COMMON
SHARES
PAN
AMERICAN SILVER CORP.
UNDERWRITING
AGREEMENT
February
5, 2009
GOLDMAN
SACHS CANADA INC.
CIBC
WORLD MARKETS INC.
As
Representatives of the
several
Underwriters named in
Schedule
I attached hereto (the “Representatives”)
c/o
Goldman Sachs Canada Inc.
77 King
Street West
Suite
3400
Toronto,
Ontario M5K 1B7
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 5,540,000 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 831,000 of its common shares (the
“Additional Shares”), without par value. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
“Shares”. Goldman Sachs Canada Inc. and CIBC World Markets Inc. 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 13, 2009 (the “Preliminary Base Short Prospectus”) and a final
short form base shelf prospectus dated January 20, 2009 (the “Final Base Shelf
Prospectus”) in respect of up to US$200,000,000 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,
Saskatchewan,
Yukon, Nunavut and Northwest Territories (the “Qualifying Provinces”); and the
Reviewing Authority has issued a prospectus receipt under National Policy
11-202: Process for Prospectus Reviews in Multiple Jurisdictions (a “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 a 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 February 4, 2009, 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 a Decision Document dated January 20, 2009 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 any of
the Canadian Qualifying Authorities and no proceeding for that purpose has been
initiated or, to the best of the Company’s knowledge, threatened by any of the
Canadian Qualifying Authorities, and any request on the part of any of the
Canadian Qualifying Authorities for additional information has been complied
with.
(c) The
Canadian Prospectus and 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 a 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. 333-156707) on January 13, 2009
and Amendment No. 1 thereto on January 20, 2009, providing for the registration
of up to US$200,000,000 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
on January 21, 2009 pursuant to Rule 467(b) 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 on January 13, 2009 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 final prospectus supplement relating to the Shares
and including the pricing information omitted from the U.S. Preliminary
Prospectus (as defined below), 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 that excludes certain pricing information and
is 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.
(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 (in the light of the circumstances under
which they were made, in the case of the U.S. Prospectus) not misleading;
provided, however, that this representation and warranty shall not apply to any
information contained in or omitted from the Registration Statement or the U.S.
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter 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 9:32 a.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) 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.
(l) The
Company has an authorized and outstanding 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, have been duly and validly authorized and issued and have been
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”).
(m) 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.
(n) 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 its 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”).
(o)
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 certain 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.
(p)
This Agreement has been duly and validly authorized, executed and delivered by
the Company.
(q)
The issue and sale of the Shares, the compliance by the Company with this
Agreement and the consummation of the transactions herein contemplated do not
and will not (i) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default (or an event which with notice
or lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any Lien upon any property or assets of the Company or
any 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.
(r) 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 (the “TSX”), the submission of a notification to The
NASDAQ Stock Market (“Nasdaq”) relating to the issuance of the Shares 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 or shall be made within
the time period prescribed therefor.
(s)
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.
(t)
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; and 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. 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.
(u)
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.
(v) The
common shares of the Company have been registered pursuant to Section 12(g) of
the Exchange Act. The common shares of the Company are listed on the
TSX and on 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.
(w) 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.
(x) The
Company maintains disclosure controls and procedures and internal control over
financial reporting (as such terms are defined in Rule 13a-15 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 and internal control over
financial reporting are effective.
(y) 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.
(z) 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.
(aa) 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.
(bb) Neither
the Company nor, to the Company’s knowledge, any of its affiliates (within the
meaning of Rule 144 under the Securities Act) has, 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.
(cc) 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.
(dd) 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.
(ee) 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.
(ff) 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 Financial Industry
Regulatory Authority, Inc. (“FINRA”).
(gg) 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,
except with respect to the ownership of certain surface rights at the Morococha
mine, which are as described in the Canadian Preliminary Prospectus, the
Registration Statement 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.
(hh) 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.
(ii) 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.
(jj) 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.
(kk) 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 .
(ll)
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. Without limiting the generality of the
foregoing, none of the Company, any Subsidiary or, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or
any Subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”), including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA; and the Company, each Subsidiary
and, to the knowledge of the Company, affiliates of the Company have conducted
their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith. 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.
(mm) 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.
(nn) 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 Canadian Preliminary Prospectus
or any U.S. 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.
(oo) All outlooks or projections, if any, disclosed in the
Canadian Preliminary Prospectus, the Registration Statement or the Pricing
Prospectus, have been prepared based upon reasonable assumptions in the
circumstances and, with respect to write downs and charges, using accounting
principles consistent with the audited financial statements of the Company for
the year ended December 31, 2007.
(pp) The
Company does not believe it is a “passive foreign investment company”, as such
term is defined in the United States Internal Revenue Code of 1986, as
amended.
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
US$16.25, 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 US$0.771875 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 February 12, 2009, 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 (“DTC”) or CDS Clearing
and Depository Services, Inc. (“CDS”), as applicable, for 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 831,000 Additional Shares at the same purchase price per share to be paid by
the Underwriters for the Firm Shares and at the same commission per share to be
received by the Underwriters as set forth in Section 2(a) above, for the sole
purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised at any time and from time
to time, in whole or in part on one or more occasions, on or before the
thirtieth day following the 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 DTC or CDS, as applicable, 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 Canadian Prospectus or 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 Goldman Sachs Canada Inc. or CIBC World Markets Inc.,
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 Canadian Preliminary Prospectus or any U.S.
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 any of 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 Canadian Preliminary Prospectus or any U.S.
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 Reviewing Authority 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 any of 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,
President and Chief Executive Officer and General Counsel, and (ii) 45 days in
the case of the Company’s other directors, 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 (provided, however, that any funds managed by
William A. Fleckenstein or Michael Larson for the benefit of third parties shall
not be subject to the foregoing restrictions), 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; (v) the sale of shares issued
upon the exercise of options or pursuant to stock option plans in effect on the
date hereof; and (vi) the Company’s issuance of its common shares (such issuance
individually or in the aggregate not to exceed 25% of the total number of common
shares of the Company outstanding as of the Closing Date after giving effect to
the closing of the Offering) as payment for all or part of the purchase price in
connection with strategic acquisitions by the Company. The Company
will not qualify a prospectus under Canadian Securities Laws or file a
registration statement under the Securities Act in connection with any
transaction by the Company or any person that is prohibited pursuant to the
foregoing, except for (i) registration statements on Form S-8 relating to
employee benefit plans; or (ii) prospectuses or registration statements on Form
F-4, F-8, F-10 or F-80 relating to securities offered or sold in connection with
an acquisition in accordance with and pursuant to clause (vi) of the immediately
preceding sentence.
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 the Lead Managers waive, 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 Canadian
Qualifying Authorities, 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 Canadian Qualifying Authorities or the Commission);
provided, however, that any information required to be delivered pursuant to
this Representation which is made available on SEDAR or the 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 Canadian
Qualifying Authorities 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, Argentinian counsel to
Company and Bolivian counsel to the 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 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.
(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) or as disclosed by the Company to the
Representatives in writing prior to the date hereof; 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 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 FINRA 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, each affiliate of
any Underwriter within the meaning of Rule 405 under the Securities Act, 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 Canadian Preliminary Prospectus or any U.S.
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
Canadian Preliminary Prospectus or any U.S. 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
document other than the Registration Statement), 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 the Lead
Managers 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, in the light of the circumstances under which they were made (in the
case of any document other than the Registration Statement), 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 such Underwriter through the Lead Managers
expressly 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 to any
indemnified party otherwise than under this Section 7, unless and to the extent
such failure results in the forfeiture by the indemnifying party of substantial
rights 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 or 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 8. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 8 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any judicial,
regulatory or other legal or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the
provisions of this Section 8, (i) no Underwriter 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 and each broker-dealer
affiliate of any Underwriter 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 Goldman Sachs Canada Inc., 77 King Street West,
Suite 3400, Toronto, Ontario M5K 1B7, Attention: Lukas Gordon, and to
CIBC World Markets Inc., Brookfield Place, P.O. Box 500, 161 Bay Street, 7th
Floor, Toronto, Ontario M5J 2S8, Attention: David A. Scott, with a
copy to Shearman & Sterling LLP, 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 the Lead Managers, which address will be supplied to
any other party hereto by either of the Lead Managers 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 States District Court for the Southern District of the
State of New York sitting in the City and County of New York, Borough of
Manhattan (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 first sentence of paragraph seven, the second sentence of
paragraph nine, and paragraphs ten through twelve, in each case under the
caption “Plan of Distribution” 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 présentes exigent que cette convention ainsi
que tous les documents y afférents soient rédigés et signés 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.
| |
Name: |
Robert Pirooz |
| |
Title:
|
Corporate
Secretary, General Counsel
and
Director
|
| |
|
|
Accepted
as of the date first above written
GOLDMAN
SACHS CANADA INC.
By: /s/ Lukas
Gordon_________
Name: Lukas
Gordon
Title:
Vice President
CIBC
WORLD MARKETS INC.
By: /s/ David
A.
Scott_________
Name: David
A. Scott
Title:
Managing Director
On behalf
of themselves and the other
Underwriters
named in Schedule I hereto.
SCHEDULE
I
|
Underwriter
|
Total
Number of Firm
Shares to be Purchased
|
|
Number
of Additional
Shares
to be Purchased if
Option is Fully
Exercised
|
|
Goldman
Sachs Canada
Inc.
|
1,939,000
|
|
290,850
|
|
CIBC
World Markets
Inc.
|
1,939,000
|
|
290,850
|
|
UBS
Securities Canada
Inc.
|
443,200
|
|
66,480
|
|
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
|
332,400
|
|
49,860
|
|
RBC
Dominion Securities Inc.
|
332,400
|
|
49,860
|
|
National
Bank Financial
Inc.
|
138,500
|
|
20,775
|
|
Raymond
James
Ltd.
|
138,500
|
|
20,775
|
|
Salman
Partners
Inc.
|
138,500
|
|
20,775
|
|
Canaccord
Capital Corporation
|
138,500
|
|
20,775
|
|
Total
|
|
|
|
SCHEDULE
II
Ross J.
Beaty
Geoff A.
Burns
William
A. Fleckenstein
Michael
Larson
Michael
J.J. Maloney
Robert P.
Pirooz
Paul B.
Sweeney
David
Press
EXHIBIT
A
Subsidiaries
|
Name
|
Jurisdiction
|
Ownership (%)
|
|
Pan
American Silver S.A. 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 S.A.
|
Peru
|
90.3%
|
|
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
|
95%
|
|
Plata
Panamericana (Spain) S.L.
|
Spain
|
100%
|
|
Pan
American Silver (Spain) S.L.
|
Spain
|
100%
|
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 “reporting issuer” in the Province of Newfoundland and Labrador and
is not noted by the Newfoundland and Labrador Securities Commission (the
“Newfoundland and Labrador Commission”) as being in default of the requirements
of the Securities Act
(Newfoundland and Labrador) or the regulations thereunder or the instruments,
orders, published policy statements and notices of 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 that a Canadian Court would not give effect to 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 (or, in
appropriate circumstances, a non-monetary judgment), 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, unless the
Court considered that the judgment creditor would be most truly and exactly
compensated if all or part of the money payable under the judgment were measured
in the currency of the New York judgment, in which case the Court would give
judgment for the amount of Canadian dollars necessary to purchase the equivalent
amount of the currency of the New York judgment at a british Columbia chartered
bank on the last banking day before the judgment debtor paid the amount of the
judgment to the judgment creditor.
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 3.5%, unless the Court considered that
the judgment creditor would be most truly and exactly compensated if all or part
of the money payable under the judgment were measured in the currency of the New
York judgment, in which case interest would accrue at New York’s interest rate
most closely analogous to the British Columbia prime lending rate of banks to
governments.
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, and by the date, specified in
the TSX Letter.
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 Québec.
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 Financial Industry Regulatory Authority, 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 “Certain
Income Tax Considerations for U.S. Holders” 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 registered public 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 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”), (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 counsel’s 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(b)
under the Securities Act, the Registration Statement became effective on January
21, 2009, after notification of the Commission by the Company or the Reviewing
Authority that a Decision Document had been issued with respect thereto, and
such counsel has 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
February
__, 2009
Goldman
Sachs Canada Inc.
CIBC
World Markets Inc.
As
Representatives of the several
Underwriters
referred to below
c/o
Goldman Sachs Canada Inc.
77 King
Street West
Suite
3400
Toronto,
Ontario M5K 1B7
Attention: Lukas
Gordon
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 Goldman Sachs Canada Inc. and CIBC
World Markets Inc., during the period from the date hereof until [ninety (90)/ forty-five (45)]
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. [For Fleckenstein &
Larson: For the absence of doubt, it is acknowledged and agreed that
any funds managed by the undersigned for the benefit of third parties shall not
be subject to the foregoing restrictions.]
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 Goldman Sachs Canada Inc. and CIBC World Markets Inc. 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 Goldman Sachs Canada Inc. and CIBC World
Markets Inc., 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: 5,540,000
Number of
Additional Shares Offered: 831,000
Public
Offering Price per Share: US$16.25