of filing each of the Canadian Preliminary Prospectus
Supplement and the Canadian Prospectus Supplement, an opinion (the "French
Language Auditors' Opinion") of the Corporation's auditors addressed to the
Underwriters and their legal counsel shall have been delivered to the
Underwriters and dated as of the respective filing date, such opinion to be in
form and content acceptable to the Underwriters, acting reasonably, to the
effect that the financial statements and other financial data contained or
incorporated by reference in the French language versions of each of the
prospectuses, is in all material respects a complete and proper translation of
the English version thereof
(d) At the Closing Date you shall have received the written opinion of
Borden Ladner Gervais LLP, Canadian counsel for the Company, dated the Closing
Date and addressed to the Underwriters, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto.
(e) At the Closing Date you shall have received the written opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, United States counsel for the
Company, dated the Closing Date and addressed to the Underwriters, in form and
substance satisfactory to you, to the effect set forth in Annex II hereto.
(f) At the Closing Date, you shall have received the written opinion of
Peruvian counsel to the Company, Mexican counsel to the Company and
Argentinian counsel to Company, dated the Closing Date and addressed to the
Underwriters, in form and substance satisfactory to you, as to ownership by
the Company and its Subsidiaries of mineral properties in those jurisdictions,
and with respect to such matters related to the transactions contemplated
hereby reasonably requested by the Underwriters.
(g) At the Closing Date, you shall have received the written opinion of
local counsel in the jurisdictions of incorporation of the Company's
Subsidiaries, dated the Closing Date and addressed to the Underwriters, in
form and substance satisfactory to you, as to ownership of these Subsidiaries
and such other matters as may reasonably be requested by the Underwriters.
(h) At the Closing Date, you shall have received the written opinion of
Shearman & Sterling LLP, the Underwriters' United States counsel, and Blake,
Cassels & Graydon LLP, the Underwriters' Canadian counsel, (together,
"Underwriters' Counsel"), dated the Closing Date and addressed to the
Underwriters, in form and substance satisfactory to you, with respect to the
issuance and sale of the Shares, the Canadian Prospectus, the Registration
Statement, the Pricing Disclosure Package, the U.S. Prospectus and such other
matters as you may require, and the Company shall have furnished to
Underwriters' Counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(i) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated the
Closing Date, in form and substance satisfactory to you, as to the accuracy of
the representations and warranties of the Company set forth in Section 1
hereof as of the date hereof and as of the Closing Date, as to the performance
by the Company of all of its obligations hereunder to be performed at or prior
to the Closing Date, as to the matters set forth in subsections (a) and (k) of
this Section 6.
(j) At the time this Agreement is executed and at the Closing Date, you
shall have received (i) comfort letters, from Deloitte & Touche LLP,
independent chartered accountants for the Company, dated, respectively, as of
the date of this Agreement and as of the Closing Date, and addressed to the
Underwriters and the Canadian Affiliates of the Underwriters, and in form and
substance satisfactory to the Underwriters and Underwriters' Counsel; and (ii)
comfort letters from PricewaterhouseCoopers LLP, independent chartered
accountants for Corner Bay Silver, dated, respectively, as of the date of this
Agreement and as of the Closing Date, and addressed to the Underwriters and
the Canadian Affiliates of the Underwriters and in form and substance
satisfactory to the Underwriters and Underwriters' Counsel.
(k) (i) Neither the Company nor any Subsidiary shall have sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Pricing Prospectus, any material loss or
interference with its business or properties from fire, explosion, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, other than as
set forth in the Pricing Prospectus (exclusive of any supplement thereto); and
(ii) subsequent to the dates as of which information is given in the Canadian
Prospectus (exclusive of any amendment or supplement thereto subsequent to the
date hereof), the Registration Statement (exclusive of any amendment thereto
subsequent to the date hereof) and the Pricing Prospectus (exclusive of any
supplement thereto), there shall not have been any change in the share capital
or long-term or short-term debt of the Company or any Subsidiary or any change
or any development involving a change, whether or not arising from
transactions in the ordinary course of business, in the business, general
affairs, management, condition (financial or otherwise), results of
operations, shareholders' equity, properties or prospects of the Company and
the Subsidiaries, individually or taken as a whole, the effect of which, in
any such case described above, is, in the judgment of the Lead Managers, so
material and adverse as to make it impracticable or inadvisable to proceed
with the Offering on the terms and in the manner contemplated in the Canadian
Prospectus (exclusive of any amendment or supplement thereto subsequent to the
date hereof) and the Pricing Prospectus (exclusive of any such supplement).
(l) You shall have received a duly executed lock-up agreement from each
person who is a director or officer of the Company listed on Schedule II
hereto, in each case substantially in the form attached hereto as Annex III.
(m) At the Closing Date, the Shares shall have been approved for listing
on the TSX.
(n) At the Closing Date, the NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements for the Offering.
(o) The Company shall have furnished the Underwriters and Underwriters'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be satisfactory in
form and substance to the Lead Managers and to Underwriters' Counsel, all
obligations of the Underwriters hereunder may be cancelled by the Lead
Managers at, or at any time prior to, the Closing Date and the obligations of
the Underwriters to purchase the Additional Shares may be cancelled by the
Lead Managers at, or at any time prior to, the Additional Closing Date. Notice
of such cancellation shall be given to the Company in writing or by telephone.
Any such telephone notice shall be confirmed promptly thereafter in writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several,
to which they or any of them may become subject under Canadian Securities
Laws, the Securities Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Canadian Prospectus,
as originally filed or any amendment thereof, in the Registration Statement,
as originally filed or any amendment thereof, or in any Preliminary Prospectus
or the U.S. Prospectus, or in any supplement thereto or amendment thereof, or
in any Issuer Free Writing Prospectus, or in any "issuer information" (as
defined in Rule 433(h)(2) under the Securities Act) filed or required to be
filed pursuant to Rule 433(d) under the Securities Act, or (B) in any other
materials or information provided to investors by, or with the approval of,
the Company in connection with the Offering, including in any "road show" (as
defined in Rule 433 under the Securities Act) for the Offering ("Marketing
Materials"), or (ii) the omission or alleged omission to state in the Canadian
Prospectus, as originally filed or any amendment thereof, in the Registration
Statement, as originally filed or any amendment thereof, or in any Preliminary
Prospectus or the U.S. Prospectus, or in any supplement thereto or amendment
thereof, or in any Issuer Free Writing Prospectus, or in any "issuer
information" (as defined in Rule 433(h)(2) under the Securities Act) filed or
required to be filed pursuant to Rule 433(d) under the Securities Act, or in
any Marketing Materials, a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made (in the case of any prospectus), not misleading;
provided, however, that the Company will not be liable in any such case to the
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Lead Managers expressly for use therein.
The parties agree that such information provided by or on behalf of any
Underwriter through Bear Stearns consists solely of the material referred to
in Section 16 hereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including but not limited to
other liability under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, each of the directors of the Company, each of the
officers and directors of the Company who shall have signed the Canadian
Prospectus and the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under Canadian Securities Laws, the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Canadian Prospectus, as originally filed or any amendment thereof, in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the U.S. 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, in each
case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the Lead
Managers specifically for use therein; provided, however, that in no case
shall any Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares to be purchased by such
Underwriter hereunder. The parties agree that such information provided by or
on behalf of any Underwriter through the Lead Managers consists solely of the
material referred to in Section 16 hereof.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section
7, unless and to the extent such failure results in the forfeiture by the
indemnifying party of substantial right and defences). In case any such claim
or action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate, at its own expense in the defense of such action, and
to the extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel satisfactory to such
indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement
of the action, (iii) the indemnifying party does not diligently defend the
action after assumption of the defense, or (iv) such indemnified party or
parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to one
or all of the indemnifying parties (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties. No indemnifying party shall,
without the prior written consent of the indemnified parties, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened claim, investigation, action or proceeding in
respect of which indemnity or contribution may be or could have been sought by
an indemnified party under this Section 7 or Section 8 hereof (whether or not
the indemnified party is an actual or potential party thereto), unless such
settlement, compromise or judgment (i) includes an unconditional release of
the indemnified party from all liability arising out of such claim,
investigation, action or proceeding and (ii) does not include a statement as
to or an admission of fault, culpability or any failure to act, by or on
behalf of the indemnified party.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to which the
Company and one or more of the Underwriters may be subject, in such
proportions as is appropriate to reflect the relative benefits received by the
Company and the Underwriters from the Offering or, if such allocation is not
permitted by applicable law, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault
of the Company and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company bears to (y) the underwriting discount or commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the U.S. Prospectus. The relative fault of each of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any judicial, regulatory or other legal or
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 8, (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which
the discounts and commissions applicable to the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
8, each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each officer and director of the
Company who shall have signed the Canadian Prospectus and the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company subject in each case to clauses (i) and (ii) of
the immediately preceding sentence. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 8 or
otherwise. The obligations of the Underwriters to contribute pursuant to this
Section 8 are several in proportion to the respective number of Shares to be
purchased by each of the Underwriters hereunder and not joint.
9. Underwriter Default.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates
(the "Default Shares") do not (after giving effect to arrangements, if any,
made by the Lead Managers pursuant to subsection (b) below) exceed in the
aggregate 10% of the number of Firm Shares or Additional Shares, each
non-defaulting Underwriter, acting severally and not jointly, agrees to
purchase from the Company that number of Default Shares that bears the same
proportion of the total number of Default Shares then being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto bears to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters, subject, however, to
such adjustments to eliminate fractional shares as the Lead Managers in their
sole discretion shall make.
(b) In the event that the aggregate number of Default Shares exceeds 10%
of the number of Firm Shares or Additional Shares, as the case may be, the
Lead Managers may in their discretion arrange for themselves or for another
party or parties (including any non-defaulting Underwriter or Underwriters who
so agree) to purchase the Default Shares on the terms contained herein. In the
event that within five calendar days after such a default the Lead Managers do
not arrange for the purchase of the Default Shares as provided in this Section
9, this Agreement or, in the case of a default with respect to the Additional
Shares, the obligations of the Underwriters to purchase and of the Company to
sell the Additional Shares shall thereupon terminate, without liability on the
part of the Company with respect thereto (except in each case as provided in
Sections 5, 7, 8, 10 and 11(d)) or the Underwriters, but nothing in this
Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that any Default Shares are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, the Lead Managers or the Company shall have the right to
postpone the Closing Date or Additional Closing Date, as the case may be for a
period, not exceeding five business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus
or in any other documents and arrangements, and the Company agrees to file
promptly any amendment or supplement to the Registration Statement or the
Prospectus which, in the opinion of Underwriters' Counsel, may thereby be made
necessary or advisable. The term "Underwriter" as used in this Agreement shall
include any party substituted under this Section 9 with like effect as if it
had originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement or in certificates of officers of the Company or
any Subsidiary submitted pursuant hereto, including the agreements contained
in Section 5, the indemnity agreements contained in Section 7 and the
contribution agreements contained in Section 8, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof or by or on behalf of the
Company, any of its officers and directors or any controlling person thereof,
and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8, 10 and 11 hereof shall survive any termination
of this Agreement, including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective when the parties hereto have
executed and delivered this Agreement.
(b) The Lead Managers shall have the right to terminate this Agreement at
any time prior to the Closing Date or to terminate the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if, at or after the Applicable
Time, (i) any domestic or international event or act or occurrence has
materially disrupted, or in the opinion of the Lead Managers will in the
immediate future materially disrupt, the market for the Company's securities
or securities in general; or (ii) trading on the New York Stock Exchange (the
"NYSE"), Nasdaq or on the TSX shall have been suspended or been made subject
to material limitations, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the NYSE, Nasdaq or on the TSX or by order of the Commission or
any other governmental authority having jurisdiction; or (iii) a banking
moratorium has been declared by any U.S. state or U.S. or Canadian federal
authority or any material disruption in commercial banking or securities
settlement or clearance services shall have occurred; or (iv) any downgrading
shall have occurred in the Company's corporate credit rating or the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act) or any such organization shall have publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities; or v (A) there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency
or war by the United States or (B) there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (A) or (B), in the judgment of the Lead Managers,
makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may be, on
the terms and in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to Section 9(b) hereof), or if the sale
of the Shares provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth herein is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Lead Managers, reimburse the Underwriters for
all out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed and
confirmed in writing, to such Underwriter c/o Bear, Stearns & Co. Inc., 383
Madison Avenue, New York, New York 10179, Attention: Stephen Parish, Senior
Managing Director, Equity Transactions Group, with a copy to Shearman &
Sterling LLP at Commerce Court West, 199 Bay Street, Suite 4405, Toronto, ON
M5L 1E8, Attention: Christopher J. Cummings, and to Blake, Cassels & Graydon
LLP, 2600, Three Bentall Centre, 595 Burrard Street, P.O. Box 49314,
Vancouver, BC V7X 1L3, Attention: Peter J. O'Callaghan;
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to the Company and its counsel at the addresses set forth
in the Registration Statement;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to Bear Stearns, which address
will be supplied to any other party hereto by Bear Stearns upon request. Any
such notices and other communications shall take effect at the time of receipt
thereof.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and said controlling persons and their respective successors, officers,
directors, heirs and legal representatives, and it is not for the benefit of
any other person, firm or corporation. The term "successors and assigns" shall
not include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
14. Governing Law and Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by and construed in accordance with the laws of
the State of New York. The Company irrevocably (a) submits to the jurisdiction
of any court of the State of New York or the United State District Court for
the Southern District of the State of New York (each a "New York Court") for
the purpose of any suit, action, or other proceeding arising out of this
Agreement, or any of the agreements or transactions contemplated by this
Agreement, the Registration Statement and the U.S. Prospectus (each, a
"Proceeding"), (b) agrees that all claims in respect of any Proceeding may be
heard and determined in any New York Court, (c) waives, to the fullest extent
permitted by law, any immunity from jurisdiction of any New York Court or from
any legal process therein, (d) agrees not to commence any Proceeding other
than in a New York Court, and (e) waives, to the fullest extent permitted by
law, any claim that such Proceeding is brought in an inconvenient forum. The
Company hereby irrevocably designates CT Corporation System Inc., 111 Eighth
Avenue, New York, New York 10011, as agent upon whom process against the
Company may be served. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST
EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND
CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION
STATEMENT AND THE PROSPECTUS.
15. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder into any currency
other than U.S. dollars, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Underwriters could
purchase U.S. dollars with such other currency in The City of New York on the
business day preceding that on which final judgment is given. The obligations
of the Company in respect of any sum due from it to any Underwriter shall,
notwithstanding any judgment in any currency other than U.S. dollars, not be
discharged until the first business day, following receipt by such Underwriter
of any sum adjudged to be so due in such other currency, on which (and only to
the extent that) such Underwriter may in accordance with normal banking
procedures purchase U.S. dollars with such other currency; if the U.S. dollars
so purchased are less than the sum originally due to such Underwriter
hereunder, the Company agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify such Underwriter against such loss. If the
U.S. dollars so purchased are greater than the sum originally due to such
Underwriter hereunder, such Underwriter agrees to pay to the Company an amount
equal to the excess of the U.S. dollars so purchased over the sum originally
due to such Underwriter hereunder.
16. The parties acknowledge and agree that, for purposes of Sections
1(e), 1(g), 1(h), and 7 hereof, the information provided by or on behalf of
any Underwriter consists solely of the material included in the table
following paragraph one, the first sentence of paragraph five, and in
paragraphs 11, 12, 13 and 15, in each case under the caption "Underwriting" in
the Prospectus.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery
of a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
20. Language. The parties hereto hereby specifically request that
this Agreement and all documents related hereto be drawn up and signed in the
English language only. Les parties aux presentes exigent que cette convention
ainsi que tous les documents y afferents soient rediges et signes en langue
anglaise seulement.
[signature page follows]
If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
PAN AMERICAN SILVER CORP.
By: /s/ Robert Pirooz
----------------------
Name: Robert Pirooz
Title: Secretary
Accepted as of the date first above written
BEAR, STEARNS & CO. INC.
By: /s/ Steve Park
------------------
Name: Steve Park
Title: Vice President
HARRIS NESBITT CORP.
By: /s/ William S. Schreier
---------------------------
Name: William S. Schreier
Title: Managing Director
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
SCHEDULE I
Number of Additional
Total Number of Firm Shares to be Purchased if
Underwriter Shares to be Purchased Option is Fully Exercised
----------- ---------------------- ------------------------
Bear, Stearns & Co. Inc. ........................ 2,012,500 185,993
Harris Nesbitt Corp. ............................ 2,012,500 185,993
CIBC World Markets Inc. ......................... 862,500 79,711
Merrill Lynch, Pierce, Fenner & Smith 575,000 53,140
Incorporated ................
Canaccord Capital Corporation (USA), Inc. ....... 143,750 13,285
NBF Securities (USA) Corp. ...................... 143,750 13,285
------- ------
Total..................................... 5,750,000 531,407
================ ===============
SCHEDULE II
Ross J. Beaty
Geoff A. Burns
William A. Fleckenstein
Michael Larson
Michael J.J. Maloney
Paul B. Sweeney
John H. Wright
John Willson
A. Robert Doyle
Robert P. Pirooz
Steven Busby
Andrew Pooler
Michael Steinmann
Wayne Vincent
EXHIBIT A
Subsidiaries
------------
Name Jurisdiction Ownership (%)
---- ------------ -------------
Pan American Silver S.A.C. Mina Quiruvilca Peru 100% (Voting)
99.7% (Non-voting)
Pan American Silver Peru S.A.C. Peru 100%
Pan American Silver (Barbados) Corp. Barbados 100%
Compania Minera Argentum Peru 87%
Plata Panamericana S.A. de C.V. Mexico 100%
Corner Bay Silver Inc. Canada 100%
Pan MacKenzie Resources Inc. U.S. 100%
Minera Corner Bay S.A. de C.V. Mexico 100%
Compania Minera Alto Valle S.A. Argentina 100%
Minera Triton Argentina S.A. Argentina 100%
Pan American Silver (Bolivia) S.A. Bolivia 55%
ANNEX I
Form of Opinion of Borden Ladner Gervais LLP
--------------------------------------------
1. The Company is a corporation existing under the Business
Corporations Act (British Columbia) and is in good standing with respect to
the filing of returns at the office of the Registrar of Companies for British
Columbia.
2. Corner Bay Silver Inc. is a corporation existing under the Canada
Business Corporations Act and is:
(i) in good standing with the office of the Director appointed under
the Canada Business Corporations Act with respect to filing annual returns;
(ii) registered as an "extraprovincial company" under the Business
Corporations Act (British Columbia) being the only registration of general
application to corporations required to permit them to be qualified to carry
on business in British Columbia; and
(iii) is in good standing with respect to filing annual reports at
the office of the Registrar of Companies for British Columbia;
3. Based solely upon our review of the minute books of Corner Bay
Silver Inc., the Company is the registered holder of all issued and
outstanding shares of Corner Bay Silver Inc.
4. Each of the Company and Corner Bay Silver Inc. has the corporate
power and capacity to own or lease its assets and to carry on its business as
described in the Canadian Prospectus and the U.S. Prospectus.
5. The Company has the corporate power and capacity to execute,
deliver and perform its obligations under the Underwriting Agreement.
6. The Company is:
(a) a "reporting issuer" under the Securities Act (British
Columbia), not in default of filing financial statements required by the
Securities Act (British Columbia) or the Securities Rules (British Columbia),
and not in default of paying fees and charges prescribed by the Securities
Regulation (British Columbia);
(b) a "reporting issuer" in the Provinces of Alberta and Ontario and
is not included on the list of defaulting issuers maintained by the Alberta
Securities Commission or the Ontario Securities Commission;
(c) a "reporting issuer" under the Securities Act (Quebec) and its
standing is in compliance with the filing requirements of Chapter II, Division
II and Chapter III of Title III of the Securities Act (Quebec);
(d) a "reporting issuer" in the Province of Saskatchewan and is not
noted by the Saskatchewan Financial Services Commission Securities Division
(the "Saskatchewan Commission") as being in default of the requirements of The
Securities Act, 1988 (Saskatchewan) or the regulations thereunder or the
instruments, orders, published policy statements and notices of the
Saskatchewan Commission;
(e) a "reporting issuer" under subsection 118(1) of The Securities
Act (Manitoba) and subject to the requirements of National Instrument 51-102
Continuous Disclosure Obligations ("NI 51-102") and the company is not in
default of its requirement to file financial statements pursuant to NI 51-102
along with any prescribed filing fee as set out in the regulations to The
Securities Act (Manitoba) and there is no order in effect which directs
trading to cease in any securities of the Company and no preceding of The
Manitoba Securities Commission is scheduled to consider whether such an order
should be issued; and
(f) a "reporting issuer" in the Provinces of New Brunswick, Nova
Scotia and Newfoundland and Labrador and is not noted by the New Brunswick
Securities Commission (the "N.B. Commission"), the Nova Scotia Securities
Commission (the "N.S. Commission") or the Newfoundland and Labrador Securities
Commission (the "Newfoundland and Labrador Commission") as being in default of
the requirements of the Securities Act (New Brunswick), the Securities Act
(Nova Scotia) and the Securities Act (Newfoundland and Labrador) or the
regulations thereunder or the instruments, orders, published policy statements
and notices of the N.B. Commission, the N.S. Commission and the Newfoundland
and Labrador Commission.
7. The Company is authorized to issue 100,000,000 common shares
without par value, of which [ ] common shares are issued and outstanding
immediately prior to closing of the Offering.
8. The Firm Shares have been duly authorized and allotted and
validly issued as fully paid and non-assessable common shares in the capital
of the Company.
9. The Additional Shares have been duly authorized and allotted and,
upon due exercise by the Underwriters of the option to purchase Additional
Shares in accordance with the terms of the Underwriting Agreement and upon
receipt by the Company of payment in full of the exercise price for such
Additional Shares, such Additional Shares will be validly issued as fully paid
and non-assessable common shares in the capital of the Company.
10. All necessary corporate action has been taken by the Company to
authorize the execution, delivery and filing of the Preliminary Base Short
Prospectus, the Final Base Short Prospectus, the Canadian Preliminary
Prospectus Supplement and the Canadian Prospectus Supplement under Canadian
Securities Laws and, to the extent authorization of execution, delivery and
filing is a matter governed by the laws of the Province of British Columbia,
the filing of the U.S. Base Prospectus, the U.S. Preliminary Prospectus or the
U.S. Prospectus Supplement with the Commission..
11. The execution and delivery by the Company of the Underwriting
Agreement and the performance by the Company of its obligations thereunder
have been duly authorized by the Company.
12. The Underwriting Agreement has been, to the extent execution and
delivery are matters governed by the laws of the province of British Columbia,
duly executed and delivered by the Company.
13. The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder will
not result in any breach or violation of, or be in conflict with, or
constitute a default under, or create a state of facts which after notice or
lapse of time, or both, would constitute a default under, or result in the
creation or imposition of any mortgage, lien, charge or encumbrance upon any
property or assets of the Company under:
(a) any term or provision of the articles or notice of articles of
the Company;
(b) any resolution of the directors or shareholders of the Company;
(c) to our knowledge, any material agreement or instrument to which
the Company is bound;
(d) any law of British Columbia, Alberta, Ontario or Quebec or the
federal laws of Canada applicable therein; or
(e) to our knowledge, any judgment, decree or order of any court,
government agency, commission, body or regulatory authority having
jurisdiction over the Company.
14. A British Columbia or Canadian federal court of competent
jurisdiction (a "Canadian Court") would give effect to the choice of law of
the State of New York ("New York law") as the proper law governing the
Underwriting Agreement, on appropriate evidence of such law being introduced,
provided that:
(a) the choice was bona fide and legal, that is, either there is a
connection between New York and the transaction or the parties did not choose
New York law to avoid the application of the law of another jurisdiction with
which the transaction has the closest connection;
(b) that choice was not contrary to British Columbia's public
policy, that is to its essential public or moral interest ("British Columbia
Public Policy"); and
(c) the British Columbia legislature has not enacted legislation
providing that the substantive law of British Columbia is to apply to the
particular situation before the courts,
and provided that the British Columbia court would apply
British Columbia procedural law in any proceeding arising from the agreements,
and we are not aware of any reasons under the laws of the Province of British
Columbia and the federal laws of Canada applicable therein for avoiding the
choice of New York law to govern the Underwriting Agreement.
15. A Canadian Court would give effect to the appointment by the
Company of CT Corporation System as its agent to receive service of process in
the United States under the Underwriting Agreement.
16. If the Underwriting Agreement is sought to be enforced in a
Canadian Court, that court would retain discretion to decline to hear such
action if it were not the most appropriate forum to hear such an action.
17. The laws of the province of British Columbia would permit a
common law action to be brought in the Supreme Court of British Columbia on a
final, conclusive, subsisting, unsatisfied, in personam judgment of a New York
Court for a sum certain, that is not impeachable as void or voidable under New
York law, within six years of that judgment. In such an action the Court would
not consider the merits of the New York proceeding. Provided that the judgment
creditor proved on a balance of probabilities that:
(a) the New York Court had jurisdiction under New York law to deal
with the New York proceeding and to require the judgment debtor to appear
before it;
(b) either there was a real and substantial connection between the
parties, the cause of action and New York or the judgment debtor had attorned
to the jurisdiction of the New York Court (and submission of the Company to
the jurisdiction of the New York Court in Section 14 of the Underwriting
Agreement would be sufficient for that purpose); and
(c) the New York Court granted the New York judgment in the judgment
creditor's favour,
the Court would grant judgment enforcing the New York judgment
unless the judgment debtor proved on a balance of probabilities that:
(a) the judgment creditor had committed a fraud on the New York
Court leading to that court concluding it had jurisdiction under New York law
when it did not;
(b) there were new facts, which the judgment debtor could not
previously have discovered exercising due diligence, suggesting the judgment
creditor had obtained the New York judgment by fraud going to its merits;
(c) the New York judgment was obtained by a breach of Canadian
principles of natural justice with respect to the New York Court's procedure;
(d) the New York judgment was contrary to British Columbia's public
policy, that is, to its essential conception of morality and justice; or
(e) there was a manifest error on the face of the New York judgment.
The Court would apply British Columbia law with respect to the
procedures for the enforcement of the judgment. The Court's judgment would be
in Canadian dollars converted from the currency of the New York judgment at
the rate of exchange applicable on the conversion date which would be in the
discretion of the Court. If the New York judgment included an interest
component, it would be included in the principal amount of the British
Columbia judgment, with interest accruing on the total from the date of the
British Columbia judgment at the British Columbia post-judgment interest rate,
which is now 5.0%.
18. The attributes of the Shares conform in all material respects
with the description of the common shares in the Canadian Prospectus and the
U.S. Prospectus.
19. Subject to the qualifications set out therein, the statements of
law in the Canadian Prospectus and the U.S. Prospectus under the heading
"Eligibility for Investment" and "Certain Income Tax Considerations for
Canadian Holders" are a fair and accurate summary of the law in all material
respects;
20. The form and terms of the certificates representing the Shares
comply with the requirements of the Business Corporations Act (British
Columbia), the Company's articles and notice of articles and the requirements
of Appendix D of the TSX Company Manual and have been duly approved by the
Company.
21. Computershare Investor Services Inc., at its principal offices
in the cities of Vancouver and Toronto, has been duly appointed as the
registrar and transfer agent in respect of the common shares of the Company,
including the Shares.
22. The TSX has conditionally approved the listing of the Shares,
subject to the Company fulfilling all of the requirements of the TSX as
specified in the TSX Letter by July 4, 2006.
23. All necessary documents have been filed, all requisite
proceedings have been taken and all other legal requirements have been
fulfilled by the Company under the Canadian Securities Laws to qualify the
distribution of the Firm Shares and the Additional Shares to the public in
each of the Provinces of Canada by or through investment dealers or brokers
duly and properly registered in the appropriate category under the applicable
Canadian Securities Laws who have complied with the relevant provisions of
such Canadian Securities Law and the terms of such registration.
24. The distribution of the Firm Shares conforms, in all material
respects, with all laws in the Province of Quebec relating to the use of the
French language in connection therewith, other than those relating to oral
communications as to which we express no opinion, provided the purchasers in
Quebec receive a copy of the Canadian Prospectus and forms of order or
confirmation in the French language only, and provided that the Canadian
Prospectus in the English language and forms of order or confirmation in the
English language may be delivered without delivery of the French language
versions thereof to natural persons in Quebec who have expressly requested
them in writing.
25. No withholding tax, stamp duty, registration or documentary
taxes or similar charges are imposed under the federal laws of Canada or the
Province of British Columbia or will be payable in respect of the payment or
crediting of payments to the Underwriters contemplated by the Underwriting
Agreement by the Company to an Underwriter that is not, and is not deemed to
be, a resident of Canada for the purposes of the Income Tax Act (Canada),
provided that the Underwriter deals at arm's length with the Company (as such
term is understood for purposes of the Income Tax Act (Canada)), and to the
extent that such amounts are payable in respect of services rendered by the
Underwriter outside of Canada that are performed in the ordinary course of
business carried on by the Underwriter outside of Canada that includes the
performance of such services for a fee.
Such counsel shall also provide a separate letter confirming (i) no
facts have come to such counsel's attention in the course of its review as
counsel to the Company which lead such counsel to believe that (a) the General
Disclosure Package, as of the Applicable Time and as of the date of the
letter; or (b) the Prospectus, on the date thereof or the date of the letter,
contained or contains an untrue statement of a material fact, or omitted or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, in light of the
circumstances under which they were made, and (ii) in such counsel's opinion
the Prospectus as of its issue date appears on its face to be appropriately
responsive in all material respects to the form requirements of the securities
laws, rules and regulations of the Provinces of British Columbia, Alberta,
Ontario and Quebec.
ANNEX II
Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
-----------------------------------------------------------
1. Pan MacKenzie Resources, Inc. (the "Delaware Subsidiary") is
validly existing in good standing under the laws of the State of Delaware.
2. All the 2000 issued and outstanding shares of common stock of
the Delaware Subsidiary are owned of record by Corner Bay Minerals Inc.
3. The Underwriting Agreement has been duly executed and
delivered, to the extent such execution and delivery are governed by the laws of
the State of New York, by the Company.
4. No consent, approval, license, authorization or validation of,
or filing, qualification or registration with any court, regulatory body,
administrative agency or governmental body of the State of New York or the
United States of America having jurisdiction over the Company under Applicable
Laws required to be made or obtained by the Company pursuant to Applicable Laws,
other than any consent, approval, license, authorization, validation, filing,
qualification or registration that may have become applicable as a result of the
involvement of any party (other than the Company) in the transactions
contemplated by the Underwriting Agreement or because of such parties' legal or
regulatory status or because of any other facts specifically pertaining to such
parties, which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required for, the execution or delivery
of the Underwriting Agreement by the Company or the consummation by the Company
of the transactions contemplated thereby. "Applicable Laws" means those laws,
rules and regulations of the State of New York and the federal laws, rules and
regulations of the United States of America, in each case that, in our
experience, are normally applicable to transactions of the type contemplated by
the Underwriting Agreement (other than the United States federal securities
laws, state securities or blue sky laws, antifraud laws and the rules and
regulations of the National Association of Securities Dealers, Inc.), but
without such counsel having made any special investigation as to the
applicability of any specific law, rule or regulation
5. The Company is not required to seek an order permitting
registration under the Investment Company Act of 1940, as amended.
Such counsel shall also provide a separate tax opinion stating
that such counsel is of the opinion that under current United States federal
income tax law, although the discussion set forth in the Prospectus under the
caption "United States Federal Income Tax Consequences" does not purport to
summarize all possible United States federal income tax consequences of the
purchase, ownership, and disposition of the Securities by U.S. Holders (as
defined in the Prospectus), such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
considerations that are anticipated to be material to U.S. Holders who
purchase the Securities pursuant to the Prospectus.
In addition, such counsel shall provide a separate letter which
shall contain a statement that such counsel has participated in conferences
with officers and representatives of the Company, Canadian counsel for the
Company, representatives of the independent accountants of the Company and
representatives of the Underwriters and U.S. and Canadian counsel for the
underwriters at which the contents of the Registration Statement, the Pricing
Prospectus and the Prospectus and related matters were discussed and that on
the basis of the foregoing, (i) the Registration Statement, at the date of the
first use of the Prospectus Supplement, and the Base Prospectus, as
supplemented by the Prospectus Supplement, as of the date of the Prospectus
Supplement, appeared on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the General
Rules and Regulations thereunder ("Rules and Regulations") (except that in
each case such counsel need not express any view as to the financial
statements, schedules and other financial included or incorporated by
reference therein or excluded therefrom), (ii) the Form F-X, as of its date,
appeared on its face to be appropriately responsive in all material respects
to the requirements of the Securities Act and the Rules and Regulations
applicable to such form, and (iii) no facts have come to such counsels'
attention that have caused such counsel to believe that the Registration
Statement, at the date of the first use of the Prospectus Supplement,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date and
as of the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading (except that in each case such counsel need not express
any view as to the financial statements, schedules and other financial
information included or incorporated by reference therein or excluded
therefrom or the information derived from the reports of, or attributed to,
persons named in the Preliminary Prospectus and the Prospectus under the
heading "Interest of Experts"). In addition, on the basis of the foregoing, no
facts have come to such counsel's attention that have caused such counsel to
believe that the General Disclosure Package, as of the Applicable Time,
contained 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 (except that such
counsel need not express any view as to the financial statements, schedules
and other financial information included or incorporated by reference therein
or excluded therefrom or the information derived from the reports of or
attributed to persons named in the Preliminary Prospectus and the Prospectus
under the heading "Interest of Experts"). Such counsel shall also state that
Pursuant to Rule 467(a) under the Securities Act, the Registration Statement
became effective upon the filing of Amendment No. 1 thereto with the
Commission on February 10, 2005, and such counsel has have been orally advised
by the Commission that (i) no stop order suspending the effectiveness of the
Registration Statement has been issued and (ii) no proceedings for that
purpose have been instituted or are pending or threatened by the Commission.
In addition, according to the Commission's EDGAR database, the Form F-X was
filed with the Commission prior to the effectiveness of the Registration
Statement, and the filing of each of the Preliminary Prospectus and the
Prospectus pursuant to General Instruction II.L of Form F-10 was made in the
manner and within the time period required by such General Instruction II.L.
ANNEX III
Form of Lock-Up Agreement
-------------------------
April __, 2006
Bear, Stearns & Co. Inc.
Harris Nesbitt Corp.
As Representatives of the several
Underwriters referred to below
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Attention: Equity Transactions Group
Pan American Silver Corp. Lock-Up Agreement
-------------------------------------------
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed
public offering (the "Offering") by Pan American Silver Corp., a British
Columbia corporation (the "Company"), of its common shares, without par value
(the "Shares").
In order to induce you and the other underwriters for which you act
as representatives (the "Underwriters") to underwrite the Offering, the
undersigned hereby agrees that, without the prior written consent of Bear,
Stearns & Co. Inc. ("Bear Stearns") and Harris Nesbitt Corp. ("Harris
Nesbitt"), during the period from the date hereof until [ninety (90)/
forty-five (45)] days from the date of the final prospectus for the Offering
(the "Lock-Up Period"), the undersigned (a) will not, directly or indirectly,
offer, sell, agree to offer or sell, solicit offers to purchase, grant any
call option or purchase any put option with respect to, pledge, borrow or
otherwise dispose of any Relevant Security (as defined below), and (b) will
not establish or increase any "put equivalent position" or liquidate or
decrease any "call equivalent position" with respect to any Relevant Security
(in each case within the meaning of Section 16 of the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder), or
otherwise enter into any swap, derivative or other transaction or arrangement
that transfers to another, in whole or in part, any economic consequence of
ownership of a Relevant Security, whether or not such transaction is to be
settled by delivery of Relevant Securities, other securities, cash or other
consideration. As used herein "Relevant Security" means the Shares, any other
equity security of the Company or any of its subsidiaries and any security
convertible into, or exercisable or exchangeable for, any Shares or other such
equity security. Notwithstanding the foregoing, the undersigned may sell
Relevant Securities issued by the Company upon the exercise of options
currently outstanding on the date hereof or pursuant to stock option plans in
effect on the date hereof.
Notwithstanding the preceding paragraph, if (1) during the last 17
days of the Lock-Up Period the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the
expiration of the Lock-Up Period the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by the immediately preceding
paragraph shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event, as applicable, unless Bear Stearns and Harris
Nesbitt waive, in writing, such extension. The undersigned acknowledges that
the Company has agreed in the underwriting agreement for the Offering to
provide notice to the undersigned of any event that would result in an
extension of the Lock-Up Period pursuant to this paragraph, and the
undersigned agrees that any such notice properly delivered will be deemed to
have been given to, and received by, the undersigned.
The undersigned hereby authorizes the Company during the Lock-Up
Period to cause any transfer agent for the Relevant Securities to decline to
transfer, and to note stop transfer restrictions on the share register and
other records relating to, Relevant Securities for which the undersigned is
the record holder and, in the case of Relevant Securities for which the
undersigned is the beneficial but not the record holder, agrees during the
Lock-Up Period to cause the record holder to cause the relevant transfer agent
to decline to transfer, and to note stop transfer restrictions on the share
register and other records relating to, such Relevant Securities. The
undersigned hereby further agrees that, without the prior written consent of
Bear Stearns and Harris Nesbitt, during the Lock-up Period the undersigned (x)
will not file or participate in the filing with the Securities and Exchange
Commission of any registration statement, or circulate or participate in the
circulation of any preliminary or final prospectus or other disclosure
document with respect to any proposed offering or sale of a Relevant Security
and (y) will not exercise any rights the undersigned may have to require
registration with the Securities and Exchange Commission of any proposed
offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Agreement and that this
Agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon
the successors and assigns of the undersigned from the date first above
written.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
[Signature Page Follows]
Very truly yours,
By: _____________________________
Print Name: _______________________
ANNEX IV
--------
Pricing Terms included in the Pricing Disclosure Package
Number of Firm Shares Offered: 5,750,000
Number of Additional Shares Offered: 531,407
Public Offering Price per Share: $23.88
Underwriting Commissions per Share: $1.1343
Date of Delivery of Firm Shares: April 18, 2006
DOCUMENT 2
John H. Wright
c/o 1500 - 625 Howe Street
Vancouver, BC V6C 2T6
__________________, 2006
All Applicable Securities Regulatory Authorities
BY SEDAR
Dear Sirs/Mesdames:
Re: Pan American Silver Corp. (the "Company")
Prospectus Supplement to the Short Form Base Shelf Prospectus
dated February 9, 2005
Consent of Professional pursuant to National Instrument 44-102
In connection with the filing of the prospectus supplement to the short form
base shelf prospectus of the Company to be dated April ____, 2006 (the
"Prospectus Supplement"), I hereby consent to the use of my name in connection
with references to my involvement in the preparation of a Technical Report
dated August 29, 2003 with respect to the Company's La Colorada project in
Mexico (the "Technical Report") and to the use of the Technical Report,
portions thereof and information which is referenced in the Company's Annual
Information Form dated March 30, 2006 (the "AIF"), a document incorporated by
reference in the Prospectus Supplement, including the section of the AIF
entitled "La Colorada Mine".
I have read the Prospectus Supplement and the AIF and have no reason to believe
that there are any misrepresentations in the information contained therein that
are derived from the Technical Report or that is within my knowledge as a
result of the services I have performed in connection with the Technical
Report.
Yours truly,
/s/ John H. Wright
John H. Wright, P. Eng.
Norman Pitcher
c/o 1500 - 625 Howe Street
Vancouver, BC V6C 2T6
____________, 2006
All Applicable Securities Regulatory Authorities
BY SEDAR
Dear Sirs/Mesdames:
Re: Pan American Silver Corp. (the "Company")
Prospectus Supplement to the Short Form Base Shelf Prospectus
dated February 9, 2005
Consent of Professional pursuant to National Instrument 44-102
In connection with the filing of the prospectus supplement short form base
shelf prospectus of the Company to be dated April ___, 2006 (the "Prospectus
Supplement"), I hereby consent to the use of my name in connection with
references to my involvement in the preparation of a Technical Report dated
August 29, 2003 with respect to the Company's La Colorada project in Mexico
(the "Technical Report") and to the use of the Technical Report, portions
thereof and information which is referenced in the Company's Annual Information
Form dated March 30, 2006 (the "AIF"), a document incorporated by reference in
the Prospectus Supplement, including the section of the AIF entitled "La
Colorada Mine".
I have read the Prospectus Supplement and the AIF and have no reason to believe
that there are any misrepresentations in the information contained therein that
are derived from the Technical Report or that is within my knowledge as a
result of the services I have performed in connection with the Technical
Report.
Yours truly,
/s/ Norman Pitcher
Norman Pitcher, P. Geol.
RESOURCE EVALUATION INC.
2560 W La Cresta Road
Tucson, Arizona 85742
U.S.A.
__________________, 2006
All Applicable Securities Regulatory Authorities
BY SEDAR
Dear Sirs/Mesdames:
Re: Pan American Silver Corp. (the "Company")
Prospectus Supplement to the Short Form Base Shelf Prospectus
dated February 9, 2005
Consent of Professional pursuant to National Instrument 44-102
In connection with the filing of the prospectus supplement to the short form
base shelf prospectus of the Company to be dated April ____, 2006 (the
"Prospectus Supplement"), we hereby consent to the use of our name in
connection with references to our involvement in the preparation of a Technical
Report dated February 2004 with respect to the Company's Morococha operations
located in Peru (the "Technical Report") and to the use of the Technical
Report, portions thereof and information which is referenced in the Company's
Annual Information Form dated March 30, 2006 (the "AIF"), a document
incorporated by reference in the Prospectus Supplement, including under the
section of the AIF entitled "Acquisition of the Morococha Property".
We have read the Prospectus Supplement and the AIF and have no reason to
believe that there are any misrepresentations in the information contained
therein that are derived from the Technical Report or that is within our
knowledge as a result of the services we have performed in connection with the
Technical Report.
Yours truly,
RESOURCE EVALUATION INC.
Per: /s/ Donald F. Earnest
----------------------
Donald F. Earnest
Authorized Signatory
Robert B. Barnes
1220 Fifth Street
Spearfish S.D., U.S.A. 57783
____________, 2006
All Applicable Securities Regulatory Authorities
BY SEDAR
Dear Sirs/Mesdames:
Re: Pan American Silver Corp. (the "Company")
Prospectus Supplement to the Short Form Base Shelf Prospectus
dated February 9, 2005
Consent of Professional pursuant to National Instrument 44-102
In connection with the filing of the prospectus supplement short form base
shelf prospectus of the Company to be dated April ___, 2006 (the "Prospectus
Supplement"), I hereby consent to the use of my name in connection with
references to my involvement in the preparation of a Technical Report dated
August 29, 2003 with respect to the Company's La Colorada project in Mexico
(the "Technical Report") and to the use of the Technical Report, portions
thereof and information which is referenced in the Company's Annual Information
Form dated March 30, 2006 (the "AIF"), a document incorporated by reference in
the Prospectus Supplement, including the section of the AIF entitled "La
Colorada Mine".
I have read the Prospectus Supplement and the AIF and have no reason to believe
that there are any misrepresentations in the information contained therein that
are derived from the Technical Report or that is within my knowledge as a
result of the services I have performed in connection with the Technical
Report.
Yours truly,
/s/ Robert B. Barnes
Robert B. Barnes, P. Eng.
Martin G. Wafforn
c/o 1500 - 625 Howe Street
Vancouver, BC V6C 2T6
__________________, 2006
All Applicable Securities Regulatory Authorities
BY SEDAR
Dear Sirs/Mesdames:
Re: Pan American Silver Corp. (the "Company")
Prospectus Supplement to the Short Form Base Shelf Prospectus
dated February 9, 2005
Consent of Professional pursuant to National Instrument 44-102
In connection with the filing of the prospectus supplement to the short form
base shelf prospectus of the Company to be dated April ____, 2006 (the
"Prospectus Supplement"), I hereby consent to the use of my name in connection
with references to my involvement in the preparation of a Technical Report
dated March ____, 2006 with respect to the Company's Manantial Espejo project
in Argentina (the "Technical Report") and to the use of the Technical Report,
portions thereof and information which is referenced in the Prospectus
Supplement, including without limitation the section of the Prospectus
Supplement entitled "Recent Developments".
I have read the Prospectus Supplement and have no reason to believe that there
are any misrepresentations in the information contained therein that are
derived from the Technical Report or that is within my knowledge as a result of
the services I have performed in connection with the Technical Report.
Yours truly,
/s/ Martin G. Wafforn
Martin G. Wafforn, P. Eng.
Michael Steinmann
c/o 1500 - 625 Howe Street
Vancouver, BC V6C 2T6
__________________, 2006
All Applicable Securities Regulatory Authorities
BY SEDAR
Dear Sirs/Mesdames:
Re: Pan American Silver Corp. (the "Company")
Prospectus Supplement to the Short Form Base Shelf Prospectus
dated February 9, 2005
Consent of Professional pursuant to National Instrument 44-102
In connection with the filing of the prospectus supplement to the short form
base shelf prospectus of the Company to be dated April ____, 2006 (the
"Prospectus Supplement"), I hereby consent to the use of my name in connection
with references to my involvement in the preparation of a Technical Report
dated March ____, 2006 with respect to the Company's Manantial Espejo project
in Argentina (the "Technical Report") and to the use of the Technical Report,
portions thereof and information which is referenced in the Prospectus
Supplement, including without limitation the section of the Prospectus
Supplement entitled "Recent Developments".
I have read the Prospectus Supplement and have no reason to believe that there
are any misrepresentations in the information contained therein that are
derived from the Technical Report or that is within my knowledge as a result of
the services I have performed in connection with the Technical Report.
Yours truly,
/s/ Michael Steinmann
Michael Steinmann, P.Geo, Ph.D.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PAN AMERICAN SILVER CORP.
---------------------------------
(Registrant)
Date: April 17, 2006 By: /S/ ROBERT PIROOZ
---------------- --------------------------
Name: Robert Pirooz
Title: Secretary