Agency Agreement between Golden Star Resources Ltd. and Harris Nesbitt Corp., Blackmont Capital Corp., and Wellington West Capital Markets (USA) Inc.
Golden Star Resources Ltd. is entering into an agreement with Harris Nesbitt Corp., Blackmont Capital Corp., and Wellington West Capital Markets (USA) Inc. (the Agents) to sell 29,200,000 common shares at Cdn. $2.80 per share, raising Cdn. $81,760,000. The Agents will act on a best efforts basis to sell the shares and will receive a fee of Cdn. $0.126 per share sold. The agreement is conditional on the closing of a related underwriting agreement for the same shares in Canada. The Agents will assist with documentation, distribution, and regulatory filings.
10901 W. Toller Drive
Suite 300
Littleton, Colorado
80127-6312
Attention: Mr. | Peter J. Bradford, President and Chief Executive Officer |
- 2 -
(1) | In this Agreement: | |
Agents has the meaning ascribed thereto on page 1 hereof; | ||
Agents Fee has the meaning ascribed thereto on page 1 hereof; | ||
Authorities has the meaning ascribed thereto in Section 6(1)(h) hereof; | ||
business day means any day other than a Saturday, Sunday or statutory or civic holiday in the City of Toronto, Ontario and the City of New York, New York; | ||
Canadian Preliminary Prospectus has the meaning ascribed thereto in Section 2(2) hereof; | ||
Canadian Prospectus has the meaning ascribed thereto in Section 2(2) hereof; | ||
Canadian Securities Laws means, collectively, all applicable securities laws of each of the Qualifying Provinces and the respective rules and regulations under such laws, together with applicable published policy statements, notices and orders of the securities regulatory authorities in the Qualifying Provinces; | ||
Closing Date has the meaning ascribed thereto in Section 10(1) hereof; | ||
Common Shares has the meaning ascribed thereto on page 1 hereof; | ||
Exchange Act means the United States Securities Exchange Act of 1934, as amended; | ||
Exchanges means the Toronto Stock Exchange (TSX) and the American Stock Exchange (AMEX); | ||
Incorporated Documents has the meaning ascribed thereto in Section 2(2) hereof; |
- 3 -
Inter-Dealer Agreement means that certain inter-dealer agreement, dated the date hereof, between the Underwriters and the Agents; | ||
Lead Managers has the meaning ascribed thereto on page 1 hereof; | ||
Material Resource Properties has the meaning ascribed thereto in Section 6(1)(h) hereof; | ||
Material Subsidiaries means the entities set out in Schedule A in which the Corporation holds the types and percentages of securities or other ownership interests therein set forth, and, unless the context otherwise requires, shall be deemed to include St. Jude; | ||
Offering has the meaning ascribed thereto on page 1 hereof; | ||
Preliminary Prospectus Supplements has the meaning ascribed thereto in Section 2(2) hereof; | ||
Prospectus Supplements has the meaning ascribed thereto in Section 2(2) hereof; | ||
Qualifying Provinces means the provinces of Canada in which the Corporation has filed a Canadian preliminary short form prospectus and a (final) short form prospectus in respect to the Common Shares to be sold by the Underwriters in Canada; | ||
Registration Statement has the meaning ascribed thereto in Section 2(2) hereof; | ||
SEC means the United States Common Shares and Exchange Commission; | ||
Securities Act means the United States Securities Act of 1933, as amended; | ||
Selling Firms has the meaning ascribed thereto in Section 5(1)(a) hereof; | ||
St. Jude means St. Jude Resources Ltd.; | ||
Stock Option Plans means the stock option plans of the Corporation as approved by the shareholders of the Corporation, as constituted on the date hereof; | ||
Time of Closing has the meaning ascribed thereto in Section 10(1) hereof; | ||
Underwriters has the meaning ascribed thereto on page 1 hereof; | ||
Underwriting Agreement has the meaning ascribed thereto on page 1 hereof; | ||
United States means the United States of America, its territories and possessions, any state of the United States, the District of Columbia, and the areas subject to the jurisdiction of the United States of America; | ||
U.S. Preliminary Prospectus has the meaning ascribed thereto in Section 2(2) hereof; |
- 4 -
U.S. Prospectus has the meaning ascribed thereto in Section 2(2) hereof; | ||
U.S. Securities Laws has the meaning ascribed thereto in Section 2(2) hereof; and | ||
U.S. Shelf Prospectus has the meaning ascribed thereto in Section 2(2) hereof. | ||
(2) | Any references in this Agreement to gender include all genders and words importing the singular number shall include the plural and vice versa. | |
(3) | The division of this Agreement into sections, subsections, paragraphs and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Unless something in the subject matter or context is inconsistent therewith, references herein to sections, subsections, paragraphs and other subdivisions are to sections, subsections, paragraphs and other subdivisions of this Agreement. | |
(4) | Except as otherwise indicated, all amounts expressed herein in terms of money refer to lawful currency of the United States and all payments to be made hereunder shall be made in such currency. |
The Corporation represents and warrants to each Agent that: |
(1) | The Corporation meets the requirements for the use of Form S-3 under the Securities Act. | ||
(2) | The Corporation has filed with the SEC, pursuant to the Securities Act and the rules and regulations adopted by the SEC thereunder (the U.S. Securities Laws), a registration statement on Form S-3 (File No. 333-118956), including a prospectus, and such registration statement has become effective (including financial statements, exhibits and Incorporated Documents (as defined below) as amended to the date of this Agreement, the Registration Statement). The Corporation has filed with the SEC, Canadian and United States versions of preliminary prospectus supplements and will file the final prospectus supplements specifically relating to the Common Shares pursuant to Rule 424(b) under the Securities Act (the Preliminary Prospectus Supplements and Prospectus Supplements respectively). Such Preliminary Prospectus Supplements and Prospectus Supplements are in a form approved by the Lead Manager. The Preliminary Prospectus Supplements were filed with the SEC on December 12, 2003 and the Prospectus Supplements have been filed with the SEC on December 21, 2005. The term U.S. Shelf Prospectus means the form of prospectus included in the Registration Statement. The term U.S. Prospectus means the U.S. Shelf Prospectus together with the U.S. Prospectus Supplement. The term U.S. Preliminary Prospectus means the U.S. Shelf Prospectus together with a preliminary prospectus supplement specifically relating to the Common Shares. The term Canadian Prospectus means the Canadian (final) short form prospectus filed with the Qualifying Provinces together with the U.S. Shelf Prospectus (annexed thereto as Appendix C). The term Canadian |
- 5 -
Preliminary Prospectus means the Canadian preliminary short form prospectus filed with the Qualifying Provinces together with the U.S. Shelf Prospectus (annexed thereto as Appendix C). The term Prospectuses means collectively, the U.S. Prospectus and the Canadian Prospectus. As used herein, the terms Registration Statement, U.S. Shelf Prospectus, U.S. Preliminary Prospectus, U.S. Prospectus, Canadian Preliminary Prospectus and Canadian Prospectus shall include, in each case, all documents incorporated, or deemed incorporated, therein by reference pursuant to the requirements of Item 12 of Form S-3 (the Incorporated Documents), and any reference herein to the terms amend, amendment or supplement with respect to any of the foregoing documents shall be deemed to refer to and include the filing of the Incorporated Documents. | |||
(3) | The Registration Statement at the time it became effective, and the U.S. Shelf Prospectus contained therein, complied, and on the date of the Prospectuses, and at the Closing Date, the Registration Statement and the Prospectuses will comply, fully in all material respects with the requirements of the Securities Act and the U.S. Securities Laws; the Incorporated Documents, as of the date each was filed, comply and will comply fully in all material respects with the requirements of the Exchange Act and the rules and regulations adopted by the SEC thereunder; and at the date of the Prospectuses, and at the Closing Date, the Registration Statement and the Prospectuses 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 not misleading, except that this representation and warranty does not apply to statements or omissions in the Registration Statement, U.S. Prospectus or the Canadian Prospectus made in reliance upon information furnished in writing to the Corporation by any Agent or Underwriter concerning the Agents or Underwriters expressly for use therein. | ||
(4) | The representations and warranties made by the Corporation in Section 2 of the Underwriting Agreement are incorporated herein by reference and shall have the same effect as if made to the Agents under this Agreement. |
The Agents obligations under this Agreement are conditional upon and subject to: | ||
(1) | the Agents receiving at the Time of Closing favourable legal opinions to be delivered to the Agents by Fasken Martineau DuMoulin LLP, Canadian counsel to the Corporation, and Davis Graham & Stubbs LLP, the Corporations U.S. counsel (who may rely, to the |
- 6 -
extent appropriate in the circumstances, on the opinions of local counsel acceptable to counsel to the Corporation as to the qualification or the registration of the Common Shares for sale to the public in Canada and the United States and as to other matters governed by the laws of the Qualifying Provinces other than the provinces in which they are qualified to practice and may rely, to the extent appropriate in the circumstances, as to matters of fact on certificates of officers, of public officials and Exchange officials or of the auditors or transfer agent of the Corporation), dated the Closing Date, addressed to the Agents, as to those matters set forth in Schedule B hereto, and in form and substance satisfactory to the Agents and their counsel, acting reasonably; | ||
(2) | the Agents having received the comfort letters referred to in Section 9(1)(a) and Section 9(1)(b); | |
(3) | the Agents having received comfort letters, dated the Closing Date, in form and substance satisfactory to the Agents, acting reasonably, bringing forward to a date not more than two business days prior to the Closing Date, the information contained in the comfort letters referred to in Section 9(1)(a) and Section 9(1)(b); | |
(4) | the Agents receiving at the Time of Closing a legal opinion (or opinions), dated the Closing Date in form and substance satisfactory to the Agents and their counsel, acting reasonably, addressed to the Agents, from local counsel to the Corporation, as to mining title matters with respect to each of the Material Resource Properties (other than Hwini-Butre); | |
(5) | the Agents receiving at the Time of Closing a legal opinion (or opinions) dated the Closing Date, in form and substance satisfactory to the Agents and their counsel, addressed to the Agents, from local counsel to the Corporation, stating that the Material Subsidiaries have been duly created and that each is validly existing under the laws of the jurisdiction in which it was incorporated, amalgamated or continued, and that the Corporation or a Material Subsidiary owns all of the issued and outstanding share capital of each such corporation, except as set out in Schedule A; | |
(6) | at the Time of Closing, there having been no material adverse change in the business, affairs, operations, assets, liabilities or financial condition of the Corporation on a consolidated basis since the date hereof; | |
(7) | at the Time of Closing, CIBC Mellon Trust Company, at its principal office in Vancouver, having been duly appointed as the transfer agent and registrar for the Common Shares; | |
(8) | the Underwriting Agreement having been executed by the Corporation and the Underwriters, and none of the Underwriters shall have relied upon any rights of termination in the Underwriting Agreement to terminate the offering of the Common Shares in Canada and all conditions to the Underwriters obligations thereunder having been waived or satisfied; | |
(9) | the Corporation delivering a certificate signed on behalf of the Corporation by the Chief Executive Officer of the Corporation and the Chief Financial Officer of the Corporation, addressed to the Agents and dated the Closing Date, in a form satisfactory to the Agents |
- 7 -
and their counsel acting reasonably, certifying for and on behalf of the Corporation and not in their personal capacities that, to the actual knowledge of the persons signing such certificate, after having made due inquiry: |
(a) | the Corporation has complied in all respects with all covenants and satisfied all terms and conditions of this Agreement on its part to be complied with and satisfied at or prior to the Time of Closing on the Closing Date; | ||
(b) | no order, ruling or determination having the effect of ceasing or suspending trading in any Common Shares of the Corporation or prohibiting the sale of the Common Shares or any of the Corporations issued securities has been issued and no proceeding for such purpose is pending or, to the knowledge of such officers, threatened; | ||
(c) | no order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for such purpose shall be pending before or, to the knowledge of such officers, threatened by the SEC and any additional information requested on the part of the SEC shall have been complied with to the reasonable satisfaction of the Agents; and | ||
(d) | all of the representations and warranties made by the Corporation in this Agreement are true and correct as of the Time of Closing with the same force and effect as if made at and as of the Time of Closing after giving effect to the transactions contemplated hereby; and |
(10) | the Agents having received favourable opinions of Stikeman Elliott LLP and Dorsey & Whitney LLP, their Canadian and United States counsel, respectively, as to such matters as the Agents shall reasonably request; and | |
(11) | the Agents having received at the Time of Closing such further certificates, opinions of counsel and other documentation from the Corporation as are consistent with the transactions contemplated herein and provided that no less than 48 hours notice thereof is given prior to the Time of Closing. |
The Agents: |
(a) | shall offer or arrange the offer of the Common Shares for sale to the public, directly and through other investment dealers and brokers (such other investment dealers and brokers, are referred to herein as the Selling Firms), only as permitted by and in compliance with all relevant laws and regulatory requirements (including under the Securities Act), upon the terms and conditions set forth in the U.S. Prospectus and in this Agreement and will require each Selling Firm to so agree and provided that the fees (exclusive of expenses) of the Selling Firms will be paid by the Agents; | ||
(b) | shall not solicit offers to purchase or sell the Common Shares so as to require registration thereof or the filing of a prospectus or similar document with respect |
- 8 -
thereto under the laws of any jurisdiction other than the United States, and will require each Selling Firm to agree with the Agents not to so solicit or sell. In this connection, the Agents agree that they will not offer or sell any of the Common Shares constituting a part of their allotment within Canada except, if applicable, through the Underwriters on the terms and conditions set forth in the Underwriting Agreement and the Inter-Dealer Agreement and in compliance with the Canadian Securities Laws; | |||
(c) | agree that if they offer to sell or sell any Common Shares in jurisdictions (which may include Europe) other than the United States and through the Underwriters in the Qualifying Provinces, such offers and sales shall be effected in accordance and compliance with the applicable laws of such jurisdictions and shall be effected in such manner so as not to: (i) require registration of the Common Shares, or the filing of a prospectus or other document with respect thereto; or (ii) subject the Corporation to any continuous disclosure or similar reporting requirements under the laws of any jurisdiction outside the provinces of Canada or the United States; | ||
(d) | shall use all reasonable efforts to complete and to cause the other Selling Firms to complete the distribution of the Common Shares as soon as practicable; | ||
(e) | shall notify the Corporation when, in their opinion, the Agents and the other Selling Firms have ceased distribution of the Common Shares; and | ||
(f) | shall comply in all material respects with all U.S. Securities Laws with respect to the use of green sheets and other marketing materials. |
(2) | Notwithstanding the foregoing, no Agent shall be liable to the Corporation with respect to any other Agent under this Section 5. |
(1) | The Corporation hereby represents and warrants to the Agents, intending that the same may be relied upon by the Agents, that: |
(a) | each of the Corporation and the Material Subsidiaries has been duly incorporated, continued or amalgamated and organized and is validly existing under the laws of its jurisdiction of incorporation, continuance or amalgamation, has all requisite corporate power and authority to carry on its business as now conducted and as contemplated by the Prospectuses, and to own, lease and operate its properties and assets, and the Corporation has all requisite power and authority to carry out its obligations under this Agreement; | ||
(b) | the only material operating subsidiaries of the Corporation are listed in Schedule A; | ||
(c) | the Corporation or one of its Material Subsidiaries owns the issued and outstanding shares of each of the Material Subsidiaries as set out in Schedule A, |
- 9 -
in each case free and clear of any pledge, lien, security interest, charge, claim or encumbrance, other than as is described in the Prospectuses; | |||
(d) | no order, ruling or determination having the effect of ceasing, suspending or restricting trading in any Common Shares of the Corporation or the sale of the Common Shares has been issued and no proceedings, investigations or inquiries for such purpose are pending or, to the Corporations knowledge, threatened; | ||
(e) | the Corporations common shares are posted and listed for trading on the Exchanges and the Corporation is not in default in any material respect of any of the listing requirements of the Exchanges; | ||
(f) | other than options under the Corporations Stock Option Plans, the Corporation is not a party to and has not entered into any agreement, warrant, option, right or privilege reasonably capable of becoming an agreement, for the purchase, subscription or issuance of any Common Shares or securities convertible into or exchangeable for common shares other than as set out in the Prospectuses; | ||
(g) | as at December 20, 2005, the authorized share capital of the Corporation consisted of an unlimited number of Common Shares and an unlimited number of First Preferred shares, of which 142,987,394 Common Shares and no First Preferred shares are issued and outstanding; | ||
(h) | the Corporation, each of the Material Subsidiaries, and, to the Corporations knowledge after due inquiry, St. Jude have conducted and are conducting their respective businesses in material compliance with all applicable laws, rules, regulations, tariffs, orders and directives, including without limitation, all laws, regulations and statutes relating to mining and to mining claims, concessions or leases, and environmental, health and safety laws, rules, regulations, or policies or other lawful requirements of any governmental or regulatory bodies having jurisdiction over the Corporation and the Material Subsidiaries in each jurisdiction in which the Corporation or the Material Subsidiaries carries on their respective businesses, other than those in respect of which the failure to comply would not individually or in the aggregate be material and adverse to the Corporation and the Material Subsidiaries (taken as a whole). Each of the Corporation, the Material Subsidiaries, and, to the knowledge of the Corporation after due inquiry, St. Jude hold all certificates, authorities, permits, licenses, registrations and qualifications (collectively, the Authorities) in all jurisdictions in which each carries on its business and which are material for and necessary or desirable to carry on their respective businesses as now conducted. To the best of the Corporations knowledge, information and belief all the Authorities are valid and existing and in good standing and none of the Authorities contain any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation and the Material Subsidiaries (taken as a whole) as now conducted or as currently proposed to be conducted. None of the Corporation, any of the Material Subsidiaries, or, to the knowledge of the Corporation after due inquiry, St. Jude has received any notice of proceedings relating to the revocation or |
- 10 -
modification of any of the Authorities which, singly or in the aggregate, if the subject of an unfavourable decision, ruling or finding, would materially adversely affect the business, operations, financial condition, or income of the Corporation or the Material Subsidiaries (taken as a whole) or any notice of the revocation or cancellation of, or any intention to revoke or cancel, any of the mining claims, concessions or leases comprising: |
(i) | the Bogoso/Prestea property; | ||
(ii) | the Prestea Underground property; | ||
(iii) | the Dunkwa-Mampon properties; | ||
(iv) | the Wassa property; and | ||
(v) | the Hwini-Butre property. |
The above-noted properties are referred to, collectively, as the Material Resource Properties and each such property, other than the Hwini-Butre property, is as described in the Form 10-K of the Corporation dated April 14, 2005; | |||
(i) | the Corporation, each of its Material Subsidiaries, and, to the Corporations knowledge after due inquiry, St. Jude have good and marketable title to all assets owned by them free and clear of all liens, charges and encumbrances, other than as described in the Prospectuses, and other than such liens, charges and encumbrances that are not individually or in the aggregate material to the Corporation or the Material Subsidiaries taken as a whole; | ||
(j) | except as set out in the Prospectuses or as are not individually or in the aggregate material to the Corporation and the Material Subsidiaries (taken as a whole), or other than as would not have a material effect on the value of such interests, all interests in the Material Resource Properties are owned, leased or held by the Corporation, its Material Subsidiaries or, to the Corporations knowledge after due inquiry, St. Jude as owner or lessee thereof, are so owned with good and marketable title or are so leased with good and valid title, are in good standing, are valid and enforceable, are free and clear of any liens, charges or encumbrances, except with respect to the litigation listed ion Schedule C, and no royalty is payable in respect of any of them; no other material property rights are necessary for the conduct or currently intended conduct of the Corporations, the Material Subsidiaries or, to the knowledge of the Corporation after due inquiry, St. Judes business and there are no restrictions on the ability of the Corporation or the Material Subsidiaries to use, transfer or otherwise exploit or explore (as the case may be) any such property rights, except as set out in the Prospectuses; | ||
(k) | (A) the Corporation and its Material Subsidiaries are in material compliance with all material terms and provisions of all contracts, agreements, indentures, leases, instruments and licences material to the conduct of their businesses taken as a |
- 11 -
whole and (B) all such contracts, agreements, indentures, leases, policies, instruments and licences are valid and binding in accordance with their terms and are in full force and effect; | |||
(l) | except in each case as publicly disclosed: (i) to the best of the Corporations knowledge, information and belief none of the real property (and the buildings constructed thereon) in which the Corporation or any of the Material Subsidiaries or, to the knowledge of the Corporation after due inquiry, St. Jude has a direct or indirect interest, whether leasehold or fee simple or otherwise (the Real Property), or upon or within which it has operations, is subject to any judicial or administrative proceeding alleging the violation of any federal, provincial, state or municipal environmental, health or safety statute or regulation, domestic or foreign, or is subject to any investigation concerning whether any remedial action is needed to respond to a release of any Hazardous Material (as defined below) into the environment; (ii) except in material compliance with applicable environmental laws, neither the Corporation nor any Material Subsidiary nor, to the Corporations knowledge, St. Jude or any occupier of the Real Property, has filed any notice under any federal, provincial, state or municipal law, domestic or foreign, indicating past or present treatment, storage or disposal of a Hazardous Material; (iii) except in material compliance with applicable environmental laws, none of the Real Property has at any time been used by the Corporation or a Material Subsidiary or, to the knowledge of the Corporation after due inquiry, St. Jude or, to the best of the Corporations knowledge, information and belief by any other occupier, as a waste storage or waste disposal site; (iv) the Corporation, on a consolidated basis, has no contingent liability of which it has knowledge in connection with any release of any Hazardous Material on or into the environment from any of the Real Property or operations thereon; (v) none of the Corporation, any Material Subsidiary or, to the Corporations knowledge after due inquiry, St. Jude or, to the best of the Corporations knowledge, any occupier of the Real Property, generates, transports, treats, processes, stores or disposes of any waste on any of the Real Property in material contravention of applicable federal, provincial, state or municipal laws or regulations enacted for the protection of the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or human health or wildlife (vi) to the Corporations knowledge, no underground storage tanks or surface impoundments containing a petroleum product or Hazardous Material are located on any of the Real Property in contravention of applicable federal, provincial, state or municipal laws or regulations, domestic or foreign, enacted for the protection of the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), human health or wildlife. For the purposes of this Section 6(1)(l), Hazardous Material means any contaminant, chemical, pollutant, subject waste, hazardous waste, deleterious substance, industrial waste, toxic matter or any other substance that when released into the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) is likely to cause, at some immediate or future time, harm or degradation |
- 12 -
to the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or risk to human health and, without restricting the generality of the foregoing, includes any contaminant, chemical, pollutant, subject waste, deleterious substance, industrial waste, toxic matter or hazardous waste as defined by applicable federal, provincial, state or municipal laws or regulations enacted for the protection of the natural environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), or human health or wildlife; | |||
(m) | except as disclosed in the Prospectuses, the Corporation and each of its Material Subsidiaries other than St. Jude maintain appropriate insurance against loss of, or damage to, their assets for all insurable risks on a repair, reinstatement or replacement cost basis, and all of the policies in respect of such insurance coverage are in good standing in all respects and not in default; | ||
(n) | the consolidated audited financial statements of the Corporation for its fiscal year ended December 31, 2004 and the unaudited interim financial statements of the Corporation for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005 and the unaudited pro forma consolidated balance sheet as of September 30, 2005 (collectively the Corporations Financial Statements), copies of which are or will be included or incorporated by reference in the Preliminary Prospectuses and in the Prospectuses, together with managements discussion and analysis of financial condition and results of operations on such annual and interim financial statements (but other than is respect of the foregoing pro forma financial statements for which there is no management discussion and analysis) and including any reconciliation of financial statements prepared in accordance with generally accepted accounting principles in Canada and with generally accepted accounting principles in the United States, are true and correct in every material respect and present fairly and accurately the financial position and results of the operations of the Corporation on a consolidated basis for the periods then ended and the Corporations Financial Statements have been prepared in accordance with generally accepted accounting principles in Canada applied on a consistent basis, and comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act, as applicable, and the related published rules and regulations thereunder; | ||
(o) | the execution and delivery of and the performance by the Corporation of this Agreement and the Underwriting Agreement and the consummation of the transactions contemplated hereby and thereby, including the issuance and sale of the Common Shares have been authorized by all necessary action on the part of the Corporation; | ||
(p) | this Agreement and the Underwriting Agreement have been duly executed and delivered by the Corporation and each such agreement is a legal, valid and binding obligation of, and is enforceable against, the Corporation in accordance |
- 13 -
with its terms (subject to bankruptcy, insolvency or other laws affecting the rights of creditors generally, the availability of equitable remedies and the qualification that rights to indemnity and waiver of contribution may be contrary to public policy); | |||
(q) | except as disclosed in the Preliminary Prospectus Supplement and the Prospectuses, since September 30, 2005: (A) there has been no material change in the business, affairs, operations, assets, liabilities or financial condition of the Corporation on a consolidated basis; (B) no current reports or other documents have been filed on a confidential basis with the SEC; (C) there has been no transaction entered into by the Corporation and not disclosed which is material to the Corporation; (D) the Corporation and its Material Subsidiaries, on a consolidated basis, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business, nor entered into any material transaction or agreement not in the ordinary course of business; and (E) there has been no dividend or distribution of any kind declared, paid or made by the Corporation or, except for dividends paid to the Corporation or its Material Subsidiaries, any of its Material Subsidiaries, or to the Corporations knowledge after due inquiry, St. Jude, on any class of capital stock or repurchase or redemption by the Corporation or any of its Material Subsidiaries of any class of capital stock; | ||
(r) | the directors and officers of the Corporation and their compensation arrangements with the Corporation, whether as directors, officers or employees of the Corporation, are as disclosed in the Preliminary Prospectus Supplement and the Prospectuses if required to be so disclosed; | ||
(s) | all of the material contracts and agreements of the Corporation, its Material Subsidiaries, and, to the Corporations knowledge after due inquiry, St. Jude, not made in the ordinary course of business (collectively the Material Contracts) have been disclosed in the Preliminary Prospectus Supplement and the Prospectuses; | ||
(t) | all tax returns, reports, elections, remittances and payments of the Corporation, its Material Subsidiaries, and, to the Corporations knowledge after due inquiry, St. Jude, required by law to have been filed (or are in the process of being prepared for filing, which delayed filing will not have a material adverse effect on the Corporation and its Material Subsidiaries taken as a whole) or made in any applicable jurisdiction, have been filed or made (as the case may be), other than for taxes being contested in good faith, or with respect to which the failure to file or make would not have a material adverse effect, either individually or in the aggregate, to the Corporation and the Material Subsidiaries taken as a whole, and, to the knowledge of the Corporation, are substantially true, complete and correct and all taxes of the Corporation and of its Material Subsidiaries, in respect of which payment or accrual is required under applicable law, other than taxes being contested in good faith, have been so paid or accrued in the Corporations Financial Statements; |
- 14 -
(u) | the Corporation is not and, after giving effect to the offering and sale of the Common Shares, will not be an investment company or an entity controlled by an investment company within the meaning of the United States Investment Company Act of 1940, as amended; | ||
(v) | except as set out in Schedule C, there is no material action, suit, proceeding, investigation or judgment pending, or to the Corporations knowledge, threatened or outstanding against or affecting the Corporation or any Material Subsidiary or, to the Corporations knowledge after due inquiry, St. Jude (or their respective officers and directors in such capacity) at law or in equity or before or by any federal, provincial, state, municipal or other governmental department, commission, board or agency, domestic or foreign, which in any way materially adversely affects or may reasonably be expected to materially adversely affect the business, operations or condition of the Corporation and any Material Subsidiary taken as a whole, (financial or otherwise) or its property or assets or which questions or may question the validity of the creation, issuance or sale, of the Common Shares or any action taken or to be taken by the Corporation or any Material Subsidiary pursuant to or in connection with this Agreement or any other material contract to which the Corporation or any Material Subsidiary is a party, as the case may be; | ||
(w) | except as have been made or will be obtained prior to the Time of Closing, under the laws of the Qualifying Provinces and the United States, no consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental agency or body or regulatory authority is required for the creation, issue, sale and delivery (as the case may be) of the Common Shares or the consummation by the Corporation of the transactions contemplated in this Agreement and the Underwriting Agreement; | ||
(x) | all necessary corporate action has been taken or will have been taken prior to the Time of Closing by the Corporation so as to validly issue and sell the Common Shares to the Underwriters and, upon receipt by the Corporation of the purchase price as consideration for the issue thereof, the Common Shares will be validly issued and outstanding as fully paid and non-assessable shares of the Corporation; | ||
(y) | the attributes of the Common Shares conform in all material respects with the description thereof contained in the Registration Statement, the Preliminary Prospectus Supplements and the Prospectuses; | ||
(z) | none of the Corporation, any of its Material Subsidiaries, to the Corporations knowledge after due inquiry, St. Jude, any employee or agent of the Corporation, any Material Subsidiary or St. Jude, has (i) made any unlawful contribution or other payment to any official of, or candidate for, any federal, state, provincial or foreign office, or failed to disclose fully any contribution, in violation of any law, or (ii) made any payment to any foreign, United States or state governmental officer or official, or other person charged with similar public or quasi-public |
- 15 -
duties, other than payments required or permitted by the laws of the United States; | |||
(aa) | each of the Corporation and each of its Material Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in Canada and to maintain asset accountability; (iii) access to assets is permitted only in accordance with managements general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Corporation has a plan to integrate St. Judes internal accounting controls into those of the Corporations in early 2006; | ||
(bb) | neither the Corporation nor to the knowledge of the Corporation after due inquiry any of the Corporations officers, directors or affiliates has taken, and at the Closing Date will have taken, directly or indirectly, any action which has constituted, or might reasonably be expected to constitute, the stabilization or manipulation of the price of sale or resale of the Common Shares; | ||
(cc) | since December 31, 2004, the Corporation has timely and properly filed on a timely basis (i) with the SEC all reports and other documents required to have been filed by it with the SEC pursuant to the Securities Act and the rules and regulations, (ii) with the AMEX all reports and documents required to have been filed by it pursuant to the rules and regulations of the AMEX, and (iii) all reports or other documents required to have been filed by it with the securities commission or similar regulatory body of each province in Canada, the TSX or any other applicable Canadian governmental authorities. True and complete copies of all such reports and other documents have been delivered or made available to the Agents; | ||
(dd) | neither the Corporation nor any Material Subsidiary, (other than St. Jude) (i) was a personal holding company within the meaning of Section 542 of the Internal Revenue Code of 1986, as amended (the Code) (a PHC), a foreign personal holding company with the meaning of Section 542 of the Code (an FPHC), or a controlled foreign corporation with the meaning of Section 957 of the Code (a CFC) for its taxable year ended December 31, 1995 or for any previous taxable year, or (ii) expects that it will constitute a PHC, a FPHC or a CFC for its current taxable year ending December 31, 2003; | ||
(ee) | the Corporation (i) was not a passive foreign investment company (a PFIC) within the meaning of section 1296 of the Code for its taxable year ended December 31, 2004 or for any previous taxable year and (ii) expects that it will not constitute a PFIC for its current taxable year ending December 31, 2005; | ||
(ff) | CIBC Mellon Trust Company, at its principal office in Vancouver, has been duly appointed as the transfer agent and registrar for the Common Shares; |
- 16 -
(gg) | the Corporation has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), which (i) are designed to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to the Corporations principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated for effectiveness as of the end of the period covered by the filing of the Corporations most recent annual or quarterly report filed with the SEC; and (iii) are effective in all material respects to perform the functions for which they were established; | ||
(hh) | based on the evaluation of its disclosure controls and procedures, the Corporation is not aware of (i) any significant deficiency in the design or operation of internal controls which could adversely affect the Corporations ability to record, process, summarize and report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporations internal controls; | ||
(ii) | since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses; | ||
(jj) | except as described in the Prospectuses, there are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), or any other relationships with unconsolidated entities or other persons, that may have a material current or future effect on the Corporations financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue or expenses; and | ||
(kk) | the Corporations Board of Directors has validly appointed an audit committee whose composition satisfies the requirements of the AMEX Listed Company Manual and the Board of Directors and/or the audit committee has adopted a charter that satisfies the requirements of the Exchange Act and the AMEX Listed Company Manual and the audit committee has reviewed the adequacy of its charter within the past twelve months. Neither the Board of Directors nor the audit committee has been informed, nor is any director of the Corporation aware, of (1) any significant deficiencies in the design or operation of the Corporations internal controls which could adversely affect the Corporations ability to record, process, summarize and report financial data or any material weakness in the Corporations internal controls, or (2) any fraud, whether or not material, that involves management or other employees of the Corporation who have a significant role in the Corporations internal controls. |
-17-
(2) | The representations and warranties made by the Corporation to the Underwriters in the Underwriting Agreement are hereby incorporated by reference, and shall have the same effect as though they were made to the Agents under this Agreement. |
(a) | it is, and will remain so, until the completion of the Offering, appropriately registered under U.S. Securities Laws so as to permit it to lawfully fulfil its obligations hereunder and it is, and will remain so, until the completion of the Offering, a member in good standing of the National Association of Securities Dealers, Inc.; and | ||
(b) | it has good and sufficient right and authority to enter into this Agreement and complete its transactions contemplated under this Agreement on the terms and conditions set forth herein. |
(1) | The Corporation covenants with the Agents that: |
(a) | during the period from the date hereof to the completion of the distribution of the Common Shares, the Corporation will promptly advise the Agents in writing of the full particulars of any material change in the business, affairs, operations, assets, liabilities or financial condition of the Corporation, on a consolidated basis, or any material change in any statement contained in the U.S. Prospectus or the Canadian Prospectus, as such documents exist immediately prior to such change, which change is, or may be, of such nature as would result in any of such documents, as they exist immediately prior to such change, containing an untrue statement of a material fact or an omission to state therein a material fact that is required to be stated or that is necessary to make the statements therein not misleading in light of the circumstances in which they were made or which would result in any of such documents, as they exist immediately prior to such change not complying with the Securities Act. The Corporation will promptly prepare and file with the SEC an amendment to the Registration Statement or supplement to the Prospectus and/or the Canadian Prospectus which in the opinion of the Agents, acting reasonably, may be necessary or advisable to correct such untrue or misleading statement or omission. The Corporation shall in good faith discuss with the Agents any change in circumstances (actual, anticipated, contemplated or threatened) which is of such a nature that there may be a reasonable doubt as to whether written notice need be given to the Agents under the provisions of this Section 8(1)(a); | ||
(b) | the Corporation will deliver without charge to the Agents, as soon as practicable, and in any event no later than December 13, 2003 in the case of the Canadian Preliminary Prospectus and the U.S. Preliminary Prospectus and December 21 in the case of the U.S. Prospectus and the Canadian Prospectus, and thereafter from time to time during the distribution of the Common Shares, in such cities as the |
-18-
Agents shall notify the Corporation, as many commercial copies of each of the U.S. Prospectus and the Canadian Prospectus, respectively (and in the case of an amendment or supplement, such amendment or supplement), as the Agents may reasonably request for the purposes contemplated by the U.S. Securities Laws and the Canadian Securities Laws and such delivery shall constitute consent by the Corporation to the use by the Agents, the Underwriters and the Selling Firms of such documents in connection with the Offering in the United States and Canada, subject to the provisions of U.S. Securities Laws and Canadian Securities Laws; |
(c) | the Corporation shall use its best efforts to arrange that the Common Shares are listed and posted for trading on the TSX and the AMEX on the Closing Date; | ||
(d) | the Corporation shall not issue or announce the issuance of any Common Shares of the Corporation or any securities convertible into or exchangeable for or exercisable to acquire Common Shares of the Corporation without the prior consent of the Lead Managers on behalf of the Agents, acting reasonably, during a period commencing on the date of execution of this Agreement and ending 90 days after the Closing Date (the Restricted Period), other than: |
(i) | upon exercise of currently outstanding rights, or agreements, including options, warrants and other convertible securities and any rights which have been granted or issued, subject to any necessary regulatory approval (including, for the avoidance of doubt, the common shares and convertible securities to be issued under the Plan of Arrangement with St. Jude resources Ltd. and the common shares underlying such convertible securities); | ||
(ii) | currently outstanding options granted to officers, directors, employees or consultants of the Corporation or any subsidiary thereof pursuant to the Corporations stock option and purchase plans (collectively, the Option Plan); or | ||
(iii) | options issued pursuant to and in accordance with the Option Plan; |
(e) | it will apply the net proceeds from the sale of the Common Shares as set forth under the caption Use of Proceeds in the Prospectuses subject to reallocation as contemplated thereby; and | ||
(f) | to make generally available to its securityholders as soon as practicable, but in any event, not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act), an earnings statement of the Corporation and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the rules and regulations of the SEC thereunder (including at the option of the Corporation, Rule 158). |
-19-
(1) | The Agents obligations under this Agreement are conditional upon the receipt by the Agents concurrently with the filing of the U.S. Prospectus, of: |
(a) | a long form comfort letter dated the date of Prospectus Supplements from the auditors of the Corporation, addressed to the Agents, in form and substance reasonably satisfactory to the Agents, relating to the verification of the financial information and accounting data and other numerical data of a financial nature contained in the U.S. Prospectus and Canadian Prospectus and matters involving changes or developments since the respective dates as of which specified financial information is given in the U.S. Prospectus and the Canadian Prospectus to a date not more than two business days prior to the date of such letter. Such letter shall further state that such auditors are independent public accountants within the meaning of the Securities Act and the appropriate rules and regulations thereof, and that: |
(i) | in their opinion the Corporations Financial Statements examined by them and included in the U.S. Prospectus and the Canadian Prospectus comply in all material respects with the applicable accounting requirements of the Securities Act and the related published rules and regulations; | ||
(ii) | in their opinion any unaudited pro forma financial statements included or incorporated by reference in the Registration Statement, U.S. Prospectus or Canadian Prospectus comply as to form in all material respects with the requirements of the Securities Act and the Exchange Act and the related published rules and regulations, and all pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements; | ||
(iii) | they have performed the procedures specified by the American Institute of Certified Accountants for a review of interim financial information described in Statement of Auditing Standards No. 71, on the unaudited financial statements included or incorporated by reference in the Registration Statement; | ||
(iv) | on the basis of the review referred to above nothing came to their attention that caused them to believe that the unaudited financial statements included or incorporated by reference in the Registration Statement, U.S. Prospectus or Canadian Prospectus, including any reconciliation of financial statements prepared in accordance with generally accepted accounting principles in Canada with generally accepted accounting principles in the United States, do not comply as to form in all material respects with the requirements of the Securities Act and the Exchange Act and the related published rules and regulations, or that any material modification should be made to such unaudited |
-20-
financial statements for them to be in conformity with generally accepted accounting principles; |
(v) | they have compared specified United States and Canadian dollar amounts (or percentages derived from such United States and Canadian dollar amounts) and other financial information contained in the Prospectuses (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Corporation and its subsidiaries subject to the internal controls of the Corporations accounting system or are derived from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such United States and Canadian dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter; | ||
(vi) | they compared for the period from the date of the latest balance sheet included in the Prospectuses to the date of the latest available balance sheet read by such auditors, or at a subsequent specified date not more than two business days prior to the date of the Prospectuses, there was any material change in the capital or any increase in short term indebtedness or long-term debt of the Corporation and its Material Subsidiaries consolidated or, at the date of the latest available balance sheet read by such auditors, there was any material decrease in consolidated net current assets or net assets as compared with amounts shown on the latest balance sheet included or incorporated by reference in the Prospectuses; and | ||
(vii) | they compared for the period from the date of the latest income statement included in the Prospectuses to the date of the latest available income statement read by such auditors or at a subsequent specified date not more than two business days prior to the date of the Prospectuses, there were any material decreases as compared with the corresponding period of the previous year and with the period of corresponding length ended the date of the latest income statement included in the Prospectuses, in the consolidated revenue, net operating income, or total or per share amounts of net income. |
(b) | a long form comfort letter dated the date of Prospectus Supplements from the auditors of St. Jude, addressed to the Agents, in form and substance reasonably satisfactory to the Agents, relating to the verification of the financial information and accounting data and other numerical data of a financial nature regarding St. Jude contained in the U.S. Prospectus and Canadian Prospectus and matters involving changes or developments since the respective dates as of which specified financial information is given in the U.S. Prospectus and the Canadian Prospectus to a date not more than two business days prior to the date of such |
-21-
letter. Such letter shall further state that such auditors are independent public accountants within the meaning of the Securities Act and the appropriate rules and regulations thereof, and that: |
(i) | in their opinion the St. Judes Financial Statements examined by them and included in the U.S. Prospectus and the Canadian Prospectus comply in all material respects with the applicable accounting requirements of the Securities Act and the related published rules and regulations; | ||
(ii) | they have performed the procedures specified by the American Institute of Certified Accountants for a review of interim financial information described in Statement of Auditing Standards No. 71, on the unaudited financial statements included or incorporated by reference in the Registration Statement; | ||
(iii) | on the basis of the review referred to above nothing came to their attention that caused them to believe that the unaudited financial statements included or incorporated by reference in the Registration Statement, U.S. Prospectus or Canadian Prospectus, including any reconciliation of financial statements prepared in accordance with generally accepted accounting principles in Canada with generally accepted accounting principles in the United States, do not comply as to form in all material respects with the requirements of the Securities Act and the Exchange Act and the related published rules and regulations, or that any material modification should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles; | ||
(iv) | they compared for the period from the date of the latest balance sheet included in the Prospectuses to the date of the latest available balance sheet read by such auditors, or at a subsequent specified date not more than two business days prior to the date of the Prospectuses, there was any material change in the capital or any increase in short term indebtedness or long-term debt of St. Jude or, at the date of the latest available balance sheet read by such auditors, there was any material decrease in consolidated net current assets or net assets as compared with amounts shown on the latest balance sheet included or incorporated by reference in the Prospectuses; and | ||
(v) | they compared for the period from the date of the latest income statement included in the Prospectuses to the date of the latest available income statement read by such auditors or at a subsequent specified date not more than two business days prior to the date of the Prospectuses, there were any material decreases as compared with the corresponding period of the previous year and with the period of corresponding length ended the date of the latest income statement included in the Prospectuses, in the consolidated revenue, net operating income, or total or per share amounts of net income. |
-22-
(2) | Such comfort letters referred to in Section 9(1)(a) and Section 9(1)(b) shall be in addition to any comfort letters required by the terms of the Underwriting Agreement to be addressed to the Underwriters. | |
(3) | Similar documents and comfort letters shall be delivered to the Agents with respect to any amendment to the Prospectuses (provided, in the case of comfort letters, that the amendment to the Prospectuses contains financial, accounting or other numerical data of a financial nature), or as required by the terms of the Underwriting Agreement to be delivered to Underwriters. |
(1) | The Offering will be completed at the offices of Fasken Martineau DuMoulin LLP in Toronto at 8:00 a.m. (Toronto time) on December 30, 2005 (the Time of Closing and the Closing Date, respectively) or at such other time and/or on such other date as the Agents and the Corporation may agree upon, but in any event no later than January 6, 2006. | |
(2) | At the Time of Closing, subject to the terms and conditions contained in this Agreement, the Corporation shall deliver to the Agents a certificate or certificates representing the Common Shares against payment of the purchase price, net of the Agents Fee, by wire transfer, dated the Closing Date, payable to the Corporation. Upon the receipt of the wire transfer the Corporation shall deliver to the Agents written confirmation of the receipt thereof. | |
(3) | At the Time of Closing, subject to the terms and conditions contained in this Agreement, the Corporation shall have obtained approval to list for trading the Common Shares on the Exchanges. |
(1) | Except as otherwise provided herein, all terms and conditions set out herein shall be construed as conditions and any breach or failure by the Corporation to comply with any such conditions in favour of the Agents shall entitle the Agents to terminate their obligations under this Agreement by written notice to that effect given to the Corporation prior to the Time of Closing on the Closing Date. The Corporation shall use its reasonable best efforts to cause all conditions in this Agreement to be satisfied. It is understood that the Agents may waive in whole or in part, or extend the time for compliance with, any of such terms and conditions without prejudice to their rights in respect of any subsequent breach or non-compliance, provided that to be binding on the Agents, any such waiver or extension must be in writing. | |
(2) | In addition to any other remedies that may be available to the Agents, the Agents shall each be entitled, at their option, to terminate and cancel, without any liability on the Agents part, their obligations under this Agreement, by giving written notice to the Corporation at any time at or prior to the Time of Closing on the Closing Date: |
-23-
(a) | if there should occur any suspension or limitation of trading in Common Shares generally on the TSX or AMEX, or if a general moratorium on commercial banking activities in Toronto or New York should be declared by the relevant authorities, or if, in relation to the Corporation, any inquiry, investigation or other proceeding (whether formal or informal) is commenced, threatened or announced or any order or ruling is issued by any officer of such Exchange or market, or by the SEC, or any other regulatory authority in Canada or the United States, or if any law or regulation under or pursuant to any statute of Canada or of any province thereof or of the United States is promulgated or changed which, in the reasonable opinion of the Agents (or any of them) operates to prevent or materially restrict trading the Common Shares or the distribution of the Common Shares; | ||
(b) | if any inquiry, investigation or other proceeding is commenced or any other order is issued under or pursuant to any statute of the United States or any state thereof or Canada or any province thereof(other than an inquiry, investigation or other proceeding order based solely upon the activities or alleged activities of any Agent , Canadian Underwriter or Selling Firm) or Canada or any province thereof or there is any change of law or the interpretation or administration thereof by a securities regulator or other public authority, which in the reasonable opinion of the Agents, operates to prevent or materially restrict the trading of the Common Shares or the distribution of the Common Shares; | ||
(c) | if there shall occur any actual material adverse change in the business, affairs, operations, assets, liabilities or financial condition of the Corporation and its subsidiaries considered as one enterprise, and which in the Agents opinion would reasonably be expected to have a material adverse effect on the market price or value of any of the Common Shares or the Corporations common shares generally; | ||
(d) | if the Agents determine that any material adverse fact or information with respect to the Corporation or the Common Shares that existed on or prior to December 8, 2005 that had not been publicly disclosed in accordance with applicable securities laws by December 12, 2005; or | ||
(e) | if there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence, including without limiting the generality of the foregoing, any military conflict, civil insurrection, or any terrorist action (whether or not in connection with such conflict or insurrection), which, in the Agents opinion, materially adversely affects or involves, or will materially adversely affect or involve, the Canadian or United States financial markets and/or prevents or materially restricts the trading of the Common Shares or the distribution of the Common Shares. |
(3) | The Agents shall make reasonable best efforts to give notice to the Corporation (in writing or by other means) of the occurrence of any of the events referred to in Section 12(2), provided that neither the giving nor the failure to give such notice shall in any |
way affect the entitlement of the Agents to exercise this right at any time prior to or at the Time of Closing. | ||
(4) | The rights of termination contained in this Section 12 as may be exercised by the Agents are in addition to any other rights or remedies the Agents may have in respect of any default, act or failure to act or non-compliance by the Corporation in respect of any of the matters contemplated by this Agreement. | |
(5) | If the obligations of the Agents are terminated under this Agreement pursuant to these termination rights, the Corporations liabilities to the Agents shall be limited to the Corporations obligations under Section 13, Section 14 and Section 15. |
(1) | The Corporation agrees to indemnify and hold harmless each Agent, and their respective directors, officers, employees and agents, and each person, if any, who controls any Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages and liabilities, joint or several (including any investigation, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which they, or any of them, may become subject under the Securities Act, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon (i) any breach of a representation or warranty of the Corporation contained herein or the failure of the Corporation to comply with any of its obligations hereunder, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the U.S. Preliminary Prospectus, the Canadian Preliminary Prospectus, the U.S. Prospectus, the Canadian Prospectus or the Registration Statement, or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such untrue statement or omission or alleged untrue statement or omission was made in such U.S. Preliminary Prospectus, the Canadian Preliminary Prospectus, the U.S. Prospectus, the Canadian Prospectus or the Registration Statement, or such amendment or supplement, in reliance upon and in conformity, with information furnished in writing to the Corporation by or on behalf of any Agent or Underwriter expressly for use in the preparation thereof; provided, however, that the foregoing indemnity against losses, claims, damages or liabilities is subject to the condition that, insofar as it relates to any untrue statement or alleged untrue statement, omission or alleged omission made in the Registration Statement, the U.S. Preliminary Prospectus and the Canadian Preliminary Prospectus but eliminated or remedied in the U.S. Prospectus and the Canadian Prospectus, such indemnity shall not inure to the benefit of any Agent from whom the person asserting any loss, claim, damage or liability purchased the Common Shares which are the subject thereof (or to the benefit of any person who controls such Agent) if such Agent failed to send or give a copy of the U.S. Prospectus (or any amendment or supplement thereto) to such person at or prior to the time such action is required by the Securities Act. | |
(2) | Each Agent agrees to indemnify and hold harmless the Corporation, each person, if any, who controls the Corporation within the meaning of Section 15 of the Securities Act or |
- 25 -
Section 20 of the Exchange Act, each director of the Corporation and each officer of the Corporation, against any and all losses, claims, damages and liabilities, joint or several (including any investigation, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which they, or any of them, may become subject under the Securities Act, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the U.S. Preliminary Prospectus, the Canadian Preliminary Prospectus, the U.S. Prospectus, the Canadian Prospectus or the Registration Statement, or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which was made in the U.S. Preliminary Prospectus, the Canadian Preliminary Prospectus, the U.S. Prospectus, or the Canadian Prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Corporation by such Agent with respect to the Agents expressly for use in the preparation thereof. | ||
(3) | Any party which proposes to assert the right to be indemnified under this Section 13 will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnified party under this Section 13, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served, but the omission so to notify such indemnifying party of any such action, suit or proceeding shall not relieve it from any liability which it may have to any indemnified party otherwise than under this Section 13. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defence thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defence thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, other than reasonable costs of investigation subsequently incurred by such indemnified party in connection with the defence thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized by the indemnifying parties, (ii) the indemnified party shall have reasonably concluded that there may be a conflict of interest between the indemnifying parties and the indemnified party in the conduct of the defence of such action (in which case the indemnifying parties shall not have the right to direct the defence of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not in fact have employed counsel to assume the defence of such action. An indemnifying party shall not be liable for any settlement of any action or claim effected without its consent. For the purposes of clause (ii) of the preceding sentence only, any indemnified party or |
- 26 -
parties shall be represented by one counsel whom they may select with the approval, which shall not be unreasonably withheld, of the indemnifying parties. |
- 27 -
- 28 -
(a) | to the Corporation at: | |||
Golden Star Resources Ltd. | ||||
10901 W. Toller Drive | ||||
Suite 300 | ||||
Littleton, Colorado | ||||
U.S.A. 80127-6312 | ||||
Attention: Peter Bradford and Allan Marter | ||||
Facsimile No.: (303)  ###-###-#### | ||||
with a copy to: | ||||
Fasken Martineau DuMoulin LLP | ||||
Toronto Dominion Bank Tower | ||||
Toronto-Dominion Centre, Box 20, Suite 4200 | ||||
66 Wellington Street West | ||||
Toronto, Ontario | ||||
M5K 1N6 | ||||
Attention: John S.M. Turner | ||||
Facsimile No.: (416)  ###-###-#### | ||||
and to: | ||||
Davis Graham & Stubbs LLP | ||||
1550 Seventeenth Street, Suite 500 | ||||
Denver, Colorado | ||||
U.S.A. 80202 | ||||
Attention: Deborah Friedman | ||||
Facsimile No.: (303)  ###-###-#### | ||||
(b) | to the Agents at: | |||
Harris Nesbitt Corp. |
- 29 -
c/o BMO Nesbitt Burns Inc. | ||||
1 First Canadian Place | ||||
4th Floor, P.O. Box 150 | ||||
Toronto, Ontario | ||||
M5X 1H3 | ||||
Attention: Peter Collibee | ||||
Facsimile No.: (416)  ###-###-#### | ||||
Blackmont Capital Corp. | ||||
c/o Blackmont Capital Corp. | ||||
BCE Place, 181 Bay Street | ||||
Suite 900, P.O. Box 779 | ||||
Toronto, Ontario | ||||
M5J 2T3 | ||||
Attention: Rick Vernon | ||||
Facsimile No.: (416)  ###-###-#### | ||||
Wellington West Capital Markets (USA) Inc. | ||||
c/o Wellington West Capital Markets Inc. | ||||
145 King Street West, Suite 700 | ||||
Toronto, Ontario | ||||
M5J 1J8 | ||||
Attention: William Washington | ||||
Facsimile No.: (416)  ###-###-#### | ||||
with a copy to: | ||||
Stikeman Elliott LLP | ||||
5300 Commerce Court West | ||||
199 Bay Street | ||||
Toronto, Ontario | ||||
M5L 1B9 | ||||
Attention: Jay C. Kellerman | ||||
Facsimile No.: (416)  ###-###-#### | ||||
and to: |
- 30 -
Dorsey & Whitney LLP | ||||
BCE Place | ||||
161 Bay Street, Suite 4310 | ||||
Toronto, Ontario | ||||
Canada M5J 2S1 | ||||
Attention: Gil Cornblum | ||||
Facsimile No.: (416)  ###-###-#### |
Yours very truly, | ||||||
HARRIS NESBITT CORP. | ||||||
By: | /s/ Michael Vitton | |||||
BLACKMONT CAPITAL CORP. | ||||||
By: | /s/ Robert Matthews | |||||
Authorized Signing Officer | ||||||
WELLINGTON WEST CAPITAL MARKETS (USA) INC. | ||||||
By: | /s/ Greg Thompson | |||||
Authorized Signing Officer |
GOLDEN STAR RESOURCES LTD. | ||||||
By: | /s/ Allan Marter | |||||
Name | Type of Ownership | Percentage | ||||
Caystar Holdings (Cayman Islands) | Shares | 100 | % | |||
Bogoso Holdings (Cayman Islands) | Shares | 100 | % | |||
Bogoso Gold Limited (Ghana) | Shares | 90 | % | |||
Wasford Holdings (Cayman Islands) | Shares | 100 | % | |||
New Century Mines (Ghana) (Prestea Underground) | Shares | 90 | % | |||
Wexford Goldfields Limited (Ghana) | Shares | 90 | % |